I.R.G.C. Commander Rejects Rouhani’s Criticism about Guards' Role in Iran’s Economy

By Ahmad Majidyar | Fellow and Director of IranObserved Project - The Middle East Institute | Jun 27, 2017
I.R.G.C. Commander Rejects Rouhani’s Criticism about Guards' Role in Iran’s Economy

The chief commander of the Islamic Revolution Guards Corps has rejected President Hassan Rouhani’s criticism of the I.R.G.C.’s involvement in Iran’s economy and defended his forces’ track record, the Iranian media reported. According to I.R.G.C.-affiliated Tasnim News Agency, Major General Mohammad Ali Jafari said it was inappropriate for government officials to “delegate difficult tasks with minimal profits to Sepah [I.R.G.C.] and boast about projects executed by Sepah… but at the same time speak unfairly against Sepah.” Jafari made the remarks after Rouhani said last week that “part of the economy was in the control of a government without a gun, and we gave it to a government with a gun – this is not economy and privatization.” Rouhani’s comments referred to the Ahmadinejad administration which transferred the ownership of government assets and projects to the I.R.G.C. under a privatization scheme.

Without naming Rouhani, Jafari blasted the president’s remarks and emphasized that the I.R.G.C. is the main guarantor of Iran’s security and stability. “A government without a gun is humiliated and ultimately forced to surrender,” he said, adding that the Iranian people need the I.R.G.C.’s help now more than ever before.  

Comment: In the past decade, the I.R.G.C. has turned into Iran's most significant economic powerhouse and dominates the country’s key sectors such as energy, construction, telecommunication, media, mining, electronics, automobile, banking, and shipping, among others.  While I.R.G.C. leaders claim their involvement in the economic sector benefits the Iranian people and economy, in reality the I.R.G.C spends most of the revenues on military expenditures at home and abroad.

Khatam al-Anbia, the main construction and engineering arm of the I.R.G.C., and its front companies implement major projects not only inside Iran but also in regional countries, particularly in conflict zones such as Syria and Iraq. The company is one of the main sources of revenue for the I.R.G.C.

Over the past four years, the Rouhani government has failed to rein in the I.R.G.C.’s growing role in the Iranian economy. In April, the commander of Khatam al-Anbia said it would finish ten major projects in the new Iranian year, which began on March 21. According to General Ebadollah Abdollahi, the ten mega-projects the completion of four phases of Iran’s South Pars gas field, completion of the Persian Gulf Star gas condensate refinery, construction of gas and natural gas liquid (N.G.L.) factories, a project to control surface runoff, construction of a freeway south of Tehran, building a high-speed railroad connecting Tehran to Isfahan, development of the southeastern port of Shahid Beheshti, and construction of two steel factories in the cities of Mianeh and Baft.

Last year, Abdollahi had announced that $25 billion in investment funds had been allocated to the ten mega-projects, and he had asked for $6 billion more to complete the projects.

Khatam al-Anbia, and other I.R.G.C.-affiliated companies, benefited greatly from the privatization program of former President Mahmoud Ahmadinejad. In 2006, the company secured deals worth at least $7 billion in the oil, gas, transportation and other sectors. In October 2007, the U.S. Department of Treasury designated Khatam al-Anbia and several other I.R.G.C. companies under E.O. 13382 as part of a plan to counter Iran’s bid for nuclear capabilities and support for terrorism. And in February, 2010, the Treasury took further action against Khatam al-Anbia by designating the company’s commander, General Rostam Ghassemi, and its subsidiary companies. As the Treasury noted, the I.R.G.C. uses profits from Khatam al-Anbia for its illicit activities, including nuclear proliferation and support for terrorism in the region.

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