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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)

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Update No: 077 - (28/04/08)

Criticism of Ahmadinejad grows
The detailed results of the first round of the parliamentary elections show that the supporters of Ahmadinejad gained 59 seats, the conservatives loyal to Ali Larjani 36 seats and non-factional conservatives 44 seats. The reformists only won 24 seats, with 49 independents and 10 members of the minorities also being elected. Following the parliamentary elections, the success of Larjaniís new grouping of conservatives, the so called Ďreformist conservativesí, attracted a lot of attention. The other most influential rising star in the conservative camp, Mohammad Qalibaf, is also close to this relatively pragmatic grouping. Both he and Larjani are likely future presidential challengers. Compared to Rafsanjaniís old moderate pragmatists, who are absent from the parliament following their boycott of the polls, the reformist conservatives are more to the right of the political spectrum. Some pundits believe that a future alliance of moderates and Ďreformist conservativesí has the best chance of seizing power in the future.

While both Larjani and Qalibaf have so far been lying relatively low, sources of criticism towards Ahmadinejad are already multiplying. Economy and Finance Minister Daoud Danesh Jaafari is reportedly about to step down due to strong tensions with the President over economic management. In particular, Jaafari criticises Ahmadinejadís free loans to poor Iranians as a major factor in driving money supply growth and inflation. A debate is also raging within the cabinet, among supporters of cheap loans and those like the president of the Central Bank who want them to at least match inflation. The loan spree is considered by many economists as a major factor in inflation growth. Even among the clergy, criticism over Ahmadinejadís economic policies is mounting. In an unusual step, two traditionalist clerics, Ayatollahs Mohammad Reza Mahdavikani (former prime minister) and Grand Ayatollah Nasser Makarem Shirazi, and a moderate Grand Ayatollah, Abdolkarim Mossavi Ardebili (formerly head of the judiciary), echoed popular discontent over prices and the cost of housing. A reflection of the increasingly defensive attitude of Ahmadinejadís circle is the increasingly interventionism mood of the military into politics, and the open attacks by Hassan Khomeini, the grandson of the Ayatollah, who is close to the reformists. 

A war of sanctions
The impact of the sanctions on Iranís economy remains a matter of discussion. The government claims that although trade with Europe is shrinking, this is more than offset by booming economic relations with Asia. In just one year (2007), trade with Germany, once Iranís leading commercial partner, declined 26.5%, but trade with Asia and Pacific nations grew more than 100% in the past three years to reach about US$90 billion in 2007 and is expected to reach US$100 billion this year. The sanctions regime might become much tougher if Gordon Brownís call for targeting the liquified gas sector will be welcomed, but winning Russian and Chinese support will be very problematic. Teheranís increasingly proactive lobbying to be admitted into full membership of the Shanghai Cooperation Organization seems to reflect a sense of growing isolation, but Russia and China do not appear to have any intention to let Iran as long as the nuclear dispute continues.

Not all that happens in Iranís economy is bad, however. Some observers do believe that within 3-4 years Iran will produce enough gasoline to meet not only internal demand but also to export it. The controversial measures taken to reduce the consumption (or waste) of gasoline are reported to have more than halved imports, from 223,000 bpd to 94,000 bpd. Similarly, oil production is growing although not very fast. In April it reached 4.21 million bpd, the highest level since the Revolution.

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