President Mahmoud Ahmadinejad’s speech in a southern port town has been marred by shouts from disenchanted Iranians demanding jobs.  Ahmadinejad on Monday addressed hundreds gathered in Khorramshahr — about 625 miles (1,000 kilometers) southwest of Tehran — when scores from the crowd interrupted his speech with shouts: “We are unemployed!” The rare protest is unusual in Iran, where Ahmadinejad’s public events are carefully controlled. But public discontent has been rising over Iran’s deteriorating economy. Iran is wrestling with 25 percent unemployment and rising inflation. It also faces possible new U.N. sanctions over its controversial nuclear program that the West fears is geared toward making atomic weapons. Tehran denies the charge.

Despite Iran’s vast energy reserves, widespread economic malaise has been the greatest source of popular discontent and the chief Achilles heel of the Islamic Republic. Experts examine the potential economic impact and efficacy of international sanctions and other punitive measures.With Hossein Askari, Fareed Mohamedi, Kevan Harris, Matthew Levitt and Karim Sadjadpour.

Free Iran:  Another article that highlights the futility of trying to gain Chinese cooperation against this regime.  America needs a more realistic policy – one which doesn’t depend on Chinese or Russian cooperation for its success.

State-run Chinaoil has sold two gasoline cargoes for April delivery to Iran, industry sources said on Wednesday, stepping into a void left by fuel suppliers halting shipments under threat of U.S. sanctions. Go to Reuters.

Daimler is to divest its 30% stake in an engine company in Iran as part of a wider review of links to the country.

The German carmaker’s chief executive, Dieter Zetsche, said Tehran’s political policies were behind the move.

“In view of the current political situation we have… extensively reassessed this business relationship,” Mr Zetsche said. Also at WSJ — Go to BBC.

As Iranian oil industry needs an upgraded technology and employs a complex method in producing oil from Soroush and Norouz oil fields, it has lost more than US$2 billion in three years.

It is reported that the export of ultra heavy crude oil produced in these fields purchased earlier by Reliance Industries, India’s top private oil company has been halted. About 136,000 barrels of such oil are produced there mostly for export. Go to original article.

Free Iran:  Lots of good stats…

The following are some details about Iran’s principal energy partners and joint projects:

* CHINA – Iran is the third-largest crude oil supplier to China. For the whole of 2009, China imported some 460,000 barrels per day (bpd) of crude from Iran, about 15 percent more than contracted supplies.

- In 2010, Zhuhai Zhenrong Corp, the world’s largest single lifter of Iranian crude, agreed to purchase 240,000 bpd from the OPEC member. The levels were similar to the 2009 supply deal. Go to Reuters.

Free Iran:  It’s been months since the Green leaders have discussed economic issues in detail.  They need to be all over stories like this one…

A conservative Iranian newspaper has reported that one of the Middle East’s biggest soft drink producers has closed down its plant after it fired its workers.

In a report ridiculing the government’s management of the industry, the conservative Jomhourieslami (Islamic Republic) newspaper has reported that the soft drink company Khorram Noush located in the war-torn city of Khorramshahr has shut down its plant after it fired its workers. Go to original article.

A few days after a report by Human Rights groups about the shooting deaths of tradesmen across the Kurdish border was published, new reports indicating at least four shootings of porters over the Nowruz holidays in Iranian Kurdistan have surfaced.  Abject poverty and lack of investments in Kurdistan are the main reasons many people do smuggling.  Local porters or “Koul bar” in Kurdish are a phenomena of current day Kurdistan. Go to original article.

Iran should raise domestic gas prices by around 10 times to help boost development of the sector and generate up to $17 billion savings in state spending, Oil Minister Massoud Mirkazemi said in remarks published Monday.

The semi-official Mehr News Agency said the Oil Ministry had asked the government to allow it to hike prices to prevent a “consumption crisis,” referring to growing household demand for heavily-subsidised natural gas.

“To deal with this problem I proposed to increase the price of gas by at least 900-1000 rials (about 10 U.S. cents) per cubic metre,” Mirkazemi said, adding that an “improved consumption pattern” would lead to savings of $16-17 billion.

Iran sits on the world’s second-largest natural gas reserves after Russia, but sanctions blocking access to modern technology and other factors have slowed its development as an exporter. Go to Reuters.

TEHRAN — Iran has emerged as the world’s seventh largest consumer of cosmetics, spending 2.1 billion dollars annually on various beauty products, state-run Engish language Iran Daily newspaper said on Sunday.

The report quoting a survey conducted by TMBA, a private economic research body, said that Iran accounts for 29 percent of the cosmetics market in the Middle East. Go to AFP.

“Ansar Bank Serving Citizens” is a slogan that is repeatedly broadcast on the national Islamic Republic television these days.  Ansar was a financial institution that became a private bank after it obtained a permit from Iran’s Central Bank; the same permit obtained by the “Mehr Iranian Organization” and “Ghavamin Charity Fund.”  These institutions all belong to the Islamic Republic’s military establishment.  Ansar and Mehr Iranian were founded by the Islamic Passdaran Revolutionary Guards Corps (IRGC), and Ghavamin belongs to the Iranian police.

Many economic observers connect the establishment of private banks by the military to related to issues such as money laundering and international sanctions.  Last week especially, news stories in the Arab media reported that Bahrain’s interior minister was removed from his post and served a weeklong prison sentence for his involvement in an IRGC money laundering scheme.  Official sources have denied the report but investigations are ongoing.

Since the coming to power of Ahmadinejad, the IRGC has become a visible player in the Iranian economy.  The Khatam brigade is the symbol of this development, running projects in various sectors (oil, gas, roads, dams) of the economy and industry.

In addition to the two financial institutions, which have grown under the Ahmadinejad administration, the IRGC engages its vast economic activities through affiliated institutions such as the Khatam brigade and the IRGC’s cooperative union.  The website Deutsche Welle quoted an economist (Ahmad Alavi) as having said that there is a very direct political relationship between the coming to power of the ninth and tenth administration and the IRGC’s dominance over the economy.  Article 44 of the Iranian economy mandates privatization, but its implementation would diminish the government’s control over the economy.  Therefore, officials want the constitutional provision to be implemented only in name so that they can preserve their power.

Meanwhile, on Farvardin 3, regional media outlets reported the arrest and removal of Bahrain’s interior minister, Mansour bin Rajab, for his involvement in an IRGC money laundering scheme.  The case also involves Ali Jannati, Iran’s ambassador to Kuwait and the son of ayatollah Jannati, head of the powerful Guardian Council.  Hossein Amir-Abdollahian, Iran’s ambassador to Bahrain, has said that the IRGC played no role in the Bahran money laundering case.

The IRGC has not reacted to the new, although Bahrain’s interior minister, who remains under arrest, has denied cooperation with the IRGC.  News sources report that Mansour bin Rajab was caught while trying to cash a check, originating from the IRGC, worth 6 million Euros at a bank in Beirut.  Arab media have claimed that the money came from drug smuggling, suggesting a money laundering scheme.

RAHANA:  Workers in Iran Start the New Year with Many Hardships from the Previous Year

RAHANA – The prospects for elimination of subsidies, the slow down turn in the economy, and liberalization policies confront many workers this Iranian New Year.  Forcing workers on contracts, a policy pursued by Ahmadinejad administration, has been an instrument to control and clamp down on workers protest, forcing them to fear job loss.  The following examples, from the early days of the new year, portray the situation of workers all over Iran.
Rasht Khavar Textile factory workers have not received their February and March wages as well as half of their yearly bonuses.  However, workers refrain from protests because of the nature of their contacts and fear terminations.  Retired workers have not received pensions worth 4 to 6 thousand US dollars.  Another Textile company in Rasht, Iran Barak, laid off 100 of its contract workers on the verge of the Iranian New Year, March 20.  Like many other textile factories, Iran Barak has been reducing the permanent workforce and hiring temporary replacements; now more employees are contract workers than permanent ones.
Terminated Ahwaz Pipe Mill contract workers staged a sit-in at the site of the mills’ mosque on March 29.  They were supposed to meet with the management, which never materialized.  The workers then set out for the governor’s mansion and eventually were able to have a delegation enter the mansion.  The workers were promised a meeting with the management on April 5.  Among the grievances are non-payment of last 14 month wages.  Workers are now deciding their next course of action following the Monday meeting.  Workers would like to see 200 fired people returning to work.
Currently, Zohur Napkin Firm workers have received only half of their wages since March.  There are 250 workers at the firm, most are on temporary contracts. Zohur, a formerly public firm, has been privatized.
Iran Paint Factory workers have had half their bonuses cut down because of penalties enforced by the employer.  Iran Paint employs about 120 workers, which are mostly on contracts.  They are paid between 270 and 290 US dollars per month, yet, the poverty line is around 500 US dollars.
On april 5, 150 Workers of Sabalan Fabric Factory, at the Ardebil provincial governor’s mansion, staged a protest demanding the payment of the last 7 months wages.  The company has reduced its work force by 15 percent recently.
Metal Industries Factory has closed its gates until mid April due to lack of raw materials.  Parvin Mohammadi, one of the workers at the factory, told the Iran Labor News Agency that “factory No. 1 of Metal Industries employs 350 permanent workers.  The workers were given the same reason last year and it led to wages not being paid for three months.  The workers fear a similar scenario this year.  The workers at the factory No. 2, which builds metal bridges, are also around 350 and they have gone back to work following the Nowruz recess.  They, however, are owed one month of back wages.”  Metal Industries factories No. 1 & 2 are among the oldest and largest production units in the southwest of Tehran.

Go to Rooz Online.

Russia’s second-largest oil group on Wednesday said that it would consider ceasing the supply of petroleum to Iran, a move that would make it the latest in a line of companies to halt shipments to Tehran.

Lukoil’s move may be a further signal that Russia’s government is beginning to throw its weight behind the drive to increase pressure on Iran over its nuclear programme. Senior officials at the company told the Financial Times they were considering halting the shipments.

Lukoil has been supplying refined petroleum to Tehran intermittently, moving between about 250,000 barrels to 500,000 barrels every other month, according to traders.

“They are not one of the major players in supplying gasoline to Iran, they do it on occasion,” a trader told Reuters on Wednesday. But he added: “Now they will stop because of pressure coming from their head office in Moscow.”

In March, Shell announced that it had stopped petroleum supplies to Iran, joining two of the world’s largest independent trading companies, Glencore and Vitol, which had taken similar decisions.

However, news agencies said Iran has maintained a robust import programme of refined oil products from the international market, buying from Malaysia’s state oil firm Petronas, Kuwait’s Independent Petroleum Group and France’s Total…

Go to Financial Times.

Iran confirmed that its oil exports to India, China and Japan have been sharply reduced.

Hamid Hoseini, head of Petroleum Products Exports Syndicate told ISNA that India and China are not concerned with sanctions but are in fact trying to “take advantage” of the current situation.

While Japan and China have reduced their oil imports from Iran, India’s Reliance Industries has completely ceased purchasing oil from Iran.

Hamid Hoseini announced that China has reduced its oil imports from Iran by half.

He added that sanctions against Iran can be “effective” and Iran can no longer be too choosy in its sale of oil.

He has advised Ministry of Oil officials to allow the private sector to join in oil projects and find smaller markets in order to overcome the effects of sanctions.

China, Japan, India and European countries are the top consumers of Iran’s oil.

Conflicts over Iran’s nuclear program and the possibility of increasing international sanctions against Iran have already caused major reduction in Iran’s sale of crude oil.

In March, Russian oil company Lucoil stopped all its activities in Iran. Earlier Royal Dutch Shell, Vitol, Glencore and Trafigura reported having stopped sale of petroleum products to Iran.

Go to original article.

About 300 contract workers at Ahwaz Pipe Mills in southern Iran, who have not received end of the year bonuses, found their jobs terminated when returning from the Nowruz holidays. Workers staged numerous protests in the course of last year over not receiving their back pays.

In a phone interview, one of the workers at the mill described their plight in the following manner:

“The workers were told that due to cost cutting measures, some of the work force needs to be let go.  Among the 250-300 contract workers, about 70 were kept, because they were relatives of the officials, etc.  The rest were terminated.  The reason given was that it was the end of the contract period.  We set out for the labor ministry to find remedies and see what the status of our benefits would be. We have given our lives for this firm.  Our hair has turned gray with years of work here.  At our age,  no one will be hiring us.  Yet, we were told that the contracts periods was up and there are no funds to give you.

Go to original article.

The dramatic political turmoil in Iran since last year’s disputed presidential election has been well publicized. But less well known are the country’s economy troubles.

Like much of the information coming from Iran, economic data are hard to trust. But it appears Iran’s unemployment rate has reached about 20 percent. Actual inflation is probably running higher than that and has been above 20 percent for years.

Iran’s currency, the rial, is weak, its value propped up by government use of oil revenues. The country’s banking system is also shaky.

And now, Iran is facing a U.S.-led effort at the United Nations Security Council to impose more economic sanctions.

A Struggle With Subsidies

Iran’s economic problems are linked to its extensive use of subsidies — billions of dollars a year — to keep basic necessities such as electricity, gasoline, bread and other food staples far below their true market value.

Experts say subsidies could eventually bankrupt the Iranian government, and so this year, a great debate has emerged over subsidies, says Hossein Askari, an expert on Iran’s economy at George Washington University.

“Iran has realized that subsidies are very costly, not the way to develop an economy; but they have, I think, used subsidies because they have seen this as the best mechanism, depending on who is in power, in order to get political support,” he says.

Earlier this year, President Mahmoud Ahmadinejad proposed reducing government subsidies. But ever the populist, Ahmadinejad asked the Parliament to let him use billions of dollars of revenue from reduced subsidies to distribute to poor people at his own discretion.

This has been Ahmadinejad’s approach since he was first elected president in 2005, says Djavad Salehi-Isfahani, an Iran expert at Virginia Tech.

“Without giving money to the poorer people, it would be impossible to implement the price increase and have peace in large cities,” Salehi-Isfahani says.

The president and the Parliament have not yet found common ground, so subsidy reduction is on hold for the moment, analysts say.

Political Interference

The troubled banking system also has been affected by Iranian politics, Askari says.

“In a system like Iran’s, there’s a great deal of pressure on the political side for the banks to do what they’re told to do, and not what they should do as good bankers,” he says. “So, yes, Iran’s banking system is a mess.”

Ahmadinejad has forced the banks to lend money at artificially low rates of interest. At the same time, says Salehi-Isfahani, state-owned enterprises, which dominate the economy, insist that banks provide them with more rials when they cannot pay their workers.

“So the banks on the one hand are unable to attract depositors because they can’t pay interest enough to match at least the inflation rate,” he says. “And at the other end, the money they have lent out they are not able to recoup.”

What keeps Iran’s economy afloat are the billions of dollars it makes exporting oil, but even that is in trouble. Sanctions imposed by the United States over the past 14 years have discouraged foreign oil companies from investing in Iran’s oil sector and helping to modernize it.

Iranian oil exports are far less today than they were in the 1970s, before the Islamic Revolution ousted the shah…

Go to NPR.