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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)

Books on Iran

REPUBLICAN REFERENCE

Area (sq.km)
1.648 million

Population

66,128,965

Capital
Teheran

Currency
Iranian rials

President
Mohammad Khatami-Ardakani





Update No: 045 - (25/08/05)

A cabinet of hard-liners
As expected, the new president, Ahmadinejad, has filled his cabinet with hardliners, among whom quite a few have a background in the Revolutionary Guards. Not a single reformer has been appointed. A lonely centrist is Mohammad Rahmati, who stayed on as Transport Minister from the previous Khatami government. Among the key players Manouchehr Mottaki is the Foreign Minister, who has in past issued statements in favour of a tougher position in the negotiations on Iran's nuclear programme. Ali Saeedlou is the new Oil Minister, while the economy minister is Davud Danesh-Jafari and the commerce minister Masud Mir-Kazemi.
Not only no reformer figure in the new cabinet, but many even within the ranks of the right wing faction in the parliament were disappointed. The appointees are largely from the "new right" tendency, which leaves the traditional right with little power. In the Teheran Council, a formal split between the two tendencies has already occurred and 15 conservative councillors have decided to form their own group. Observers now wonder whether the rift will develop further.
The ranks of the reformers, on the other hand, are increasingly in disarray. Former president Khatami is now taking up the leadership of the clerical reformist party, Militant Clerics Association, but the former leader of the party Karrubi has announced that he will form yet another reformist party. 

Purge of oil ministry still a possibility
The appointment of Saeedlou as Oil Minister came as a partial surprise. He did figure on the alleged short list of candidates discussed in the press before the appointment, but not as one of the top options. He has no previous experience in the industry and is personally very close to Ahmadinejad, having served as his deputy in the Teheran administration. The oil industry was hoping for the appointment of Beheshtian, a former official in the oil ministry who left after clashing with the previous reformist oil minister. At least he would have known the industry and would have been less likely to start a large scale purge, now feared by many. 
These fears are unlikely to help in a situation where oil multinationals already feel under pressure from the US to quit the Iranian market. In August Royal Dutch Shell disclosed that it faces US sanctions because of its operations in Iran. 
Nonetheless, August was a month of good news on the oil front. Among them was the resumption of talks with Turkey about the prices of the gas that Iran has been supplying. The suspension of the deliveries last winter caused serious problems in Turkey, which however is also receiving gas from Russia. Moreover, during August, outgoing Oil Minister Zanganeh revealed that Iran's oil production has recently increased to 4.2 million bpd, as a result of the investment of US$50 billion over the 1998-2004 period. This contradicted the expectations of oil industry analysts in the West, who had predicted a decrease in Iran's oil production due to the exhaustion of existing fields. Zanganeh admitted that capacity is falling at the rate of 300-350,000 bpd, but also said that investment was sufficient to more then offset those losses. 
During August the debate about Iran's industries continued. The extent of waste taking place was highlighted by an industry official, who pointed out that far too many textile industries have been created, which now can only work at 60% of their capacity because Iranian production costs are 30% higher than international standards, therefore preventing significant exports. There is also growing criticism against the planned privatization of state industries, because the government refuses to privatize profit-making companies and is ready to give up only those which are not profitable. The plan to sell shares of state companies is scheduled to start next March. The more general uneasiness about the future of the economy under a conservative president led to the Teheran stock exchange's steady decline after the elections.

Brinkmanship past the brink?
As repeatedly announced, in August Iran restarted the uranium conversion that it had suspended as requested by a group of European countries. The move was widely denounced and led President Bush to declare that the military option was not excluded in dealing with Iran. If Iran does not back down, in the second half of September the IAEA will have to refer it to the Security Council of the UN, where sanctions may be proposed against Iran. Teheran might be counting on a veto from Russia and China, which however is far from certain. Russia for one has condemned the Iranian move. Iran probably also counts on the difficulties that the Security Council would experience trying to agree on sanctions against Iran, hoping that this would buy time. Moreover, once approved such sanctions might prove rather mild or ineffective in the short term, giving Iran even more time to develop its program further. After all, experience shows that once a country has affectively developed nuclear weapons, there is little choice but to accept the fait accompli. 

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ENERGY

Iran to become key exporter of LNG in world 

Iran will turn into one of the world's largest LNG - liquefied natural gas - exporters within the next 10 years, noted managing director of Islamic Republic of Iran Shipping Lines (IRISL), Ali Ashraf Afkhami.
Iran's LNG exports hit 34 million tonnes per year and it is expected that exports of the condensates would reach 25 million tonnes next year, he said. Elaborating on the IRISL performance, he stated, "International activities of the IRISL increased from 5 per cent in 2000 to 45 per cent in 2004; however, it is expected that the figure will go up by 60 per cent in the near future."
Commenting on the capabilities of the national shipping line, he added that 24 vessels were added to the IRISL last year, elaborating, "Iran's national fleet capacity currently stands at 9.7 million tons, and we hope to see the figure of 16 million tons in the near future."
The official also explained that the IRISL, enjoying 115 active vessels, has a total of 6900 employees at its 110 representative offices.

Iran to retain OPEC ranking in oil production, export 

Organisation of Petroleum Exporting Countries (OPEC) recently announced that Iran will retain second place in OPEC in terms of oil production and exportation, Tehran Times reported. 
The OPEC secretariat in Vienna has issued a 20-year development plan for Iran under which the country will retain no less than 7 percent of crude oil production and export on world energy markets, behind Saudi Arabia. According to the plan, from 2010 Iran will produce seven million barrels of crude oil, liquefied gas and gas condensate and some 1.5 billion cubic metres of natural gas, daily.

Georgia to transport Iranian gas to Europe 

Georgia will facilitate projects proposed by Ukraine and the European Union to transport Iranian gas to Europe, Georgian Energy Minister, Nika Gilauri, said, Interfax News Agency reported on August 8th. 
Gilauri said the package of proposals that Britain, France and Germany submitted to Georgia on the EU's behalf on August 5 included the construction of a trunk pipeline to ship Iranian gas to Europe, provided that Tehran discontinues its nuclear programmes.
Ukraine submitted two options to Iran for transporting Iranian gas to Europe at the start of July. Ukraine's proposals, like the EU's, involve routing the gas via Georgia, using either an Iran-Armenia-Georgia-Russia-Ukraine-Europe pipeline or an Iran-Armenia-Georgia-Black Sea-Ukraine-Europe route. "We'd welcome any of these projects and do all we can to facilitate them," Gilauri said. "This would be an additional source of gas for Georgia and bolster the country's energy security," he added. Asked whether the United States might respond negatively to these projects, Gilauri said the US government had not yet made any comment. "If a question arises, we will definitely consider it," he said. 

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FOREIGN LOANS

IDB offers a US$62m loan to Iran 

The Board of Directors of the Islamic Development Bank (IDB) ratified the bank's decision to grant a loan of US$62,600,000 to Iran.
The decision was made during the bank's 31st session, in which, the Board okayed allocation of a development loan worth US$36,600,000 to the Bandar Abbas Shipbuilding Plant (Iran Shipbuilding and Offshore Industries Complex Company (ISOICO)).
IDB, in the same session, also approved a loan of US$26m to Iran Saipa Diesel Company to promote its spare parts purchases.
The total loans allocated to the IDB member countries during the bank's recent session amounted to US$437m.

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