Why Ahmadinejad´s Fuel Rationing is a Clever Economic Move
The Iranian President Ahmadinejad has been denigrated for many things, most of them have been proven untrue.
Many western reporters, even those from the "liberal" media have explained to us, that his move towards fuel rationing was an act of desperation caused by his "catastrophic economic policies".
Once again we have been fooled by those who claim to be professional fact-finders, but who are either incapable or more likely unwilling to do their homework:
While Iran is indeed still a developing country with a large part of the labor-force (about 30%) still working in the agricultural sector, with a relative low productivity rate, it is growing and modernizing rapidly, with no slow-down under the Ahmadinejad government.
On the contrary-
On Tuesday Apr 10, 2007 Iran daily reports:
Economic growth and fair distribution of income make up the backbone of policies pursued by the government of President Mahmoud Ahmadinejad in the economic front, Iran’s executive director at the International Monetary Fund, Abbas Mirakhor said...
The economy has shown a strong growth in 2005-6 fiscal year, posting a growth rate of 5.4 percent, compared with 4.8 percent in the preceding year...
Development of non-oil sector as well as strengthening of private investors via injecting oil revenues are also on the agenda of planners, policymakers and government bodies, the official noted.
Non-oil sector grew by six percent in 2005-6, registering an unprecedented increase, he added.
Non-oil industries continued to grow causing the economy to post a 5.8-percent growth rate in 2006-7....
On the same day Iran Daily reports further:
Foreign Investment At Record Level
Foreign investment hit a record $10.2 billion in the Iranian year from March 21 in 2006 to March 20 in 2007, from $4.2 billion in 2005 and $2 million in 1994, the Persian daily Iran reported on Monday.
Asian entrepreneurs made the largest investments in the Islamic state by investing in 40 out of 80 projects funded by foreigners.....
And the "United Nations Conference on Trade and Development" agrees on this one:
A UN report indicates that Iran attracted more foreign direct investment (FDI) in 2006 compared to the year earlier...Inward FDI grew by three-fold to reach $901 million in 2006. The figure was $306 million in 2005 and $282 million in 2004.
Foreign investors, particularly giant oil and gas companies have defied US pressure and continued to invest in this hydrocarbon-rich country in recent years.
And while the agricultural sector is in dire need for modernisation, Iran is stil managinging to become self-sufficient, for instance in wheat production-
On Mon, Apr 09, 2007 Iran daily reports:
Iran needs to add 10 million tons to its current wheat storage capacity over the next three years.
Iran will export two million tons of wheat by March 2008, a turn-around for a nation that once imported the basic commodity, reported PressTV.
In many countries economic growth and positive export figures have next to no impact on the job market. Germany, for instance, had in 2005 a foreign trade surplus of 200 billion $, but still an unemployment rate of 11,6%. This is different in Iran.
On Mon, Oct 08, 2007 Iran Daily reports:
For the first time in a decade, Iran’s unemployment rate has reached a single-digit figure, 9.9 percent, after being above 10 percent for more than a decade.
The number of jobless dropped from about three million in recent years to 2.5 millions this summer, he stated, adding that this is while one million people joined the working age group, IRIB reported... One of the policies contributing to this positive outcome was the support for small businesses with quick economic returns.
Increase in economic growth is possible by expanding small industrial units and their activities.
One of the most urgent goals in Iranian economy is to diversify from it´s dependency on oil revenues and exports. And here like in most other areas the Ahmadinejad government can show a successful trend:
On Thursday, Oct 11, 2007 Iran daily reports:
Non-oil exports witnessed a growth of 7.5 percent in volume and 8.6 percent in value during March-September... about 15.5 million tons of commodities valued at $7 billion were exported during the period compared to 14.4 million tons of goods costing $6.5 billion shipped overseas during the same period of the previous year, Fars news agency reported....
So the rationing fuel last June, can not be seen as an act of despair. These economic measures are far from desperate, they are in fact extremely well thought through and rather clever.
To understand them, you have know, what is going on in Iran´s auto-industry and why an oil-exporting country is still a fuel importer.
(But I think most of us do know, why Iran would be somewhat reluctant to support the US-Dollar by buying fuel in that currency.)
Iran Khodro Company has Started Production of Dual-Fuel Cars in July 2007;
National Push for Natural Gas Fuel
Iran Khodro Company (IKCO) has begun the production of dual-fuel gasoline-compressed natural gas cars in late July. IKCO is the largest vehicle manufacturer in Iran and the Middle East, and builds cars and commercial vehicles for domestic use and for export.
-The company produces currently 650,000 passenger cars. Over the past ten years, the Iranian car-manufacturing company has enjoyed an annual growth rate of 23 percent. According to Executive Director Manuchehr Manteqi,the rate has even risen 5.5 times faster in the truck and bus production divisions during the past seven years.No company in the Third World has been able to launch a production line beyond its national borders except for Iran Khodro, which has managed to secure some joint investments overseas.-
From June 22, Iran began rationing petrol and the Oil Ministry has allocated each private motorist 100 liters per month at about 10 cents per liter.
On Sep 30, 2007 the Iranian Parliament voted against giving priority to a double urgency bill requiring the government to offer gasoline at free market rate. Parliamentarians opposed to the bill maintained that if gasoline is offered at free market price, it would contribute to inflation. Sale of non-rationed gasoline also contradicts the main objective of the plan which is cut in gasoline consumption and import.
Although Iran is the second-largest OPEC producer of crude oil (behind Saudi Arabia), its refinery infrastructure is inadequate to meet domestic transportation needs. With a combined capacity of 1.6 million barrels per day, the Iranian refineries currently produce just 16% gasoline, according to the Energy Information Administration.
Iran has thus imported refined products since 1982, and these imports have been increasing rapidly. The parliament instituted the fuel rationing in the face of the rising cost of imports and the possibility of sanctions.
In an interview with an Iranian TV channel, President Mahmoud Ahmadinejad called for a nationwide focus on reducing fuel consumption, and also described an increasing focus on switching transportation to natural gas fuel.
“National income from sales of oil, gas and other oil products is about 50 billion dollars annually while country’s total energy consumption is about 55 billion dollars.”
The president said,
"By executing fuel rationing, the daily consumption has decreased from 80 million liters to 70 million liters, and we plan to reduce the figure to less than 60 million liters.He added,
“If we can change our automobiles fuel from gasoline to gas during the next 3-4 years, we won’t need gasoline anymore.”The president also said,
“We will have constructed 550 CNG fuel stations in the country before the end of September and the figure will reach to one thousand before March 20, 2008.”
Iran has an estimated 970 trillion cubic feet (Tcf) in proven natural gas reserves, making it the world’s second largest reserves and surpassed only by Russia, according to the EIA.
IKCO’s compressed natural gas company will start operations next year with an initial capacity of 250,000 CNG tanks per year to meet domestic demand. The carmaker has purchased 70,000 fuel tanks from a domestic company and the agreement for another 300,000 has been inked. An additional agreement for 200,000 tanks is also under negotiation.
The Iranian cabinet has decided to allocate the amount saved by implementing the gasoline rationing plan to railroad development.
Minister of Roads and Transportation Mohammad Rahmati noted that his Ministry is determined to expand the country’s railroad network. “If 1,000 kilometers of railroad lines are constructed in the country each year, all provincial capitals will be linked to the railroad network within the next few years.“
Turning to road development, the minister promised that all villages with above 40-50 households will have access to asphalted routes within the next two years.
Sources:
Iran-Daily: Foreign Investment At Record Level
Iran-Daily: Robust Growth
Iran-Daily: Stage Set for Wheat Export
Foreign Investors love the Iranian Ahmadinejad Government
Ahmadinejad´s Economic Measures Benefit Iran´s Low-Income Families
Iran-Daily: Non-Oil Exports Rising
Iran Khodro Company Starts Production of Dual-Fuel Cars
Iran Khodro annual car production
Iran-Daily: MPs Reject Double Urgency Gasoline Bill
Iran-Daily:Gasoline Savings To Fund Rail Projects
I just wanted to let you know that I always appreciate your contribution.
It doesn't hurt that you are top notch in your knowledge and understanding, and very hard-working (QRS as well).
For example, this article about the REAL situation in Iran is VERY different from Lamestream Khazar media.
Good move Ahmadinejad!
It's true Iran lacks the infrastructure for processing Crude Oil, and they have PLENTY of Natural Gas ---> Inteligent...
it´s always nice to hear a compliment.
Yes, Ahmadeinejad must juggle many different elements in order to keep Iran together. In the main city of Tehran, people in the southern part tend to be poor and religiously conservative. People in the northern part tend to be affluent and (comparatively) secular. These two forces are engaged in a mild tug-of-war that Ahmadeinejad must factor into every decision. One reason for rationing was to keep order at all levels. People in northern Tehran are car-happy, like China. Everyone must have a car.
Ahmadeinejad must satisfy Kurds, Persians, Azerbaijanis, and Arabs inside Iran. He must satisfy clerics and businessmen. Meanwhile he’s got an aggressive army on both sides of him, led by a madman (Bush).
A lot of people in Iran are not happy with Ahmadeinejad. The way I see it, this is not because of his failures, but his successes. His improvements have made people impatient for more improvements.
The Iranian government also must walk a tightrope between censorship and openness. The government doesn’t want to censor, but it also doesn’t want Iran to be corrupted by western filth.
Drugs are another problem. Heroin is cheap, and drug addiction widespread. Among the more affluent kids in northern Tehran, the drug of choice is MDMA (aka “ecstasy”), which is largely distributed through Israeli organized crime. Most people in prison are there on drug charges. There are probably less political prisoners in Iran than there are in the USA. (Guantanamo is only one of many political prisons operated by the U.S. government. I live near one myself.) Iran has 200,000 officially designated addicts, but informal sources say the number is much higher. I have thought of doing a post on how outside parties (e.g., israeli and Pakistani gangsters, plus the CIA) use drugs to cripple Iran, just as the East India Company once used opium to cripple China. The Iranian government does what it can to fight this poison, but it’s a never-ending battle.
Demographics is another issue. The Iran-Iraq war killed so many people that two thirds of Iran’s 70 million people today are under the age of 30. That’s a lot of young people with a lot of energy. They want to wear their clothes ever-tighter and ever-shorter. Again the problem is…how do we have free speech, while not allowing filth? How much censorship is too much? How do we have a vibrant economy without descending into moral corruption? Young people (in any nation) do not see moral corruption as a problem.
Of course the western zio-media portrays Iran as a nation of fanatics. This is standard war propaganda.
Excellent article, Erlenda.
This is a great collection of information about Iran's economy.
However, just as we should take zionist propaganda with a grain of salt, we have to take news from Iranian sources with a grain of salt noting that human beings no matter who they are omit information that paints a less than rosy picture of reality and that might indicate a less than admirable agenda on the part of government officials.
I say this in a general sense - and not with Iran in particular in mind. I happen to greatly admire Ahmadinejad. but, it's hard to tell the motives behind other obviously powerful elements in Iranian politics and economy.
Anyway - two points that are worth highlighting:
(1) high levels of foreign investment are NOT necessarily a good thing. For example, if the foreign investment is simply in the form of capital to facilitate the exchange of goods ALREADY in the Iranian economy - then what good is that??? NONE. In fact, it's an invasion by foreign capital.
If however, foreign technology and know how is being invested in Iran (and simply valued in dollars) then that is a good thing and can benefit Iranians.
But, again before we can honestly assess the net benefit to Iranians of this influx of "foreign investment", we must analyze the TERMS of these investment agreements and understand TO WHOSE BENEFIT EXACTLY those terms inure. in other words, are Iranian capitalists conspiring together with foreign capitalists to rob iranians of the benefits of their natural resources. This is unclear from the information provided.
(2) On the other hand, the information you offered about iran's oil and gas production, its refined oil capabilities, and its strategy for the future is an EXCELLENT explanation for why else the west wants to bomb the hell out of Iran ASAP.
This explains perfectly why israel and its agents in the US government want to destroy Iran ASAP.
Iran is on the verge of ENERGY INDEPENDENCE - not just in respect to the more remote benefit they might derive from producing nuclear technology - but, from the very real and tangible immediate benefits they can realize by using their VAST natural gas reserves.
Iran - today is a very dangerous nation, indeed.
If israel doesn't destroy them now - 3yrs from now, it will be too late.
---------------------------------------
"Money" has no value - people do.
..it's never been about WMD, if you want those, you can buy plenty from the mainstream death dealers!
..the problem is not debauchery in general, but the high-level pushing of it; drugs, morals, porno filth, PSYCHOLOGICAL and ECONOMIC war propaganda, including PROHIBITION.. Opium has been around forever, but there were'nt terrible problems with it until the English showed up, fighting two OPIUM WARS over their right to sell it in China [1834-1843, 1856-1860]. first one's free, here's a rig and the pure, by the way it's illegal so give me your wallet!
http://en.wikipedia.org/wiki/Opium_Wars
..The Chinese never used to smoke tobacco, nor had any problems with opium before the BRITisH showed up, pushing Indian opium.
Check out this map!
who should profit.
The sources I used, b.t.w., are not purely Iranian.
But you should know, that it is the Iranian upper class which is opposed to the Ahmadinejad government, while the lower classes and the more religious people support him.
The Iranian constitution does not allow a purely socialist society, the government must privatize according to article 41, if I remember right.
But there are provisions made to never allow a take-over of Iranian industry by foreigners.
And the Ahmadinejad government is giving out "justice shares" to low income people to help distributing the nation´s wealth more fairly.
Iran finances it´s development in big parts through the national Islamic banking system, but it does invite and allow foreign capital.
This means that Iran is not isolated from the rest of the world.
Venezuela under Hugo Chavez, b.t.w,, has a very similar approach. He allows foreign investors to stay and invites new ones, if they play by the rules, meaning if parts of the profits made from resources and labor of Venezuela is put back into Venezuelan society to allow growth and development.
Chavez has also announced, that he is seeking a new form of financial system in which all Latin American countries are invited to participate.
Iran has asked to receive observer status.
This means - most likely - that the Iranians are teaching the Latin Americans, how a non-interest based money system works.
And the Iranians have a lot of experience in changing their money system successfully and without any economic collapse.
It reminded me that today it was announced that the 2007's Nobel prize of literature went to British female writer Doris Lessing. She was born Doris May Taylor in (western province) Kermanshah on Oct. 22, 1919 to British parents.
"Lessing married Frank Charles Wisdom in 1939 with whom she had a son and a daughter. They divorced in 1943 and two years later she married German-Jewish immigrant Gottfried Lessing (in a Marxist group) with whom she had a son. The couple divorced in 1949, and she moved to London where she was active in the British Communist Party 1952-1956."
She, as 11th female laureate, has published more than 60 books and was lauded for 57 years of "that epicist of the female experience who with scepticism, fire and visionary power has subjected a divided civilization to scrutiny."
She lives in London now and apparently more realistic.