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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: 053 - (28/04/06)

Military option more likely
Press leaks indicated in early April that preparations for a military offensive against Iran are already going on and that the likely date is sometime in 2007. Although US officials denied the content of the leaks, most international analysts are upgrading the chance of a US military campaign against Iran, despite signs of disunity within the anti-Iranian front. The UK argues that Iran should be offered new incentives to renounce the uranium enrichment program, including a direct US participation in the talks, and seems to have received the endorsement of France and Germany. The Bush Administration, on the other hand, appears to be divided between hardliners and extreme hardliners, with the latter involved in an effort to even prevent any discussion of the British proposal. Although the Iranian announcement in April, that it had succeeded in mastering uranium enrichment technology and had developed advanced centrifuges to speed up the process, the reaction of the Bush Administration was unusually tame. The Americans were busy trying to convince Chinese President Hu Jintao to soften their opposition to sanctions against Iran, but at the same time the Russians were hardening their own position against the sanctions, arguing that they would only be acceptable if it was possible to demonstrate that Iran was indeed developing atomic weapons. In practice, there seems to be little chance of Security Council-approved sanctions, ass we have consistently pointed out here, so that the Bush Administration might have decided to go ahead alone, while continuing to pay lip service to international mediation efforts. The Iranians, on the other hand, seem convinced that they still have cards to play. In April Supreme Leader Khamenei made explicit his endorsement of direct talks with the US over Iraq, in part probably to counter-balance Ahmadinejad's radicalism, but also to remind the Americans of the choice that the Iranian leadership is presenting to them, i.e. that what Iran really wants is US recognition and an end to the embargo. If that happened, Khamenei seems to imply, the Ahmadinejad problem could be sorted out. After all, was not the previous president Khatami marginalised by the establishment?

Strategies of (self-)isolation
US efforts at hurting Iran's economy continued unabated in April. Contradicting earlier statements by President Bush himself, the Pakistani government was asked by the US Ambassador to abandon the Iran-Pakistan-India pipeline project and choose another option. In March the Bush Administration had even asked the Japanese to at least temporarily halt work at the Azadegan oil field, in order to put pressure on the Iranians concerning the nuclear dispute, although Tokyo refused to bow. If the efforts of the Bush Administration to isolate Iran economically had limited effects so far, the Ahmadinejad government is giving a hand with its own nationalistic approach to foreign investment. In April his government announced that in the future Iran will allow foreign companies to participate in oil development projects only in oil fields jointly owned by Iran and neighbouring countries. All other oil fields will be reserved exclusively to domestic companies, although the latter may still use foreign companies as subcontractors. At the same time it was announced that the long criticised buy back contracts for investors in Iran's oil fields will be replaced by a new type of contract called 'investment sharing', although the Iranian authorities did not elaborate on the exact shape of these contracts, which are under development. Only in the case of the South Pars project, where the Iranians are falling behind the Qataris and fear being left with too small a share of the oil, future bidding will still take place according to the old buy back contracts. 

Foggy economic plans
Hidden behind the excitement caused by international controversies, there is some uncertainty with regard to the effective economic plans of the government. For example, there is some confusion concerning fuel imports. The current budget only allocated US$2.5 billion to this purpose, as opposed to the US$4.5 billion spent last year, whereas consumption is expected to grow to 74 million litres from last year's 67 million. According to the head of the Management and Planning Organisation, it might be necessary to restrict the use of car fuel for as many as 6 months during the current financial year, which of course would be hugely controversial politically. 
Despite the enforcement of a number of anti-inflationary measures in the current budget, such as the reduction of hard-currency expenditures, experts now forecast inflation to reach as high as 20% during this year, up from the current 17%. 

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ENERGY

Gazprom interested in Iranian gas field 

Russian state gas monopoly, OAO Gazprom, has expressed interest in participating in the development of the world's largest offshore gas field in Iran, the Tehran Times reported.
Gazprom chairman, Alexei Miller, met Iranian Ambassador, Gholamreza Ansari, recently to discuss a possible role for the Russian gas behemoth in a planned pipeline linking Iran, Pakistan and India and in the South Pars field, the company said in a statement.
Iran sits on the world's second largest proven gas reserves after Russia. South Pars, which is believed to be the world's largest gas field, is shared by Iran and Qatar. It is estimated to hold 7 per cent of the world's total gas and 38 per cent of Iran's reserves.

Turkmenistan, Iran sign NG deal 

Officials from Turkmenistan and Iran signed an agreement recently to increase the price and the volume of supplies of Turkmen natural gas to its southern neighbour, the Central Asian nation's Foreign Ministry said, the Tehran Times reported.
Under the deal, which cemented agreements reached by the nations' presidents last month, Iran will pay US$65 (euro54) per 1,000 cubic meters of gas as of February 1st of this year, up from the previous price of US$42 (euro35), the ministry said in a statement.
It also envisages that Iran will buy 14 billion cubic meters of gas in 2007, up from 5.8 billion cubic meters in 2005 and a planned 8 billion cubic meters this year.
Turkmenistan, the second-largest natural gas producer in the former Soviet Union, after Russia, exports gas to Iran via a 200-kilometer (125-mile) pipeline under a 25-year framework agreement.

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