President Hassan Rouhani on Sunday reaffirmed Iran’s strong opposition to any foreign military presence in the region.
“The Islamic Republic of Iran is against the presence of any country in the region, the Middle East and the Persian Gulf,” Rouhani told visiting Afghan counterpart Hamid Karzai in Tehran, president.ir reported.
He said Iran is concerned about tensions caused by the presence of foreign forces in Afghanistan and called for the complete withdrawal of US-led troops from the war-torn country. “The security of Afghanistan should be handed over to its own people,” Rouhani pointed out.
Elsewhere in his remarks, the president referred to cultural and religious commonalties between the two nations and good neighborly relations and said Iran seeks to expand ties with its neighbors, Afghanistan in particular, and believes the security and welfare of the Afghan people will help boost regional cooperation.
Karzai, for his turn, praised Iran for its stance on Afghanistan.
He underlined his country’s commitment to all agreements with Iran.
The Afghan president also said Kabul is willing to sign a comprehensive accord for cooperation with Iran, saying that the Afghan nation will surely welcome the pact.
The Afghan president also held a separate meeting with Iranian Foreign Minister Mohammad Javad Zarif.
Continued on Page 2
$75b budget to target stagflation
President Hassan Rouhani said bringing down inflation and boosting growth were his government’s economic priorities as he presented his first budget to the Majlis on Sunday.
Gross domestic product had gone down by six percent over the past year, Rouhani said in a live address on state television, while inflation was running at 44 percent when he took office in August. He described the situation as ‘very worrying’.
Analysts say soaring inflation is due to increasingly tough economic sanctions and mismanagement by the former administration.
Rouhani described the sanctions as ‘oppressive’ but also blamed the former government, saying its ‘unpredictable behavior’ had compounded problems such as inflation and unemployment.
“Employment is the most important future issue for the economy but now the biggest problem is (tackling) stagflation,” Rouhani in a live address on state television.
“The combination of stagnation and inflation over the past two years was unprecedented,” he said.
Rouhani earmarked government spending for the year starting in March 2014 at $75 billion, calculated on an open-market exchange rate, with an overall budget ceiling estimated at about $265 billion, media reported, leaving flexibility to lift spending depending on income received during the year.
Former president Mahmoud Ahmadinejad’s overall draft budget ceiling for this year was about $200 billion but the full budget was never approved. In August, officials under Rouhani indicated the spending plans faced massive shortfalls.
“The (Rouhani) government has dared to present a 12-month budget and that’s a bit of a risk. He’s prepared to tell people what can be afforded but he’s also showing an element of financial discipline,” Mehrdad Emadi, an Iran-born economist at Betamatrix consultants, based in Britain told Reuters.
Special committees of Majlis are now required to present their report about the budget draft within 15 days.
In office from 2005 until August, Ahmadinejad presided over a period of unparalled revenue growth due to high oil prices and was able to fund ever increasing budgets until Iran’s oil receipts were targeted by new sanctions at the start of 2012.
Critics say the former government squandered billions of dollars on cash handouts and housing projects, stoking inflation and making the new government’s task even greater.
Rouhani indicated that a new mechanism for subsidy payments would be implemented soon. He also stressed the importance of increasing Iran’s total gas output through new phases of the giant South Pars gas field.
Rouhani secured a landslide election victory in June promising a policy of ‘constructive engagement’ with the outside world would help ease sanctions on the Islamic Republic imposed over its nuclear program.
$100 per barrel oil
The draft budget estimates oil exports at about 1.1 million barrels per day (bpd), oil ministry website Shana said on Tuesday, indicating Tehran sees no major recovery in sales next year despite the prospect of limited sanctions relief.
Iranian media reported last week that the 2014 spending assumes an average oil price of $100 per barrel, about $10 below benchmark Brent crude prices.
The International Monetary Fund expects Iran’s economy will shrink 1.5 percent this year in inflation-adjusted terms, after an estimated 1.9 percent contraction last year which was the biggest since 1988, when Iran’s eight-year war with Iraq ended.
IAEA experts visit Arak plant
A team of inspectors from the International Atomic Energy Agency (IAEA) on Sunday visited Arak heavy water plant, a senior Iranian official said.
Two of the IAEA inspectors, who arrived in Tehran on Saturday, began their inspection of Arak reactor on Sunday, the spokesman for the Atomic Energy Organization of Iran (AEOI), Behrouz Kamalvandi, told ISNA.
“Their inspection is underway and will be completed this evening,” said Kamalvandi, adding that the inspectors will go back to Vienna on Sunday night.
According to an agreement between Iran and the IAEA on November 11, Iran permitted the UN nuclear watchdog’s inspectors to visit central Arak heavy water plant and Gachin yellow cake mine in Bandar Abbas, southern Iran.
The voluntary move is a goodwill gesture on the part of Iran to clear up ambiguities over the peaceful nature of its nuclear energy program.
Kamalvandi said the IAEA inspection of Gachin mine will be discussed during the upcoming meeting between representatives from Iran and the UN nuclear agency on Wednesday in Vienna.
Commenting on remarks by US Undersecretary of State Wendy Sherman on the dismantling of many parts of Iran’s nuclear facilities, Kamalvandi said, “Iranian officials have many times reiterated their stance that Iran’s nuclear rights are non-negotiable… and these rights include [the right to possess] the complete nuclear fuel cycle, including enrichment”.
On November 24, Iran and the five permanent members of the United Nations Security Council—Russia, China, France, Britain and the US—plus Germany sealed an interim deal in the Swiss city of Geneva to lay the groundwork for the full resolution of the West’s decade-old dispute with Iran over its nuclear energy program. Sherman said on December 5 that a comprehensive agreement between Iran and the six world powers ‘includes a lot of dismantling of their [Iranian] infrastructure’.
Iran has announced that Arak reactor, which uses natural uranium to produce radio medicines, is planned to gradually replace the Tehran research reactor to produce medical radioisotopes for cancer patients.
On Saturday, Kamalvandi said that the AEOI has provided the UN nuclear agency with information about the country’s new generation of centrifuges.
“The AEOI has provided the agency with necessary information about the research being carried out on the country’s peaceful ( nuclear) activities on time and within the framework of the Safeguards Agreement,” Kamalvandi was quoted as saying by Press TV.
The new generation of centrifuges has more capacity compared to the first and second generations, and have undergone initial tests, he said. The Iranian official said the new generation was produced to enhance enrichment machinery and increase production capacity.
Iran to regain real status in oil market
After the Western sanctions against Tehran are lifted, the traditional customers of Iran’s oil will resume crude imports from the country.
Announcing this, Akbar Torkan, chief advisor to President Hassan Rouhani, said Iran will soon regain its real status in global oil markets, IRNA reported.
In the past years, Arab countries, particularly Saudi Arabia, have tired hard to satiate the market by producing more oil and compensate for Iran’s declined output.
Currently, due to the pressures of the sanctions, rumors are heard about Iran’s inclination towards signing concession and production sharing agreements which is very dangerous for the country, Torkan said. He stressed that the oil industry should not regress.
These sorts of agreements will degrade the oil industry, he added. “We should be a step ahead of buy-back deals to be able to develop our oil and gas fields independently.”
After the victory of the Islamic Revolution in 1979, Iran replaced production sharing and concession agreements with buy-back contracts, Torkan recalled.
Iran should devise oil contracts in line with its interests, he reiterated.