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Will Iran’s military really divest from business holdings?

Despite its complex challenges, the Iranian military’s planned divestment from the economy holds the potential for more transparency and accountability.
Iranian soldiers march during the annual military parade marking the anniversary of the outbreak of its devastating 1980-1988 war with Saddam Hussein's Iraq, on September 22,2017 in Tehran.
President Hassan Rouhani vowed that Iran would boost its ballistic missile capabilities despite criticism from the United States and also France. / AFP PHOTO / str        (Photo credit should read STR/AFP/Getty Images)
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A significant recent development in Iran’s attempts to liberalize the country’s investment climate was the announcement by Defense Minister Ali Hatami that military organizations have been tasked by Supreme Leader Ayatollah Ali Khamenei to divest from "nonrelated" economic activities. Al-Monitor recently discussed the implications of this instruction, especially the fact that it will be difficult to find buyers who are prepared to invest in assets that have been controlled by military organizations over the past two decades. In this article, we will look at the entities at the core of this process and try to figure out what scenarios could emerge over the next few years, especially how the ownership structures could change.

Focusing on the military owned enterprises in Iran and the assumed process of divestment, there will be two core questions: What can be described as “nonrelated” activity, and which owners within the military sector would be compelled to divest their assets. There is a lot of ambiguity on both levels.

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