By Bijan Khajehpour for Al-Monitor. Any opinions expressed are those of the author, and do not necessarily reflect the views of Iran Business News.
The Iranian economy consists of three distinct sectors: public, private and semi-state — which includes religious, revolutionary, military foundations and cooperatives, as well as social security and pension funds.
Experts agree that as a result of flawed privatization processes in the past three decades, the ownership of top governmental enterprises has been transferred to the semi-state sector.
Consequently, gradually the semi-state sector has become the largest constituency in the country’s economy. One of the players in this semi-state sector is the network of companies around the Islamic Revolutionary Guard Corps (IRGC), whose role in the economy is usually subject to guessing games by all types of commentators.
The IRGC entered economic activity beyond its military tasks in the aftermath of the 1980-88 Iran-Iraq War. Former IRGC Commander in Chief Mohsen Rezaei recounts that in 1989, then-President Akbar Hashemi Rafsanjani asked the IRGC to shift its capabilities toward the country’s reconstruction. Key political stakeholders welcomed this process during the reconstruction phase.
Limitations of the growth of the IRGC in the country’s economy became evident when IRGC-affiliated companies started to bully their way into government projects during the era of President Mohammad Khatami (1997-2005). The most visible cases of friction were the cancellation of the Turkcell mobile license in 2004 and also the cancellation of the Imam Khomeini International Airport security contract with the Turkish company TAV in 2005.
Both these contracts were later awarded to IRGC-affiliated consortia. The reluctance in the Khatami era to allow the IRGC to enter strategic sectors such as petroleum was followed by the era of President Mahmoud Ahmadinejad (2005-2013) when all key sectors were opened to IRGC interests, up to the point that Rostam Qassemi, head of Khatam-ol-Anbia industrial conglomerate, became petroleum minister.