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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: 104 - (27/07/10)

Undiminished ambitions
President Ahmadinejad is certainly keen to show that he does not feel intimidated by sanctions and political pressure. Apart from the grandiose programmes to develop Iran’s military industry, which have been trumpeted for years, in July he announced a plan to put a man into space by 2019. The Iranian satellite programme is already approaching its operational phase, after the testing of the rocket that should take it into space. Perhaps this reminds us of the worst phase of the Cold War in the 1950s. At the same time Ahmadinejad has decided to raise VAT by 70%, antagonising the bazaar traders, traditionally one of the main sources of support of the conservative faction within the Iranian regime. These traders have gone on strike to protest the move, but their supporters among the conservatives have been unable to convince the Supreme Leader Khamenei to force Ahmadinejad to change course.

Waiting for the real deal?
Nonetheless, Teheran’s confidence that its circle of friends would hold against the sanctions is increasingly being shaken. In recent weeks for the first time Ahmadinejad and other officials have resorted to threatening and insulting Russian leaders and companies, because of the latter’s inclination to abide by the sanctions. Russian President Medvedev has been called ‘mouthpiece’ of the west recently, after he expressed his conviction that Iran is indeed developing nuclear weapons, while Lukoil has been threatened with blacklisting if it drops out of contracts already signed with Iran. Lukoil has already reneged on the Anaran oil field agreement, but Teheran is trying to lure it back in some form. In reality Moscow is not happy that the US and EU are applying additional sanctions on top of those approved with Russian consensus and has even suggested that Russian companies could supply refined oil products to Iran, ignoring the new sanctions. While the European Union announces even tougher sanctions, the refusal of insurance companies to ensure Iranian shipments discourages the shippers. Shipping companies are more and more reluctant to accept contracts involving Iran, adding to Teheran’s trouble. In this context, Teheran’s invitation to oil majors to bid for its oil contracts looks like little more than an attempt to remind the world that there would be advantages in making a deal with Iran. But what does Iran really want? So far nobody has really put on the table anything advantageous for Iran, only threats. The theory that Iran may be ready to sacrifice the nuclear programme for American recognition and an end to the embargo, has therefore not been tested yet.

The sharks circle
The Iranians believe that Washington is also sponsoring armed opposition groups in Baluchistan and Kurdistan, as a way to add pressure, which historically would certainly be unsurprising. Although there is no evidence of this, the activities of the armed opposition have been intensifying. Everybody is beginning to see a wounded Iran as worthy of a bite of two of flesh: the PKK, which operates in Turkey and was once supported by Iran, recently blew up a section of the Turkish-Iranian gas pipeline. It has been confirmed that two companies owned by the Revolutionary Guards have dropped out of separate gas projects; the reasons are not clear, but the official explanation is that their existing commitments would have prevented them from respecting the tight schedule imposed by the government. Other sources say that the sanctions targeted at the Revolutionary Guards could have slowed down the gas projects. It is not all bad news for Iran, though. At least Iraq is now a friendly neighbour. The massive smuggling of Iraqi refined oil to Iran, without any effort of the Iraqi government to intervene, reminds Washington of how massive its blunder in Iraq has been. It is actually the Iraqi regional government, supposedly more US friendly than Baghdad, which is directly involved in the smuggling. The relationships with Turkey are also friendlier than they have ever been, since the establishment of the Islamic Republic: the US$1.3 billion deal over a more capable gas pipeline has now been signed.

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