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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: 076 - (28/03/08)

Iranian voters choose Ahmadinejad
The March parliamentary elections saw President Ahmadinejad's supporters do better than expected. Although only 190 seats have already been assigned and the remaining 100 will need a runoff, results so far assign about 145 seats to various brands of conservatives and 40 to reformists. Projections of the future parliament are difficult, but reformists are confident that they will have about 50 MPs, with the rest going to conservatives and a small number of non-aligned MPs. The reformist claim to be satisfied with the result, considered that they had just 100 candidates and had been particularly weakened by the vetting of candidates in their traditional stronghold of Teheran, where in fact they do not seem to have elected anybody. The reformists had about 40 MPs in the outgoing parliament, so if the projection is confirmed they would make a net gain of about 10. The most interesting aspect of the elections was however the shifting balance of power within the conservatives. The exact new balance of strength among conservative factions is not clear and might be heavily affected by the forthcoming run off. However, of 113 MPs whose factional alignment has been identified, 70 are pro-Ahmadinejad and 43 are critics. Some well known conservative critics, like Ali Larjani, did very well in the poll, which may worry Ahmadinejad particularly as he could be yet another future presidential challenger. On the whole, however, the rise of the conservative critics of Ahmadinejad was inferior to the expectations. Contrary to the reformists, the conservative critics were not hampered by the vetting and therefore the result could be said to genuinely reflect the support of the different conservative factions. In other words, Ahmadinejad is still on top after all, even if he will have to court the support of conservative critics in the parliament. In a sense the main winner of these elections is Supreme Leader Khamenei, whose ability to control Ahmadinejad will now increase.

External affairs: good and bad news
The bad news are that at the beginning of March the UN Security Council voted new sanctions against Iran. The good news is that the new sanctions are still quite mild, including the freezing of the assets of 13 Iranian companies and travel bans for five Iranian officials. It also bans the sale to Iran of items which can have either a military or civilian purpose. The mild sanctions were a reflection of the need to have both China and Russia on board. The resignation in March of Admiral Fallon as chief of U.S. Central Command can be seen as a sign that the option of a war with Iran is still not completely out. Fallon was outspoken in his opposition to any military initiative against Iran and was invited to go by Washington. This can be read in a number of ways: maybe Washington has war plans, or maybe the administration believes that unless the Iranians think such war plans exist they will never bow to its pressure. 

The curse of gasoline, the blessing of gas
Iran's gasoline policy continued to evolve in March, with the decision to allow consumers to buy gasoline over the rationing quota, but at a much higher price (45 cents a litre as opposed to 42 cents a gallon). The decision was timed to coincide with the New Year (which starts 21 March), but might continue indefinitely if the government finds it a suitable way to surreptitiously increase prices without causing protests.

In March the government announced with great fanfare that for the first time non-oil exports have reached 50% of total exports. While this is good news for Teheran, it is not really a sign of diversification of the economy away from natural resources, as the lion's share of non-oil exports is accounted for by liquefied natural gas. Indeed gas is beginning to take off as a major new commodity export. A new deal was signed in March with Switzerland's Elektrizitaetsgesellschaft Laufenburg, which will import from Iran 5.5 bln cubic meters of natural gas annually.

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