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Key Economic Data 
  2003 2002 2001 Ranking(2003)
Millions of US $ 136,833 107,522 114,100 34
GNI per capita
 US $ 2,000 1,710 1,680 110
Ranking is given out of 208 nations - (data from the World Bank)

Books on Iran


Area (
1.648 million




Iranian rials

Mohammad Khatami-Ardakani

Update No: 050 - (30/01/06)

Confused battle lines
While Iran's President Ahmadinejad seems to be doing his best to isolate Iran as much as possible from the international community, the prospects of a referral to the Security Council remain unclear. It is even less clear what would happen if a referral was indeed decided. The Bush Administration was successful in its strategy to send the Europeans ahead and try "soft power" strategies and fail and now the relationship between the key European countries and Iran have significantly worsened. It appears likely that the Europeans might support a referral to the Security Council. The same applies to the IAEA, another loser in the attempt to softly convince Iran to offer credible guarantees that it is not after the atomic bomb. IAEA's director general El-Baradei says that the agency will issue a final condemnation of Iran if it is not granted access to key sites by the end of January. During January US officials once again voiced the possibility of the use of force against Iran, but this appears more a ruse to put pressure on Iran's friends, chiefly Russia and China, than a genuine intention. At the same time the same officials have been blandishing the Russians by describing their proposal of cooperation with Iran as a good plan. However, even if the Bush Administration might have succeeded in driving a wedge between the Russians and the Iranians, this might not have got far enough to convince the Russians to accept a referral, even if they are clearly irritated by Iran's cold reception of their plan. Russia's Foreign Minister Lavrov maintains that sanctions are neither the best nor the only way to put pressure on Iran. In any case, even if Iran was referred to the Security Council, there seems to be little scope for sanctions. Iran would only be seriously hurt if sanctions affected its oil exports, which is unthinkable in the current predicament; besides, US ally Japan, Iran's largest customer, would be the hardest hit. Oil sector analysts argue that the loss of Iran's oil could only be partially offset by increased production in the few countries which have unused production capacity, chiefly Saudi Arabia. As a result, oil prices would shoot up further, hurting mainly Asian countries and among them China, a country whose support is essential if sanctions have to be approved. 

Ahmadinejad pushes Iran's foreign policy rightward
For all his seemingly extremist positions in foreign policy, Ahmadinejad appears to be succeeding in dictating the terms to the Iranian leadership, including supreme leader Khamenei, who recently dismissed the danger of sanctions, recalling that in the past they actually helped to generate self-reliance among Iranians, and Ahmadinejad's main rival, Hashemi Rafsanjani, who in January hinted in a speech delivered in Teheran that the "enemy" wants to prevent Iran from developing nuclear know-how in order to keep it weak. Support for nuclear fuel production seems to be widespread among Iran's legislators too. 

New plans for gas
While international attention is very much focused on Iran's foreign policy, the new president and his circle have been reassessing Iran's policies concerning the development of the oil and gas sector. While the Khatami presidency had development grandiose plans to develop gas exports throughout the world, the Ahmadinejad presidency appears to be siding with a faction within the Oil Ministry which argues that Iran's best option is to use gas mainly for internal consumption. In part, this line of thought maintains that given the declining productivity of Iran's oil fields, massive injections of gas are needed to maintain and improve the recovery rate. Some also argue that it would make better economic sense to use gas to replace oil for internal consumption rather than build a huge export infrastructure in order to export gas. While there continue to be interest among all factions in exporting gas to India and China, the plans to increase exports to Europe might be sacrificed if the attempt of the Ahmadinejad circle to seize full control of the oil ministry succeeded. It is important to point out than in the plans of Rafsanjani, the man who has been indirectly controlling the oil ministry for many years, exports of gas were also seen as a way to increase Iran's geopolitical influence, an aim which is not shared by Ahmadinejad. 
On the economic front a more pressing concern in January was the rapid rise of currency liquidity, which is being stimulated by the increase in oil revenues and by the inability of the Central Bank to exchange petrodollars for rials, which in turn is due to the government's failure to clear its debts with the Central Bank. The governor of the Central Bank estimates that for each US$1 billion that the Central Bank fails to exchange for rials, liquidity grows 5% and inflation 3%. 

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Iran-Kyrgyzstan to expand ties

Recently a meeting was held between Iran's Majlis National Security and Foreign Policy Commission chairman, Alaeddin Boroujerdi and Kyrgyz Ambassador to Tehran, s Tairov. During the meeting, there were negotiations for expansion of political and economic cooperation between the two states in tune with the current potentials, Interfax News Agency reported.
At the meeting, it was reported that according to a report released by Majlis Media Department, Boroujerdi declared Iran's support for closer economic and trade ties between the two countries. He said that considering the importance of the need for raising the regional status of both states, the economic growth and multifaced development of countries of the region is necessary.
Boroujerdi even congratulated the re-election of President Nursultan Nazarbayev and hoped that the scheduled visit of Nazarbayev to Iran in the coming year will pave the way for further bolstering of mutual bonds.
Tairov is also pleased with broadening of bilateral relations and presented a report on the latest economic and trade developments of his country. He called for the support of the Iranian parliament for further expansion of ties in the domain of politics and economy.
Tairov said that an official invitation will be sent to president Mahmoud Ahmadinejad to attend president Nazarbayev's swearing-in ceremony. Meanwhile, he appreciated Iran for sending observers to Kyrgyzstan to supervise the recent presidential election in the country.

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