On Monday morning, the Iranian Privatization Organization hosted a delegate of Czech economists headed by Professor Petr Derulak alongside honorary Czech ambassador in Tehran. The goal of this meeting was to discuss and exchange ideas and to transfer experience of Czech Republic in successful privatization that took place from 1989 to 1996 to the Iranian officials. The delegate also included experts from Swiss Forfait and European Trade Union Institute.
The meeting began with Dr. Mohammad Tabar’s remarks and presentation on the economic statistics of the I.R. Iran and its pivotal role in the region as economic powerhouse. The introduction also included historical background and ties of two nations mentioning Machine Sazi Tabriz’s establishment by Czech engineers in 1960s. Dr. Tabar explained the formation of privatization mandate and article (44) framework to his counterparts. This part included elaboration on “Justice Shares” and how it is divided into 30 cooperative provincial investment companies. The Czech economists found our approach in enabling the lowest-income Iranians to benefit from the privatization process as an innovative attempt to maximize social utility.
Professor Derulak and his colleagues acknowledged that the I.R. Iran is in a better position to perform privatization today than Czech Republic was in 1990s. The large population and the size of its economy as well as developed financial system, have given the country leverage to better negotiate with private sector participants and foreign investors. Moreover, our guests reminded the Iranian side that creating and enforcing strong corporate governance within the portfolio companies in a manner that aligns principal and agent interests is the single biggest challenge in the privatization realm. They stressed the fact that privatization itself shall not be deemed as the ultimate goal rather future success of the divestitures. In response to their concerns, Mr. Pouri Hosseini mentioned that the I.R. Iran has been always pursuing privatization mandate alongside the taxation reform and improvement of business environment and has never overlooked the importance of multi-faceted reforms.
In the last section of the discussion, Czech economists cautioned their counterparts in dealing with multinationals as part of ceding process. While realizing the technology and know-how spillover of multinationals acquiring local companies, they warned about the possibility of these divestitures functioning as loss minimizes and profitability boosters for the other subsidiaries of the multinational located outside the subject country. They recommended finding a balance for this challenge and reiterated Iran’s negotiating leverage in dealing with such corporations. At the end, Mr. Pouri Hosseini and Ambassador Čumba agreed to further collaborate in attracting more Czech investors towards Iranian Privatization Organization and its portfolio companies.