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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: 103 - (27/06/10)

After much talk, the sanctions arrive
A new package of sanctions against Iran has finally been approved by the UN Security Council in June, leading to the US and European countries to take measures to prohibit transactions with blacklisted companies, and freeze their assets outside Iran. Investing in Iran is now formally banned. The US Treasury has identified about 20 companies, active in the petrochemical sector, which it claims are under Iranian control. These companies will no longer be able to trade with US companies. The sanctions also target Iranian shipping and the US have taken measures to counter the Iranian habit of renaming and re-registering ships in order to evade sanctions.

It is becoming increasingly difficult for Iran to export its oil, particularly to Europe. At present just 238,000 bpd are being imported by European refineries, as opposed to 1.462 million bpd bought by Asian refineries. Even some Asian clients are dropping out, however, like Reliance Industries, India's largest private refiner. Even in Central Asia problems are emerging; here Iran had fuel swap deals with Kazakhstan and Turkmenistan, which are now suspended both because of Iranís attempt to renegotiate the terms and because the two countries are considering the option of re-orienting their exports through Russia in order to avoid the sanctions.

Iran seeks ways round them
On the positive side for Iran, new clients are emerging, such as Pakistan, which is so keen to secure supplies that has agreed to build a pipeline to import gas from Iran, despite strong American objections. Iran hopes to bring India into the deal as well, knowing that it would like to expand imports of gas and that Pakistan would like to earn the transit fee, but this prospect seems far-fetched. Iranís gas production remains modest compared to its potential in any case and the country imports large quantities of gas from Turkmenistan over the winter to make up for shortages; Iran has even built a new pipeline to Turkmenistan to increase imports. The desire to develop gas production is clashing with the lack of external investment. The auctioning off of another six South Pars gas phases was concluded recently and was won by Iranian companies: IDRO, Petropars and Khatam al-Anbiya, which belongs to the Revolutionary Guards' industrial conglomerate. Two of the six phases had previously been awarded to Anglo-Dutch Shell and Spain's Repsol YPF, but the two companies withdrew in the face of forthcoming sanctions. There are however doubts whether Iranian companies have the technical and managerial capabilities to handle the project. The regime is making a virtue out of necessity and clams that the handing out of the contracts to Iranian companies reflects the growth and maturation of Iranian business.

A mixed economic picture
Iran's inflation rate resumed its downwards trend in May, after stabilising for a couple of months, and dropped to 9.9% year-on-year in May, down from 10.3%the previous month. Prices of food and other basic products are actually rising faster than the inflation rate suggests, but the cost of housing has been falling. In Teheran for example property prices have dropped 60% from their peak. Although the rate of unemployment is rather stable, those seeing their first job are constantly increasing in numbers as 800,000 enter the job market every year yet only 400,000 jobs are created yearly. The current IMF forecast is that Iranian GDP will grow 3% in 2010 and 3.2% in 2011, which means a slow recovery. On the internal political front, the post-electoral turmoil has calmed down, but the fissures within the clerical elite remain evident and there is no sign that they are being healed. Now many are already beginning to look at the next presidential elections as the only way out of the crisis: Ahmadinejad is not allowed to run for a third term.

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