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IRAN

NEWS REPORT
 

 

In-depth Business Intelligence

Key Economic Data 
 
  2002 2001 2000 Ranking(2002)
GDP
Millions of US $ 107,522 114,100 101,600 34
         
GNI per capita
 US $ 1,710 1,680 1,650 115
Ranking is given out of 208 nations - (data from the World Bank)

Books on Iran

REPUBLICAN REFERENCE

Area (sq.km)
1.648 million

Population
66,128,965

Capital
Teheran

Currency
Iranian rials

President
Mohammad Khatami-Ardakani

 

Update No: 036 - (23/11/04)

Conservatives and reformists: who is the most divided internally?
As the presidential elections get closer, the two camps appear increasingly divided about whom to support. The progressive wing of what used to be the reformist front is now pushing for the former Minister for Science, Research and Technology Mustafa Moin to be selected as a joint candidate of all the reformist groups. Moin, a scientist who supported the Islamic Revolution from the beginning, served in Khatami's governments and resigned in 2003 following a clash with the parliament. Moderate reformists, on the other hand, are not keen on Moin, whom they see as too close to the Islamic left, and are increasingly gathering behind former president Rafsanjani. A centrist more than a reformer, Rafsanjani would find it easier to work with the conservative majority in the parliament. Moreover, contrary to Moin, Rafsanjani would have good chances of winning. Even if he is unpopular among reformist voters, many of them might support him in order to prevent the conservatives from achieving complete domination of the political system.
At the moment, the conservatives appear even more divided. Old guard traditionalists are divided between Aliakbar Velayati, a former minister of foreign affairs, and Ali Larijani, a former chief of radio and television. The neo-conservatives, who control the parliament, are discussing whether Mahmoud Ahmadinejad, the mayor of Teheran, or Ahmad Tavakoli, a member of parliament, would be the best choice. A divided conservative front would likely be defeated by Rafsanjani. It is not a chance that the conservative press started running a campaign against Rafsanjani's family, although some supporters of Velayati have already stated that they would rather support Rafsanjani than a neo-conservative candidate. On the other hand, an old guard conservative would find it difficult to defeat Rafsanjani, even if he was the only right-wing candidate. 
While the discussion on the candidates for the May Presidential elections go on, the conservatives are still carrying on their unrelenting campaign against the progressive media. In November, two more journalist were arrested, while hundreds of pro-democracy sites have been blocked and several of their promoters arrested.

The nuclear program: will the deal work?
On the international front, the confrontation of the Iranian nuclear program continued to steal the scene. The preliminary agreement with the European Union countries, to suspend the enrichment of the uranium in exchange for trade, security and technological incentives, did not satisfy the Bush administration. Some diplomatic sources claimed that Iran was exploiting the few days left before the coming into force of the suspension in order to produce as much gas as possible. Moreover, there are different interpretations of the deal. Some Iranian officials argue that the suspension will last only a few months, until experts of both sides reach a conclusion about the military or civilian nature of the program. In any case the fact that China came out strongly in support of the Iranian position makes unlikely that the Security Council will approve punitive measure against Iran even if the US push for it. There is speculation that the Chinese might go as far as vetoing a resolution aiming in that direction. 

Oil bonanza has little direct impact on Iranian economy
Since Iran earns an additional US$900 million for every $1 increase in the price of oil, it is expected that it will earn US$10 billion more this year. This money is expected to be saved in order to be spent in the future. It is probably a wise decision, since if it was invested in the Iranian industry as it is it would probably be wasted. Despite widespread recognition that Iran needs to expand its use of capital-intensive methods, so far progress has been slow. In fact, the investment productivity index decreased by 2.2% each year over the last four years, while manpower profitability has increased by a significant, but still modest 2.4% on average during the same period. As a result, job creation continues to lag behind the target, with 2.28 million jobs created in 2000-2004, as opposed to the planned 2.57 million. It is not all bad news, however. The Sadra industrial group is willing to partecipate in one of the South Pars project's phases, a sign that the Iranian industry is developing its capabilities in the oil sector. The government is keen to see Iranian companies increasingly replace multinationals in the oil and gas industry. 

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ENERGY

Second Armenia-Iran power cable to be built end-2004 

Iranian energy company Sanir is to complete building a second high-voltage power cable between Armenia and Iran by the end of 2004, Saak Abramian, director general of Armenia's ZAO High-Voltage Power Cables, Interfax News Agency reported.
He said the second line would make it possible to double the flow of electricity between Armenia and Iran. The cable is being constructed based on an energy cooperation memorandum between Iran and Armenia, signed in Yerevan in July 2002, he added.
Under this memorandum, Iran provided Armenia with a credit of 8.4m Euro to build the second power line, which would be repaid with electricity supplies from Armenia. During the summer, Armenia supplies electricity to Iran, and imports electricity from Iran in winter. Armenian Energy minister, Armen Movsisian, said that a third line might be built, along which Armenia could supply electricity to pay for gas supplied through the Iran-Armenia pipeline, which should start no later than January 2007.

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