New dimensions of the controversial government decision to liquidate state assets are unfolding before public eyes every day. The reactions of experts and media to this measure is completely logical and correct. State assets are not the properties of any person, organization or government. These assets are like the country’s natural resources such as oil and development projects; they should be used for intergenerational affairs and posterity.
In general, the government has no right to sell the nation’s assets to finance its budget deficit, Morteza Afqeh, an economist and university professor, prefaced his write-up for the Persian-language daily Ta’adol with this note. A translation of the text follows:
The government was likely to take contentious measures following its failure to revive the Joint Comprehensive Plan of Action and its negotiations with the world powers. The government had vowed not to allow sanctions to impact the country’s economy, but it not only failed to deliver on this promise, but it also behaved in such a way that problems arising from sanctions entangled the warp and weft of the economy.
The grim news of the thwarted nuclear deal is sending markets into a tailspin by the day and adversely affecting people’s livelihoods.
The government has used up all possible capacities to tackle the budget deficit (selling bonds, increasing taxes on wage earners and producers, making extensive borrowings from the central bank and the banking system, etc.) in the past years. And now it has decided to earn 1,080 trillion rials [$2.35 billion] through the sale of state properties and transfer of assets and incomplete projects. The move is no less than auctioning national properties in the most dangerous way possible.
The government has used up all possible capacities to tackle the budget deficit (selling bonds, increasing taxes on wage earners and producers, borrowing extensively from the central bank and the banking system, etc.) in the past years. And now it has decided to earn 1,080 trillion rials [$2.35 billion] through the sale of state properties and transfer of assets and incomplete projects
A seven-member committee is going to make decisions about state assets worth millions of dollars. This team will enjoy judicial immunity and no one can question their moves. In other words, no one can express any objection if this committee sells a 100-trillion-rial worth of a property at the price of 1 trillion rials.
One of the key decisions of this team is to sell more than 66,000 unfinished projects. Normally, such a procedure should be carried out by experts and under special scrutiny. But you’ll be thrown into panic when you realize that this decision is expected to be made in the shortest possible time, i.e., just one year.
I believe the approval process of “the liquidation of state assets” plan is ambiguous for the following reasons:
State assets belong to the same category of oil revenues. Therefore, they should be used for intergenerational and development projects. The fact that the government intends to use them to run its current affairs, such as paying salaries to its workers is an anti-development and wrong approach.
The impunity granted to this team is strange. It is not unlikely that the government would sell its assets at low prices, given its crying need for income, which increases the risk of corruption in the process.
The next important issue is the competence of the seven-member board. People who make decisions for such a crucial matter must be knowledgeable economic experts. You don’t see such capabilities in these people.
Assume that this team manages to generate 1,080 trillion rials from the sale of state assets. What will the government do to finance its budget deficit next year [March 2023-24]? What will be its next step to procure the needed resources?
Government officials should tell us how they are going to launch the next phase of national auctioning in the years to come.
