BobW
--- Yoshie Furuhashi <critical.montages at gmail.com> wrote:
> On 10/13/07, Robert Wrubel <bobwrubel at yahoo.com>
> wrote:
> > What is the difference between privatization and
> > nationalization in the countries where those terms
> > apply? Let's say the proposed Iraq oil law is as
> bad
> > as privatization gets, as close to outright
> thievery.
> > Iraqis get, what?, 15% or 20% of some extracted
> value.
> > At the other end, how much does Venezuela keep
> for
> > itself? How much does it have to pay to the oil
> > majors, or Halliburtons, to get the stuff out of
> the
> > ground and refined? And how do we describe Saudi
> > Arabia? Half privatized, half nationalized?
> >
> > Maybe Iran, the girl that everyone wants to marry,
> can
> > strike a good deal? And maybe no oil will flow
> > without marrying someone?
> >
> > BW (seeking enlightenment)
>
>
<http://montages.blogspot.com/2007/10/privatization-iranian-style.html>
> Privatization Iranian Style
>
> Iran's Press TV announces the privatization of state
> enterprises in
> the oil industry, claiming that "oil privatization
> in Iran can serve
> as a model for other regional countries" ("Iran, a
> Model for Oil
> Privatization," 7 October 2007). Is it true? If it
> were a model
> privatization according to the Washington Consensus,
> the business
> press should be jumping up and down and hailing
> Iran's power elite as
> if they were the AKP of Turkey, the West's favorite
> Islamist party,
> but they aren't. Why is that?
>
> Note that the upstream sector, i.e. the exploration
> and production
> sector, is excluded from the privatization plan:
> "Iran's Oil Ministry
> Excludes 25 Companies from Privatization" (Tehran
> Times, 8 October
> 2007). In other words, Iran's government will be
> privatizing the
> enterprises that are normally not in the state's
> hands to begin with
> in other countries.
>
> For international comparison of national oil
> companies and their
> upstream fiscal regimes, see Figure 1 on page 9 of
> Miranda L. Wainberg
> and Michelle Michot Foss, "Commercial Framework for
> National Oil
> Companies" (Working Paper, Center for Energy
> Economics, University of
> Texas at Austin, March 2007).
>
> Click on the figure for a larger view.
> Upstream Fiscal Regimes
>
> To top it off, this is what "privatization" in Iran
> looks like: "the
> fact the purchasers are themselves state entities
> casts doubt on
> whether this can be termed a real privatization."1
> It's better to
> describe this as transition "from a state-held
> monopoly to a
> state-sanctioned oligopoly" as Daniel Brumberg and
> Ariel I. Ahram put
> it.2
>
> This mode of "privatization" has complex effects:
>
> * in the long term, it is likely to create a
> caste of
> people who may eventually threaten the
> politico-
> economic foundation of the Islamic Republic;
>
> * in the short term, it gives power to the
> Bonyads
> (religious foundations) and the Pasdaran (the
> Revolutionary Guard) whose leaders, workers,
> and beneficiaries are among the sectors of the
> Iranian population who are the most
> ideologically
> invested in the Islamic Revolution and its
> brand of
> populism;
>
> * in the medium term, it may help Iran's
> government
> alleviate the following problem:
>
> While the firm is obliged to give over 25
> percent
> of its profits from crude and (when prices
> are high)
> a deposit to the oil stabilization fund,
> NIOC keeps
> for itself revenues derived from
> petrochemicals,
> gas, domestic sales of gasoline, and can
> make use
> of gas for reinjection to revive older
> fields. This type
> of arrangement provides NIOC with ample
> incentive
> to continue to work on diversifying
> Iran's petroleum
> industry, as any improvement in non-oil
> capability
> will benefit NIOC directly. However, it
> also has the
> potential for long-term conflict between
> state interests
> in maximizing the revenue from oil, and
> NIOC
> preference to focus on gas and
> petrochemicals as
> more lucrative ventures. (Brumberg and
> Ahram,
> pp. 30-31)
>
>
> 1 This is Privatization Iranian Style:
>
> The Tehran stock exchange has broken its record
> for
> the highest ever transaction on the nascent
> bourse
> with the sale of shares worth over $1 billion
> dollars in
> a state copper company, media reported
> yesterday.
>
> Twenty percent of shares in National Iranian
> Copper
> Industries were sold in less than seven minutes
> on
> Wednesday for 10 trillion rials ($1.1 billion).
>
> The purchaser was a consortium made up mainly
> of
> state companies, including the pension funds of
> the
> steel industry and state broadcasting, the
> reports said.
>
> While the shares have been sold as part of the
> government's ongoing privatization program, the
> fact
> the purchasers are themselves state entities
> casts
> doubt on whether this can be termed a real
> privatization.
>
> Another 20 percent of the company would go on
> sale
> in the next week, media reports said.
>
> The deal easily tops the previous high set
> earlier this
> year when the Iranian government sold almost
> $110
> million worth of shares in a leading steel
> company.
>
> Privatization program:
>
> The state currently has a grip on over
> three-quarters of
> Iran's economy and supreme leader Ayatollah Ali
> Khamenei last year issued a decree envisaging a
> major
> program of privatization.
>
> Drawn up by the Expediency Council, Iran's top
> political
> arbitration body headed by former president
> Akbar
> Hashemi Rafsanjani, the plan aims to ease state
> control
> over the economy.
>
> The program set out by Khamenei to privatize 80
> percent
> of public and state institutions notably
> excludes firms in
> the oil and energy sector as well as industries
> involved
>
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