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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

Update No: 082 - (21/09/08)

Inflation fight starts heads rolling 
The inflation rate rose further in August, to 27.6% from 26.1% in July. Staple food items are being particularly affected, hitting hard the poorest strata of the population. Since President Ahmadinejad draws support from such strata, he must certainly be worried of the trend. As if that was not enough, Supreme Leader Khamenei, in recent times quite supportive of Ahmadinejad, is now openly calling on the government to contain the rise in prices. Khamenei’s intervention should not necessarily be construed as an attempt to undermine the President. At the end of August, he stated openly that Ahmadinejad should plan to continue in power for another four years. Khamanei has been praising Ahmadinejad in particular for his handling of the nuclear issue.

The inability to control inflation cost the governor of the Central Bank of Iran his head in September, after having served just a year in the position. Despite having been appointed as the replacement of a man more radically opposed to the economic policies of Ahmadinejad’s government, Mazaheri was nonetheless in favour of freeing up bank rates and tightening controls over lending, in order to contain inflation. As such, he opposed the requests of some members of the cabinet to loosen the loan policy to small companies, in order to expand employment. A few days before his removal. Mazaheri had announced that banks would be allowed to raise their interest rates over the existing ones, which are limited to a ceiling established by the government. 

Thanks to Georgia
Despite the obvious impact of the sanctions among multinationals, many of them are still keen on not burning the bridges with Iran. French company Total, for example, stressed recently that it has no plan to abandon its existing projects in the country, which include a major oil field in Kharog Island, and is just postponing investment because of the excessive risk involved as the situation stands. Indeed, several observers believe that the worst might soon be over for Iran, as the Bush Administration enters its last few months and the international ‘correlation of forces’ is at least temporarily shifting in Washington’s disfavour. After the row over Georgia, there seems to be no chance whatsoever of Russia agreeing to new sanctions against Iran. The Chinese are happy to let the Russian play the more assertive role, but are not far behind. Indeed negotiations over a fourth sanctions package have so far led nowhere. The Iranians are exploiting the situation by raising the stakes and reducing their cooperation with the International Atomic Energy Agency, which has recently complained about the lack of Iranian cooperation to its investigation on the Iranian nuclear program, on top of the fact that Iran refuses to halt its enrichment program as requested by the United Nations. The IAEA has also recently released information concerning some evidence that the Iranians are working at adapting one of their missiles for carrying nuclear warheads.

Waiting for the real diplomacy next year?
Beyond the next few months, the expectation is that a new American president might open a new page on Iran. Not only Senator Obama has publicly taken the stand, that he would open talks to Ahmadinejad if he was elected, but such a mood seems to be predominant in Washington and not just among Democrats. In mid-September five former U.S. secretaries of state (Henry Kissinger, Warren Christopher, Madeleine Albright, Colin Powell, James Baker) all stated in public that they favour opening talks to Teheran as the best strategy to prevent the development of an Iranian atomic bomb, even if they have different visions of what the content of the talks should be. 

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