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I I r r a a n n E E c c o o n n o o m m y y U U p p d d a a t t e e
Issue 129/2016 – Monday December 5th Iranian leadership denounces US Senate’s approval of ISA extension
The Iranian leadership unanimously denounced the US Senate’s confirmation of the House of
Representative’s vote for the extension of the 1996 Iran Sanction Act (ISA) for another decade. “They should know that the Islamic Republic will definitely react,” Supreme Leader Ali Khamenei was quoted as saying last week, in reaction to the House of
Representative’s vote. Press TV quoted Foreign Ministry Spokesman Bahram Ghassemi as saying on Friday that the Senate’s approval of the bill “is against the JCPOA,” and that Tehran "is carefully monitoring the US government behavior in regards to the JCPOA which prohibits new sanctions on the country.” Ali Tayyebnia, minister of Economic Affairs
& Finance said on Saturday that the lifting of Iran’s sanctions is “irreversible” and that “the wall of sanctions has come down.” “Any country that tries to breach its international obligations has indeed questioned its own credibility and won’t be followed up by the rest of the international community,”
added Tayyebnia.
In a related development, IRNA wrote on December 2nd that the parliament considers the approval of the ISA legislation as a violation of the JCPOA, and is mulling over a two or three-urgency plan which mandates the government to resume nuclear activities. IRNA wrote that 264 MPs have issued a statement calling for doing a reciprocal act against the Senate’s approval of “cruel” ISA extension. Meanwhile, President Rouhani who attended the Parliament session on Sunday to submit the 1396 budget bill underscored that Iran will remain committed to its obligations but said the Senate’s approval of ISA is against and a
“violation” of the JCPOA. “If it is put into effect, it would be a clear violation of the JCPOA and will unleash an overwhelming response from us,” said the
president. Rouhani said that during this week’s session of the Council of Supervising JCPOA Implementation, necessary decisions will be made and announced to the people.
However, first Vice President Eshagh Jahangiri and Minister of Foreign Affairs Javad Zarif seem to have taken a more moderate stance. In an address to a local conference on fighting narcotics, Jahangiri said on Sunday that we should be careful that such laid traps “don’t push us to extremist positions.” He called for having wisdom and expediency in making
decisions in order to not “play into the hands of the others.”Similarly, Minister of Foreign Affairs Zarif was careful not to use the term “violation” but said the Senate’s vote imply that the US cannot be trusted to acts its commitments. "To the world community, the extension of sanctions against Iran shows the
unreliability of the American government," state-run IRIB quoted Zarif as saying on arriving in India for an official visit. "America is acting against its
commitment."
Moderates in Iran argue that the Senate’s action is symbolic and won’t have an effect on coutnry’s economy post-sanctions. The front-page of the moderate-reformist daily Donyay-e Eghtesad published an article on Monday penned by Hamid Baeedi-Nejad, a member of the Iranian nuclear
negotiating team who has recently been appointed as Iran’s ambassador to London. “One of the main assumptions on lifting sanctions that was approved by the Islamic Republic during the negotiations was that the lifting of the Congress-imposed sanctions will take place at the 8th year of the JCPOA
implementation, or earlier when the IAEA approves the full peaceful nature of the Iranian nuclear program. Therefore, until then, the US secondary
2 sanctions will remain in place but won’t be
implemented,” wrote Baeedi-Nejad.
Separately and in an article published on the front- page of the reformist daily Shargh on Sunday, Nemat Ahmadi, a prominent Iranian moderate lawyer argued that although when initially imposed in 1996, the ISA (D’Amato1 Law) badly hurt Iranian petroleum industry and scared off many IOCs and led to their replacement with less credible Asian companies such as the Chinese one, the new management team under the Rouhani administration, led by Bijan Zangeneh managed to overcome sanctions and promote the country’s petroleum sector projects while the D’Amato sanctions were in place. “While the D’Amato sanctions were still in place, Iran under the Rouhani administration managed to overcome its problems in terms of oil production, marketing and sale, without being subject to the sanctions imposed by D’Amato. So, how the extension of these sanctions can reverse the positive atmosphere created in the wake of the JCPOA?”asked Ahmadi.
84 MPs initiate Road Minister impeachment over deadly train crash
A letter to impeach minister of Road & Urban
Development signed by 84 lawmakers was submitted on Sunday to the Majles presiding board, wrote Tasnim News Agency. The deadly train crash last week which caused at least 44 dead and more than 100 passengers injured occurred near the central province of Semnan is the main cause of the MPs decision to impeach the minister. The accident occurred when a moving passenger train hit a
stationary train that had stopped due to a mechanical failure. Initial investigations show that the accident occurred because of a “human error” and that the Automatic Train Control system (ATC) didn’t work.
The crash took place on the main line between Tehran and Mashhad.
1 Name of a Republican New York senator Alfonse D’Amato initiated the legislation
Rouhani submits 2017/18 budget bill to parliament
On Sunday, President Rouhani submitted the next Persian year’s budget bill to the parliament for approval, local media outlets reported. The 371- trillion-toman ($116 billion at the official exchange rate of 32,00 toman) bill is up 10.6% from the plan for the current year2, projects larger revenues from tax and oil revenues, and will be studied and amended by the parliamentarians after 1.5 months.
The government’s proposed budget bill is based on an oil price of $50 a barrel, compared with the $40 a barrel price in the current year’s budget. Also, the US dollar price would be 33,000 rials, which is 10%
higher than the amount in the current year’s budget.
The export of crude oil is projected to be 2.42 million barrels per day in 2017/18 Iranian year.
Addressing the lawmakers, Rouhani said in the past three years, his administration tackled all the impediments imposed by the “cruel sanctions” and
“mismanagement” inherited from the previous administration and managed to reduce the inflation rate from above 40% to less than 10%. He also said that among the oil producing countries, Iran has been less susceptible to the declining prices. Rouhani said the economy registered a growth of 4.4% in spring and summer 2016, and added that out of the 159 trillion toman revenue that is projected to be generated in 1396, about 113 trillion tomans (71%) will be from tax income. "We hope to end the current year with single-digit inflation, a five percent GDP growth rate and the creation of 700,000 new jobs,"
Rouhani said in his speech.
Rouhani said since the oil export growth in 1396 won’t be at the pace we’ve seen in the past two years, the country major economic-related issue in the next year would be maintaining the GDP growth launched in the current year and as a means to
2 Taking into account inflation running at about 8%, next year's budget bill envisages about zero spending growth in real terms.
3 realize this objective, the government is going to
activate and increase the involvement of the private sector, banks and the National Development Fund (NDF) to mobilize the economy and complete the half-finished projects and finance new projects.
Total govt. budget sources Value
Tax revenues 112 trillion tomans
Oil revenues 110 trillion tomans
Oil exports 2.42 million bpd
Oil price $50-55 a barrel
US dollar 3,300 tomans
Gasoline price increase 5% ↑
Gas oil price increase 20% ↑
Customs duty on car imports 5% ↑
Electricity price increase3 20 rials ↑ per kw/h
Govt.’s Spokesman and Head of the Management &
Planning Organization (MPO) said the country’s GDP growth rate n 1396 (21 March 2017 – 20 March 2018) would be 7.7% and investment is expected to grow by 12.3%, Mehr News Agency reported today.
Mohammad-Bagher Nobakht who was speaking to reporters said inflation rate is expected to remain in the 7-8% territory next year.
A New Zealander economic delegation visited Tehran
A New Zealander delegation led by Tedd McClay, the coutnry’s minister of trade has visited Tehran this week and met with Iranian economic officials
including CBI governor, minister of Science, Research
& IT, and minister of Industry, Mine & Trade. In an address to the Iran-New Zealand Trade Forum held on Saturday, Tedd McClay expressed hope that with a fivefold increase, the two countries’ business
relations reaches $1 billion annually in the near future. He said this is the first New Zealander
business delegation that visits Tehran after 12 years.
Food, geothermal energy, agricultural products, transport and scientific cooperation were among the
3 Electricity consumption tariff will increase from 30 rials per kw/h to 50 rials per kw/h
areas that McClay said his country is interested in developing cooperation with Iran. McClay also met with CBI Governor Valiollah Seif and said
representatives of the New Zealand Banker Association are accompanying him in this trip and said this presence indicates that this country is determined to accelerate developing bilateral relations. McClay was leading a 25-member delegation in his visit to Tehran, which takes place after a 12-year hiatus.
According to the daily Donyay-e Eghtesad, the Iran- New Zealand trade volume amounted to $174 million in 2016, up from $90 million in 2015
