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Books on Iran
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Update No: 075 - (28/02/08)
Vetted again
Iran's internal politics is now focused on the forthcoming 14 March
parliamentary elections. In February the Guardian Council vetted the candidates'
lists and excluded almost a third of the prospective MPs, many of them
reformists. Although the Council then reinstated almost 600 candidates following
their appeals, the large majority of the highest profile reformist candidates
remain excluded from the elections. Before the post-appeals reinstatement, the
reformist coalition estimated that it would have been able to effectively
compete in just 67 of 290 seats, a number which may have rise to about 90
afterwards. Nonetheless, the reformists have ruled out a boycott; they probably
expected such a move anyway given that it had already occurred in previous
electoral campaigns. They probably hope that together with pragmatic
conservatives they can further weaken Ahmadinejad's hold in the parliament and
deprive him of sufficient support to implement his plans.
US economic siege makes Russians and Chinese happy
On the international scene the main development in February was a new diplomatic
offensive against Iran from Washington. After some hesitation following the
publication of a report by the US intelligence agencies, which described the
Iranian military program as having been discontinued five years ago, the
Department of State has seized on a new IAEA report, which despite recording
progress on the Iranian side with regard to transparency also claimed that
Teheran still does not allow full access to all aspects of its nuclear program
and keeps enriching uranium as well as expanding its centrifuges facilities. The
Americans, with European support, will try to push for more economic sanctions
against Iran. It is utterly unlikely however that either the Chinese or the
Russians will agree to new sanctions in the UN Security Council. Both are
accelerating the development of deep economic relations with Teheran. Russian
firm Gazprom for example is negotiating the formation of a joint company with
the Iranians for the development of two phases of the South Pars gas fields and
several other projects. The fact that sanctions and US pressure discourage many
firms from dealing with Iran is also favouring Russian and Chinese penetration
of the Iranian markets. In fact many other countries still show signs of being
attracted by the prospect of investing in Iran, despite rising US pressure.
Turkey, for example, has expressed interest in investing in the South Pars gas
fields too and is also discussing the possibility of partnering with a Swiss
firm in the construction of a gas pipeline to bring Iranian gas to Italy.
Ambitious plans
The Iranians are investing significant resources in the expansion of their still
modest gas sector. They account for a 1% share of the world gas export market,
but plan to expand that to 10%. They have already been expanding their
capabilities in the manufacturing of heavy compressors and turbines; internal
distribution of gas has greatly been expanded too and now 76% of the households
have domestic supplies of gas. Teheran also plans to expand its role in the
world petrochemicals market, where its market share has always been very low.
Production, at least according to government sources, now stands at 22 millions
tones, behind only Saudi Arabia, but exports are low even if they have been
increasing. In order to boost them, Iran opened in February its first oil
exchange in the island of Kish, a free economic zone. Iran plans to sell crude
too there, pricing it in euros in order to attract European customers and to
reduce its reserves in the American currency. The Iranians are confident that
the move will be successful given the tight conditions of the market and the
savings that it promises to euro zone customers.
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