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IRAN


 

 

Key Economic Data 
 
  2003 2002 2001 Ranking(2003)
GDP
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

REPUBLICAN REFERENCE

Area (sq.km)
1.648 million

Population

66,128,965

Capital
Teheran

Currency
Iranian rials

President
Mohammad Khatami-Ardakani





Update No: 057 - (25/08/06)

Yet another deadline looms
As the 31 August deadline for answering the European nuclear offer approaches, most observers were convinced that Iran will give a negative or non-committal answer, play for time and give no undertaking to abandon its uranium enrichment program. The Lebanese events seem to point in that direction, as one side issue of that affair is Teheran seems to have been intent on giving a sample of what the US might have to face in Iraq, if they opted to impose sanctions or worse on Iran. At the same time, aware of Bush's difficulties at home, where experienced policy makers of both parties have been stepping up their criticism of the Administration, Teheran probably also meant to strengthen the feeling that the Bush Administration's policy of imposing by force a new order in the Middle East is only dragging the region towards anarchy.

Vulnerable, not vulnerable?
The debate about just how vulnerable Iran is to sanctions continued in August, with Teheran gathering its own experts in open seminars to state that the potential for harming the Iranian economy is very limited. US and European analysts are less convinced of Iran's impermeability to sanctions and identify the huge imports of fuel as the main weak spot. Teheran seems to be aware of this weakness, but its recent effort to limit consumption through rationing faltered in August, when the government decided to allocate additional funds and backtrack from its earlier decision to slash the amount spent on fuel subsidies. Any plan to reduce consumption has been postponed till the next financial year, with the government trying to save face alleging problems in printing ration cards as the reason for postponement. The government now claims to be working to improve public transport in order to prepare the ground for future measures. However, the reason for Iran's vulnerability is not in low production levels, but in the absurdly high and wasteful consumption, which in turn derives from very low prices. It remains to be seen whether under duress (such as externally imposed sanctions), Iranian citizens will accept the need to reduce consumption, or whether they will 'rise' against the clerical regime, as the Bush administration hopes, with their characteristic optimism in such matters. If the former was the case, sanctions might actually do Teheran a favour. 

Iran's worst enemy?
President Ahmadinejad's populist politics might in the end become the Iranian economy's worst enemy. This year his most controversial decisions yet have been an increase in foodstuff subsidies, the increase in minimum wages and forcing banks to lower interest rates by two percentage points. Some economists estimate now that as many as 100,000 jobs were lost after the increase in wages. The increase of import tariffs by 5.2% has also attracted much criticism among economists. Ahmadinejad's hostility to private and foreign investment has already forced the more pragmatic Supreme Leader Khamanei to intervene. Certainly, the business sector continues to show little love for Ahmadinejad' policies. After having lost 25% of its value last year, the Teheran stock exchange index is down 12% so far this year. 

Oil and Gas 
The oil industry also continues to suffer from Ahmadinejad's economic nationalism. Since he came to power, the slow trickle of foreign investment in the oil industry has come to a complete halt, with not a single new contract signed. Although Ahmadinejad's circle pushes for do-it-yourself policies in developing its oil fields, that seems in practice to translate as that the development just doesn't happen. Some observers claim that Iran has not been able to compensate for the gradual depletion of older fields and that it is losing as much 40,000 bpd a month. 
The only recent development in the oil and gas industry was the agreement with Turkey in August. While uncertainty continues to surround Iran's plans concerning gas exports, Teheran has decided that since a pipeline to Turkey is already in place, it makes sense to use its residual capacity of 5 billion cubic meters to export gas to Europe.

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ECONOMIC COOPERATION

Iran, Kyrgyzstan vow broader economic cooperation 

Visiting Kyrgyz Minister of Commerce and Economy, Akylbek Japarov, conferred recnelty with Iran's Minister of Industries and Mines, Alireza Tahmasbi, on expansion of economic cooperation between the two countries, the Tehran Times reported.
According to the Public Relations Department of the Ministry of Industries and Mines, at the meeting, Tahmasbi referred to President Ahmadinejad's remarks on expansion of cooperation with Muslim states specially those having cultural and historical commonalties with the Islamic Republic of Iran and underlined the need for expansion of ties with Kyrgyzstan.
Given Iran's extensive experiences in various sectors, he voiced Iran's readiness to set up car assembly lines, construct cement factories, electric power plants, exploit minerals as well as construct diary firms and small scale workshops.
He said that the Iranian technical and engineering firms with valuable experiences are ready to support the construction and implementation of various projects as construction of dams, roads and power plants in Kyrgyzstan.
The Kyrgyz minister, for his part, appreciated the Iranian president for providing the Iranian businessmen with a credit line to help promote their businesses in Kyrgyzstan and lauded the country's invaluable experiences in industrial sectors.
In the past 15 years ago, Kyrgyzstan was experiencing an industrial recession, he said adding that the new Kyrgyz president has brought new plans to enhance and promote the country's industrial sector, he said.
In conclusion, he called for active cooperation of Iranian state-run and private sectors to help reconstruct the country's industrial sectors.

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ENERGY

Iran, Azerbaijan begin mutual transfer of electricity 

Electricity from Iran started flowing to the Republic of Azerbaijan via the Astara border on August 20th, in accordance with an agreement entered into by the two countries, the director of public relations of the Gilan Regional Electricity Company said, IRNA reported.
Speaking to IRNA, Alireza Mozayyan, said a seven-kilometre, 230-kilowatt electricity line has been constructed between the two countries to transfer a maximum 50 megawatts of electricity from Iran to the Republic of Azerbaijan and vice-versa.
"According to an agreement concluded between the two countries, Azerbaijan will provide the required electricity needs of Astara and Talesh (Iranian cities) in summer while Iran will supply electricity to Azerbaijani cities in winter," he said.
The exchange deal between the two countries is believed to cut investment costs.
Gilan Province is capable of generating 1,800 megawatts of electricity.

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