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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: 051 - (23/02/06)
Atom or death?
The competition for power among conservative factions is increasingly
dictating the pace of the Iranian nuclear crisis. The situation in January was
such that both the US and the Europeans were openly stating their support for
referring Iran to the Security Council. The Israelis, who believe an embargo on
Iranian oil is feasible, were actively lobbying the Russians, who however are
still opposing the referral of Iran to the Security Council, even if starting
from mid-January their position has been coming closer to that of the US and
Europeans. Many analysts in reality agreed that even if an embargo was imposed,
preventing smuggling would be problematic and would entail the risk of an armed
confrontation. Although US and Israeli threats of military action, including by
Rumsfeld himself, were widely seen as attempts to force the Security Council to
take action, rather than genuine forewarning of action, quite a few military
analysts believe that an air campaign against Iran will indeed take place, but
not before 2007, by which date diplomatic sources could well said to have been
exhausted and the no-return threshold in the Iranian nuclear programme have been
approached. However, the opinion of the analysts is divided with regard to
whether such air strikes would be effective in seriously disrupting Iran's
nuclear programme. News that Iran was moving its foreign exchange reserves out
of Europe seemed to confirm in late January that the country's leadership was
getting ready for a sanction regime, even if it was later clarified that the
withdrawals only affected Italian banks and were motivated by a court case which
had led to the freeze of an account controlled by the Iranian government.
False hope
However, by late January Supreme Leader Khamenei must have been growing so
worried by Ahmadinejad's brinkmanship policies that he agreed to a suggestion by
former president Rafsanjani to create a new body in charge of nuclear policies.
Even some top leaders of the Revolutionary Guards, supposedly Ahmadinejad's main
base of support, appear to be in favour of such a move, possibly because they
think that Iran is not ready yet to withstand successfully international
sanctions. In particular, many think that as long as Iran imports 40% of its
consumption of gasoline it will be very vulnerable to sanctions. The plan to
convert to liquified gas is still in a very early stage. As a result of
Rafsanjani found-again influence, in early February it looked as if Iran was
inclined to major concessions, including the end of enrichment in Iran, which
were being negotiated between Iranian and Russian diplomats.
However, in mid-February Ahmadinejad intervened to pre-empt Rafsanjani's move
and froze talks with the Russians "indefinitely", moved to unseal the
research sites and to start uranium enrichment, while at the same time warning
that it would not allow snap UN inspections. On 11 February President
Ahmadinejad even threatened publicly to withdraw from the non-proliferation
treaty if pressure from the West continued, although his foreign ministry
reaffirmed Iran's commitment to the NPT a day later. At the same time, a state
of emergency has been declared in the country's nuclear sites, presumably
reflecting the fear that an Israeli/US air strike could take place at any time.
Bad mood among investors
One of the consequences of the worsening international climate is that
Iran's prospects to attract international investment are suffering a severe
setback. Even internal investors appear increasingly depressed and the Teheran
stock exchange has been badly hit. The property sector is also reported to be
markedly slowing down, but a crisis of liquidity is reported across the board,
while capital outflow has been increasing, especially towards Dubai and the
United Arab Emirates.
Another victim of the negative climate could become the new oil bourse, which is
to open on 20 March. While the bourse might have some potential for success as
it will for the first time allow buyers to purchase oil paying in euros rather
than in dollars, few will want to invest in it in the current situation.
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ENERGY
Iran dashes hopes for Russian nuclear deal
Iran announced recently it was indefinitely postponing talks scheduled for
Moscow, dashing hopes a Russian compromise proposal might ease its nuclear
stand-off with the United Nations, The Financial Times reported on February
14th.
Tehran also resumed enriching uranium at its Natanz plant in defiance of the
recent vote by the UN's watchdog, the international Atomic Energy Agency,
according to diplomats in Vienna, the IAEA's homebase. The resumption came a day
after Gholam-Ali Haddad-Adel, Iran's parliamentary speaker, said Tehran was
about to restart "nuclear research activities" at Natanz. IAEA
inspectors are due to visit Iran's nuclear sites to verify that Tehran has
resumed enrichment.
The Natanz plant contains a small number of centrifuges, which convert uranium
hexoflouride gas into enriched uranium. It is not large enough to produce
enriched uranium for nuclear weapons.
Iran is nonetheless defying February's IAEA vote calling for a suspension of the
nuclear programme.
Moscow's proposal for Iran to enrich uranium in Russia, a possible compromise
received a further blow as Gholam-Hossein Elham, the Iranian government
spokesman, said talks had been put off because of the "new situation,"
a reference to Tehran's being referred to the UN Security Council.
The decision in Moscow and Beijing to back referral has prompted criticism in
Tehran of Iran's nuclear negotiation team.
On visits to both Moscow and Beijing shortly before the IAEA vote, Ali Larijani,
Iran's top security official, praised the stance of his hosts. Aftab website,
affiliated to Mr Larijani's predecessor, Hassan Rowhani, recently wrote that the
hopes of those looking to Russia and China had "turned out to be a
mirage."
Conservative pragmatists like Mr Rowhani are wary of strengthening a hard line
in Tehran. On Saturday, President Mahmoud Ahmadinejad hinted Iran would consider
leaving the Nuclear Non-Proliferation Treaty if its access to nuclear technology
were blocked.
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FOREIGN COOPERATION
Tashkent-Tehran boost bilateral cooperation
The seventh sessions of Iran and Uzbekistan's joint economic and commercial
commission was recently held in Tehran. Iranian Ambassador to Uzbekistan,
Mohammad Fat'hali, said that during the session, the officials of both countries
discussed bilateral cooperation in trade and commerce, banking, finance,
insurance, transportation, transit and communication, industry, technical and
engineering services, agriculture and animal husbandry, Interfax News Agency
reported.
Bilateral cooperation between Iran and Uzbekistan is increasing in various
fields especially in the economic, trade and industrial areas. The officials of
both countries also signed several documents of cooperation, which enhances the
bilateral cooperation. The last document on bilateral cooperation signed by the
Uzbek deputy prime minister and Iranian Commerce Minister, Massoud Mir-Kazemi,
in Tehran in January was put down in an agreement for cooperation among the two
countries private sectors. The Iranian diplomat said, "Tehran and Tashkent
are currently members of the ECO and Shanghai Cooperation Organisation (SCO).
They share common stances in the fight against terrorism and illicit drug
smuggling and establishment of security in the region."
"Economic cooperation between Iran and Uzbekistan can serve to meet several
needs of the two countries," Fat'hali said. He added Iran is an appropriate
market for Uzbekistan's agricultural products. The ambassador said Uzbekistan is
seriously promoting its auto-manufacturing industry, adding Iranian
industrialists can cooperate with the opposite side thanks to Iran's great
achievements.
Iran is also the best route for Uzbekistan to have access to international
waters to export its goods while Uzbekistan is a transit route for Iranian
lorries to Kazakhstan, Tajikistan and Kyrgyzstan.
Beside ground and railway transportation, Tehran and Tashkent have set up a
direct flight once a week. Iran and Uzbekistan enjoy great potentials for
expansion of tourism cooperation.
Rahmonov, Ahmadinejad to boost Tajik-Iranian ties
Iranian President, Mahmoud Ahmadinejad, on January 17th extended an official
welcome for Tajik President, Emomali Rahmonov, who arrived in Iran for a two-day
visit. Rahmonov was invited by Ahmadinejad to attend a conference on
Iran-Tajikistan economic cooperation and held talks with Iranian officials,
Interfax News Agency reported.
Rahmonov was also welcomed by Iranian Commerce Minister, Massoud Mir-Kazemi,
upon arrival at Mehrabad International Airport. During his stay, Rahmonov met
with Majlis Speaker, Gholam-Ali Haddad-Adel, Expediency Council Chairman, Akbar
Hashemi Rafsanjani, and Foreign Minister, Manouchehr Mottaki. During these
meetings, the two sides discussed bilateral, regional and international
developments. Iran and Tajikistan currently enjoy a high-level of political and
economic cooperation. The restructuring of Tajikistan's debt to Iran was also
discussed. "The question of restructuring Tajikistan's debt to Iran will be
mulled, and we hope for a decision that would be positive for Tajikistan,"
Rahmonov said at the conference of energy experts from Iran, Russia and
Tajikistan. "An impressive package of documents has been compiled. The
construction of the Anzob tunnel will be discussed. We also intend to propose
the construction of the Shahristan tunnel to Iran," Rahmonov said.
Tajikistan owes Iran nine million Euro. Iran has expressed its readiness to
invest up to 170 million Euro in the Sangtuda-2 hydro power station, with a
capacity of 220 megawatts in Tajikistan. Russia's UES is completing the
construction of the 670 megawatt Sangtuda-1 station, and RusAl, the 3,600
megawatt Rogun power station. The volume of Iran-Tajikistan trade exchanges
stood at 130 million Euro in 2005.
Iran exports mainly foodstuff and construction materials to Tajikistan and
imports aluminium and cotton. Iran has generously participated in Tajikistan's
development through investment in the country, particularly in the construction
of the Anzab tunnel and Sangtuda 2 power plant. Iran's Ambassador to Dushanbe,
Nasser Sarmadi Parsa, said that Rahmonov's visit to Tehran would open a new
chapter in expansion of economic and cultural ties between the two countries.
Sarmadi said that during Rahmonov's stay in Tehran, implementation of various
economic projects was discussed. A draft agreement has been prepared by Iran,
Tajikistan and Afghanistan on trilateral cooperation in the electricity sector,
Iran's minister of Energy, Parviz Fattah, said on January 17th. He referred to
the dam construction as one of the focal issues in the talks currently held
between Iranian and Tajik officials. Besides the drafts of a memorandum of
understanding (MOU) on the transfer of electricity from Tajikistan has already
been prepared. He added that after their approval, the agreements would be
disclosed in further detail. Iran and Tajikistan plan to expand their bilateral
cooperation in the field of dam construction in the near future. Tajikistan is
also interested in the expertise of Iranian experts and engineers in the sector.
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