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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: 048 - (28/11/05)
Striving to avoid referral
After the IAEA decision last month, which put Iran just one step away from
referral, Teheran has been engaged in damage limitation. On 20 October Iran
handed over to IAEA the requested documents and allowed its inspectors to
question one of the key official involved in the nuclear programme.
Interestingly, US officials called this an important concession. At the same
time, Iran had been putting pressure on IAEA members not to vote in favour of a
referral on 25 November, when the next session at IAEA takes place. The South
Koreans have been the most heavily targeted, with a ban on some of their
exports, even if it is clear that South Korea's vote in October was motivated by
its concerns with North Korea and not by a particular willingness to align with
the US. Other tools are being used with some countries. For example, in the case
of India, Iran despatched its officials to convince the left wing parties in the
government coalition to maintain pressure on the Indian Prime Minister not to
vote for a referral.
In the event, the IAEA have postponed a referral to the UN Security Council
following an inconclusive debate. Both the US and the troika of European powers
involved in negotiations, Britain, France and Germany, sensed some signs of a
shift in the Iranian position and decided to allow more time for further
negotiations.
A loose cannon?
However, Teheran's case has been undermined by the apparently inept
behaviour of President Ahmadinejad, who in November by delivering one of his
usual anti-Sionist speeches offered the opportunity to the European press to
unleash a wave of criticism. While the untimely speech itself was probably due
to the new President's inexperience, he stood by its content afterwards, adding
to the damage. It looks likely that radical circles close to Ahmadinejad are
encouraging him to take such stances, in order to sabotage the efforts of the
moderate conservatives to come to an understanding with the Americans, which
they probably fear would favour their adversaries. In this optic Ahmadinejad's
decision to purge the Iranian diplomatic corps of moderates and appoint new
faces does not necessarily look as lunatic as some commentators have said. The
ambassadors to France, Germany and the United Kingdom, the three European
countries involved in negotiations with Teheran, are all being replaced, as well
as the ambassador in Geneva, who was also involved in the nuclear discussions.
The Iranian team to the UN has also been completely changed. Some serious damage
might derive by sending a team of inexperienced diplomats to such important
negotiations and the reappointment of Javid Zarif as permanent representative to
the UN (he had resigned a month earlier) might be a sign that the regime is
worried about not pushing the purges too far. However, in terms of factional
competition within the conservative front the move might prove advantageous.
Unsurprisingly, the main criticism of Ahmadinejad's move came from Hashemi
Rafsanjani, who is once again trying to take the lead in the negotiations with
the Americans. On the other hand, Supreme Leader Khamenei is trying to position
himself between the two conservative factions, radical and pragmatic, sometimes
apparently favouring Rafsanjani, some other time coming out in support of
Ahmadinejad.
The purges are coming
The purge of the diplomatic corps was not the only such purge to take place
in November. At the beginning of November Ahmadinejad also replaced the managing
directors of the state-owned banks. The President, after all, had promised to
bring new faces into government, although some argue that Ahmadinejad might just
want to be surrounded by people with little personal power base in order to be
able to dictate policies more easily. Nonetheless, Ahmadinejad is facing serious
trouble in the parliament and had to withdraw his second nominee for the
position of oil minister, Mahsuli, a former revolutionary guard who was again
seen as lacking the necessary preparation by many deputies. The President
finally had to propose a technocrat from the National Petrochemical Industrial
Company as his third candidate to the post, Sayyed Mohsen Tasaloti. Even some
fundamentalist groups, like Ansar Hezbollah, criticised the President's penchant
for choosing cronies, although what they demand is the appointment of
religiously committed individuals. In the meanwhile contradictory reports
continue to emerge with regard to Iran's oil output. In November the director of
the National Iranian Oil Company admitted that some decline in production might
occur soon, due to "technical problems".
Stalled privatisations
Although Ahmadinejad adopted a statist rhetoric, the people that he
appointed to leading posts in the economy are considered to be relatively
liberal. Still, little progress is being made on the privatisation front,
despite the fact that 41% of the largest public enterprises are in the red. Out
of a net worth of US$110 billion, only US$570 million worth of shares have been
put for sale and of this only US$17 million effectively sold. Even these have
been bought by other public companies. On the other hand, some signs of a
renewed interest in foreign investment could be seen in November, when vice
president Davoudi invited foreign companied to explore opportunities in the
mining sector. In the meanwhile the stock exchange continues to lose ground, not
least because of Ahmadinejad's lack of worry about the prospect of economic
sanctions.
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