A pivotal power struggle is underway in Iran 's private sector. For the fist time in 27 years, independent entrepreneurs have an opportunity to gain control of Iran 's Chamber of Commerce, Industry and Mining, an organization that exerts considerable influences over the country's economic life.
Up until now, the chamber, or ICCIM, has been controlled by a highly secretive organization named Jamiat Motalefeh Eslami, or the Islamic Coalition Society. Motalefeh, as it is commonly referred to, was created in the 1960s by lay Muslim activists to support Ayatollah Ruhollah Khomeini's efforts to topple the Shah's regime. Since the 1979 Islamic revolution, Motalefeh has worked closely with traditionalist clerics, an arrangement that has proved profitable for the organization.
In the 1980s, as a result of crisis conditions created by the Iran-Iraq war, Iran's revolutionary government was forced to back away from its socialist-oriented policy course, and cede control over parts of the economy to the country's entrepreneurial class. This involved allowing selected bazaar-based merchants to set up commercial companies that then distributed billions of dollars worth of imported goods to the populace. These selected merchants were invariably members or sympathizers of Motalefeh.
Overnight, with Ayatollah Khomeini's blessing, Motalefeh became the effective custodian of Iran's private sector. Since that time, Motalefeh's stranglehold over the ICClM has been near total. The chamber, in turn, plays an important role in shaping Iran's fiscal and economic policies. The chamber has long been tightly controlled by its chairman, Alinaghi Khamoushi, along with his two top aides, all of them hailing from Motalefeh. But after making a serious political miscalculation, Khamoushi now finds himself struggling to retain his control of the ICCIM.
The origins of Khamoushi's difficulties go back four years, to the ICCIM's previous leadership vote. At that time, former president Mohammad Khatami's reformist administration was still in power, and it forced Khamoushi to allow independent candidates from the private sector to compete for seats on ICCIM's 60-member board.
Surprisingly, the independents headed by a maverick businessman, Mohammad Reza Behzadian won the largest of votes in the 2003 election. Behzadian himself gained the important post of chairman of the Tehran Chamber of Commerce. The victory, however, proved short-lived. First, Khamoshi used his connections with the conservative-dominated parliament to engineer a cutoff of funds to the Tehran chamber. He also orchestrated Behzadian's ouster from the Tehran post, replacing him with a moderate-conservative businessman named Mohammad Nahavandian.
With the approach of this year's vote, Khamoushi attempted to disqualify all potential rivals for power, including Nahavandian. In doing so, he appears t ached. His infuriated opponents made use of their own political connection to secure a February 11 decision by the Supreme Supervisory Council overruling Khamoushi, and permit an open ICCIM vote. Nahavandian, for example, is a high-powered economic advisor to the country's National Security Council and is reportedly on friendly terms with both President Mahmoud Ahmadinejad and the country's other leading political figure, Aliakbar Hashemi Rafsanjani. [For background see the Eurasia Insight archive].
In the February 21 election, Behzadian and other pro-reform independents won most of the votes in Tehran and in several provinces amid heavy turnout. The election results prompted jubilation in some entrepreneurial circles. Sarmayeh, a pro-business newspaper, called the vote a "huge milestone." Another pro-business paper, Eghtesad-e No, described the balloting as "among the most important events the business community has seen in over two decades."
According to an informed source in Tehran who backed Behzadian in the ICClM election, the reformists and independents are hoping to make significant changes in the chamber's structure and activities, including fostering greater transparency within the organization, as well as giving Iranian venture capitalists a greater say in its operations.
Behzadian and his allies also are interested in establishing a level playing field for the upcoming round of privatization, which was announced by Iran's Supreme Leader Ayatollah Ali Khamenei during a February 19 policy address. In the speech, Ayatollah Khamenei complained that privatization directives were not being implemented by the government, according to a report distributed by the official IRNA news agency. The Supreme Leader went on to characterize privatization as needed to "make a breakthrough in the financial well-being of every individual."
Last summer, the Supreme Leader ordered the privatization of 80 percent of state-owned entities, not including firms connected with the energy, defense and security sectors.
The most immediate challenge facing the ICClM independents, however, concerns the Board of Directors' composition. Their ability to press a reform agenda will depend on the number of seats they can gain on the ICClM national board, as well as on the Tehran and various provincial boards.
Khamoushi and his allies are reportedly engaged in an intense lobbying campaign with top government officials to retain their seats and the chairmanship of ICCIM. Ahmadinejad's administration enjoys the right to appoint 20 out of 60 board members. Given that three factions - headed respectively by Khamoushi, Behzadian and Nahavandian - are vying for the ICClM leadership, the government-appointed board members are likely to determine the organization's future direction.
The presidential administration has yet to make its appointments to the ICClM board. Some Tehran political observers believe authorities will eventually throw their support behind the ICClM faction that promises to back the government's current economic policies, as well as to provide assistance to companies recently established by former top commanders of the Revolutionary Guards. Many of these former commanders are closely aligned with Ahmadinejad.
The same Tehran analysts believe Khamoushi and Behzadian are not willing or able to meet the Ahmadinejad administration's conditions for support. Thus, they suggest that Nahavandian's faction would seem at present to stand the best chance of taking control of the ICCIM.
