Middle East Media and Book Reviews Online Volume 1, Issue 1

2/2/2016

Middle East Media and Book Reviews Online

Oil and Gas Privatisation in Iran: An Assessment of the Political Will
By: Reza Molavi
Oil and Gas Privatisation in Iran: An Assessment of the Political Will. London, England: Ithaca Press. 214pp. $24.95.
ISBN: 978-0863724220.
Volume: 1 Issue: 1
April 2013
Review by
David A. Grantham, PhD
Texas Christian University
In an academic environment that is heavily concentrated in Iranian social issues or political matters of state-sponsored terrorism and nuclear
capabilities, Reza Molavi’s work is a refreshing change of scenery. While scholarship chases social movements and international hostilities, Molavi
quietly turns our attention back to the powerful resource that has for decades linked Iranian politics, society, and culture. He does so with an
inventive approach centered on assessing the political will to privatize. Examining such a subjective topic takes the discussion far beyond the tired
discourse of economy and commodity. It taps into the Iranian social psyche. It engages Iranian political philosophy. The approach transforms oil
from a mere domestic resource to a commanding institution that impacts both personal and professional livelihoods. Readers will quickly realize
that the ramifications of privatization for Iranian society cannot be underestimated. Whether the wage-earner or the manager, the soldier or the
President, the debate over public versus privately held oil has, and will continue to have, enormous domestic and international consequences for
Iran.
Thematically, Molavi has chosen a difficult task. Assessing political will requires a broad sweeping analysis incorporating both the technical and
abstract. Molavi does just that. With skill and clarity, he interweaves specialized oil economics with the particulars of Iranian culture and society,
thereby creating a portrait of political will. For Iran, though, the privatization debate pivots on an “apparent reluctance” rather than a contest
between public and private (p. 1). Interestingly, “reluctance” suggests privatization is inevitable, but at what cost? It is from this vantage point that
Molavi launches his treatise.
To start, Molavi lays the foundation with four political and economic realities that, he contends, account for Iran’s political reluctance to privatize.
The first reality is the disjunction between the Iranian state and society, or as scholar Homa Katouzian calls it, the “theory of arbitrary rule” (p. 12).
Molavi argues this chasm or disconnect between the state and society severely impacts policy, especially privatization. Molavi identifies the second
reality as similar disjunction between economic and socio-political modernization. From the Shah to the Ayatollahs, the history of uneven,
government-directed modernization has created a gap between society, politics, and economy. The third reality is Iran’s economic dependence on
oil. An economy so heavily tied to one product would make it nearly impossible to withstand the market volatility associated with privatization.
One temporary economic downturn, Molavi points out, would have devastating consequences. The fourth, and perhaps most influential, is Iran’s
relationship with the West. Privatization, championed by the West, is suspect in the eyes of Iranian officials. Domestic perspectives in Iran consider
the West to be imperialistic, and therefore, taint any substantive dialogue over how to privatize. These realities act as philosophies that inform all
aspects of the privatization debate.
The body of Molavi’s work is segmented into six chapters, frequently transitioning between thematic and chronological. His recursive organization
causes redundancy at times, but that redundancy can serve to reinforce technical and abstract ideas that might otherwise be difficult to digest with
only one reference. Privatization is such a topic. At first glance the idea seems straightforward, a rather basic economic idea, however, Molavi takes
great care in explaining why it is not. Drawing largely on oral interviews with Iranian government officials and authorized publications, Molavi
divides privatization between theory and practice arguing that privatization theories arise from interplay between various actors, the international
system, and the evolution of ideas. From them emerge practices that are equally varied depending on precedence, experience, and individual
circumstances. In short, theories and practices of privatization (even in the West) are projects tailored to the actor and fluid in execution. What
makes Iran’s situation special, Molavi contends, is the relationship between religion and the state. Privatization would involve the Islamic
government, considered to be the ultimate authority over property rights with accountability only to God, to release control over oil. This essential
and decisive perspective validates, or at least rationalizes, “reluctance.” The reluctance, however, should not hamstring the government, Molavi
suggests. Models in Pakistan, Azerbaijan, and India, among others, have implemented varying degrees of privatization based on their economic and
geographical circumstances. The result is an assortment of projects in government-owned oil, joint ownership, and private oil holdings.
The next section is a critical juncture in Molavi’s monograph, one that readers should review with great care. In chapters two through four, Molavi
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