Sun, Jan 22, 2006
Advanced Search
PDF Edition
Front Page
Domestic Economy
Economic Focus
Dot Coms
Global Energy
World Politics
International Economy
Arts & Culture
Draft Budget Imperfect
Private Sector Steps in
To Balance Foreign Trade
Gas Shortage Unlikely
Pakistan Not Rushing Into Pipeline Deal
Crude Above $67 on Iran, Nigeria Concerns
EU Open to
Pistachio Import
Islamic WTO Proposed

Draft Budget Imperfect
TEHRAN, Jan. 21--The Parliament’s Unity and Efficiency Faction has begun debating the draft budget bill for the fiscal year March 2006-07 by holding specialized and general sessions.
A lawmaker, Reza Talaee-Nik said that in view of the government’s delay in submitting the bill, its ratification by the Parliament will take longer than the initial deadline which was set for mid-March.
“The government’s delay in submitting the bill means its approval by the lawmaker will take longer than the scheduled period,
subsequently causing delays its implementation which undermines the prospects for achieving the set targets,“ ISNA on Saturday further quoted him as saying.
The MP said despite having some advantages such as a rise in provincial funds, the budget poses major challenges to macro development plans by making the economy even more dependent on oil revenues, failing to present effective policies to curb liquidity and inflation growth and bearing some ambiguities with respect to allocation of funds for certain bodies.
Talaee-Nik, also a member of the Parliament’s National Security and Foreign Policy Commission, said the budget stipulates a decline in oil revenues by 50,000 billion rials compared to this year’s budget which, considering a fall of 40,000 billion rials in the operational balance, will pose major challenges in mid-term.
“The economy’s increased dependence on oil revenues will hinder attempts to materialize the objectives of the Fourth Five-Year Development Plan (March 2005-2010) as well as the 20-Year Perspective Plan,“ he noted.
Talaee-Nik further expressed concern over a rise in funds for certain official entities such as the Presidential Office, the Council of Guardians and the Foreign Ministry which, he termed, is against the state’s declared policies to reduce its current expenditures and redirect funds towards development projects.
The MP referred to an attempt by the government, within the budget, to reduce funds for certain sectors such as cultural heritage bodies and lack of attention to the needs of production units in agriculture and industrial sectors, and said this puts the country’s development aspirations under huge strain.
“In assessing the draft bill, the lawmakers should make every possible effort to make budget stipulations in tandem with development plans and make sure they work in the best national interests,“ Talaee-Nik said, calling on his colleagues to put aside political and factional considerations when debating the bill.
When presenting the bill to the Parliament on January 15, President Mahmoud Ahmadinejad said his government started its work on the basis of four principles of justice promotion, kindness, service to the nation and all-out development of the country. “We are determined to materialize these four principles based on our potentials and in cooperation with the MPs,“ said the president.

Private Sector Steps in
To Balance Foreign Trade
TEHRAN, Jan. 21--Iran’s private sector, for the first time, managed to play a key role in balancing foreign trade relations during 2005, announced a senior member of Iran Chamber of Commerce, Industries and Mines.
Houshang Adhami, a member of ICCIM’s board of representatives, further told ILNA on Saturday that state performance, in the meantime, with respect to expanding international trade relations last year was ’average’.
As if anticipating sanctions even before they are imposed, Adhami said, the government unilaterally moved to restrict trade with some countries with which it had high trade balance.
“The government’s trade policies are governed by political relations,“ he said, terming state’s trade policies as restrictive.
In October, Iran imposed embargo on imports from Britain and South Korea in the midst of the row over its nuclear activities.
Both the UK and South Korea are members of the International Atomic Energy Agency’s (IAEA) Board of Governors. The import ban followed the two countries’ support for a resolution in the IAEA to have the dispute over Iran’s nuclear programs referred to the UN Security Council for possible sanctions.
Adhami noted that despite restrictions, the private sector managed to maintain and even further expand trade cooperation with many countries by moving independent of the government’s political and economic relations.
Continuation of the current trend, said the official, can further facilitate private sector’s role in regulating Iran’s trade relations away from political tensions given the government’s emphasis on reducing its control over foreign trade from the current 75 percent to 50 percent.

Gas Shortage Unlikely
Iran has the second largest gas reserves in the world, after the Soviet Union.
TEHRAN, Jan. 21--The country is unlikely to face a shortage of gas in the coming days or weeks as most parts of the country experience sub-zero temperatures.
Announcing this, Director General of National Iranian Gas Company Seyyed Reza Kasaee-zadeh further said that 406 million cubic meters of gas are pumped daily into the national grid and that the supply is running smoothly, ILNA reported on Saturday.
“National Iranian Gas Company will make every possible effort to manage the distribution network efficiently,“ he said, reminding the citizens to optimize consumption to help the government avert possible shortage.
He said that in a number of cities where supply was disrupted due to sub-zero temperatures and high demand, kerosene was distributed among citizens in excessive amounts.
According to Kasaee-zadeh an average of 40 million cubic meters of gas is fed daily into power plants which he said is higher than the amount agreed upon initially.
“The remaining energy demand of power plants is met through liquid fuel.“
Kasaee-zadeh said higher domestic demand for gas during winter is unlikely to bring a halt in exports to the neighboring Turkey, though he said there might be a fall in the exported volume which is stipulated in the agreement.
Estimates of natural gas reserves in Iran show the country has the second largest gas reserves in the world, after the Soviet Union. While the government says it plans to turn the country into a leading gas exporter in the coming decades, it has also put an emphasis on the domestic market, trying to substitute oil by gas as the country’s main source of energy.

Pakistan Not Rushing Into Pipeline Deal
ISLAMABAD, Pakistan, Jan. 21--Pakistan will not rush into a deal for a natural gas pipeline from Iran to India via Pakistani while the United Nations has Iran’s nuclear program under scrutiny, Prime Minister Shaukat Aziz said on Friday.
According to Reuters, the International Atomic Energy Agency, the Vienna-based UN nuclear watchdog, is trying to verify that Iran’s nuclear program aims to produce electricity, as Tehran insists is the case, and not nuclear weapons.
At the same time, the United States and EU powers Britain, France and Germany want the IAEA board of governors to report the matter to the UN Security Council, which has the power to impose sanctions on Tehran. They argue that Iran is on a course to make bombs, not generate power.
Aziz, at the United Nations before visiting Washington next week, said the proposed $7 billion pipeline project with Iran would help his country’s economy keep growing at a fast clip while fostering better relations with India after years of brinkmanship between the two nuclear-armed neighbors.
However, “I think it would be fair to wait to see how these things unfold,“ he said when asked whether Pakistan was determined to see a pipeline deal go through, regardless of what might happen to Iran at the United Nations.
“We will take any decision which we have to in our national interest,“ Aziz said. “Once the environment changes, naturally we will see what these regulations or resolutions are, and create or follow a strategy accordingly.“
The prime minister said the Iran pipeline proposal was one of three possible alternatives Pakistan had been looking at for natural gas.
It is also weighing a pipeline from Qatar and one that would carry gas from Turkmenistan by way of Afghanistan.
Officials from India, Pakistan and Iran are to meet in the next month or so for additional talks on the plan, he said.
Pakistan and India said last month they hoped to start building the pipeline from Iran by 2007 despite objections from the United States which, in addition to objecting to its nuclear program, accuses Tehran of funding anti-Israeli militias and stirring insurgent attacks in Iraq.

Crude Above $67 on Iran, Nigeria Concerns
LONDON, Jan. 21--Anxiety over supplies from producer countries Iran and Nigeria pushed oil prices above $67 a barrel on Friday and analysts predicted the market would stay strong for the foreseeable future.
According to Reuters, US crude oil gained 27 cents to $67.10 a barrel by 1203 GMT, off a session high of $67.45, which was the highest level in nearly four months. London Brent crude rose 56 cents to $65.79.
“The market is so delicately balanced,“ said Mark Keenan of MPC commodity fund. “It faces a convergence of bullish factors.“
In the world’s eight largest oil exporter Nigeria, more than 220,000 barrels per day of crude have already been shut in and militants on Friday warned they would soon resume attacks on oil producers in the country.
There is also no sign of an easy solution to the West’s dispute with Iran, the world’s fourth biggest exporter. Iran faces referral to the UN Security Council over concerns it is seeking to build an atomic bomb. Iran has denied the charge and analysts fear it might hold back crude exports in response to any punishment from the West.

EU Open to
Pistachio Import
TEHRAN, Jan. 21--Iran has exported almost 1,000 tons of pistachio to 25 member states of the European Union via the project known as ’green corridor’ since last March, announced the project’s executive director, Mehdi Irani-Kermani.
He put the value of the export at almost $6 million, reported ILNA on Saturday.
He said 769 pistachio shipments to Europe were sent back to the country during 2002 plus another 508 consignments in 2003 following EU allegations that Iranian pistachio is contaminated with aflatoxin.
Subsequently, he said, last summer a series of guidelines and protocols were established in cooperation with European traders as well as producers and exporters in Kerman province to apply tougher hygienic controls by setting up the so-called ’green corridor’ involving stricter checks on the split-shelled nuts destined for abroad.
“As a result, 93.4 percent of Iran’s pistachio shipments were allowed entry into Europe in the same year.“
Irani-Kermani said tea and saffron growers are following the same steps to further expand exports.
Iran began to give special treatment to pistachio nuts destined for export to the European Union in a bid to avert a ban. The European Union had warned if the number of rejected consignments does not decline, it will impose further restrictions.
The EU, which currently tests all pistachio imports from Iran, has obliged the Islamic Republic to reduce from 16 to 10 percent the quantity of consignments rejected due to levels of aflatoxin.
Aflatoxin is a substance found in mold and has been linked to liver and kidney cancer.
Iran is the world’s number one pistachio producer, claiming to hold 50 percent of the market. Pistachios, along with carpets, caviar and saffron, are a source of national pride and a top non-oil export.

Islamic WTO Proposed
TEHRAN, Jan. 21--Head of the Trade Development Organization Mehdi Ghazanfari proposed the creation of a body similar to the World Trade Organization exclusively for Muslim states, with the aim of setting up an Islamic common market.
In his interview with ISNA on Saturday, Ghazanfari said such a body could be named Islamic-WTO (I-WTO).
He said offering preferential tariffs to members within the framework an Islamic WTO can help facilitate expansion of trade relations among Islamic states.
“Achieving such as aspiration would demand prolonged preparatory efforts and intensive negotiations between interested parities,“ he said, calling on countries such as Iran, Saudi Arabia and Malaysia to take the initiative by signing a multilateral agreement that can pave the way for establishing such an organization.
Ghazanfari referred to his recent meetings with Iranian investors in Dubai and said many of them are willing to transfer their skills and investment to Iran. “They are keen to use the country’s trade potentials and access to free waters to access Central Asian markets.
“The accumulation of cash in countries such as the United Arab Emirates has been brought about by opportunities for free trade, lenient banking, insurance and customs regulations and expanded trade services.“
Latest statistics suggest that more than 4,650 Iranian companies are operating in Dubai, where Iranian nationals have contributed to some 45 percent of fixed investments.
Iranian businesses invested in 10 percent of the economic activities in Jebel Ali Free Zone in 2003.
Iranian nationals make up some 25 percent of the active population of Dubai.
The number of Iranian students studying at UAE universities has increased from 1,700 in 2003 to 9,000 in 2004.