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Why Iran must shake up its approach to state-owned enterprises

While the government’s general budget grabs the most attention in Iranian media, it is high time for Iran to revise the way it approaches the dilemma of the vast number of uncompetitive state-owned enterprises.
EDITORS' NOTE:  Reuters and other foreign media are subject to Iranian restrictions on their ability to film or take pictures in Tehran.

The front of the National Iranian Oil Refining and Distribution Company building is seen in Tehran November 17, 2009. Iran temporarily boosted gasoline production by about 30 percent on Tuesday to show the West it can cope with any sanctions targeting its fuel imports.   REUTERS/Morteza Nikoubazl (IRAN POLITICS ENERGY BUSINESS) - GM1E5BH1FIK01

A year ago, President Hassan Rouhani’s budget proposal for the next Iranian year (beginning March 21) sparked a heated internet debate among Iranians. The main cause of their anger was the lavish funds allocated to certain state agencies and institutions. However, what was left unnoticed and indeed in need of much more public attention was the draft budget's section on state-owned enterprises.

A litany of problems in Iran are thought to be the byproducts of budget decisions, including high liquidity growth, abnormal bank interest rates, costly business activity, money laundering, capital flight and smuggling of goods, to name a few. 

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