Rooyesh

President Mahmoud Ahmadi-Nejad says he likes to check Iran’s economic pulse in his own neighbourhood in eastern Tehran. He once told MPs in response to criticisms about rising prices to go and buy their tomatoes from Narmak. And he is fond of mentioning favourite shopkeepers in Narmak who he claims have helped him to understand the country’s economic hardships.

“There is an honourable butcher in our neighbourhood who knows all the economic problems of the people,” Mr Ahmadi-Nejad said recently. “I get my economic information from him.” A visit to Narmak this week, however, shows Iranians’ growing economic frustrations. The imposition of petrol rationing, which provoked the burning of 10 petrol stations on Tuesday night, came on top of a recent fuel price rise and steep increases in the cost of housing and dairy products. The economic pressures are threatening to tarnish Mr Ahmadi-Nejad’s image as a leader who is close to his people. “Butter is now 400 tomans [43 cents] from 300 tomans only a week ago,” said a woman customer at the president’s favourite grocery shop, shaking her head. “God knows what will happen following petrol rationing.” Another shopper, a mother of two, said tearfully: “It’s a month since I started looking for a flat, but there is no way I can afford the new rents that have suddenly increased by three or four times.” Curiously, people in Narmak, who have sold the president goods for decades, say they respect Mr Ahmadi-Nejad as a decent customer who does not bargain like most others. But they do not recall being asked by him about people’s problems, either before or since he became president. Reza, a 50-year-old butcher, says he sold red meat and liver to the president for about 30 years. “He has not come shopping here since his presidency [in 2005],” he added. “I respected him like all my other customers, but he never asked me about anything.” Another butcher, who asked not to be named, thought Reza was probably the president’s main butcher. “I remember once he was angry with me for selling liver for 100 tomans [11 cents] more than what Mr Reza charged.” “The butcher he talked about is like the promises he has made to people. They are not true,” said one angry customer at the butcher’s, claiming that he had spent four hours waiting to fill his car with petrol. In spite of his frequent references to Narmak, Mr Ahmadi-Nejad has moved away from the district to another house near the presidential office in central Tehran. But according to neighbours, he returns every month or so and visits people in his small alley called Hedayat, meaning Islamic guidance. Neighbours do not know which butcher he was referring to, but talk of a 76-year-old grocer who visits the president whenever he shows up in Hedayat alley and tells him in a few minutes about the recent problems of his customers. “He doesn’t ask me questions, but only listens to me,” said Yahya Esfandiari, the grocer, who clearly holds Mr Ahmadi-Nejad in high regard, saying that the president “wants to work, but is stopped by some vipers”. Mr Esfandiari told the president about the high cost of housing last time he met the president. “He said the housing problem would be resolved in four or five months.” Source: Financial Times

Iran on Saturday dismissed the threat of fresh UN sanctions and announced an impending visit by a senior atomic watchdog official for talks over Tehran’s controversial nuclear programme. “The Iranian nation will pursue its right and the disturbances will have no effect,” supreme leader Ayatollah Ali Khamenei was quoted as saying by state-run television. Khamenei backed the defiant policy of President Mahmoud Ahmadinejad who has vowed Iran will not back down on its nuclear work in the face of international pressures.

“Iran’s foreign policy has always been offensive. Unfortunately at certain times there was a defensive policy, which was a mistake,” Khamenei said in a ceremony marking the second anniversary of Ahmadinejad’s election. “The policy of resistance to defend Iran’s (nuclear) right will continue without any faltering,” said the president. The UN Security Council has already imposed two sets of sanctions against Iran after it failed to heed ultimatums to suspend uranium enrichment, the process that makes nuclear fuel but in highly extended form can also produce the fissile core of an atomic bomb. The West suspects that Iran’s nuclear programme is a cover for a push to develop the bomb, although Iran has said repeatedly that it is for civilian purposes only. The Security Council could toughen Iran sanctions, which now target people and institutions involved in its nuclear and missiles programmes, and impose travel bans, freezing of bank accounts and inspections of Iranian cargo ships and aircraft. But in comments published on Saturday, Ahmadinejad brushed off the threat saying: “They cannot hurt us, not that they don’t want to but because they are incapable of doing so as they are in a difficult situation.” Ahmadinejad added, “The global arrogance cannot stop the Iranian nation,” in an allusion to the United States, the main ally of Israel, the only country in the Middle East believed to have a nuclear arsenal. Washington has never ruled out military action to stop Iran’s nuclear drive. Iran’s ambassador to the International Atomic Energy Agency said on Saturday that UN resolutions had only hastened Iran’s enrichment work. “At the moment Iran has speeded up its enrichment activities, so Security Council resolutions have had a positive effect on this work,” Ali Asghar Soltanieh told the student ISNA news agency. He also said that construction work on a heavy water reactor in Arak, in central Iran, was continuing without delay, despite IAEA calls to halt the work. A senior diplomat with ties to the IAEA said that Iran was already operating more than 1,300 centrifuges for enrichment by mid-May at its Natanz plant and could have 3,000 by the end of July. Under ideal conditions they could produce enough highly enriched uranium to produce a nuclear weapon within a year at most. But Iran says it is willing to resolve questions over the nature of its nuclear programme with the IAEA, which has been unable to fully verify Iran’s atomic work. Soltanieh announced meanwhile that IAEA deputy director general Olli Heinonen will visit Tehran from July 11 to 13 to “examine a work plan to respond to all remaining issues over Iran’s nuclear programme.” Soltanieh told ISNA that Heinonen, who heads the Department of Safeguards, will be accompanied by IAEA officials “who are not inspectors and will not carry out any inspections into Iran’s nuclear facilities.” Iran’s top nuclear negotiator Ali Larijani invited the IAEA team to Tehran after talks last week in Vienna with UN watchdog chief Mohamed ElBaradei. Larijani had undertaken to define within two months an action plan with the IAEA, which is demanding the possibility of checking on the ground whether Iran’s nuclear programme has military ambitions. Soltanieh said the visit will precede a new meeting between Larijani and EU foreign policy chief Javier Solana who have held talks aimed at finding a way out of the standoff.

Source: AFP

Iran’s supreme leader on Saturday threw his weight behind a gasoline rationing scheme which sparked angry protests and left more than a dozen petrol stations burnt out in the world’s fourth largest oil exporter. Supreme Leader Ayatollah Ali Khamenei, Iran’s highest authority under its system of clerical rule, hailed the government’s “bravery” in a speech to President Mahmoud Ahmadinejad and senior officials, state television reported.

Despite huge energy reserves, the Islamic Republic has limited refining capacity and imports 40 percent of its fuel needs, a sensitive issue when world powers are threatening new U.N. sanctions over Tehran’s nuclear ambitions. Seeking to rein in costly imports and soaring consumption of heavily-subsidised fuel, the government in May raised the litre price by 25 percent and on Wednesday launched a delayed plan to ration the sale of gasoline. Many motorists complained the amount of fuel they are allowed to buy, just 100 litres a month, is not enough and some lawmakers have called for a review of the allowances. But Khamenei, who has also previously defended the government against criticism on some issues, made clear he backed the move. “The issue of gasoline is one of these actions which the government bravely made a decision about,” he was quoted as saying. “And of course, by studying all of its aspects, (the implementation of) this decision should continue.” Critics say the government needed to act to put a brake on demand but that raising the price would be more efficient than artificially restricting the sale of gasoline. They say the announcement that rationing would start just hours beforehand added to public anger, leading to the torching of 19 petrol stations on Tuesday, according to media reports. Khamenei suggested the money Iran could save through the scheme — gasoline imports cost it $5 billion last year — should be used to improve living conditions. “If this huge amount decreases eventually, certainly it will be spent on issues related to people’s lives, employment and building roads and schools,” he said. The government has not said if drivers will be allowed to buy fuel above their allocation at a higher price than the subsidised rationed price of 1,000 rials (11 U.S. cents) per litre. If not, analysts say a black market is inevitable. Ahmadinejad’s economic management has faced mounting criticism from the public and the media. Some 57 economists said in a open letter this month government policies were fuelling price rises and failing to deliver the fairer society he promised when he came to power. The United States, which is leading efforts to isolate Iran over its nuclear plans, has said Iran’s gasoline imports are a point of “leverage.” Washington accuses Iran of seeking to build nuclear weapons, a charge Tehran denies.

Source: Reuters

IS IRAN slipping back into a more repressive mode? A generally edgy feeling sharpened this week when the government announced that petrol would be rationed within hours. This caused chaos at pumps, with drivers fighting over the last drops of fuel; some of them chanted anti-government slogans and set cars on fire. A cap on consumption of 100 litres (22 gallons) a month shows that the government is nervous about relying on imported fuel. The unrest suggests that people are getting cross about the economy.

Yet this does not mean that political dissent is bubbling up. The regime’s detractors may feel angry but they have little scope for expressing their feelings. The crackdown is probably not because of a real threat from within; it is a way of responding to pressure from outside for fear of military strikes, an economic embargo or American plans for a “velvet revolution” leading to a change of regime. Since December, the UN Security Council has passed two resolutions imposing sanctions on Iran because of its persistent failure to be candid about its nuclear programme, while the United States has pressed Western companies to cut ties with the Islamic Republic. It has sent more troops and battleships to the Persian Gulf and has detained Iranians inside Iraq. The American press continues to speculate about American and perhaps Israeli air attacks against Iran’s nuclear sites. Iran has also reacted vehemently to last year’s decision by the American administration to give $66m to Iranian opposition groups. Most of the cash is for radio and satellite broadcasters putting across views at odds with those beamed by Iranian state television, but $20m is for unnamed groups inside Iran. The overall figure is expected to rise to $75m next year. A mood of fear has been building up for more than a year. Many Iranians interpreted last summer’s detention of Ramin Jahanbegloo, a mild-mannered academic, as a warning not to attend political or cultural conferences abroad. In September Iran’s largest liberal daily, Sharq, was closed; it reopened last month but the ban may have made its journalists more cautious. In March campaigners for women’s rights were arrested and held for several days for defying a government order not to protest. A teachers’ demonstration was also broken up in the same month. At present, the authorities seem keener to intimidate would-be dissenters rather than imprison hundreds of them. By locking up a few well-known ones, the authorities are serving notice to intellectuals generally. The authorities have embarked on one of the harshest morality campaigns for several years. But the crackdown, which after two months has begun to slacken, may have been driven by a desire to placate conservative clergy in Qom, Iran’s most religious city, where several of them have criticised President Mahmoud Ahmadinejad for letting standards slip. In any event, the regime has been going out of its way to display its strength. Police and militiamen have been manning “morality checkpoints” across Tehran, the capital, and have been publicly beating alleged gangsters, who were paraded on television and forced to wear derogatory placards. This grimly reminded liberals of a period in the 1990s when intelligence agents assassinated known criminals—and then started to kill a number of well-known intellectuals and dissidents too. The supreme leader, Ali Khamenei, who is more powerful than the president, has called for a “year of national unity and Islamic consolidation”. The presence of more old soldiers in the government’s upper ranks has shifted the power balance, which in the past prevented any one faction from winning too much control. Since Mr Ahmadinejad’s election as president in 2005, younger conservatives have dominated key positions. Many of them view politics through a military prism. It is they who are keenest on the present crackdown. The brief arrest in April of Hossein Mousavian, a former nuclear negotiator, showed how strong the hawks are. Last week a group of angry right-wing radicals and seminarians gathered outside a clerical court in the eastern city of Mashhed to demand the prosecution of a former president and leading reformer, Muhammad Khatami, for having shaken hands with some women during a recent trip to Italy—a bad error under a strict interpretation of Islamic law. Either the reactionaries are rattled by the prospect of the general election scheduled for next year, or they are flaunting their confidence. In Iran’s opaque politics, it is hard to say which. Source: Economist

U.S. and European officials are still very angry at Mohamed ElBaradei, director-general of the International Atomic Energy Agency, for appearing to concede that Iran’s uranium-enrichment program is here to stay. “Every time he gets up there, he comes out with Iranian talking points,” snipes one Western diplomat. But NEWSWEEK has learned that the British recently drafted a proposal that shifts the West’s “red line” closer to El Baradei’s position as a way of breaking the stalemate in the talks.

The draft proposal, which is being circulated among the governments but has not yet been formally submitted to Iran, calls for a “freeze for freeze” rather than an outright suspension of enrichment. The “freeze” concept is similar to the “timeout” that ElBaradei first called for last January. In order to get talks started, both ideas effectively permit Iran to continue with the uranium enrichment it is doing already, but they demand that Tehran freeze further construction of centrifuges and reprocessing of nuclear material, in exchange for a reciprocal freeze on further U.N. sanctions. That seems to mark a concession by the Europeans and Americans, who had previously insisted that Tehran suspend all enrichment activities before they would come to the table to negotiate a broader agreement. Washington and the so-called “EU-3”—Britain, France and Germany—also pushed through two U.N. Security Council resolutions insisting on suspension. In an interview, a European diplomat who is helping to disseminate the proposal denied that it represents a breach of the U.S-European “red line,” which is to insist that Iran suspend all enrichment before formal talks begin. “We’re talking about choreography here,” he said. “We said we are prepared to be flexible over process to get back to talks. That doesn’t mean that we’re flexible over the substance of the red line. If it would help the Iranians to be able to sell this to their own domestic audience, to say they won this great victory, we can accept that.” Iran’s chief nuclear negotiator, Ali Larijani, has insisted that Iran will never suspend enrichment. Earlier this year, Iran announced it had reached “industrial-scale” enrichment, with more than 1,000 centrifuges operating. Despite some technical setbacks, experts feared that Tehran was working its way steadily toward the 3,000 centrifuges it would need to produce nuclear weapons (though Tehran denies that is its aim). Around that time, ElBaradei outraged European and American negotiators by suggesting that Iran’s program was so far advanced that demands for complete suspension were unrealistic. “They pretty much have the knowledge about how to enrich [uranium],” he told The New York Times. “From now, it’s simply a question of perfecting that knowledge. People will not like to hear it, but that’s a fact.” An IAEA official, speaking on condition of anonymity, told me that ElBaradei is simply recognizing the reality on the ground in Iran that Washington refuses to see. “ElBaradei warned about this a year ago when they had only 20 centrifuges—in other words, the danger of just letting things drag on. There is simply not going to be any absolute suspension of Iran’s activities, and the longer the United States and others hold out for that the more centrifuges Iran will build,” said the official. ElBaradei’s worry is that if the diplomatic stalemate continues, Iran could have 8,000 centrifuges by Christmas, a critically high number. Tehran also seems to be gravitating toward a “freeze for freeze.” During a visit last week to Iran, I talked to a senior Iranian official, Mohsen Rezai, secretary of the Expediency Council, who spoke favorably about El Baradei’s concept of a timeout. “With old solutions and old arguments, [the nuclear issue] will not be resolved,” he said, adding, “I agree with Mr. El Baradei that you cannot bomb away nuclear technology.” Now, sensing they may have an ally at the IAEA, the Iranians are eager to satisfy ElBaradei’s demands for further clarity on the illicit history of Iran’s program—so much so that Larijani met twice with him last week. Larijani also apparently dropped Iran’s earlier demand that cooperation with the IAEA would come only after the Security Council referred the Iran case back to the agency. “They can have their surveillance. They can have their inspections,” Larijani told me in a separate interview in Tehran. What remains at issue is how much enrichment Iran will be permitted to have. Source: Newsweek

The Financial Times is reporting the Iran’s parliament on Wednesday night agreed to press ahead with plans to introduce fuel rationing in the face of panic and rioting across the country over the proposals. The protests presented a rare public challenge to Mahmoud Ahmadi-Nejad, the president, whose popularity has been based on his pledge to share oil revenues more fairly and cut living costs for ordinary Iranians. After attending a closed parliamentary session addressed by the interior and oil ministers, Gholam-Ali Haddad-Adel, Iran’s parliamentary speaker, said fuel rationing, introduced at midnight on Tuesday, had to continue, to thwart US threats and the possibility of sanctions hitting petrol imports.

Though Iran is one of the world’s biggest oil producers, its lack of refineries means it must import about 40 per cent of its petrol – of which it consumes about 75m litres a day. Iran imported $4.9bn (£2.45bn) of petrol in the year to March 20. This year, however, the government is authorised by parliament to import only $2.5bn. Police were out in force in the capital to protect petrol stations, at least 10 of which had been burned overnight by angry crowds. In north-western Tehran, police patrolled the Niyayesh highway, where one petrol station had been burnt. Protesters had also smashed the windows of the nearby state-owned banks Sepah and Tejarat. “It serves this regime right,” said one driver passing by a burnt petrol station. “People should do the same in response to in-creases in the prices of other goods.” Kazem Vaziri-Hamaneh, oil minister, assured people they would not face petrol shortages. But this failed to convince Tehran motorists, who formed queues several kilometres long outside those petrol stations that remained open. The local media reported similar long lines throughout the country, although only three petrol stations outside the capital were reported to have been set ablaze and there were no reports of casualties. The judiciary said 80 people “who destroyed public resources” had been detained. The government made contradictory statements about fuel rationing plans in the run-up to Tuesday’s announcement. Motorists were instructed to use smart cards last month to prepare for rationing but hundreds of thousands of drivers have yet to obtain them, including Tehran’s 5,000-strong taxi fleet. The government has imposed rations of 100 litres of petrol a month for private cars, 450 litres for private taxis and 800 litres for shared taxis.

The Iranian president, Mahmoud Ahmadinejad, was under pressure to perform a U-turn on petrol rationing yesterday after the restriction prompted violent protests at filling stations across the country this week. MPs said they would press the government to alter or even scrap the plan after angry citizens set fire to at least a dozen petrol stations in Tehran and chanted slogans against President Ahmadinejad following Tuesday night’s sudden introduction of quotas. Banks, supermarkets and fire engines were also attacked while further disturbances were reported in other big cities, including Isfahan and Shiraz.

There were unconfirmed reports that three people were killed in the violence, which led to 80 arrests. In a sign of official concern that the disturbances might spread, the government temporarily closed the country’s mobile phone text messaging network after widespread circulation of a text urging protestors to gather in Tehran’s Valiasr Square. The unrest was triggered by an announcement on state television on the rationing, prompting a rush by drivers to fill their tanks. Motorists are restricted to a monthly limit of 100 litres (22 gallons) for the next four months while cab drivers must not exceed 800 litres. Iran, the world’s fourth largest oil producer, imposed rationing to try to cut the estimated £5bn annual cost of providing massively subsidised petrol, which has to be imported because the country lacks refinery capacity. While parliament has already approved the plan, MPs had urged the government to delay the scheme amid fears over its social and economic impact. However, some analysts say it has become more urgent because of the prospect of further UN security council sanctions over Iran’s nuclear programme. Nevertheless, there was anger yesterday that the government had implemented the scheme without prior notice in an apparent attempt to prevent fuel hoarding. Esmaeil Ahmadi-Moqaddam, the chief of police, said its implementation had even been kept secret from his officers, so there had been no time to provide extra security for the filling stations. MPs attacked the failure to allow motorists to buy fuel at higher free market prices and said that if disturbances continued parliament might be recalled from the three-week recess that began yesterday. Kamal Daneshyar, chairman of the parliamentary energy committee, said: “We have told the government … that rationing with this mechanism should not be implemented, but they paid no attention. Petrol rationing will not last long and will be only a short-term measure. Free-market prices should be offered sufficiently.” The decision has already had an impact on Tehran’s congested roads, with traffic cut as cars are left at home to save fuel. Taxi drivers have responded by raising fares. Issa Saharkhiz, a political analyst, suggested the impact on the fortunes of Mr Ahmadinejad’s could be equally dramatic. “This will damage [him] and the people and groups around him, maybe even the supreme leader. He is not going to be a candidate for a second presidential term.”

Source: Guardian 

Asharq Al-Awsat reports from Tehran. Unless one sees it with his own eyes, it is difficult to imagine the volume of foreign goods in Iran and the diversity of brands that are available such as Sony, Panasonic, Hitachi, Nokia, Philips, LG and Aqua. Jomhouri Islami is the main street where electronic goods are sold in Iran. The entire street is allocated to the selling of electronics and in the middle of the street there stands the largest multi-floored commercial centre that sells food, clothes, cosmetics and furniture.

Shops are designed in a modern fashion that tempts people to buy anything that catches their eyes. Those who visit the street are mostly young people who come to check on the latest commodities, especially mobile phones without necessarily intending to buy. There are fears however amongst Iranian traders owing to the decrease in buying and selling rates and recession. However, other traders say that it is only natural that the market fluctuates, asserting that recession is something that affects all markets in the world and that it does end at some point. “The market is bad. Prices go down every day and people do not buy because of unemployment and inflation. The power to purchase has decreased over the years because people do not have enough money to buy products despite the decrease in prices,” complained Hussein Kayanen who currently works in a store selling televisions and video players made by brands such as Sony and Samsung. Hussein is a young man in his early twenties who fears that his economic conditions would be affected by the current situation in the country. He told Asharq Al-Awsat, “In Iran, there are only two factories that produce devices and spare parts for television sets, videos and radios. There is not much diversity in the commodities that they offer; accordingly they cannot compete with foreign commodities. Electronic devices are imported from Dubai, Malaysia and Singapore.” Whilst the Iranian market succumbed to the invasion of imported electrical goods, the Iranian cotton and textile industry are trying to remain in the market. “We have some Chinese goods, but the majority of available products in the market are Iranian since many Chinese products are poorly manufactured. Iranian blankets and bed sets sell better, whereas Chinese shoes are more popular products,” said Qambiz Izhakian, another seller of Jomhouri Islami Street. Izhakian specializes in household furnishing and textiles. Izhakian told Asharq Al-Awsat newspaper, “The market has been down for five years now. The situation gets worse year after year as inflation and the weak purchasing power of government employees greatly affect us. Also the threat to impose different sanctions on Iran affect the market, therefore people stop buying. I come to the shop in the morning and wait for customers then I return home. This is the case every day. Even if I wanted to sell my shop and start another business, I would not be able to find somebody who would want to buy the shop. I don’t like my job but I cannot change it.” Perhaps the only shops that are able to gain any kind of profit in Jomhouri Islami Street are those that sell mobile phones. Samadi, the owner of one shop that sells mobile phones and cameras, imports these goods from Gulf States, South Korea, China and Finland. He told Asharq Al-Awsat, “Generally, the market is good and the volume of our sales is good. But the only problem is that some new laws have caused the situation to deteriorate to a degree that costs of importing foreign goods are increased. The majority of our sales are mobile phones and cameras.” In the side streets of downtown Tehran, the numerous vendors, the majority of whom are young men, sell fake Chinese goods such as jeans, trousers and shirts. These street sellers do not suffer like those who sell in shops because they do not pay rent, electricity bills or salaries for other employees. They only buy contraband goods in bulk and display them on the street. They find buyers easily, since not all Iranians can afford imported foreign goods due to high prices. Iranians know where to find fake goods and where to find original goods. For example, ‘Waly Qasr’ and ‘Jomhouri Islami’ that are both located in central Tehran sell fake clothes that are imported from China, India, Malaysia and Dubai. If one wanted to buy genuine clothing items then modern Iranian stores that are built based on Britain’s John Lewis store or US Macy’s then the north [of the city] would be the place to go. There are those who attribute the economic situation of the market to the decisions adopted by Iranian President Mahmoud Ahmadinejad. An Iranian journalist who spoke to Asharq Al Awsat on condition of anonymity cited an example of the method adopted by Ahmadinejad when making decisions. He explained that when Ahmadinejad was elected, one of his first decisions was to change the working hours in banks to start at nine o’clock instead of eight o’clock. His decision led to many problems with banks, thus Ahmadinejad decided to retract the decision. In addition, what raised concern amongst many traders and businessmen is that Ahmadinejad had endorsed this resolution and withdrew it without consulting or discussing the matter with them. Many of the conservatives in Iranian parliament headed by Ahmad Tavakoli, the economic official in parliament, criticised Ahmadinejad’s management of the economy. The head of the Expediency Discernment Council of the System, Hashemi Rafsanjani criticized Ahmadinejad’s government causing the budget of fiscal year 2007-2008 to be dependant on the oil sector. After receiving permission from the Supreme Guide of the Republic, Ayatollah Ali Khamenei, 150 members of parliament (out of a total of 290) wrote an open letter criticizing the economic policies of Ahmadinejad, his delay in completing the budget and his tour of Latin America. Also 54 established university professors wrote an open letter criticizing agricultural policies and the increasing reliance upon imported foods from abroad, especially rice. In light of sanctions on Iran, some parties fear that importation will become a more expensive process especially as it is not guaranteed that people will maintain their current consumption patterns and this could paralyze the ability of traders and businessmen to work. Iranian importers feel the pressure more than others as they have to pay in advance for the value of goods that they buy. This is no longer easy especially considering the fact that a growing number of international banks are slowly severing ties with Iranian companies due to the American campaign to pressure Iran economically and isolate it from the international financial system, external to the framework of the United Nations sanctions. Nowadays, many banks in Europe and Asia have responded to American calls. UBS, HSBC, and the Standard Chartered and Commerce Bank stated that they decreased the level of financial ties with Iranian banks and companies. In the past few months, the US Department of the Treasury has sought to warn global financial institutions against investing in Iran particularly the Iranian oil and gas sectors. In December 2006, Iranian Oil Minister Kazem Vaziri Hamaneh said that Tehran is facing difficulties in developing its oil fields. According to Shana News Agency that is affiliated to the Iranian Ministry of Oil, “Currently, international banks and investors have lowered their cooperation with us.” However, an Iranian official stated that the impact of sanctions on the Iranian economy has been exaggerated. From his office, he told Asharq Al Awsat, “Sanctions would only lead to a rise in prices since our borders with Iraq and Afghanistan are lengthy. Therefore, smuggling anything and everything would be possible. It is not true that we receive fake goods only, there are authentic goods that are smuggled to Iran from Europe.” He added, “All kinds of commodities are admitted to the Iranian market. All kinds of publications such as The Times, Newsweek, Fortune and others are admitted into the Iranian market except those that use the phrase ‘the Arab Gulf’. Whilst some traders sensed the impact of the current economic crisis, it was the Iranian stock market that paid the higher price as it lost approximately a third of its value over the past few months. Trading in the stock market is still a new concept for the majority of Iranians however this is changing. It is easy to see social and cultural differences within Tehran’s stock market as those who have money do not hide it. There are at least three million traders in the stock market and 419 registered companies according to the chairman of the stock market, Ahmad Mir-Matahri. The problem, however, is that the Tehran Stock Exchange fails to attract foreign investors even today. The vast majority of stock exchange companies are affiliated to the government and there is a small area for private companies, which leaves the stock market vulnerable to internal and external political fluctuations. The Tehran Stock Exchange is located in a large, old building where traders watch the screens from 8am to 12:30pm. A number of young Iranians, both male and female observe closely the progress of the stock market. Ali, 26 years-old and a graduate of accounting, began investing in the stock market with his friends and gained some profit however the situation is now changing. During his participation in trading, he told Asharq Al Awsat, “I began trading in the stock market six years ago with three friends. I was interested in investing in the stock exchange due to its stability and the stability of the overall economy during Mohammed Khatami’s term. When we started, we were gaining profit for four years, however, the past few years have seen the prices plummet therefore, we have lost money.” According to Ali, there are two reasons behind the fall in the stock exchange; firstly, many of the shares were overvalued and secondly, due to the policies of Ahmadinejad’s government. “There are no clear fiscal policies, besides that the government does not support the stock market. Most of the financial liquidity is directed at the real estate sector. The government should adopt policies that provide stability to the market and encourage foreign investments.” Mohammadi Jalian, another trader in the stock market who suffered from financial losses blamed his experience on the overvaluing of stock prices. Jalian told Asharq Al Awsat, “I managed a factory before I retired. Before the 1979 Iranian revolution, I had some shares in the stock market. Since 2003 when I retired, I started looking into the stock market to see whether I could invest in it. When I first started, prices were at the highest point. Unfortunately, prices began to fall and I was one of those who lost out during the process. The reason for the decline is that the whole market is unstable. Also companies have overvalued the prices of their shares. For example, some companies raised the price of their share to 85,000 Toman [one Toman contains 10 Iranians Rials] and suddenly the price dropped to 30,000 Toman. Why did the government allow this to happen? People like me are paying the price and we lose because of instability of the market.” However, neither Ali nor Mohammadi Jalian specified the number of companies that were greatly affected by the current plummet in the stock market. One trader, who spoke to Asharq Al Awsat on condition of anonymity said, “In the stock market, there are approximately 430 companies but only 10 of them currently maintain their financial dealings. Others have frozen financial transactions and we cannot buy or sell. I think that many people have left the stock market and headed either abroad or to the real estate market in Iran.” Today, because of the Iranian market’s need for hard currency, the government decided to take a major step towards the liberation of the Iranian economy in an effort to revive it. The head of the legislation department in the Iranian stock exchange, Saleh Abadi, told Asharq Al Awsat that the privatization process will be in accordance with Article 44 of the Iranian constitution. Abadi said, “The sizes of the projects that we aim to privatize reach $100 US billion dollars… it is the largest privatization plan in Iran. Some of the sectors that will be privatized are new and were not included in the privatization process before such as telecommunication companies, banks, petrochemicals, insurance companies, mining as well as the iron and steel industry. It is not yet clear how the decision to impose sanctions against Iran by the United Nations would affect Iran’s projects for privatization or cause capital to leave Iran. However, Abadi did not show concern regarding this issue. He emphasized, “The claim that most companies trading in the stock market had frozen their transactions is absolutely untrue. Most companies are still active and there is a lot of exaggeration in reflecting the size of losses in the Iranian stock market. All stock markets in the entire region have suffered losses recently. Iran is no exception. There is also an exaggeration regarding the size of the funds that left Iran for Dubai and the Gulf.” Although the government of former Iranian President Hashemi Rafsanjani began an ambitious program of privatization following the end of the Iran-Iraq war, many of the projects were postponed due to objection of the Shura Council (parliament) on the privatization of some projects. Nowadays, 70% of the Iranian economy is in the hands of the government including all heavy industries such as mining, steel and copper, petrochemicals and the automobile industry. In 2005, Iranian authorities attempted to sell the equivalent of 2.5 billion dollars of state-owned enterprises but only succeeded in selling 30% of this value. Article 44 of the Iranian constitution states that there are three economic sectors: the public sector, the cooperative sector and the private sector. Despite the fact that the constitution gives the state the right to possess critical economic projects, on the practical level, the private sector succeeded in playing an increasing role in the Iranian economy. There are plans to privatize 80% of state enterprises. Recently, Iran’s Supreme Leader Ali Khamenei stated that based on Article 44 of the constitution, more Iranian companies, including banks and petrochemical companies, will be privatized. What is noticeable from the Iranian economy is the significant growth of the tertiary sector that outdoes the other sectors. In comparison, agriculture occupies 11.2% of the Gross Domestic Product (GDP), whereas industrialization occupies 41.7% and the tertiary sector occupies 47.1% of the GDP. Growth in the service sector is reflected in the division of labor; currently 45% of the labor force in Iran (approximately 26 million people) works as part of the tertiary sector compared to 30% in the agricultural sector and 25% in the industrial sector. Due to these transformations, agricultural production in Iran has declined whereby Tehran has become one of the largest importers of foodstuffs. Iran’s annual imports amount to $63.18 US billion whereas its annual exports amount to $45.48 US billion. Iranian economists increasingly criticize the state’s reliance upon imports of rice. With the growth of the tertiary sector, the state budget mainly depends on the oil sector. 45% of the national budget comes from oil and natural gas sales, as well as 31% of taxes and customs duties. The rest of its budget is through petrochemicals, automobiles, textiles, carpets, and pharmaceutical industries, food industries, including sugar refining, the oil industry and agriculture. The annual growth rate reached 5% and annual growth rates should remain at 5% in order to provide 900,000 jobs annually. There is an unemployment crisis and official figures estimate unemployment at a rate of 11%. However, experts assert that the percentage is much higher. Because of unemployment, the gap between rich and poor increased and so has the rate of poverty. In his study on poverty in Iran, Dr. Saeed Madani, a sociologist at the Shaheed Beheshti University stated that there are three levels of poverty; those living on less than one dollar a day (estimated at 3.5 million to 4.45 million Iranians), those who live on between $1 to $2 a day (estimated at about eight million Iranians) and lastly, those who live on between $2 to $3 a day (estimated at 11 million people). These conditions cause frustration amongst young Iranians. One young Iranian man said, “It is not difficult to be as rich as long as there is no governing system and this is the situation in Iran. We are the freest country in the world because we do not have a governing system. I can be very rich in a legal way benefiting from the freedom of transactions because of the lack of rules in the country. This is exactly what affluent people have done. For example the absence of clear laws on taxes in Iran enables people to evade paying taxes. A person who owns a Mercedes vehicle could go and pay taxes for a Khodro car.”

Democratic presidential contenders Hillary Rodham Clinton and Bill Richardson on Wednesday urged the Bush administration to continue a dialogue with Iran as the U.S. tries to thwart the country’s pursuit of nuclear weapons. In separate speeches, the candidates offered a broad indictment of President Bush’s foreign policies, from the Iraq war to the use of unilateral force to relations with Iran and North Korea. Clinton said the administration has given Iran “six years of the silent treatment.”

“In this vacuum, Tehran continues its progress toward developing nuclear weapons and increasing its influence in the region,” she told the Center for a New American Security. “After initial talks with Iran and Syria on Iraq, the administration says it isn’t sure that we need any more discussions with either of them. I think we should keep talking.” Richardson, who served as U.N. ambassador for Clinton’s husband, said that instead of lecturing Iran’s leadership, the United States should talk with them without preconditions. And instead of using inflammatory names, such as “Axis of Evil,” the U.S. and its allies should seek and find common ground, particularly with moderates unhappy with the current leadership. “If we want Iran to improve its behavior, we would do well to stop threatening to attack them,” he told the Center for National Policy. “We must remember that no nation has ever been forced to renounce nukes — but many have been persuaded to do so with a combination of carrots and sticks.” Richardson, the New Mexico governor, said he would not seek immediate face-to-face negotiations with Iranian President Mahmoud Ahmadinejad, a hardliner elected in 2005, but with others around him. The administration has rejected direct negotiations with Ahmadinejad and has instead pursued international economic sanctions to stop the country’s nuclear weapons development. Meanwhile, nearly all the Republicans vying to replace Bush said during a recent debate they would not rule out using nuclear weapons to halt the program. Vice President Dick Cheney has repeatedly said the administration is keeping all options on the table for dealing with Iran, even as efforts continue to resolve the dispute diplomatically. The New York senator said U.S. priorities should be bringing troops home from Iraq, demanding that Iraqis take responsibility for their country or lose U.S. aid and intensive diplomacy to restore frayed relationships. “We have a long road ahead to repair the damage that has been done these past six years,” she said. She said she would introduce legislation soon to deal with nuclear terrorism. She said the administration has abandoned nonproliferation efforts, cutting off dialogue with Iran and allowing North Korea to reprocess enough material to make nuclear bombs and test a nuclear weapon. Clinton said she would increase funds for the global threat reduction initiative, ensure the removal of highly enriched uranium from research reactors around the world and create a senior adviser to the president for nuclear terrorism.

Source: The Associated Press

The Associated Press reports a radio reporter being detained in Iran urged the Bush administration to end its vocal campaign for democracy there, saying it encouraged Iran’s current regime to curtail its citizens’ freedoms. Parnaz Azima, who works for the U.S.-funded Radio Farda, spoke with WTOP radio in a telephone conversation that she said she believed was being monitored, noting that she had been followed and photographed since her detention began.

She is one of four Iranian-Americans arrested while visiting Iran and charged with endangering national security. Her passport was seized on Jan. 25 when she arrived in Tehran to visit her mother. She is free on bail but is barred from leaving the country. Three others remain in custody and the Iranian government has not spoken of their fate. Azima said the Bush administration’s $66 million (€49 million) campaign to promote change inside Iran through Persian-language news, entertainment and music broadcasts has spurred President Mahmoud Ahmadinejad’s government to work to eliminate Iran’s democracy movement. “I hope that Mr. Bush’s administration doesn’t repeat this. This is a very serious mistake,” she said. “The open announcements about funding democracy in Iran have angered the government and now they have one goal — to crush those activities and to put pressure on the Iranian activists, especially those who are inside Iran.” A State Department spokeswoman, Nancy Beck, declined to comment on Azima’s statements, saying she had not heard them. The detentions have sparked widespread criticism, particularly in the U.S. where Bush administration officials are already at loggerheads with Iran over its controversial nuclear program. In a guest column in Wednesday’s edition of The New York Times, the husband of detained scholar Haleh Esfandiari, said Iranian officials have been “angling” for confessions from the four similar to that they claim was proffered by liberal intellectual Ramin Jahanbegloo, who has been held since March. “No one, in Iran or elsewhere, believes these coerced statements. They do nothing for the country’s security or its international standing,” wrote Esfandiari’s husband, Shaul Bakhash. “They only make the regime look inhumane.” Bakhash said Iranian officials, instead of repeating “this sorry charade,” could follow the model they used when they freed the British sailors and marines who were held for nearly two weeks after being seized in what Iran said was their territorial waters in the Persian Gulf. The country suffered no “embarrassing aftermath,” he said. “In the case of my wife and the others, the Iranian authorities can repeat the discreditable mistakes of the past or they can emulate the good sense they eventually displayed with the British,” said Bakhash. “They can free the detainees and bring a quick end to what has become an embarrassing episode for Iran and a cruel experience for those they have so unfairly imprisoned.” Azima is unsure what will happen to her, although she said she was offered conditions for her release: Admit to collaborating with the democracy movement and quit her job with Radio Farda. “Categorically, I said no,” said Azima to the first demand. Her job, she said “is my personal affair and nobody can dictate to me where to go and what to do.” Azima does not know how long it will take to resolve her case. “My lawyer says I have to wait until the court decides what will happen to me. The judge says it could take one or two years.” The fate of the other three Iranian-Americans being held in Iran is also unclear. All remain in custody: Esfandiari, who directs the Middle East program at the Woodrow Wilson International Center for Scholars in Washington; Kian Tajbakhsh, an urban planning consultant with George Soros’ Open Society Institute; and Ali Shakeri, a founding board member of the Center for Citizen Peacebuilding at the University of California, Irvine. An Iranian government spokesman, Alireza Jamshidi, said last week that the government’s investigation of the four was still in its “final phases” and results would be announced in one or two weeks.