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IRAN


 

 

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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Update No: 064 - (28/03/07)

Sanctions to come
With Iran's failure to stop the uranium enrichment process on 21 February, the country is definitely heading towards more Security Council - sponsored sanctions. The US are pushing for an embargo on arms sales and on export credits. The forthcoming sanctions are also expected to target industries and businesses linked with the Revolutionary Guards, who control many of them, and certain institutions allegedly linked with Iran's armament programs, such as the Sepah Bank. Iranians, however, seem determined to pursue their path. A dispute with Russia over the construction of the Bushehr reactor, now delayed again, is only adding to the Iranians' revolve to become autonomous in this field. Recently contradictory signals emerged from Washington with regard to the US approach towards Iran. The state department accepted to take part in an international conference on Iraq with Iran and Syria, but ruled out direct talks. Moreover, the Bush Administration continued to wage a propaganda war against both countries but particularly Iran. Commentators are divided with regard to whether the participation to the conference is a first move towards beginning to engage Iran or whether it is just an attempt to pretend to be moving in that direction, while actually working in different directions. At the same time reports concerning US and Saudi underground activities against Iran's influence in the region have been surfacing in the media. Some source link the disappearance of Deputy Defense Minister Ali-Reza Askari in Istanbul at the beginning of March to these activities, although it might also be that Askari simply 'defected'.

Some reform, much criticism
The Iranian government finally took the resolve to start addressing the problem of excessive fuel consumption, introducing rationing and increasing the price from US$0.09 to 0.11 per litre. Although the change is still modest, it is a move in the right direction. Many observers assumed that given President Ahmadinejad's populism the situation was going to remain frozen for some time at least. Nonetheless, criticism of Ahmadinejad's economic management continues to strengthen. In part this is the result of the reformists regaining some courage to challenge the government, but the main factor has been the fact that former president Rafsanjani has joined the ranks of the sceptics with public statements about the excessive and growing reliance on oil revenue. Ahmadinejad is also drawing criticism from the clergy because of his habit of discussing religious issues, a topic which the clergy claims as its own exclusive domain.

Business-friendly Khamenei
Supreme Leader Khamenei once again took the lead on matters of privatisation of Iran's industries in February, when he decreed that in accordance with the constitution the privatisation should proceed. Several conservatives have been objecting to Ahmadinejad's plans to privatise through the distribution of shares to the population, arguing that this will not suffice to bring about a substantial change in the economic performance of the companies involved. The private sector is still struggling to assert its own role. Now for the first time it might have the chance of seizing control of the Chamber of Commerce, which so far has been controlled by the Islamic Coalition Society, a political organisation created in the 1960s to support Khomeini. Following board elections in February, independent businessmen have now a majority in the Chamber. The elections witnessed a high participation, possibly a result of the widespread desire among businessmen to ensure that the forthcoming privatisation of state industries is fair and open. 
Some signals have emerged in official statistics that economic malaise is not just an invention of the anti-Ahmadinejad opposition. According to official figures, several industrial sectors continued to register significant growth rates this year, but others recorded a decline in production, as in the case of aluminium, electronics and communications. The latest figures also show that inflation is up to 13.4%, with a trend towards further increases.

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