Head of Iran's chamber of commerce, a conservative, and an economist and university professor who is a member of the Tehran chamber of commerce, both blamed the country's economic stagnation on the Article 44 of the constitution, which nationalzed major industries 25 years ago. Head of the Iran’s Chamber of Commerce Alinaqi Khamoushi said all experts agree that the Article 44 of the Islamic Republic constitution has not reached its goals. Economist Ali Rashidi, a member of the Tehran chamber of commerce said the constitution was drafted under certain conditions, and has many problems, and the nationalization clause is its biggest problem.
Article 44 of the Islamic Republic constitution, ratified after the 1979 revolution, resulted in nationalization of a wide spectrum of industries, from steel production to auto manufacturing, to banking, insurance, mining and large agricultural concerns, and reduced the private sector to a secondary, complimentary role to government and cooperative sectors. This article later became the greatest tool in the hands of government managers of industries, who resisted privatization.
The drafters of the Islamic Republic constitution were revolutionaries inspired by the anti-bourgeois, anti-liberalism and anti-capitalism of the 1960s’ leftist European ideologues. Since the revolution, many have tried to somehow undo this clause, or bypass it. For example, its opponents pointed out that the Article 43 right before it warns the government against becoming “the absolute employer;” and a line at the end of Article 44 says the government, private and cooperative sectors should not damage the development process. Neither of these and other legal arguments has so far managed to reduce the shadow of the Article 44 on Iran’s economy. The solution maybe revising the constitution, but that would cause a whole new set of problems.
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