You have commented 339 times on Rantburg.

Your Name
Your e-mail (optional)
Website (optional)
My Original Nic        Pic-a-Nic        Sorry. Comments have been closed on this article.
Bold Italic Underline Strike Bullet Blockquote Small Big Link Squish Foto Photo
Submit your comments on this article
Syria-Lebanon-Iran
Iran's economic conditions deteriorate
2007-02-08
WASHINGTON — U.S. and Western pressure on Iran is squeezing its economy, feeding the inflation and joblessness that have swelled under its controversial president, Mahmoud Ahmadinejad. Trade figures and other data have begun to reflect deepening economic isolation taking place as a result of U.S.-led efforts to penalize Tehran for what the United States alleges is the pursuit of nuclear weapons and sponsorship of terrorist groups.

For example, Iran's imports from Germany fell 14% in the first eight months of 2006, the German-Iranian Chamber of Commerce says. European Union countries account for 40% of Iran's imports, and Germany is Iran's largest European supplier, providing machinery, steel and electrical equipment, along with other goods. German government export credits, used to finance trade, also fell by a third last year and are expected to drop again this year, said Ulrich Sante, a spokesman at the German Embassy in Washington.

Unemployment was 11.5% in the year ending in March, 1.2% higher than the previous year, according to the Iran Statistical Center. Food prices rose by a third from March to August, the cost of housing went up 14%, and the cost of medical care increased more than 18%.
"People who want to pursue legitimate commerce with the West will see that the policies Ahmadinejad is pursuing are leading to isolation and painting a more bleak economic future for the country," said Stuart Levey, U.S. Treasury undersecretary for terrorism and financial intelligence.

The United Nations Security Council imposed sanctions on Iran in December after Tehran failed to suspend uranium enrichment. The sanctions block exports that can be used in Iran's nuclear and missile programs and freeze assets of officials linked to those programs.

Separately, the Bush administration has cut off two Iranian banks from access to the U.S. financial system and dollar-based transactions on grounds that terrorists and weapons programs used accounts at those banks.
Good, and we should do as much of that as we can get away with.
Posted by:Steve White

#13  actually to some degree a rise in the labor force DOES create economic growth, by forcing down wages, increasing availability of labor, making it easier to start profitible industry, either for exports, or import-substitution. You still need capital, to create good jobs, and thats an issue, to be sure.

KSA is rather different I think, since their labor force has fairly extragavant expectations of what reasonable employment looks like, or so ive been led to believe.
Posted by: liberalhawk   2007-02-08 13:38  

#12  re. 5% economic growth.

Iran's economic growth came from selling oil at $40 in 2004 to $53 in 2005 and to $60 in 2006, and spending the proceeds.
Posted by: DoDo   2007-02-08 12:31  

#11  U.S. and Western pressure on Iran is squeezing its economy, feeding the inflation and joblessness that have swelled under its controversial president, Mahmoud Ahmadinejad.

Any day now we'll see a lift-the-sanctions effort to "mitigate the suffering" of the Iranian people. I don't think tougher sanctions have a snowball's chance in Hades of getting implemented. I wonder how long before the mullahs start parading dead babies around for the MSM/UN crowd.
Posted by: xbalanke   2007-02-08 12:13  

#10  Liberal Hawk,
Unfortunately, the extra money is not going into job creation. The young are still unemployed and have the highest heroin addiction rates in the world.

Also high numbers of new job entrant does not cause high economic growth rates. It creates a NEED for high growth rates. If those rates are not forthcomming, you experience a drop in real per capita GNP (e.g. Saudi Aradia).

Al
Posted by: Frozen Al   2007-02-08 12:05  

#9  LH got it. Iran's huge baby boom population has been entering the workforce for the past 10 years. Iran 2006 Population Pyramid
Posted by: ed   2007-02-08 11:13  

#8  1. Re NKor comparison. Iran govt does not have nearly the degree of control over society that Kimmie has over Nkor. Its an authoritarian society, not a totalitarian society. That makes it that much more vulnerable.

2. 5% growth. Remember when your labor market is growing fast, just creating enough jobs to keep the new workers marginally employed creates high growth figures. A third world country that DOESNT achieve high growth figures is in real trouble (and yes, there are quite a few of those) In any case, I suspect much of that growth is due to the increase in the price of oil, which still overwhelms any problems they are having in its production.
Posted by: liberalhawk   2007-02-08 10:56  

#7  "Counterbalanced by Iran-China trade. In 2001 trade was $3.3 billion, in 2005, $9.2 billion."

good point... how much more does this send them into Chinas bed?
Posted by: Thealet Hupeatle2938   2007-02-08 10:38  

#6  Counterbalanced by Iran-China trade. In 2001 trade was $3.3 billion, in 2005, $9.2 billion.
Posted by: Theans Hupeatle5489   2007-02-08 10:06  

#5  Things are bad. The Tehran stock exchange is down about 30% in the past 2 years and their official currency rate has decline by about 10% during that time. By my caluclations all the stocks on the exchange come to a market cap of below $3 billion (about 10% of the market cap of CVS Drugs).



The Tehran stock market is at:

http://www.tse.ir/qtp_27-04-2048/tse/

currency history is at:

http://www.farsinet.com/toman/exchange.html
Posted by: mhw   2007-02-08 08:38  

#4  I had the idea that real unemployment in the under-30 age group was around 50%, and that suicide and drug use are both at epidemic levels? With all Iran's business troubles, I find it very difficult to believe that net after inflation growth of the economy to be in the 5% range, more like China or India than even the US. I mean, even the EU appears to me to be better situated than Iran, and aren't they in the net 1% growth rate?
Posted by: trailing wife   2007-02-08 06:42  

#3  Thanks to crushing regulation, taxation, and the euro, the EU's unemployment and inflation numbers are pretty close to the Iran's. I.e., Europe's self-appointed elites have voluntarily achieved against their own subjects what the US has had to actively pursue against an enemy state.
Posted by: exJAG   2007-02-08 06:29  

#2  Good work by the Treasury boys. They've done a bang-up job in the war so far, from everything I've heard.

Unfortunately, sanctions won't dissuade a fanatical leadership. Look at North Korea, their citizens are freezing to death and starving, and it didn't stop the government from going nuclear.
Posted by: gromky   2007-02-08 02:40  

#1  Kudos to some good people in the Treasury and other departments for putting the squeeze on the Mad Mullahs and that big haired freak in North Korea. There's a lot more going on here than some milquetoast UN sanctions.
Posted by: Classical_Liberal   2007-02-08 01:16  

00:00