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IRAN


 

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: 034 - (30/09/04)

Iran takes nuclear diatribe one step further
During September the main development in Iran's nuclear saga was the declaration of President Khatami that Iran would start enriching uranium, disregarding whatever the international community might think about it. The IAEA report issued in early September, that absolved Teheran from the accusation of having started to enrich uranium for an atomic bomb, might well have encouraged Teheran to take such a new step. Iran has the legal right to enrich uranium, according to the Non-Proliferation Treaty, but the Americans in particular are distrustful of the ability of the IAEA to effectively monitor how the enriched uranium is going to be utilized. Already at the beginning of September the EU had threatened that if Iran developed weapons-grade uranium its relations with Europe would be at stake. As the end of the month approached, the Bush administration claimed that a draft resolution on Iran's nuclear program had been agreed with the Europeans, although this has not been confirmed by European sources yet.
In Afghanistan Teheran's foreign policy faced a new situation in September, with the removal of Iran's main ally in Western Afghanistan, the governor of Herat Ismail Khan. Although Teheran gave its consent to the move, opting to improve relations with the central government in Kabul, some factions within the regime might not have been as happy. The Afghan government was keen to offer improved relations between the two countries in exchange and on 26 August an agreement on economic cooperation was signed. Iran will contribute to the training of Afghan technicians and provide books and software, as well as building a road in Western Afghanistan. In Iraq too Iran is facing rapid and constant changes in the political situation. Although the Iranian government authorities probably appreciate Al-Sistani's ability to influence US policies in Iraq, the hardliners in Teheran seem keen to promote chaos in Iraq, as a way to legitimize their own role and tie the Americans down for as long as possible. 

Looking for candidates
Iran's internal politics is becoming more and more focused on next year's presidential elections. The various political groups are looking around for suitable candidates. The reformists seemed to be converging on the name of Mir Hussein Mussavi, a former prime minister, but he does not look too keen. His refusal might create a vacuum where the reformists, in order to avoid the victory of a hard line conservative, might opt for supporting Hashemi-Rafsanjani as the lesser evil. This is at least what Rafsanjani himself thinks, as he started meeting reformist groups during September. Rafsanjani has long been trying to position himself as the leading pragmatist and centrist in the Iranian political landscape. Mainstream conservatives are instead beginning to converge on the name of Ali Akbar Velayati, a former foreign minister who has high name recognition among the population. 
In the meanwhile, the hard line conservatives keep trying to push for a more radical agenda. The judiciary, for example, has recently declared that it wants to purge the Iranian film industry of "corrupt" artists. 

Paradoxes of Iran's economy
One of the paradoxes of Iran's economic system is that high oil prices are not necessarily always a blessing. The National Iranian Oil Company (NIOC) is now going to ask parliament to authorize the expenditure of a further US$1.1 billion for importing gasoline. Because gasoline is sold at very low, subsidized prices, consumption is very high and growing and domestic production cannot keep the pace. Imports grew from 100,000 bpd to 160,000 bpd this year. NIOC is in favour of abolishing the subsidy, but the parliament fears a political backlash. There are plans to increase gasoline production at the Bandar Abbas refinery to 640,000 bpd from the current 232,000 bpd by 2007, but it appears likely that the deadline will not be met and that imports will keep growing for a at least a few more years. 
Another example of self-inflicted economic pain is the carpet industry, which in many regards is a success story, with exports constantly rising, but is suffering from the involvement of a large number of organizations and institutions which have little to contribute to its further development, such as the Ministries of Cooperation and of Agriculture, the Imam Khomeini Relief Committee, the Martyrs Foundation, the Handicrafts Organisation, etc. There is also a lack of coordination among agencies such as the Ministry of Commerce, the Carpet Joint Stock Co and Iran's Development Centre. 
On the other hand, Iran's economic development continues to suffer from bad relations with the US, which are stepping up their pressure to isolate the country economically. The Japanese consortium which was awarded the right to exploit the huge South Azadegan oil field is falling apart under such pressure. One of the companies within the consortium, Tomen Corp., has already pulled out, while another one, Japex, is considering to do the same. Inpex Corp., which appears inclined to stay on, has tried to attract Royal Dutch/Shell into the consortium, without success, and is now trying to convince a number of other oil companies, such as Total, Statoil and others. Despite the attempt to make buyback deals more attractive to foreign companies, most of these still do not find this type of contract attractive enough. The attitude of NIOC, which sometimes adds extra clauses to the contract, does not help either. For example, in the case of the Ahwaz Bangestan oil field, NIOC is asking that the bidder agrees to buy 5 million tonnes LNG from Iran's state company, which will surely contribute to delay the reaching of a deal. 

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ENERGY

Shell eyes new oil field development contracts in Iran

Royal Dutch/Shell Group, Europe's second largest oil company by market value, has bid recently to develop new oil fields in Iran as its existing development contract has expired, a Shell spokesman said. The Iranian National Oil Co, the number two state-owned oil company in the Middle East, said that it was reviewing bids by foreign companies to explore and develop 16 potential oil fields. No more than 30 companies bought the tender documents for the developments, Middle East Economic Digest reported.
Shell and China petroleum & Chemical Corp, known as Sinopec, "bid together in the current exploration round in Iran where we see a number of business opportunities in the longer term," Shell spokesman, Simon Buerk, said in London.
He further added, "Sinopec is a fast-growing international player and together we are pursuing a number of other opportunities." Shell is trying to boost oil reserves and production, after revealing earlier this year it had wrongly categorised more than a fifth of its holdings as proven reserves. The US Federal Securities & Exchange Commission allows companies to book oil supplies held under Iranian buy-back agreements even though Tehran forbids foreign companies from owning reserves, which are considered a national resource.
The development of the Soroush and Nowruz offshore oil fields, Shell's only existing oil holdings in the Middle East's second-largest oil producing country, are scheduled to reach total production capacity of 190,000 barrels a day by the end of the year, Buerk said. Shell also owns a 25% share in the Pars Oil Co, which produces and markets lubricants in Iran.
Sinopec, Asia's largest refiner, four years ago signed a strategic alliance agreement with Shell for operations in China, which this year overtook Japan as the world's second biggest importer of crude oil.

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FOREIGN ECONOMIC COOPERATION

Belarus, Iran sign cooperation documents

The Republic of Belarus and the Islamic Republic of Iran signed six cooperation documents in the presence of the two countries' presidents, IRNA web site reported. 
Mutual cooperation between Iran and Belarus in customs, security, cultural, agriculture and natural disasters are included in the documents. 
Belarusian President, Alexander Lukashenko and his visiting Iranian counterpart, Mohammad Khatam,i signed the statement for mutual relations' principles.

Ukrainian premier, Iraqi president discuss cooperation

Ukrainian Prime Minister, Viktor Yanukovych, has stressed during a meeting with Iraqi President, Ghazi Yawar, that Ukraine will continue to develop bilateral cooperation with Iraq in political, economic, military, technical and humanitarian areas, UNIAN News Agency reported. 
The press service of the Cabinet of Ministers quoted Yanukovych as saying that the leadership of the Ukrainian state and the Ukrainian people closely follow developments in Iraq. Yanukovych stressed that there are traditional historical ties between Ukraine and Iraq.
Yanukovych expressed confidence that a necessary foundation is currently in place to deepen cooperation between the two states at a qualitatively new level. "We are confident that the Iraqi side will appreciate us as a reliable partner and friend," Yanukovych said. Ukraine sees Iraq as a country with a great future, he added.
Yanukovych believes that in the coming years Iraq will take a decent place not only in the Middle East.

Iran wants to participate in Bosnia reconstruction -Rafsanjani

The head of the Expediency Council, Hojjatoleslam Hashemi Rafsanjani, has met Kair Aldinsahic, the director of the Merhamet Charity Institute of Bosnia-Herzegovina, Resalat web site reported.
He spoke about the principles of the Islamic Republic of Iran on supporting the Muslim and oppressed nations of the world, and said: "The government and the people of Iran are determined to actively participate in the post-war reconstruction of Bosnia-Herzegovina." 
Rafsanjani further said: "Of course, as we have witnessed, America resisted Iran's humanitarian assistance by creating obstacles." Hashemi Rafsanjani, announcing the readiness of the Iranian Government and the nation to support and assist the people of Bosnia-Herzegovina said: "The Islamic Republic of Iran, enjoying the successful experience of post-war reconstruction, is ready wholeheartedly to share experience with the Muslims and seriously and actively participate in the reconstruction of that country."
According to the report from the Expediency Council, the director of the Merhamet Charity Institute of Bosnia-Herzegovina, who was in Iran at the invitation of the Imam Khomeyni Relief Committee, explained the activities of the Merhamet Institute and said: "On behalf of the government and the nation of Bosnia-Herzegovina I want to thank the people and the government of Iran for their sincere support for the people of my country during and after the war." Mr. Aldinsahic, referring to the rich culture and civilization of Iran said: "We intend to use the experience of Iran, especially that of the Imam Khomeyni Relief Committee." The director of the Merhamet Charity Institute thanked the Imam Khomeyni Relief Committee for its cooperation with his institute.

Iran, Turkmenistan discuss ways to boost bilateral cooperation

Turkmen President, Saparmurat Niyazov, and Iranian Foreign Minister, Kamal Kharazi, have discussed Turkmen-Iranian cooperation, New Europe reported. 
Kharazi was accompanied by Iran's Caspian envoy, Mehdi Safari, and Iranian Ambassador to Turkmenistan Gholamreza Ansari. Bilateral and international issues were addressed during the talks, the Turkmen presidential press service announced. The parties stated that annual trade between Turkmenistan and Iran is likely to reach €1bn in the near future. Both Niyazov and Kharazi spoke about a fast pace of cooperation, primarily in trade, the energy sector, transport, the oil and gas complex, and the construction of motorways. The talks also deal with the definition of the legal status of the Caspian Sea. Kharazi said, "A large step has been made in this direction." The parties will advance along this way "until the problem of the Caspian's Sea's legal status is finally settled," he said.

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PETROCHEMICALS

Iran exports over 2.7m tons of petrochemicals 

Iran exported over 2m 700 thousand tons of various petrochemical products, valued at $814m, since the beginning of the current Iranian calendar year (started March 20, 2004), IranMania.com reported. 
The Persian-language daily 'Abrar-e Eqtesadi' quoted deputy head of Iran's Petrochemistry Organization for foreign trade affairs, Yousef Mosafer, as saying that 22% of Iran's petrochemicals were exported to Japan. 
He added Iran also exported petrochemical products to India, China, South Korea as well as Middle Eastern, European and African countries this year. The official noted that the value of Iran's petrochemicals export would reach $1.8bn by the end of the current year. 
Mosafer said that chemical materials, aromatics, polymers, gas liquids and raw materials for chemical fertilizers are all important products exported. 
He pointed to the role of Iran's representatives outside the country in export of petrochemical products, saying 30 representative offices have been so far set up for marketing petrochemicals but the figure would be increased due to the agreements reached in this regard.

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