Wednesday, January 23, 2013

Eye on Iran: Iran's Car Industry Output Falls Sharply

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FT: "Iran's output of cars - the country's biggest non-oil industry - has fallen by about 50 per cent, as the tightening international sanctions over the country's nuclear programme aggravate economic woes. Production dropped to 677,000 cars in the first nine months of the Persian year that started in March, from 1.2m during the same period last year. Although Iran experienced dramatic reductions in vehicle production during the Iran-Iraq war in the 1980s, the latest fall in volume is unprecedented, analysts say. 'Industries such as the automotives which are dependent on imports and hard currencies [used to buy imports] are the most vulnerable to sanctions,' Ezzatollah Yousefian-Molla, a member of parliament, recently told the semi-official ISNA news agency... Domestic media have reported that more than 110 auto part makers shut down and thousands of workers lost their jobs over the past year. Moreover, Iran's two largest state-run carmakers , Iran Khodro and Saipa, are reportedly now suffering from overstaffing - or 'hidden unemployment', as the domestic media call it - due to the decline in output."

Reuters: "Iran may be holding back from working with a U.N. investigation into its nuclear program to use it as a bargaining chip in pursuit of significant sanctions relief or other concessions in broader negotiations with world powers. That could explain why United Nations nuclear inspectors once again returned empty-handed after talks last week in Tehran, where they tried to overcome obstacles to a long-stalled inquiry into suspected atomic bomb research by Iran. Iran has suggested at various times in the past that it would expect a 'kind of reward' for cooperating with the International Atomic Energy Agency (IAEA), a Western official said, making clear he saw no rationale for this. If this is Tehran's thinking, a year-long effort by the IAEA to unblock its investigation looks unlikely to succeed as long as separate diplomacy between the six major powers and Tehran remains deadlocked."

AP: "Iran's president on Tuesday claimed his country can create 10 times more wealth from inventions than from oil, rendering Western economic sanctions powerless. The West's oil embargo over Iran's suspect nuclear program won't stop the Islamic Republic's scientific and technological progress, Mahmoud Ahmadinejad said. Addressing a group of Iranians in the western city of Hamedan, Ahmadinejad mocked the embargo, saying that Iranian universities would churn out money-making innovations. He did not mention any specific technologies. 'Don't buy our oil? To hell with you,' Ahmadinejad said in remarks aimed at the West. 'It's better if you don't buy... 10 times more money will head to people's pockets through the inventions of our scientists.'"
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Nuclear Program

AP: "Foreign Minister Ali Akbar Salehi is proposing Cairo as a venue for the next round of talks with world powers over the Islamic Republic's nuclear program. Salehi is quoted by the official IRNA news agency as saying that Egypt has welcomed the offer and is now consulting with the United States, Russia, China, Britain, France and Germany to finalize it. Salehi made the comments Wednesday after a Cabinet meeting in Tehran."


Reuters: "Japanese police have arrested two men and a woman in connection with alleged illegal money transfers to an Iranian shipping firm suspected of involvement in the Islamic Republic's nuclear program, Japanese media said on Wednesday. The three employees of Tokyo-based shipping agent Ben Line Agencies Japan deny the charges, the reports said. Kyodo News Agency said the arrests were the country's first related to Iranian sanctions, quoting investigative sources. An official at Ben Line Agencies Japan said the company had no comment on the reports. The three employees are alleged to have transferred a total of 14 million yen ($158,000) to a Singapore-based firm associated with Iran's state-run Islamic Republic of Iran Shipping Lines (IRISL) in November 2011 and February 2012, without the necessary Japanese government approval, the Kyodo report added."

NYT: "Iran's currency, weakened by Western sanctions and economic mismanagement, has fallen further in value over the past few days in an apparent reaction to a leadership problem at the Central Bank that has stirred new concerns about political tensions, money traders and outside economists said Tuesday. The career of the Central Bank's governor, Mahmoud Bahmani, appeared to be in jeopardy, and with it the short-lived stability for the currency, the rial, after a drop in value last year of roughly 50 percent... While Iran does not publicize exchange rates in unofficial trading, Reuters quoted currency traders in Dubai, United Arab Emirates, as saying it cost as much as 36,250 rials to buy a dollar on Tuesday, compared with 33,000 on Sunday. 'Without reliable official information, any change in Tehran's political winds spooks the public, and they sell rials,' said Steve H. Hanke, an economics professor and currency expert at Johns Hopkins University."

Human Rights

AFP: "A court in Tehran on Tuesday asked a lay Christian leader whether an Iranian-American pastor on trial assisted in his conversion, a group supporting the detained US citizen said. Saeed Abedini, a naturalized US citizen who converted to Christianity, went on trial on Monday at a Tehran court on charges of plotting against state security, according to his lawyer. The American Center for Law and Justice, a US-based conservative legal advocacy group that is supporting Abedini, said that Abedini was not allowed in the trial Tuesday and that the court heard testimony from a lay church leader. 'This individual was specifically questioned about converting to Christianity and whether Saeed encouraged the conversion to Christianity, which he did,' Jordan Sekulow, the center's executive director, wrote on the group's blog."

Guardian: "As the June presidential election in Iran draws near, authorities have
stepped up political surveillance by ordering coffee shop owners to install cameras on their premises and turn over the recordings on demand. Cameras have proliferated in Tehran coffee shops since last summer. 'Most people thought they were part of the security systems installed by owners to protect against theft,' one Tehrani said. However the cameras are now required to be on during work hours and police have demanded access to the tapes, according to several business owners. The practice became public when Café Prague, one of the most popular coffee houses in Tehran, closed down last week after its owners refused authorities' orders to install a video system. Café Prague, a stone's throw from Tehran University in the heart of the capital, has been a sanctuary for students, activists and young intellectuals since its opening in 2009."

Domestic Politics

Bloomberg: "Iran's Central Bank Governor Mahmoud Bahmani rejected claims of illegal movements of money by a Tehran court, which ruled that he should be dismissed, state- media reported. The withdrawals were legal and had the government's backing, Bahmani said. 'The matter of withdrawing from bank accounts by the Central Bank was fully in line with the government's approval and all documents are available,' he was quoted as saying yesterday by the state-run Mehr news agency. Members of parliament have criticized the Central Bank for failing to stabilize the national currency, which has plunged about 60 percent against the dollar in the past six months. Inflation has quickened and the economy is under strain amid tighter U.S. and European Union sanctions aimed at curbing Iran's nuclear program."

Opinion & Analysis

Brendan Daly in The Commentator: "A common phrase Iranians use when discussing their country is 'before the Revolution,' followed by some comparison, depending on their political bent, on conditions in the country before and after 1979. Iranians are a varied people. Ask an Iranian their opinion of the former Shah, and the response you get will range from holy condemnation to virtual deification - and everywhere in-between.  But one thing all Tehranis currently agree on is this: everything is awful. Indeed, a phrase that is becoming equally common is 'before Ahmadinejad.' And unfortunately for the beleaguered president - who came to office in a surprise election victory in 2005 - in this case, the comparison between past and present is never positive. 'People used to complain when [former President] Khatami was in charge. About how expensive everything was, about how little freedom we had as young people. We had no idea how lucky we were,' says Reza, 29. Iranians themselves are the first to admit their penchant for complaining. But today, their complaints are more than justified.  The recent currency crisis, brought about by the tightening of the US and EU-led sanctions programme, has meant that people's savings are now worth less than half of what they were this time last year. In October, oil exports fell to their lowest level since 1988. Consequently, the government's Budget Commission announced that the Government received only half of its projected revenue in the first six months of the Iranian calendar (March to September, 2012). According to official government statistics, inflation is currently running at 27 percent. But nobody takes this number seriously - the real rate is much higher. Even governmental and clerical figures have referred to a rate of 40 percent. Economist and former advisor to President Ahmadinejad, Hossein Raghfar said on October 10th that the real rate is over 100 percent. Certainly the cost of many imported products, such as coffee, has doubled over the past few months. As has the prices of beef and chicken, since before the latest round of stringent sanctions started to take effect. This time last year, it was still very rare to hear the word 'tahrim' (sanctions) on the streets of Iranian cities. Now you hear it every day. Not to mention the latest anecdotes of the dollar-rial exchange rates... The first post-Revolution chancellor of Iran's oldest and most venerable academic institution, the University of Tehran, recently wrote an open letter to the Supreme Leader, Ayatollah Khamenei. On May 22nd, Dr Mohammed Maleki wrote his letter directly to Khamenei, an old acquaintance since before the 1979 Revolution. After receiving no response, he took the step of publishing the letter in early December. In it, he urged the clerical leader to 'to accept that Iran is at the verge of collapse' and recognize among other things, the catastrophic effects of the sanctions, and the dissatisfaction of the population. Within a matter of days the 78-year-old Maleki was summoned to Evin Prison to serve six years in prison, for sentences that had previously been suspended, for similar acts of defiance throughout his long career. But he was of course right."

Eye on Iran is a periodic news summary from United Against Nuclear Iran (UANI) a program of the American Coalition Against Nuclear Iran, Inc., a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code. Eye on Iran is not intended as a comprehensive media clips summary but rather a selection of media elements with discreet analysis in a PDA friendly format. For more information please email

United Against Nuclear Iran (UANI) is a non-partisan, broad-based coalition that is united in a commitment to prevent Iran from fulfilling its ambition to become a regional super-power possessing nuclear weapons.  UANI is an issue-based coalition in which each coalition member will have its own interests as well as the collective goal of advancing an Iran free of nuclear weapons.

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