Iran: time to open up - United Press International, 20 June
By MARTIN HUTCHINSON, UPI Business & Economics Editor
WASHINGTON, June 20 (UPI) -- Iran's President Mohammed Khatami, by Iranian
standards a reformer, was recently re-elected with 77 percent of the vote.
Meanwhile, the U.S. House of Representatives is actively working, apparently
with the support of the administration, on extending by another five years
the Iran/Libya Sanctions Act of 1996, which imposed strict economic
sanctions against the Islamic state.
Both politically (where my analytical qualifications are limited) and
economically it would appear time for re-evaluation.
Politically, Iran took 52 hostages in 1979 and returned them more or less
unharmed in 1981, after having made a mockery of former U.S. President Jimmy
Carter and American military power. This doubtlessly was galling, but it's
more than 20 years ago. A subsequent president almost fell from power due to
his inability to connect with "moderates" in Iran. Well, in case Congress
hasn't noticed, a government more "moderate" than any Reagan tried to
connect with has been in power for four years and has just been re-elected.
The United States still classifies Iran as a "sponsor of terrorism."
However, Washington has been known to do business with terrorist-linked
countries and governments: Colombia and Syria come to mind. The lines are
not clear-cut here. It must be remembered that, as of today, more Americans
have been killed in one act of domestic terrorism (Oklahoma City, 1995) than
in all acts of international terrorism since the Lockerbie bomb of 1988 --
which itself followed an unprovoked (and indeed, accidental) shooting down
of an Iranian civilian jetliner by the U.S. Navy.
Economically (thank goodness we've got off the politics) Iran is
potentially a very interesting emerging market. With 65.6 million people, it
has a Gross Domestic Product, at market exchange rates, of $61.6 billion
(according to the U.S. Department of Energy's helpful "Energy Information
Administration" guide, May 2001.)
GDP at purchasing power parity is estimated at around $300 billion. This
latter information is of no immediate commercial value, except to 65.6
million Iranians, who have the equivalent of nearly $5,000, rather than
$1,000 per capita to spend in their domestic economy. However, like
equivalent figures for East European countries in transition, it indicates
what size of economy might emerge in the relatively short term if
free-market policies were implemented.
Iran is, of course, also a major oil exporter, currently producing around
4 million barrels per day, and its proven reserves, after a big 1999 find,
now total 90 billion barrels, 9 percent of the world's total. The Iranians
believe that production can be ramped up further, even above 1974s level of
6 million barrels per day, if markets permit. Certainly the new oil find
adds credibility to this hypothesis. Interestingly, Iran also has the
world's second largest natural gas reserves, after Russia, at 812 trillion
cubic feet.
The Iranian economy has been performing quite well recently, with growth
around 4-5 percent for both 2000 and 2001 and a healthy trade surplus. It
needs to do well; population growth averaged 3.2 percent in the 1980s, an
extraordinary high level that is inevitably producing workforce unrest, as
the huge youth cohort hits the job market. Inflation is moderate, at around
17 percent currently.
Economic policy is obscurantist, but not hopeless, and has improved
considerably over the last decade. There is an active Tehran Stock Exchange,
founded in 1968, which is always a good sign, with 295 companies listed at
the end of 1999, and daily turnover of $4-5 million, remarkably substantial
for a market in which there is very little Western participation. Foreign
companies are not constitutionally exempt from expropriation, but have not
in practice been expropriated in the last decade.
In short, Iran has a political opportunity to pursue freer economic
policies, and thereby launch its 65.8 million people into the world's middle
class of emerging market countries. With Khatami re-elected by such a
majority, there seems at least to some extent to be the will politically to
do this. It thus makes every sense for the United States to encourage this
process, in spite of a terrorist threat from Iran that today is more latent
than real (and may become even less real with an economic opening of Iran.)
Of course, relaxation should be gradual, and quid pro quos should where
possible be extracted, but this is not Iraq or North Korea; the possibility
today genuinely exists of opening up Iran, and making a significant portion
of the world, with more than 1 percent of its population, a better, happier
vny.com
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Iran slams sanction renewal vote
United Press International, 22 June
By MODHER AMIN
TEHRAN, Iran, June 22 (UPI) -- Iran Friday strongly condemned the approval
earlier in the week by the International Relations Committee of the U.S.
Congress of a five-year extension of sanctions against Iran.
Foreign Ministry spokesman Hamid Reza Asefi said the use of sanctions "as
a tool in foreign policy" has proved to be a failure. "It contradicts
international conventions," Asefi said, according to the news agency IRNA.
The House committee Wednesday ignored the administration's position and
voted for a law designed to punish foreign companies that invest in Iran's
energy sector, and Libya's as well for five additional years.
"The extension of sanctions will deprive the American (oil) companies of
competing with other countries," Asefi said, noting, "In a world which is
moving toward cooperation and solidarity, the United States will once again
be left isolated."
In an open letter released on Wednesday, a number of former and present
members of the Iranian parliament addressed the U.S congressmen calling on
them to "abandon their obstinacy and take a realistic attitude towards Iran
instead of perpetuating anti-Iran sanctions."
The Iran Libya Sanctions Act expires in August after five years, but the
White House had been trying to keep the renewal to only two years, arguing
that a five-year extension would unnecessarily hinder the administration
from altering U.S. policy toward Iran should Washington deem such changes
warranted.
Iran and the United States severed ties in 1980, several months after
radical Islamic students stormed the U.S. embassy in Tehran and took over 50
staffers hostage for 444 days.
Iran has made talks with the United States conditional on an end to the
sanctions and the unfreezing of some $10 billion dollars worth of Iranian
assets in U.S. banks.
vny.com
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Iranian Legislators Seek Civilization Dialogue with US
Renmin Ribao, June 21
Iranian legislators have voiced hope that the U.S. could be a party in the process of dialogue among civilizations and take steps to improve relations between the two foes through relaxing sanctions against Iran.
In an open letter to the U.S. congressmen in regard to the possible extension of economic sanctions against Iran, the assembly of former and present representatives of the Majlis (parliament) called for deepened cultural exchanges with the U.S. in a bid to lubricate the rusty U.S.-Iran ties.
About 100 out of 290 legislators in the current Majlis are members of the assembly.
The letter, carried by the official IRNA news agency on Wednesday, said that expansion of ties between the nations and the elite of the two countries in the year of dialogue among civilizations is expected to lead to more understanding between the two sides.
It further pointed out that the U.S. congressmen are expected to refrain from taking any measures that would result in creating pessimism among the public opinion.
Instead of persisting on the unpleasant approaches of the past, the U.S. must resort to new methods, the letter noted.
Diplomatic relations between Iran and the U.S. were severed in 1980 after some Muslim students seized the U.S. embassy in Tehran and held 52 Americans hostage for 444 days, following the 1979 Iran's Islamic Revolution.
In 1996, a U.S. legislation stipulated that measures would be taken against U.S. firms that make substantial investments in the petrochemical industries of Iran and Libya, two nations that the U. S. accuses of backing international terrorism.
As the punitive Iran-Libya Sanctions Act, also known as ILSA, is due to expire in August, a powerful pro-Israel lobby is pressing for another full five-year extension of the controversial legislation. But officials in the U.S. President George W. Bush's administration are in favor of a two-year extension.
Iran has recently said the U.S. should waive sanctions to re-open U.S.-Iran ties, reiterating that the lifting of the sanctions is a precondition for thawing the icy ties between the two countries.
James Schlesinger, former U.S. energy secretary and defense secretary under Jimmy Carter, and Lee H. Hamilton, former chairman of the House Foreign Affairs Committee have also pointed out that the current stalemate in U.S.-Iranian relations does not serve overall American interests.
The sanctions have cost American companies' opportunities to invest in Iran and develop its vast oil and gas resources, they said, in an article published by the International Herald Tribune on Monday.
The United States "should loose its economic sanctions against Iran and take other steps to foster an improved relationship, without weakening efforts to advance Middle East peace and prevent terrorism and the proliferation of nuclear weapons," they said.
Regarding the letter, Mohsen Nariman, member of the assembly said "our main motive is to put the dialogue of civilizations into practice and thereby tell the U.S. that the optimal way for talks between the two governments is to open up the doors of dialogue."
Yadollah Eslami, member of the central council of the assembly, said the U.S. Congress is under the influence of the pro-Israel lobby, adding "we want to ease the pressures on the congress through such measures."
He expressed hope that the U.S. congressmen will pay close attention to the U.S. interests and refrain from fanning the flames of the hostility.
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