The economic “black hole” that threatens Iran’s future

Iran’s state-controlled economy, which is tightly intertwined with a closed political system, represents a “black hole,” according to a prominent journalist in Tehran.

Foroozan Asef Nakhaei says Iran’s constitutional law recognizes three forms of economy, namely the state sector, private sector and cooperatives. But four decades after the 1979 Islamic Revolution, the economy is being plagued by what many refer to as “Khosulati.” [a combination of the words private and public in Persian] that could be vaguely translated as private government sector.

These are companies that have been nominally “privatized” by the government but are owned or managed by political insiders. The industry devours the three legitimate economic forms like a “black hole”.

“This horrible black hole can prevent even trusted elements of the regime, men like Majles spokesman Mohammad Bagher Ghalibaf and President Ebrahim Raisi, from moving ahead with their economic plans.” Asef Nakhaei said in an article on the moderate conservative website Khabar Online adding that “the black hole can challenge and paralyze the entire system”.

According to the journalist, this is a result of a lack of transparency in the Iranian political system, which confuses Iranian and foreign observers trying to understand Iran’s decision-making process.

A recent example of the economic black hole is “Khosulati”. a $3 billion corruption case at a large steel mill that appears to be a public company but is actually controlled by government agencies and run by their agents.

Foroozan Asef Nakhaei, prominent Iranian journalist

Meanwhile, the existence of rival centers of power and the importance of unofficial networks in the political system make the situation even more ambiguous. There is no center of political power capable of criticizing the regime without dangerously challenging it from a safe distance.

Political powers that self-proclaimed “reformists” and typically allied with the “moderates” within the system could never develop rhetoric that would inspire confidence at the core of the system historically ruled by Supreme Leader Ali Khamenei 33 years.

Although the so-called “reformist” faction tried to initiate some changes in the system of government, the conservatives gradually pushed them aside.

The two groups differed in their vision of development, with the reformists taking a slightly more liberal approach, while the conservatives continued to fatten the state-controlled economy and particularly the quasi-private sector.

This and the fact that the hard-line proponents of an “Islamic government” as opposed to the “Islamic republic” have created parallel but otherwise similar institutions have prevented economic development from taking center stage. As a result, Iran’s economic plans live in a different world from actual needs. Centers of power exercise their own policies rather than responding to public demands in domestic and even foreign policy. Asef Nakhaei said that the continuation of this paradoxical duality is destructive and dangerous for the country’s survival.

If Iran’s hardline conservatives and their currently consolidated government can offer everyone some sort of legal protection from the law, they will indeed implement the ideas of the country’s reformists and moderates and urge an immature government to behave maturely. This will lead to a government based on national interests, the journalist said.

He added that Iran’s future depends on democratic reforms, regardless of who runs the system, and the elimination of parallel institutions giving way to black holes, such as the quasi-state private sector, which is eating up other sectors and valuable resources.

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