Domestic Economy

Bottomless Corruption

Bottomless Corruption
Bottomless Corruption

Media outlets began to report on economic and financial corruption in the years following the Islamic Revolution in the late 1980s and early 1990s.  
It seems that the formation of “dormant partnership companies” was the first case of widespread corruption directly targeting the capital of ordinary people. The reason behind the emergence and expansion of these companies was the inefficiency of the banking system. On the one hand, the low or even negative real interest rate of deposits in the state banking system, and on the other hand, the difficulty of accessing banking facilities, given their considerable hidden rent, led to very low and often negative real rates and created a big gap in the monetary system. 
Dormant partnership companies were an indication of a practical solution to fill this gap. Mousa Ghaninejad, a veteran economist, prefaced his write-up for the Persian daily Donya-e-Eqtesad with this note. A translation of the text follows:


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