Hi,
I posted roughly 378 posts since I started writing here. Mostly about Iran, some were links, some were my own notes. But now is time to stop this, at least for awhile.
Thanks for visiting.
Ali
Saturday, July 19, 2008
Sunday, July 13, 2008
The French Out and The Russian In!
Following Total decision to abandon developing Southern Pars, Gazprom, Russian natural gas monopoly OAO, stepped in to fill the void. Its Chief executive Alexei Miller met Iranian President Mahmoud Ahmadinejad in Tehran to talk business. Later the heads of Gazprom and National Iranian Oil Co. discussed ''creating a joint enterprise to carry out exploration and production of gas and oil fields, construction of oil and gas processing facilities, and transport inside Iran”.
This development increases the cooperation between Iran and Russia in the energy sector, a field where Russia is seeking to play a more prominent role. It also reduces the mutual interests between Iran and EU. This adds to incessant decline in the volume of trade between Iran and EU countries.
An increasing number of Iranian businesses, both semi-private and private ones, had to start working with Chinese and Russian counterparts. Their European partners halted their business dealings with Iran following UN implemented sanctions. This has weakened those who advocate accommodating EU countries and UN Security Council over its nuclear issues. They had been arguing that Iran’s persistence has cost its economy dearly. However shifting the major business interests to Russia and China has enabled the government to argue that Iranian businesses do not have any common ground with EU any more.
The unfortunate fact is that EU partners in Iran are mainly private sector, while Iranian firms in the new business ventures are either publicly owned or are related to the public institutions. One wonders if sanctions are hurting Iranian private sector most, the only group that actually have incentives to encourage moderation.
This development increases the cooperation between Iran and Russia in the energy sector, a field where Russia is seeking to play a more prominent role. It also reduces the mutual interests between Iran and EU. This adds to incessant decline in the volume of trade between Iran and EU countries.
An increasing number of Iranian businesses, both semi-private and private ones, had to start working with Chinese and Russian counterparts. Their European partners halted their business dealings with Iran following UN implemented sanctions. This has weakened those who advocate accommodating EU countries and UN Security Council over its nuclear issues. They had been arguing that Iran’s persistence has cost its economy dearly. However shifting the major business interests to Russia and China has enabled the government to argue that Iranian businesses do not have any common ground with EU any more.
The unfortunate fact is that EU partners in Iran are mainly private sector, while Iranian firms in the new business ventures are either publicly owned or are related to the public institutions. One wonders if sanctions are hurting Iranian private sector most, the only group that actually have incentives to encourage moderation.
Tuesday, June 24, 2008
I Announce You Husband and Wife!
According to Islamic law a man and a woman can say their vows themselves and be married, as simple as that, however like everywhere else marriage is no simple affair in Iran. Usually a clergy or a licensed person or sometimes a well-established judge performs the ceremony and then the marriage is registered in the official registry. In the past centuries performing marriage ceremony has been one of the sources of income for the clergies, although it never has been their monopoly.
Still in this ceremony the authority is not that of the office, but it rests with the couple. Those who perform the ceremony ask for the power of attorney first to perform the ceremony and they say their religious vows on behalf of the couple. (This is the part that a bride should wait three times to say; “yes”)
It has been a long and ancient custom to have this ceremony performed by an individual of high standing in the society and good reputation. Thus many grand ayatollahs, Sufis, men famous for their honesty or virtues are usually asked to perform this ceremony. Former President Khatami is no exception in this matter. The photo, taken from webneveshteha.com, shows him after performing the ceremony for Amir Mehdi Jouleh a screenplay writer.
What is interesting about this photo? Well in a society where wearing a tie is officially discouraged how often you see a former president with a groom who is wearing a pink tie!
Wednesday, June 18, 2008
The End of Socialism in Economic Policy Making
The new speaker of Majlis, Dr. Larijani, told reporters that the era of socialist economic policies is over. He emphasized the producing wealth must be encouraged since it guarantees a continuous growth.
He vowed that Majlis would not allow any law contradictory to the new interpretation of Article 44 of Iranian constitution, which allows for extensive privatization, to be passed. He also promised that new interpretation will become law very soon. This legitimizes privatizing several public enterprises and ends the government’s monopolies in several others. It seems that the economy is presumed to be the main task as hand.
On the other hand the government accepted that any further reduction of interest rate is not advisable, a victory for the head of Central Bank. While banks continue to implement a %12 interest rate, it is decided that the government pays %2 in subsidies to the industry to reduce their expenses.
Although it seems the tide is turning and after a few years of populist projects, high inflation has wised up some to their true cost. However President Ahmadinejad is still determined to go ahead with his great surgery of the economy. One only can hope, that rationalism prevails yet another time.
The era of socialism might be over, unfortunately its influence on Iranian intellegtsia and some politicians is not.
He vowed that Majlis would not allow any law contradictory to the new interpretation of Article 44 of Iranian constitution, which allows for extensive privatization, to be passed. He also promised that new interpretation will become law very soon. This legitimizes privatizing several public enterprises and ends the government’s monopolies in several others. It seems that the economy is presumed to be the main task as hand.
On the other hand the government accepted that any further reduction of interest rate is not advisable, a victory for the head of Central Bank. While banks continue to implement a %12 interest rate, it is decided that the government pays %2 in subsidies to the industry to reduce their expenses.
Although it seems the tide is turning and after a few years of populist projects, high inflation has wised up some to their true cost. However President Ahmadinejad is still determined to go ahead with his great surgery of the economy. One only can hope, that rationalism prevails yet another time.
The era of socialism might be over, unfortunately its influence on Iranian intellegtsia and some politicians is not.
Saturday, June 14, 2008
Soccer, Development and Decision Making in Iran
To contradict those who argue there is one single will in Iran one only needs to follow the news of soccer in this land of footballers. It is the most popular sport in Iran with fans from all ranks of society, all walks of life and both genders, with female fans still banned from attending the games in the stadiums and yet they go disguised as boys or behind the fences to see their favorite teams play. Its popularity is so widespread that even President goes to national team’s exercises and all of its affairs are followed very closely by most enthusiastic of fans. And may be it is because of that, its confederation IRIFF, the players and the coaches have gained a certain space of maneuverability.
While the world of soccer is watching Euro Cup 2008 Iran’s national team is going through qualification for the World Cup. After much debate Ali Daee, former team captain and Asia's best player in 2000, has become team's manager and coach. The other potential candidate Afshin Qotbi was put aside, although he led his team, Persepolis, to become the champion of Iranian league. Like any other coach Ali Daee prefers some players to the others. It is not a secret that he does not like Ali Karimi, Asia’s Best Player in 2004 and one of Iran’s most celebrated footballer.
Karimi was banned from playing in the national team after he made numerous criticisms towards the IRIFF. And obviously Ali Daee did not feel obliged to include him in the team. Figures such as Iranian President Mahmoud Ahmadinejad and Hassan Khomeini, the grandson of the founder of Islamic Republic intervened to have him reinstated. Although IRIFF officially has pardoned him, the coach of national team does not feel obliged to field him yet. Something odd in a country where people are supposed at least to seem that they follow the official lead.
It is interesting to notice that soccer is the first place where President Ahmadinejad found his opponents to be too formidable. Last year after a long and politically charged debate as to who should lead IRIFF he had to ask Mr. AliAbadi the chairman of Iran’s Sports Organization to step down as a candidate. FIFA had threatened to boycott Iranian teams from international competition if the government would not have withdrawn its candidate from the election for the IRIFF chairmanship, which is considered an NGO. The prospect of having Iranian teams banned from international fields proved to be too terrifying even for the current cabinet.
Looking at this example one is obliged to think that may be popular support and interest is what plans to achieve sustainable economic development lack in order to succeed in Iran.
Where soccer teams succeed to divert policies that hurt their chances to attend international competitions, Iran’s industrialists and economists fail to convince politicians of the benefits of globalization and free competition. Where national team coach exercises a free hand in choosing his players and is chosen by an NGO, Iran’s manufacturing sector is mainly run by the government appointees and its private sector has to yield to the government’s influence and interfrence from time to time. The contrast could not have been greater. May be after all what development lacks in Iran is some soccer fans!
While the world of soccer is watching Euro Cup 2008 Iran’s national team is going through qualification for the World Cup. After much debate Ali Daee, former team captain and Asia's best player in 2000, has become team's manager and coach. The other potential candidate Afshin Qotbi was put aside, although he led his team, Persepolis, to become the champion of Iranian league. Like any other coach Ali Daee prefers some players to the others. It is not a secret that he does not like Ali Karimi, Asia’s Best Player in 2004 and one of Iran’s most celebrated footballer.
Karimi was banned from playing in the national team after he made numerous criticisms towards the IRIFF. And obviously Ali Daee did not feel obliged to include him in the team. Figures such as Iranian President Mahmoud Ahmadinejad and Hassan Khomeini, the grandson of the founder of Islamic Republic intervened to have him reinstated. Although IRIFF officially has pardoned him, the coach of national team does not feel obliged to field him yet. Something odd in a country where people are supposed at least to seem that they follow the official lead.
It is interesting to notice that soccer is the first place where President Ahmadinejad found his opponents to be too formidable. Last year after a long and politically charged debate as to who should lead IRIFF he had to ask Mr. AliAbadi the chairman of Iran’s Sports Organization to step down as a candidate. FIFA had threatened to boycott Iranian teams from international competition if the government would not have withdrawn its candidate from the election for the IRIFF chairmanship, which is considered an NGO. The prospect of having Iranian teams banned from international fields proved to be too terrifying even for the current cabinet.
Looking at this example one is obliged to think that may be popular support and interest is what plans to achieve sustainable economic development lack in order to succeed in Iran.
Where soccer teams succeed to divert policies that hurt their chances to attend international competitions, Iran’s industrialists and economists fail to convince politicians of the benefits of globalization and free competition. Where national team coach exercises a free hand in choosing his players and is chosen by an NGO, Iran’s manufacturing sector is mainly run by the government appointees and its private sector has to yield to the government’s influence and interfrence from time to time. The contrast could not have been greater. May be after all what development lacks in Iran is some soccer fans!
Wednesday, June 04, 2008
Rumor has it
Several Iranian news outlets reported yesterday that it is a strong possibility that Mr. Mazaheri, head of Central Bank of Iran, is going to be replaced by Vice President Parviz Davoudi. Should this change take place it will be the first time that a senior member of government, second only to President, trades his office for the seal of Central Bank. It would also signal Mr. Ahmadinejad’s persistence in pursuing his economic policies and projects, such as merging major public banks, despite all the criticism and objections from all parts of political spectrum in Iran.
Mr. Mazaheri has made it clear that he would not lower interest rates and he would not agree to government’s plan to merge banks. Despite the pressure from the government it seems he has been successful so far to protect banking system in Iran. Many observers believe that the first of the new Majlis is to save the economy. It is most likely that the new Majlis would not remain silent in this matter. Replacing the head of Central Bank would not be as easy as some might have thought.
Mr. Mazaheri has made it clear that he would not lower interest rates and he would not agree to government’s plan to merge banks. Despite the pressure from the government it seems he has been successful so far to protect banking system in Iran. Many observers believe that the first of the new Majlis is to save the economy. It is most likely that the new Majlis would not remain silent in this matter. Replacing the head of Central Bank would not be as easy as some might have thought.
Monday, May 26, 2008
Saving or Dismantling an Economy?
It is not a secret that President Ahmadinejad does not like the banks. He does not believe in them and considers them and their functions as a threat to himself and a barrier to combat unemployment and to increase production. There is no surprise that his acting minister of economic affairs has introduced a decree to disband all major banks and to replace them with zero interest rate saving funds. These funds can lend money only according to regulations set by the government. Iran’s private banks continue to exist but only as investors. Public banks would stop offering long-term saving accounts, and be banned from offering any service or account with an interest rate.
The government has thought of taking this step although Iran’s supreme leader has approved of privatizing publicly owned banks in Iran by re-interpreting Article 44 of the constitution and although privatization is the focus of currently in place 5 years development plan. This would stop the shares of at least 3 Iranian banks to be offered through Tehran Stock Exchange to the private investors and would send terrifying shockwaves through Iran’s economy. Although this project is nowhere close to implementation, it has horrified many of experts and technocrats in Iran.
Economy has proved to be a challenge no one in the government thought it could be. When President Ahmadinejad despite experts’ arguments and his former minister’s of economic affairs counsel decided to lower interest rates even further no one expected the governor of Central Bank of Iran Mr. Mazaheri to hold his ground. He disinclined to communicate President’s orders to the banks and objected this decision in strongest terms. It is now rumored that his days are numbered. It also is rumored that he has told the President that he would not resign his post.
The debate does not end here. Dr. Tavakoli a prominent conservative and member of parliament and the chair of its research institute told reporters that 46% of short run projects that government has put in place to fight unemployment do not exist. Dr. Jahromi, the minister of labor and architect of President Ahmadinejad’s economic policies denied this report and called it misinformation. It seems except for a few close associates few admire government's economic stand.
In the meantime inflation causes the prices to increase even higher, the prices have reached new heights in real estate market and consumers are squeezed even more in groceries and super markets. One wonders if disbanding the banks would have the effect government expects it to have, or it would intensify the crisis the economy is facing now.
The government has thought of taking this step although Iran’s supreme leader has approved of privatizing publicly owned banks in Iran by re-interpreting Article 44 of the constitution and although privatization is the focus of currently in place 5 years development plan. This would stop the shares of at least 3 Iranian banks to be offered through Tehran Stock Exchange to the private investors and would send terrifying shockwaves through Iran’s economy. Although this project is nowhere close to implementation, it has horrified many of experts and technocrats in Iran.
Economy has proved to be a challenge no one in the government thought it could be. When President Ahmadinejad despite experts’ arguments and his former minister’s of economic affairs counsel decided to lower interest rates even further no one expected the governor of Central Bank of Iran Mr. Mazaheri to hold his ground. He disinclined to communicate President’s orders to the banks and objected this decision in strongest terms. It is now rumored that his days are numbered. It also is rumored that he has told the President that he would not resign his post.
The debate does not end here. Dr. Tavakoli a prominent conservative and member of parliament and the chair of its research institute told reporters that 46% of short run projects that government has put in place to fight unemployment do not exist. Dr. Jahromi, the minister of labor and architect of President Ahmadinejad’s economic policies denied this report and called it misinformation. It seems except for a few close associates few admire government's economic stand.
In the meantime inflation causes the prices to increase even higher, the prices have reached new heights in real estate market and consumers are squeezed even more in groceries and super markets. One wonders if disbanding the banks would have the effect government expects it to have, or it would intensify the crisis the economy is facing now.
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