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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: 051 - (23/02/06)

Atom or death?
The competition for power among conservative factions is increasingly dictating the pace of the Iranian nuclear crisis. The situation in January was such that both the US and the Europeans were openly stating their support for referring Iran to the Security Council. The Israelis, who believe an embargo on Iranian oil is feasible, were actively lobbying the Russians, who however are still opposing the referral of Iran to the Security Council, even if starting from mid-January their position has been coming closer to that of the US and Europeans. Many analysts in reality agreed that even if an embargo was imposed, preventing smuggling would be problematic and would entail the risk of an armed confrontation. Although US and Israeli threats of military action, including by Rumsfeld himself, were widely seen as attempts to force the Security Council to take action, rather than genuine forewarning of action, quite a few military analysts believe that an air campaign against Iran will indeed take place, but not before 2007, by which date diplomatic sources could well said to have been exhausted and the no-return threshold in the Iranian nuclear programme have been approached. However, the opinion of the analysts is divided with regard to whether such air strikes would be effective in seriously disrupting Iran's nuclear programme. News that Iran was moving its foreign exchange reserves out of Europe seemed to confirm in late January that the country's leadership was getting ready for a sanction regime, even if it was later clarified that the withdrawals only affected Italian banks and were motivated by a court case which had led to the freeze of an account controlled by the Iranian government. 

False hope
However, by late January Supreme Leader Khamenei must have been growing so worried by Ahmadinejad's brinkmanship policies that he agreed to a suggestion by former president Rafsanjani to create a new body in charge of nuclear policies. Even some top leaders of the Revolutionary Guards, supposedly Ahmadinejad's main base of support, appear to be in favour of such a move, possibly because they think that Iran is not ready yet to withstand successfully international sanctions. In particular, many think that as long as Iran imports 40% of its consumption of gasoline it will be very vulnerable to sanctions. The plan to convert to liquified gas is still in a very early stage. As a result of Rafsanjani found-again influence, in early February it looked as if Iran was inclined to major concessions, including the end of enrichment in Iran, which were being negotiated between Iranian and Russian diplomats. 
However, in mid-February Ahmadinejad intervened to pre-empt Rafsanjani's move and froze talks with the Russians "indefinitely", moved to unseal the research sites and to start uranium enrichment, while at the same time warning that it would not allow snap UN inspections. On 11 February President Ahmadinejad even threatened publicly to withdraw from the non-proliferation treaty if pressure from the West continued, although his foreign ministry reaffirmed Iran's commitment to the NPT a day later. At the same time, a state of emergency has been declared in the country's nuclear sites, presumably reflecting the fear that an Israeli/US air strike could take place at any time. 

Bad mood among investors
One of the consequences of the worsening international climate is that Iran's prospects to attract international investment are suffering a severe setback. Even internal investors appear increasingly depressed and the Teheran stock exchange has been badly hit. The property sector is also reported to be markedly slowing down, but a crisis of liquidity is reported across the board, while capital outflow has been increasing, especially towards Dubai and the United Arab Emirates. 
Another victim of the negative climate could become the new oil bourse, which is to open on 20 March. While the bourse might have some potential for success as it will for the first time allow buyers to purchase oil paying in euros rather than in dollars, few will want to invest in it in the current situation. 

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ENERGY

Iran dashes hopes for Russian nuclear deal

Iran announced recently it was indefinitely postponing talks scheduled for Moscow, dashing hopes a Russian compromise proposal might ease its nuclear stand-off with the United Nations, The Financial Times reported on February 14th.
Tehran also resumed enriching uranium at its Natanz plant in defiance of the recent vote by the UN's watchdog, the international Atomic Energy Agency, according to diplomats in Vienna, the IAEA's homebase. The resumption came a day after Gholam-Ali Haddad-Adel, Iran's parliamentary speaker, said Tehran was about to restart "nuclear research activities" at Natanz. IAEA inspectors are due to visit Iran's nuclear sites to verify that Tehran has resumed enrichment.
The Natanz plant contains a small number of centrifuges, which convert uranium hexoflouride gas into enriched uranium. It is not large enough to produce enriched uranium for nuclear weapons.
Iran is nonetheless defying February's IAEA vote calling for a suspension of the nuclear programme.
Moscow's proposal for Iran to enrich uranium in Russia, a possible compromise received a further blow as Gholam-Hossein Elham, the Iranian government spokesman, said talks had been put off because of the "new situation," a reference to Tehran's being referred to the UN Security Council.
The decision in Moscow and Beijing to back referral has prompted criticism in Tehran of Iran's nuclear negotiation team.
On visits to both Moscow and Beijing shortly before the IAEA vote, Ali Larijani, Iran's top security official, praised the stance of his hosts. Aftab website, affiliated to Mr Larijani's predecessor, Hassan Rowhani, recently wrote that the hopes of those looking to Russia and China had "turned out to be a mirage."
Conservative pragmatists like Mr Rowhani are wary of strengthening a hard line in Tehran. On Saturday, President Mahmoud Ahmadinejad hinted Iran would consider leaving the Nuclear Non-Proliferation Treaty if its access to nuclear technology were blocked.

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FOREIGN COOPERATION

Tashkent-Tehran boost bilateral cooperation 

The seventh sessions of Iran and Uzbekistan's joint economic and commercial commission was recently held in Tehran. Iranian Ambassador to Uzbekistan, Mohammad Fat'hali, said that during the session, the officials of both countries discussed bilateral cooperation in trade and commerce, banking, finance, insurance, transportation, transit and communication, industry, technical and engineering services, agriculture and animal husbandry, Interfax News Agency reported.
Bilateral cooperation between Iran and Uzbekistan is increasing in various fields especially in the economic, trade and industrial areas. The officials of both countries also signed several documents of cooperation, which enhances the bilateral cooperation. The last document on bilateral cooperation signed by the Uzbek deputy prime minister and Iranian Commerce Minister, Massoud Mir-Kazemi, in Tehran in January was put down in an agreement for cooperation among the two countries private sectors. The Iranian diplomat said, "Tehran and Tashkent are currently members of the ECO and Shanghai Cooperation Organisation (SCO). They share common stances in the fight against terrorism and illicit drug smuggling and establishment of security in the region."
"Economic cooperation between Iran and Uzbekistan can serve to meet several needs of the two countries," Fat'hali said. He added Iran is an appropriate market for Uzbekistan's agricultural products. The ambassador said Uzbekistan is seriously promoting its auto-manufacturing industry, adding Iranian industrialists can cooperate with the opposite side thanks to Iran's great achievements.
Iran is also the best route for Uzbekistan to have access to international waters to export its goods while Uzbekistan is a transit route for Iranian lorries to Kazakhstan, Tajikistan and Kyrgyzstan. 
Beside ground and railway transportation, Tehran and Tashkent have set up a direct flight once a week. Iran and Uzbekistan enjoy great potentials for expansion of tourism cooperation.

Rahmonov, Ahmadinejad to boost Tajik-Iranian ties 

Iranian President, Mahmoud Ahmadinejad, on January 17th extended an official welcome for Tajik President, Emomali Rahmonov, who arrived in Iran for a two-day visit. Rahmonov was invited by Ahmadinejad to attend a conference on Iran-Tajikistan economic cooperation and held talks with Iranian officials, Interfax News Agency reported.
Rahmonov was also welcomed by Iranian Commerce Minister, Massoud Mir-Kazemi, upon arrival at Mehrabad International Airport. During his stay, Rahmonov met with Majlis Speaker, Gholam-Ali Haddad-Adel, Expediency Council Chairman, Akbar Hashemi Rafsanjani, and Foreign Minister, Manouchehr Mottaki. During these meetings, the two sides discussed bilateral, regional and international developments. Iran and Tajikistan currently enjoy a high-level of political and economic cooperation. The restructuring of Tajikistan's debt to Iran was also discussed. "The question of restructuring Tajikistan's debt to Iran will be mulled, and we hope for a decision that would be positive for Tajikistan," Rahmonov said at the conference of energy experts from Iran, Russia and Tajikistan. "An impressive package of documents has been compiled. The construction of the Anzob tunnel will be discussed. We also intend to propose the construction of the Shahristan tunnel to Iran," Rahmonov said. 
Tajikistan owes Iran nine million Euro. Iran has expressed its readiness to invest up to 170 million Euro in the Sangtuda-2 hydro power station, with a capacity of 220 megawatts in Tajikistan. Russia's UES is completing the construction of the 670 megawatt Sangtuda-1 station, and RusAl, the 3,600 megawatt Rogun power station. The volume of Iran-Tajikistan trade exchanges stood at 130 million Euro in 2005. 
Iran exports mainly foodstuff and construction materials to Tajikistan and imports aluminium and cotton. Iran has generously participated in Tajikistan's development through investment in the country, particularly in the construction of the Anzab tunnel and Sangtuda 2 power plant. Iran's Ambassador to Dushanbe, Nasser Sarmadi Parsa, said that Rahmonov's visit to Tehran would open a new chapter in expansion of economic and cultural ties between the two countries. Sarmadi said that during Rahmonov's stay in Tehran, implementation of various economic projects was discussed. A draft agreement has been prepared by Iran, Tajikistan and Afghanistan on trilateral cooperation in the electricity sector, Iran's minister of Energy, Parviz Fattah, said on January 17th. He referred to the dam construction as one of the focal issues in the talks currently held between Iranian and Tajik officials. Besides the drafts of a memorandum of understanding (MOU) on the transfer of electricity from Tajikistan has already been prepared. He added that after their approval, the agreements would be disclosed in further detail. Iran and Tajikistan plan to expand their bilateral cooperation in the field of dam construction in the near future. Tajikistan is also interested in the expertise of Iranian experts and engineers in the sector.

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