History of Divestment

In modern economic history, production and commercial units—both private and public—have evolved alongside one another, shaped by temporal necessities and the stages of economic development. Undoubtedly, the existence of private units in manufacturing, trade, and services has been a hallmark of human civilization. The divestment of state-owned companies emerged as a policy aimed at enhancing the efficiency and value of commercial enterprises. During the 1980s and early 1990s, this policy was widely implemented across many countries, particularly in developing nations.

  1. These factors led governments worldwide to initiate the transfer of state-owned companies. To achieve this, governments—considering the economic conditions of their societies and the status of the companies—employed methods such as public stock offerings, direct sales, transfers to managers and employees, asset sales, and management or lease contracts to facilitate the divestment process.

    A brief review of divestment processes in most countries clearly shows that all nations laid the necessary groundwork for success prior to implementation. Before initiating divestment, companies underwent financial and managerial restructuring, non-economic objectives were eliminated, necessary measures for addressing employment challenges were anticipated, supportive legislation was enacted to streamline the process, and governments provided full political commitment to ensure essential support for the private sector.

    In Iran, the history of divestment can be traced back to the late Constitutional Revolution era. However, systematic and serious divestment efforts began in 2006 under the framework of the general policies of Article 44 of the Constitution, which mandated the transfer of state-owned economic enterprises to the private and cooperative sectors. Subsequently, in 2015, Articles 16 and 17 of the Law for Removing Production Barriers further emphasized this direction.

    The objectives of implementing these laws include:

    • Accelerating the growth of the national economy,

    • Expanding public ownership to ensure social justice,

    • Enhancing the efficiency of economic enterprises and the productivity of material, human, and technological resources,

    • Increasing competitiveness in the national economy,

    • Raising the share of private and cooperative sectors in the national economy,

    • Reducing the financial and managerial burden on the government in economic activities,

    • Increasing overall employment levels,

    • Encouraging public savings and investment, and

    • Improving household incomes.

    These measures collectively aim to foster a robust, diversified, and competitive economic landscape in Iran.