Rouhani moves to Loosen IRGC Grip on Economy

On Nov. 28, precisely a month before the initial protests in Mashhad, Rouhani declared on state television: “One of our goals … is for economic enterprises to be transferred to the people. And I think that besides the government, others who are in the public and nongovernmental sector, or the armed forces, must also [engage in] divestment. In this respect, and under this government, I have also spoken with the supreme leader and he fully agrees that all of these [economic enterprises] be transferred to the people.

As part of this redirection of the military’s focus, there has been a quiet crackdown on the IRGC’s business activities. In September, the Financial Times reported that “at least a dozen [IRGC] members and affiliated businessmen have been detained in recent months, while others are being forced to pay back wealth accrued through suspect business deals.”

In this vein, a “regime insider and a government official” told the Financial Times that “in the past year, the [IRGC] … had to restructure some holding companies and transfer ownership of others back to the state.” Importantly, this was reportedly being overseen by Maj. Gen. Mohammad Bagheri, the chief of staff of the armed forces, “to show that the process is carried out by a bipartisan institution.”

Enter Defense Minister Amir Hatami’s Jan. 21 interview with the official Iran daily, which has been making waves. Speaking about the divestment of the IRGC and the army, he said, “Responsibility for this task has been assigned to the General Staff of the Armed Forces by … the supreme leader, and the General Staff is pursuing this matter with all armed forces until these forces will exit irrelevant economic activities.” Hatami added that the activities of the military in the economic realm will continue per the needs of the government.

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