The battle between Iran’s reformists and conservatives over foreign investment is unlikely to end soon, with polarization centering on a bill that could define the future path of the republic’s economy.
According to a Radio Free Europe report, a conflict over the direction of Iran's troubled economy began last month on May 16, when the country's reformist-led Parliament passed a new bill to attract and protect foreign investment.
The new bill would streamline procedures for foreign investors, confirm the legality of foreign ownership of more than 49 percent in joint ventures, and give more favorable terms for repatriating capital and profits. The bill was intended to replace a current law which dates back to 1956.
The bill was seen by parliamentarians as a way in which Iran -- like many countries with struggling economies -- could benefit from foreign investment to create jobs. Under its five-year development plan up to 2005, Iran is seeking an annual 7 percent rise in investment to create 800,000 jobs a year for its booming population, sayd the RFE report.
But the Guardian Council, which oversees legislation for adherence to the values of the Islamic Revolution, rejected the bill on its first presentation.
Iranian media carried a letter signed by the secretary of the Guardian Council, Ayatollah Ahmad Jannati, stating the body's rejection of the bill. He wrote: "implementation of the [Parliament]-approved bill would jeopardize the country's independence and territorial integrity and could lead to its infiltration by foreign investors and eventual domination of the country's economy."
He added that the bill would also mean that "preference will be given to Iranians residing abroad and will lead to unjust discrimination."
By rejecting the bill, the Guardian Council opened a new battle with the parliamentarians in which it appealed to patriotic elements, such as independence and territorial integrity, to hold off efforts to change the Islamic republic's economy.
Parliament is expected to now make some minor adjustments to the bill before resending it to the Guardian Council. If it is rejected a second time, the matter will be referred to an Expediency Council, which rules in disputes between the two bodies.
The Expediency Council assembles at the call of Iran's Supreme Leader Ayatollah Ali Khamenei, in instances when the Guardian Council is presented with legislation from Parliament which opposes or falls outside the realm of the constitution or religious injunctions. The Expediency Council is formed of members chosen by the supreme leader and its rulings, which must be approved by Khamenei, are final.
A member of Parliament told RFE that he expected the Guardian Council to reject the bill on second presentation. But Mohammad Shahi-Arablou said he felt the bill was likely to be endorsed by the Expediency Council:
"My perception is that the Parliament and Guardian Council will not concur. The Parliament has to insist on its suggestions so that this bill is referred to the Expediency Council," where it would be approved.
Economist Fariborz Raies-Daana, speaking from Tehran, told RFE that every country needed outside capital to develop. But he said Iran must be cautious in opening its economy to prevent possible exploitation:
"Everyone needs [foreign investment], even the US. But from an economist's point of view, it is not a good idea to blindly accept any foreign investor who comes here. We should not necessarily think that all foreign investment brings technical development and creates capital and employment, or leads to economic growth."
According to the report, supporters of the foreign investment bill are encouraged by the fact that the Expediency Council has previously approved of laws allowing private banking and the establishment of free trade zones after their rejection by the Guardian Council.
In a related development, a US House of Representatives panel has voted for a bill that would extend US sanctions on Iran and Libya for the next five years, reported Middle East News Line.
The House International Relations Committee approved a bill on Wednesday that would continue restrictions on Tehran and Tripoli and set a limit on foreign investment in those countries. The bill essentially resumes the 1996 sanctions law, which expires in August.
The bill will now move to the full House. Congressional sources said they expected both the House and Senate to approve the bill by wide margins, according to MENL.
The Bush administration has tried to amend the bill to give the White House greater leeway in dealing with Iran and Libya. This includes limiting the sanctions for two years rather than five. A bill introduced in the House that would limit sanctions to two years was voted down by a wide margin.
Both Iran and Libya are on the US State Department list of terrorist sponsors – Albawaba.com
© 2001 Al Bawaba (www.albawaba.com)
