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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: 070 - (24/09/07)

France appears to join anti-Iran front
The anti-Iran sortie of new French Foreign Minister Bernard Kouchner, who said in September that the world should prepare for war over Iran's nuclear programme, represented a departure from the previous government's moderation and from the position of most EU countries. Although Kouchner is known for his pro-US views, the move might also be an attempt to issue a strong warning to the Iranians and therefore avoid his 'Atlanticist' views being tried by a real new war in the Middle East. He has in France backtracked on the 'aggressive' interpretation, claiming that he was quoted out of context and it was the awful prospect of war that he sought to avoid.That his words were a warning to all involved, to step back from the brink.

A number of other EU countries, such as Germany and the Netherlands, are limiting themselves to endorsing new sanctions against Iran. The Americans are also keeping up the psychological pressure, leaking information that an air war against Iran would not be limited to the nuclear infrastructure, but would target the whole military establishment. 

The Americans are also putting pressure on India to suspend its military cooperation with Iran, threatening to drop the nuclear deal between Delhi and Washington. The Iranians are reacting by trying to improve their military proficiency and by bolstering the self-confidence of the armed forces with continuous announcements of breakthroughs in the endogenous production of military technology. At the beginning of September a new commander of the Revolutionary Guards was appointed, who is reputed to be more professional and technical than his predecessor. The new commander is also known as a believer in asymmetric warfare and has been involved with the training of Iraqi militias in the past, so that the appointment might also be read as a response to US accusations of the Guards' involvement in sponsoring terrorism. The Iranians also seem to be making exaggerated claims about the progress of their nuclear program, which in fact seems to be proceeding significantly slower than planned. 

The ills of populism
Ahmadinejad's economic populism continues to worry Iran's business world after the president of the Central Bank, a recent presidential appointee, announced in September a plan to abolish interest rates on bank loans. The government's policy to keep interest rates below inflation is contributing to the depletion of the Oil Stabilisation Fund, controlled also by the Central Bank. The fund is down to US$6.3billion, that is $3bn less than in March. Another controversial aspect of the President's economic policies is the fuel rationing plan, which is drawing criticism even from those who in principle support it, because its implementation has been trusted to inexperienced supporters of Ahmadinejad. The shrinking of the Fund is likely to continue next year if it is true that the government plans to increase the 2008 budget, in order to fund big infrastructural projects. The unrealistic attitude of the government also continues to impact on the oil industry. The agreement with Total to develop part of South Pars, the world's biggest gas field, is now in doubt because Tehran is demanding a higher price for its gas. Most oil companies remain interested in Iran and continue negotiating, but are postponing to signing of contracts in the hope that the international environment will improve.

Rightward shift mobilises opposition
The Ahmadinejad government is also cracking down on civil liberties, with a purge of the universities, arrests of journalists, trade unionists, women's rights activists and student leaders. There have been more then half a million fines in 5 months against people who do not respect the country's strict dressing code. These are seen as excesses even by some of the country's judges, such as the Chief Judge. As a result political opposition to Ahmadinejad is growing and is mostly polarising around Rafsanjani, who recently consolidated his position by being elected as President of the Council of Experts, a prestigious position. He has also proposed that Iranian leaders and institutions discontinue the ritual name calling, when it refers to America as "the Great Satan". That has of couse produced a negative reaction from those who claim to know the mind of the leading Ayatollahs, who sponsor this approach . 

The reformists are in the meanwhile forming an alliance among themselves and with Rafsanjani's supporters and are expected to be able to compete in March's parliamentary elections as a single bloc, while the conservatives are increasingly divided. However the reformists risk having many of the candidates disqualified from running once again by the Guardians Council and they remain weak outside the main cities.

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