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IRAN

Books on Iran

REPUBLICAN REFERENCE

Area (sq.km)
1.648 million

Population
66,128,965

Capital
Teheran

Currency
Iranian rials

President
Mohammad Khatami-Ardakani

Dialogue of the deaf 
During April and May the diatribe between Iran and the international community continued to show no sign of resolution. In March the news that Iran's establishment had accepted to hold talks with the US over Iraq had caused some excitement, as it appeared to have some potential to break the deadlock. However, quite typically President Ahmadinejad intervened to deny that there was any need to hold talks on Iraq, now that a new government was being established. Ahmadinejad also won the headlines with his statement that the latest European proposal, to offer Iran a nuclear rector in exchange for giving up nuclear enrichment, was "laughable". The Europeans had been convinced of the need to offer something more substantial to the Iranians by the refusal of the Russians to agree to a referral to the Security Council. In reality, the European offer never stood much of a chance, since it is clear that what the Iranian establishment wants is the abolition of the US embargo, without which it is unlikely to make any concession concerning the nuclear programme. 
The Bush administration seems not to be seeking new ways to put pressure on Iran. It has announced that it will step up the use of Security Council Resolution 1540, which allows to target financial institutions which cooperated with countries in breach of the non-proliferation treaty. The resolution was used with some success against North Korea and will now be used against Iran, at least in the intentions of the Bush Administration. Some US companies, such as General Electric and Aon, have already decided to revise their attitude towards Iran. There are also plans to force the revision of the risk appraisal for doing business with Teheran, which would lead to higher costs of loans and guarantees. These are seen as de facto sanctions which could replace UN-approved sanctions if Russia's and China's opposition to any resolution sanctioning armed intervention and Germany's opposition to a tight sanction regime were not overcome. Germany, which is Iran's main trading partner, has signalled to the US that it would not go for serious sanctions. 

Growing infighting among the conservatives
Ahmadinejad's uncompromising stance on Iraq and the nuclear programme reflect his need to mark his distance from the old-conservative establishment. His announcement that women will be allowed to attend matches at the stadium also clearly appears to have been thought to strengthen his neo-conservative credentials, while at the same time upsetting the conservative clergy. His supporters also do not seem too averse to allowing non-clerical individuals, who have expertise in certain fields, to be candidates in the elections to the Council of Experts, as this might have the effect of weakening the hold of the old-conservatives on the Council, for example allowing military personnel to be elected. 
The reformists are in the meanwhile reported to be planning a comeback, strengthening relations with the clergy and trying to pay greater respect to traditional values, while at the same time exploiting worries among the public that Ahmadinejad may be pushing the confrontation with the US too far. 

A windfall to spend 
The Oil Minister announced that 2005/06 was a record year in terms of Iranian oil revenue, which reached US$45 billion. However, it is doubtful whether the current administration in Teheran will be able to spend this windfall for the best of the country. Populist measures such as the decision, taken in March by the government, to raise the minimum wage by 25% are already backfiring, as shown by a wave of job cuts which occurred in May, as many companies opted to lay off workers rather then afford the sudden pay rise. In other cases, wages have not been paid due to cash flow problems in a number of companies. It is estimated that just in the textile industry 10,000 workers have already been sacked since March.

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