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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: 134 - (26/03/13)

Summary: The prospects for Iranís oil industry appears to be worsening as implicitly recognised by Teheran itself. Inflation is up as well, while Teheran show no intention of moderating its foreign policy posture. Candidates for the presidential elections are popping up in large numbers, but no clear front-runner has emerged yet. Ahmadinejad is also hinting for the first time in public that it is not him who is pushing for the nuclear programme to continue at all costs, but Supreme Leader Khamenei; Ahmadinejad now says that he would be ready to have direct talks with Washington to reach an agreement quickly. Such a statement also offers a glimpse into the impact of the sanctions regime, which is becoming a matter of discussion among presidential contenders. Even a former intelligence minister and current member of the Assembly of Experts like Ali Fallahian, who has recently announced his candidacy at the presidential elections, has stated that he would stop the nuclear programme and sign a deal straight away

Chinese embrace
Oil buyers want steady supplies first and foremost and even Iranís special offers are not wholly reassuring to most of them. So the trend even among Iranís most faithful customers is to look elsewhere for the bulk of supplies. India in particular is struggling to deal with the range of issues created by the financial sanctions against Iran. Some Indian refineries are contacting alternative OPEC suppliers, including Iraq, Saudi Arabia and Kuwait, as a replacement. The Japanese and the Koreans also seem set to further reduce their imports from Iran from April. The latest Iranian budget foresees oil exports of between 0.9 and 1.06 million bpd for the current year, compared to 1.3 million bpd last month. The Iranians therefore expect a further drop in exports, even if they say there are on-going discussions between them and the Indian government on how to resolve the insurance issues which is pushing Indian refiners away from Iranian oil. This would leave only the Chinese as steady buyers of Iranian oil. The Chinese have the added benefit of bartering their products for Iranian oil; the Iranian however are trying to renegotiate the terms of the bartering agreement, reducing the importance of consumer goods, which are flooding the Iranian market at the expense sometimes of local products. Instead the Iranians would like the Chinese to deliver large infrastructural projects; one might already being in the process of being finalised, involving the high speed rail network. The fact is, however, that the Chinese have been reducing dramatically their investments in Iran, from US$3 billion in 2011 to US$400 million in 2012.

Economic fog
Assessments of how the Iranian economy is doing vary widely. The Iranian government implausibly is claiming that the GDP has grown by 5.2% in 2012, while the IMF talks of a 0.9% decline. The Iranian parliament has openly challenged the governmentís statistics and published an estimate according to which the economy has grown by just 0.36% in 2012. The Iranian government, admitting implicitly a worsening economic situation, has prepared a plan to distribute subsidised food to the poorest part of the population, using in fact a rationing system. According to official figure in February the inflation rate reached close to 30% and forecasts are that it could reach 31.5% by the end of March. Government sources say that even this figure is considered an achievement as experts had forecast a 40% inflation rate; the counter-measures adopted by Teheran have according to them sorted some effect and contained inflation.

While the economy is in trouble, Iranís commitments abroad are rising. In Syria, Teheran is reportedly forming a militia with the help of Hizbollah in order to shore up the Assad regime, or to maintain an influence once Assad is gone. This seems to have reached tens of thousands of men and is still growing, implying a significant financial disbursement.

Presidential line-up taking shape
In the meanwhile candidates are beginning to line up for the forthcoming presidential elections. A few former or current allies of Rafsanjani have done so, Mohammad Saeedikia, Ali Fellahiyan, Hassan Rouhani and Mostafa Pourmohammadi. Second Vice Speaker of the Iranian Parliament Mohammad Reza Bahonar and former Iranian Foreign Minister Manouchehr Mottaki have also announced they intend to run. The latter seems to have gathered extensive support among the myriad organisations in which Iranian politics is fragmented. Among the ranks of the dominant conservative faction (anti-Ahmadinejad), three high profile figures have agreed among themselves to agree on who among them should be running: Gulamali Haddad Adil, Ali Akbar Vilayati, and Mayor of Tehran Mohammad Bagher Ghalibaf. Another faction of the same conservative faction supports MP Alireza Zakani as a candidate. Head of Iran's Trade Commerce Yahya Ali Ishaq is also a candidate, as is the secretary of the Expediency Council of Iran Mohsen Rezaee. Among the reformists, a few candidates have also emerged: the first deputy of former President Mohammad Khatami, Muhammedreza Arif, Mohammad Shariatmadari and Secretary General of the Democratic Party of Iran Mostafa Kavakibian. Finally from Ahmadinejadís camp possible candidates are Isfandiyar Rahim Mashaei, Gulamhuseyn Ilham, Foreign Minister Ali Akbar Salehi and the Minister of Transport and Urban Planning Ali Nikzada.

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