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Books on Iran
REPUBLICAN REFERENCE
Area (sq.km)
1.648 million
Population
66,128,965
Capital
Teheran
Currency
Iranian rials
President
Mohammad Khatami-Ardakani
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Update No: 035 - (26/10/04)
A gathering storm?
Many wonder whether the highly rhetorical campaign being run by the Bush
Administration against Iran is just an excuse to show the Administration's
muscle or whether it is serious about Iran. Even in Iran some, like the head of
the Security Council, argue that it is in the best interest of the Iranian
regime that Bush is re-elected, because historically the Republicans have talked
a lot, but in reality the Democrats have harmed Iran more. The attempt to weaken
Teheran's potential proxies in Iraq and Afghanistan, which took place during the
summer, appear however to suggest that the Bush Administration is getting ready
for an escalation after the US presidential elections. Until then, the
Administration will seek to avoid trouble and appeared in a more talkative mood
during October, but this is not expected to last. The Iranians, on the other
hand, might be divided about the final purpose of their nuclear program, but
agree that they are not going to stop without receiving some benefit in return.
At least, if the US were to launch an air campaign to destroy nuclear
installations in Iran, the regime would benefit from a growth in anti-American
sentiment among the population. In the meanwhile, Iran's nuclear program carries
on. Russia completed in October the construction of the Bushehr Civil atomic
plant, while the conservative-dominated parliament started debating a bill which
would force the government to resume enriching uranium no matter what. The
position of the government is more moderate, but it appears clear that even
under pressure from the friendlier Europeans, Teheran will not concede more than
a temporary suspension of the uranium enrichment program.
The conservative parliament: not as pragmatic as expected
After having kept a low profile during the first several months of the new
parliament, the conservatives began taking a tougher stand during October. A
major development was the vote of no confidence for the Minister of Transport
Khorram, a reformist close to President Khatami, who had to be replaced, but the
parliament started increasing the pressure on reformist members of the
parliament across the board, to the extent that vice-president Mohammad Ali
Abtahi, another key reformist figure, decided to quit the cabinet. The
parliament also succeeded in reversing some of the reforms of the previous
reformist majority, rejecting proposals to expand the inheritance rights of
women and calling for placing more restrictions on women's social freedoms. At
the same time, the crackdown on the press and on the internet also continues.
The attitude of the parliamentary majority, which is composed of the
conservatives' new guard, is beginning to worry even the conservative old guard,
which over the last 25 years had developed a rather pragmatic approach. In part,
the recent move by the parliamentary conservative group can be read as an
attempt to form an alliance which would include hardline grass-roots
conservatives, weakly represented in parliament, possibly helping to pave the
way for a joint conservative candidate to the post of President of the Islamic
Republic. Some pragmatic moves, like the allocation of US$800 million to the
Imam Rescue Committee, a conservative social welfare organisation which had been
in the hit list of the reformists, and the decision to place the Ministry of
Intelligence under the control of the (conservative) judiciary clearly point in
that direction. The same could be said of the parliament's opposition to foreign
investment, especially in areas where organisations linked to the conservative
lobby also operate. The reformists are not just unable to stem the tide, but
have now even lost their best potential candidate for next year's presidential
poll. Mirhossein Mussavi, former prime minister (1981-1989) has in fact made up
his mind and formally announced in October that he will not stand.
Economic reforms go on, but might be affected too
Despite the new aggressiveness of the conservatives, including in matters
which affect the economy, in many regards the economic reforms are continuing.
The Expediency Council, dominated by moderate conservatives, authorised the
plans to privatise several sectors of the economy, including banking, insurance,
foreign trade, telecommunications, airlines, railways, shipping, power
generation, petrochemicals, distribution and postal services. Such plans had
been blocked by the Guardians' Council, where the presence of hardline
conservatives is stronger, and will now move forward. The plan to expand Iran's
power production by relying on private investment has already been approved by
the parliament. The suspicion of foreign involvement does not extend to every
sector of the economy either. Negotiations concerning foreign investment in the
car industry have been completed and Renault and Volkswagen will start
production between 2005 and 2006, not least because internal demand is so strong
that the 10-year ban on car imports had to be abandoned in July. Imports are
still limited to just 10,000 cars a year, but if the industry does not catch up
further concessions might become necessary. The current plan is to export half
of the Renaults manufactured under license. Worryingly, however, the vice
chairman of the parliamentary commission on industries and mines stated in
August that the plans to assemble Renault cars on a large scale jeopardises
Iran's independence and should be scrapped.
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ENERGY
472 major oil projects underway
The National Southern Oil-Rich Regions Company has 472 projects costing a total
of 26 trillion rials at hand, the company's managing director said. He added
that there are some 90 major oil and gas reserves in southern regions.
Nosratollah Espiari told ISNA that the National Southern Oil-Rich Regions
Company produces more than 3 million barrels of oil per day, stressing that the
company has produced a total of 600 million barrels of crude oil during
March-September.
"The company has also produced several trillion cubic meters of various
kinds of gases in the period," he said, adding that the company produces
some 134,000 barrels of sweet gas liquids per day.
He said oil production from southern regions account for a major portion of
Iran's oil revenues.
Iran has announced it would begin oil exploration in the northern regions of the
country from next year.
Seyyed Mehdi Mirmoezzi, managing director of National Iranian Oil Company (NIOC),
told reporters earlier this week that exploration operations in the Caspian Sea
will begin in mid-2005.
"Exploration work in the Caspian Sea should have started but has been
postponed until next year due to the delay in the construction of the main
platform by (Iran's) Sadra Company," he said, adding that exploration will
begin in deep Caspian waters as soon as the offshore platform is ready.
Iran yet to produce oil in Caspian Sea
Although the Islamic Republic of Iran holds considerable shares in Caspian Sea's
oil resources, it has not yet started exploiting oil in the region since the
Caspian Sea littoral States have failed to cooperate with Iran in this regard,
Samad Mo'men-Bellah, an expert from National Iranian Oil Company (NIOC), said,
Iran's Mehr News Agency.
"Enjoying proper geographical and geopolitical conditions to transit oil to
the Eastern and European markets via the Persian Gulf, Iran owns a great portion
of the oil resources in the Caspian Sea too," the expert added.
However, although the country is permitted, according to an agreement signed by
the former Soviet Union, to exploit oilfields resources in the region, it has
not done it since other countries in the region refuse the agreement, he said.
Although the NIOC signed an agreement with the Swedish GVA CO. and Iranian Sadra
Co. on March 2001 to construct a derrick in the area, the government has not
made any decision to exploit the reserves, he concluded.
Iran to invest in Kyrgyzstan power engineering
During a recent official visit to Kyrgyzstan, Iranian First Vice President,
Mohammad-Reza Aref, met with Kyrgyz president, Askar Akayev, Prime Minister,
Nikolai Tanayev and the speakers of both chambers of the Kyrgyz parliament.
During the meeting, the sides discussed a wide range of issues related to
strengthening bilateral political, trade-economic and cultural-humanitarian
cooperation, the press service of the Kyrgyz Foreign Ministry said, RIA-Novosti
reported.
The possibility of attracting Iranian investments to the reconstruction of small
hydro power stations on the Naryn river in Kyrgyzstan, as well as the
implementation of joint projects in tourism and housing construction were on the
agenda for discussion.
Another important issue discussed at the meetings was both sides participation
in the post-war restoration of Afghanistan, where presidential elections were
held on October 9th for the first time since the overthrow of the regime of
Islamic fundamentalists late in 2001.
On the results of Aref's visit to Bishkek, the sides will sign several
agreements on cooperation in electric power engineering and healthcare, as well
as the programme of cooperation in tourism and cultural development for
2004-2006, the foreign ministry said.
Shell secures Iranian natural gas deal with Repsol
Spanish oil group, Repsol YPF, and British-Dutch group, Shell, have signed a
project framework agreement involving the National Iranian Oil Company (NIOC)
regarding liquefied natural gas in Iran, Repsol declared on September 23rd.
Earlier the EI Pais newspaper had reported that Repsol and Shell had signed an
agreement worth 3.25bn Euro with Iran to exploit natural gas reserves.
The NIOC was recently associated with the contract which was signed in Vienna,
the report said. A Repsol YPF spokesman said, "I can confirm that we and
Shell have reached a project framework agreement with the NIOC to study an LNG
project in Iran," but added that he could not confirm the size of the
likely investment in the project. "The agreement has been signed, but
before we can proceed to the next stage, this has to be approved by the Iranian
authorities," the Repsol YPF spokesman said. He noted that no final
decision would be taken on whether the project will go ahead. EI Pais said that
about four billion Euro would be required for the extraction and marketing of
natural gas from Iran. The report said that the commercialisation of gas would
begin in 2010 with an annual production rate of seven million tonnes of
liquefied natural gas, along with an additional one million tonnes of
gas-liquefied petroleum.
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FOREIGN ECONOMIC COOPERATION
Iran, Kazakstan eye stronger cooperation
Iran would like a Caspian summit to be held in the near future, the secretary of
the Iranian Supreme National Security Council, Hassan Rowhani, said, Interfax
News Agency reported.
"Both countries said a summit of Caspian states needs to be organised in
the near future in Tehran," Rowhani said after a meeting with Kazak
President, Nursultan Nazarbayev.
A member of the Iranian delegation said Tehran suggested holding the summit in
December. Rowhani said that they had discussed the legal status of the Caspian
Sea and regional security. He said, "The presence of foreign forces in the
Caspian Sea is impermissible." The parties involved also discussed other
Caspian issues, including environmental protection, bio-resources, navigation
and cargo shipments.
Rowhani said he and Nazarbayev also considered prospects of development and
expansion of trade exchange between Kazakstan and Iran. Kazakstan and Iran have
common positions in many issues of regional security, Rowhani said. He said they
called for regional cooperation in the fight against terrorism, extremism, drug
trafficking and organised crime and support all international agreements aimed
at containing the proliferation of weapons of mass destruction.
Iranian Commerce Minister, Mohammad Shariatmadari, stressed the necessity of
setting up Iran-Kazakstan preferential tariff system. He urged the establishment
of a joint shipping line for transport of oil between Iran and Kazakstan.
Shariatmadari expressed Iran's determination to transit oil and gas via its
territory, saying that it would be better to sign an agreemnt for investment in
this field. He expressed dissatisfaction with the limitation imposed by
Kazakstan on Iranian companies for carting out development projects.
Shariatmadari called on the Kazak officials to cooperate with Iranian firms in
this aspect.
The Kazak prime minister, for his part, stressed the need to lay a pipeline
between Turkmenistan and Kazakstan, terming Iran as the most economical route
for oil transport.
During Shariatmadari's visit, two commercial memoranda of understanding (MoUs)
were signed by the Iranian minister and the Kazak minister of industry and
trade. Shariatmadari's visit took place at the invitation of Kazak Minister of
Industry and Trade, Adibek Dzhaksybekov.
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