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IRAN


 

 

In-depth Business Intelligence

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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REPUBLICAN REFERENCE

Area (sq.km)
1.648 million

Population

66,128,965

Capital
Teheran

Currency
Iranian rials

President
Mohammad Khatami-Ardakani





Update No: 042 - (24/05/05)

Rafsanjani candidate, finally
In May former president Hashemi Rafsanjani finally announced his candidacy to the presidency. He described it as a "bitter medicine" and might have been honest in this, as he will face the opposition of Supreme Leader Khamenei, who appears to be leaning towards conservative candidate Qalibaf, a law-and-order man who enjoys some popularity for having improved the efficiency of Iranian police during his tenure as chief of national police. A new poll released in May put Rafsanjani first with 16% support, followed by Larjani at 5%. Reformist candidates Moin and Kharrubi were at 4%, like conservatives Qalibaf and Velayati. Shortly afterwards, however, a poll gave Rafsanjani 25% and Moin 23%, showing how unreliable these polls are. It appears unlikely, in any case, that any candidate will win at the first round, as the appeal of Rafsanjani is not universal. Although many former reformist voters now seem inclined to choose Rafsanjani, one of the reformist candidates, Kharrubi, attacked his record recently, highlighting how by the end of Rafsanjani's tenure as president the country was very isolated and had no diplomatic links to Europe. Conservative
candidates are now under pressure to withdraw their candidacy in favour of Larjani, who has been endorsed by the main conservative association, or Qalibaf, who is favoured by Khamenei, but so far only Tavakoli has done so. Velayati has already announced that he will not withdraw. The conservative vote is likely to be split among at least two or three candidates, likely preventing any of them from making it to the second round.
Despite the relaxation of the strictures imposed on the behaviour of the population, the conservative offensive to undo whatever little reforms were implemented during Khatami years continued during May. The parliament voted in May to suspend the press law, which guaranteed relatively fair trials to journalists accused of press-related offences. 

The game of brinkmanship continues
Following the apparent easing of the tension around the Iranian nuclear program in April, May witnessed a new worsening of the situation. Feeling that they were not succeeding in extracting the desired concessions from the Europeans, the Iranians resorted once again to their brinkmanship tactics, announcing that they would restart enriching uranium. The Europeans were very upset by the move and not only UK Prime Minister Tony Blair said that he would support Iran's referral to the UN Security Council, but the foreign ministers of Britain, France and Germany also signed a letter which warned Iran of the end of the negotiating process if the enrichment was resumed. Russia may now be offering to take charge of the enrichment of Iranian uranium, while Iran would be allowed to resume the production of uranium hexafluoride. Iran, however, does not appear inclined to give up the right to enrich uranium, if only for "research purposes". 
Declarations coming from the leading candidates in the forthcoming presidential elections suggest that reaching a settlement with the US remains on the political agenda, but there seems to be confidence that given the current predicament the Americans will not be able to up pressure on Iran to the extent of seriously damaging the regime. The Iranian elite appears to be convinced that even UN sanctions would in the end amount to little more than a token and do no serious harm. 

The debate on oil deals continues
Within the Iranian oil industry different position continue to surface concerning the future role of buyback deals. Some industry officials admit that as they are the buyback deals are not good enough to attract foreign investors, who would like to participate in the sales phase too. On the other hand, the new ten year development plan, which rest on attracting US$100 billion worth of investments, does not foresee any change in the buyback contracts. 
The macroeconomic conditions of Iran remain stable, according to the information provided by the Central Bank. The Bank forecasts that this year GDP growth will reach 5%, while inflation will stand at 15%, in line with the performance of recent years. GDP growth is, of course, too slow to absorb the rapidly growing workforce, and this is recognised by officials within the Bank and elsewhere, but they do not seem to be able to offer any short- or medium term fix.

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FOREIGN TRADE

Iran to increase trade with Georgia


Iranian government will allocate 20m Euro in projects aimed at boosting economic and trade ties with Georgia, Civil Georgia reported recently.
The details of the projects have yet to be revealed but the funds for these projects will be withdrawn from the Iranian Foreign Exchange Reserve Fund, a source said. An Iranian official of chamber of commerce, industry and mines of Gilan province said that Iran plans to open its permanent trade representation in Georgia. Iranian First Vice President Mohammad, Reza Aref, visited Georgia late in April.

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TRANSPORT

Russia, Iran, Azerbaijan sign agreement on rail link

Russia, Iran and Azerbaijan have signed an agreement on constructing a railway section through Qazvin, Rasht, Bandar-e Anzali and Astara, RIA News Agency reported.
"A consortium has been set up for carrying out the project," a source in the Russian trade mission in Tehran said.
"It is planned that the railway link will be 375 km long and will mainly go through Iranian territory. A total of 15 km will go via Azerbaijan. Railway sections which have been lacking until now, will thus be constructed to link the three nations and to increase freight turnover," the source said.
"The project, which is expected to take about seven to eight years to implement, may cost US$600.5m," the source said. 
President of the Russian Railways joint-stock company, Gennadiy Fadeyev, signed the agreement on behalf of Russia.

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