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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: 135 - (26/04/13)

Summary: Iran tries to cope with the sanctions through a mix of smuggling, development of other exports apart from oil, and austerity measures. The main problem that it has to face remains the crisis of confidence in the rial, which has given way to an inflationist spiral. The line-up for the June elections is still unclear, with multiple conservative candidates already having declared their intention to run and with centrists, reformists and supporters of Ahmadinejad still having not chosen theirs.

Smuggling through
An Indian company has volunteered to provide insurance for tankers carrying Iranian oil, allowing at least temporarily a resumption of imports. The Indian government is refusing to cap oil imports from Iran, but technical issues like insurance have been curtailing imports. Taiwan is also resuming crude imports from Iran in April. Although China remains the most dependable customer for Iranian oil, commercial considerations represent a growing obstacle. Recently a major Chinese ship insurer announced that it will halt indemnity cover for tankers carrying Iranian oil, making it more difficult for importers to buy Iranian oil. The Iranians are still trying to reduce the impact of the sanctions by engaging in smuggling operations, but inevitably there is only so much they can discretely smuggle without being spotted. Increasingly, smuggling operations are coming under scrutiny, as one involving the transfer of crude at sea between ships and rebranding it as Iraqi oil. In March crude exports from Iran touched a new low, but in April they are expected to rebound to over 1 million bpd. These estimates do not take into account smuggling operations, which are estimated to exceed 200,000 bpd. Production is also declining as Iran has no interest in extracting oil which it cannot export and it has difficulty storing; in March it was down to 2.68 million bpd. In part the losses are compensated by rising exports of fuel oil by Iran, which have now reached 200,000 bpd, up 15% on the previous quarter and almost 100% over a year earlier. Fuel oil too is moved to international waters and transferred to smaller vessels, which then take it to multiple locations, often after mixing it with fuel oil from other sources.

Coping is not enough
Nonetheless, an economy of the size of Iranís cannot rely on smuggling operations to keep running and the sanctions are beginning to cause some social turmoil. Smuggling in fact is not the only strategy adopted by the Iranians to deal with the sanctions. The Iranian government also claims that not only oil exports are rising by over 10% in value this year, again partially offsetting the loss in crude exports. Among other things electricity exports to Iranís neighbours rose 29% in one year. At the same time imports have declined by about US$5-7 billion this year, so that overall the Iranian trade deficit has not increased as much as it could have. Even these measures are not enough, however. The collapse of the rial means that imports are much more expensive once they reach the market. Consumers who rely on fixed salaries are struggling particularly hard, as measures taken to increase wages have not been enough to entirely offset the fall in purchasing power. Labour activism is on the rise even if it is always harshly repressed.

Conservatives divided
The line-up for the June Presidential elections is becoming more and more crowded. Ahmadinejad will try to field his trusted advisor Mashaei, a moderate who whose political line is even less clerical and more Iranian-nationalist than Ahmadinejadís himself. It does not appear likely that he will be allowed to run, however. The second choice of Ahmadinejadís camp would probably be Ali Nikzad, the minister of housing, mainly because the homebuilding projects funded by Ahmadinejad are quite popular among the poorer sections of the population. The conservative principalist front is split among many candidates, even if the best known among them claim they will collaborate in the electoral campaign. It is not clear yet who the centrists linked to former president Rafsanjani will field. Among the reformists, former president Khatami is being invited by the base of the movement to run again, but it does not appear that he will accept the invitation.

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