The law of structural and information transparency of corporations and governmental institutions aimed at accelerating the implementation of the 6th clause of Bill 44 of Islamic Republic of Iran constitution became enforceable since 4th of February 2015 for all governmental institutions and organizations, but has not been implemented in the last two years since its official notification. At the beginning of the current year, The Iranian Parliament (Islamic Consultative Assembly) issued three executive warrantees for the above-mentioned law which were notified by the President in the middle of the month of October. This law states that: 1. The National organization for civil Registration is no longer permitted to register financial documents of quasi governmental companies that do not have an official license from the Securities and Exchange Organization. 2. The Central Bank of Iran is obliged to block all bank accounts of companies that have not provided their financial reports to the Securities and Exchange Organization, 3. Directors of quasi governmental companies who do not publish their information are considered guilty.
According to the latest statistics published by official and non-official sources, approximately 19 thousand quasi governmental companies are presently active in the Iranian economy and most of these companies are sub groups of large quasi governmental institutions such as the Islamic Revolution Mostazafan Foundation, the Foundation of Martyrs and Veterans Affairs, and the 15 Khordad Foundation. After the notification of this law, the Islamic Revolution Mostazafan Foundation has the intention of selling part of its assets at the Stock Exchange in order to take a step towards further transparency; however, it is not clear to what extent such action will be realized and what will be the time frame required for achieving this step.
The above mentioned laws promise that in a near future the Iranian economy will witness the shattering of governmental monopoly. Considering the price of oil and government’s decision based on diversifying financing methods, it has the intention to transfer its properties which are mostly non-productive. The most important challenge facing governmental and quasi governmental institutions on their way to implement this law is the lack of active private sector in Iran. Most private companies that are active in Iran are not able to buyout large companies owned by the government and might only be able to bring some part of them under their ownership. Although buying government asset can to some extent increase information transparency, however since the management of these companies will perhaps stay within the government or quasi governmental sectors, it will not result in an increase in efficiency and profitability for these companies. It seems that transferring companies owned by the government or quasi governmental institutions requires more fundamental measures so that in addition to reaching the desired clarity and transparency, it can also increase the productivity of the these companies by helping the active private sector. This is only possible in condition that with proper mechanism put forward by the government, the management of these companies be gradually transferred to the private sector, and even to increase productivity of the transferred companies certain discount can be considered for the private sector.
Bearing in mind the factors pointed out above, we can infer that if laying down such law is supported and guided by the government, it can have many positive outcomes for the Iranian economy leading to further transparency and enhanced productivity. These points can be named as the missing ring of economic prosperity during these past years.