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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: 099 - (25/02/10)

IAEA starts to turn against Iran
As Mohammed Al Baradei stepped down as head of the IAEA in November, and new evidence concerning the Iranian nuclear programme which emerges all the time, the position of the IAEA vis-ŗ-vis Iran has been hardening. Yukiya Amano, the new IAEA chief, has produced a report which is positive about the possibility of Iran being engaged in the development of nuclear weapons. The report, which has been leaked to the press, provides new ammunition to those who want to tighten the net around Iran.

The Russians seem increasingly open to the possibility of new sanctions against Iran. Russian Foreign Minister Lavrov stated that Moscow is very alarmed about Iranís lack of cooperation with the IAEA. Although discussions of new sanctions are not yet underway, they might start soon; the Israelis are placing very heavy pressure on Washington in this regard. Iranian government sources admit that the current sanctions have some effect and have pushed up transactions costs, but also state their belief that there will always be willing trading partners to deal with Iran, particularly in Asia. Trade with China might have already exceeded trade with the whole EU and is estimated at US$31 billion.

Iran recently signed a deal to import an additional 6.5 billion cubic meters of natural gas from neighbouring Azerbaijan. There is a pattern of Iran increasingly relying on natural gas imports for its own energy needs, possibly out of the belief that Russia, which has great influence on both main suppliers of gas to Iran (Azerbaijan and Turkmenistan), will never endorse energy sanctions against Iran. However, should Russia change its position, Iran would have made itself considerably vulnerable.

Opposition in disarray
The confrontation over the 11 February celebrations of the Iranian Revolution ended up in a defeat for the opposition to the regime of President Ahmadinejad. The heavy security mobilisation discouraged protesters; the government strategy of blocking the streets also prevented many from attending. The opposition movement is now looking for a new strategy, but the lack of a unified strategy means that developing it is very problematic. Many believe that the opposition movement will now disintegrate and disperse, if a charismatic leader does not emerge to lead it. The predominantly middle class base of the opposition precludes the shift towards other forms of struggle. Efforts to call for labour strikes have been dismal failures, despite the harsh impact of the economic crisis n the workforce. The more moderate wing of the opposition, figures such as defeated presidential candidates Mir-Hossein Mousavi and Mehdi Karroubi, oppose strikes, but perhaps more important is the tight control exercised by the regime on labour and labour organisations. Many small strikes have occurred in recent months, but they have all been crushed; attempts to form independent unions have led to arrests and sentences to prison terms. The Islamic Labour Councils, which represented labour interests to a degree under Khatami, have been turned into a puppet of the government under Ahmadinejad.

Debate on subsidies heats up
According to official figures, year-on-year inflation came further down to 12.2% in January from 13.5% in December, seemingly making the target of 11% by March achievable. However, the commodity price index has shown an increase of 0.4 percentage points over the previous month, stoking fears that Ahmadinejadís planned cuts to government subsidies might push inflation up again. Official figures also show a sharp rise in unemployment, which reached 11.3% in December, up from 9.5% a year earlier. The debate on subsidies continues in Iran, not least because of inconsistencies between the new five-year plan and next yearís budget, both of which are waiting to be discussed by the parliament. The government seems now to be heading for a fast cut in subsidies, to the tune of US$40 billion in just one year, contrary to the US$10-20 billion initially discussed. That would mean a steep rise in prices; for example gasoline would end up costing 4 times as much.


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