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IRAN


 

 

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: 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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