Iran minister denounces IMF weakness on developed economies

06/10/2009 | Gareth Smyth

Reiterates stance against dollar primacy

The Iranian finance minister said on Tuesday that the global economic crisis was the result of inadequate regulation in advanced economies.

Shamseddin Hosseini told a plenary session at the annual meetings of IMF and World Bank in Istanbul that the bodies had “proved incapable” of predicting the crisis.

While “constantly” monitoring developing countries, the IMF and bank had failed to give “due consideration” to the growth of “paper assets and derivatives” in the developed world, the finance minister said.

Hosseini used a subsequent a press briefing to reiterate Iran’s argument against the dollar’s primacy in international markets.

He said Iran had been involved for “some time” in discussions over shifting the denomination of oil sales away from the dollar. Hosseini was speaking just hours after Muhammad Al Jasser, the Saudi Central Bank Governor, dismissed a report in a London newspaper of secret meetings of oil producers and buyers to abandon the dollar as the accepted currency for pricing oil sales.

Hosseini also told journalists that allegations made by US Treasury Secretary, Timothy Geithner, on Sunday to the IMF Financial Committee over Iranian banks’ money laundering were “false”. Hosseini said Iran had clear laws against laundering and that, more importantly, it was haram (forbidden) in Islam.

Iran has used the annual meetings to call for reform of IMF and World Bank structures to give greater representation to developing countries.

Hosseini told the plenary session there should be a transfer of “close to 6%” of voting powers to “developing and transition countries”. Such a move has also been supported by the G24 group of emerging nations, of which Iran is a member.

In his press briefing, Hosseini defended Iranian government policy, which he said had helped the country weather the worst effects of the global crisis. He said that while $20,000 billion of “market value” had been lost worldwide, the Tehran stock exchange had risen by 40%.

Hosseini said the government would “very soon” publish its official estimate of growth for 2008/9. The IMF has projected growth of 1.5% in 2009, after 2.5% in 2008, 7.8% in 2007 and an average of 5.4% from 1996 to 2006.

Hosseini acknowledged there had been some effect on Iran’s economy from falls in oil prices.

He said the government was committed to its privatization programme, under which 80% of state-owned companies will be sold. He dismissed the government’s critics, who say the scheme is merely moving ownership between state-owned and quasi-state-owned bodies.

The recent sale of a 50%+1 stake in Telecommunications Company of Iran (TCI), he said, had raised “around $8 billion”. The buyers, he added, were 12 companies acting as a consortium.

“None is controlled by Sepah,” he added in response to a question about Iranian media reports that at least two buyers were affiliated to the Islamic Revolutionary Guard corps (IRGC). Sepah is the colloquially used name of this military body that has expanded its economic role in recent years.

But Hosseini conceded that “part of the shares” of “some” of the companies” were held by IRGC retirement funds.

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