Back to Brief on Iran
DUBAI - The Iranian economy, racked by low oil prices, a falling currency and double-digit inflation, faces daunting challenges in the new Iranian year, economic analysts said on Monday.
Iran's main grade of oil hit a nine-year low last week below $10 per barrel, compared to $17.15 a year ago and a 1997 high of nearly $22 a barrel.
Income from oil exports -- budgeted at some $16 billion in fiscal 1998/99 -- make up around 80 percent of hard currency earnings and up to 40 percent of government revenue.
Faced with nearly $30 billion in foreign debt, Iran has repayments of $4.9 billion scheduled for the new Iranian year which began on Saturday.
The unemployment rate stands at 9.5 percent, a figure that could rise dramatically as Iran's post-revolution baby boom generation enters the market. About 60 million people live in Iran and over half are under 21.
The youthful demographics mean a million jobs a year must be created, according to the monthly Iran Focus newsletter.
Other problems facing Iran's economy are the state's large role, foreign exchange controls and a weak currency, inefficient subsidies, corruption and bureaucracy, analysts said.
Businessmen frequently complain about the difficulty of conducting basic business transactions due to corruption or excessive red tape. Foreign investment in Iran has also been hampered by the lack of clear investment laws, analysts said.
International firms have also been
deterred from investing due to U.S. sanctions penalizing foreign companies
that invest more than $20 million in Iran's oil and gas industry.
Amid Economic Crises, Factional Infighting, Khamenei Resorts to More Demagogy, Iran Zamin News Agency, March 23
Yesterday, in a speech in Mashhad (northeast Iran), Ali Khamenei, the mullahs' leader, said: The objective of "the propaganda by Americans and some internal circles, advocating ties with the US," is to "humiliate the dignity and grace of our nation." Our dignity "lies in our spirit of resistance against the Arrogance and in the strength of our religious and nationalist stands" which reject establishing ties with America.
At the height of internal feuding which has led to physical encounters in the Majlis, and on the verge of complete economic bankruptcy, Khamenei has once again found the only solution in propping up an external enemy. This in turn discredits any illusions about the medieval regime's ability to reform.
Referring to "some elements at home"
who "take advantage of the free atmosphere in the country to express their
opinion," the mullahs' leader said: "These people believe that having ties
with the United States is key to resolve all of our problems." Khamenei
is thus preparing the grounds to step up repression under the guise of
"combating the United States."
White House: Conclusions about Total's Iran Deal Premature, Dow Jones News, March 23
WASHINGTON - The idea the White House has come to any decision about whether to impose sanctions on foreign companies investing in Iran is 'premature,' according to an administration official.
Instead, the White House is continuing to mull over whether or not to impose sanctions under the Iran-Libya Sanctions act against France's Total SA, Russia's Gazprom and Malaysia's Petronas for investing in a large scale project in Iran's South Pars gas field.
The issue was raised by a report in
The New York Times over the weekend which indicated the White House had
essentially concluded that it wouldn't impose sanctions on the Total consortium.
Russian Spy Agency Linked to Iran, The Washington Post, March 23
MOSCOW—Russian intelligence agents for the past several years have quietly recruited scientists here to go to Iran and teach Iranian counterparts how to build missiles to carry deadly payloads as far as 1,200 miles, Russian and diplomatic sources said.
Russians and foreigners said that officials of the Federal Security Service, Russia's intelligence arm, recruited the scientists at Russian technological institutes and weapons factories for work in Iran. The contracts, however, were negotiated in Iran between the scientists and their hosts -- apparently to insulate the security service and the government in Moscow from responsibility.
The Iranians paid the institute or factory separately, Russian and foreign officials said.
The Federal Security Service is the successor to the KGB secret police and still oversees Russia's sensitive arms factories and high-technology institutes…