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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: 058 - (21/09/06)

Buying more time
In the end Teheran once again avoided giving a definitive, clear answer to the European proposal concerning its nuclear program. It refused to suspend uranium enrichment, but at the same time it declared its readiness for further 'serious' talks. Clearly, the Iranian leaderships feels that it is not in a position of weakness after the 'lessons' of Lebanon and given the worsening violence in Iraq and Afghanistan. The message to Washington is clear: after Lebanon, more lessons could be taught elsewhere if Teheran was too drastically challenged. What seemed to be implicit in Iran's actions in Iraq is now explicit, as vice-president Saidlou and Ahmadinejad's loyalist stated in September that it is about time for the Americans to leave Iraq. On the face of it, Teheran's diplomatic gamble once again seems bound to be successful. After the initial round of negative reactions to Iran's failure to comply with European and American demands, the French government in a matter of days stated its readiness to restart dialogue with Iran. As mid-September approached even Condoleeza Rice was not excluding the possibility of new negotiations with Iran, despite President Bush's late August statement that 'Iran must face consequences'. Predictably, Teheran's response to the uncertain and confused reaction of its interlocutors was to announce its willingness to suspend enrichment for two months, too little to appease the Americans, but possibly enough to divide the Europeans, some of whom, in Iran's view, are ready to a compromise in favourable terms to the Iranians in order to avoid disruption to oil supplies and a major crisis. Finally, by 20 September it appeared clear that neither Russian, China nor France would support sanctions against Iran, forcing the US to approve a new round of negotiations between EU foreign policy chief Solana and the Iranians. IAEA reports suggest that in reality Iran's progress in enriching uranium has so far been limited and that some of its claims of making progress are inflated, a strategy which recalls somewhat the one adopted by Iraqi President Saddam Hussein in the 1990s.

An unpopular executive
The government seems to be losing popularity rapidly, haunted by charges that many ministers are not up to the task. Rumours circulate that Ahmadinejad is planning to replace the ministers of commerce and transport and of welfare and social security. This move, however, would likely not even suffice to appease his fellow conservatives in the Parliament, who would like to see ministers like education, health and agriculture go as well. The declining popularity of his cabinet does not seem to be deterring Ahmadinejad from launching controversial initiatives. After sacking 40 university professors in June because of their secular and liberal views, he is now calling for a wider purge of the academic establishment, in order to free it from the vestiges of 'colonial' influence. 

A half-hearted siege
The US government continues to up its pressure on Iran's financial institutions and economy, most recently blacklisting Bank Sedarat because of its alleged role in transferring money to 'terrorist organisations', that is Hezbollah. However, a setback occurred in September when Japanese firm Inpex appeared to have agreed to a contract to exploit part of the south Azadegan field. The contract has long been delayed due to disagreements between the Iranians and the oil firms involved and was originally supposed to start in March 2005. If the American efforts to build up pressure show slow progress, Iran's efforts to protect itself are not moving much faster. Iranian efforts to reduce the consumption of fuel, which stated earlier this year with ambitious rationing plans, have now boiled down to creating incentives for drivers to replace old, fuel-inefficient cars with newer vehicles running on natural gas. This is clearly a long term strategy and also one of doubtful impact.

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