A prominent lawmaker has said that excessive injection of money into the economy; pressure resulting from rising expenses and psychological factors are responsible for the runaway inflation in the country.
Mohammad Khoshchehreh, a Majlis Economy Commission member, criticized parliamentarians for authorizing the withdrawal of deposits from Oil Stabilization Fund (OSF).
“This is the failure of the Majlis which readily agrees to every request for taking money out of the OSF and injecting it into the market.“
The Tehran deputy underlined that factors responsible for inflation should initially be identified and then ways should be sought to curb it.
Stressing that factors causing inflation are apparent, Khoshchehreh was quoted by MNA as saying that a part of it is due to injecting money which adds to the liquidity.
Liquidity growth has reached an alarming level climbing to 1,400 trillion rials this year from 700 trillion rials two years ago (the year to March 2006).
He named growing expense pressure as the second reason for the rise in inflation. “Cost prices of goods and services as well as wages, energy, raw material, tax and other costs contribute to this.“
The lawmaker highlighted that prices of none of the mentioned factors have been stabilized and they are increasing.
In addition to the pressure resulting from demand and expenses, psychological factor can be blamed for the rise in inflation, Khoshchereh noted.
Pointing the blame on the Majlis, he reiterated that the flow of money into the economy is the most important factor in pushing the inflation rate up.
“Iran economy is like a patient suffering from anemia which needs just one blood bag. If it takes three bags it will die (meaning injection of excessive money into the economy by the parliament and the government).“
Last week, Central Bank of Iran (CBI) governor, Tahmasb Mazaheri, also admitted that the government was unable to successfully implement plans to curb inflation.
In a live TV program, he stated, “Today, inflation is not a natural disaster which cannot be predicted.“
Inflation, the top banker said, can presently be tamed and factors responsible for it can be identified.
Mazaheri, a former economy minister, underscored that CBI would no longer allocate financial resources to other banks to meet their commitments.
Inflation reached 16.2 percent during the month to October 22 as per data released by the CBI.

Energy Minister Parviz Fattah addresses the 22nd International Electricity Conference in Tehran on Monday. (Photo by Ali Hassanpour)

National power grid will soon be connected to those of Russia and Syria, Energy Minister Parviz Fattah said on Monday.
Speaking at the opening ceremony of the 22nd International Electricity Conference in Tehran, the minister added that Iran’s power grid will eventually be linked to Europe via Russia or Turkey. “The move would open a new horizon in regional and international cooperation,“ he observed.
He recalled that the national power network is currently connected to electricity networks of countries which have land borders with Iran.
“We are planning to have electricity exchange with countries with maritime frontiers. In this line, negotiations are being conducted with the United Arab Emirates for laying undersea cables.“
Iran has made significant progress in the construction of power plants in recent years, he said, adding that 80 percent of power plant equipment and devices are presently produced domestically.
Power plants currently have the capacity to generate about 48,000 megawatts of electricity, he noted.
Turning to Article 44 of the Constitution, Fattah said that power plants producing over 37,000 megawatts of electricity would be transferred to private sector within the next six years.
He earlier announced that the government would no longer invest in the construction of power plants.
The minister elaborated that since the private sector has responded favorably to the implementation of Article 44 of the Constitution which seeks large-scale privatization, the government restricted its investments in power plant projects and ’no power plant will be build with state fund this year’.
The confab will continue until November 21.

Managing Director of National Iranian Central Oil Company (NICOC) Alireza Zeighami Monday announced that the development of 18 new oil and gas fields would be put out on international tender in the first phase.
He told PIN that domestic companies would implement 75 percent of the first phase projects and the remainder would be ceded to foreign companies, adding if American and European companies refused to take part in the tender, other foreign bidders would be invited.
“At present, NICOC is producing 300 million cubic meters of gas in nine provinces of Iran which is 65 percent of the country’s total output,“ said the official.
He added that company was currently producing 145,000 barrels of oil per day, noting that the figure would rise to 165,000 bpd within the next two months.
“This is not the actual production capacity of the company,“ said Zeighami, adding its oil output would reach 320,000 bpd by 2011 and 395,000 bpd by 2016.
The NICOC head said the company’s average gas production would stand at 335 million cubic meters and its gas condensates production would reach 100 barrels a day in 2011.
He added that NICOC’s gas and gas condensates production would be 375 million cubic meters and 110 thousand barrels daily in 2016 respectively.
“To attain the goals, the company needs to invest eight billion dollars,“ Zeighami added.
He pointed to the second phase of Parsian II Refinery, South Gashoo Refinery, and LNG 1300 project as three underway projects of the company, adding 75 percent of the operations would be carried out by local experts.
“The first phase of Parsian-Nou Refinery, the development plan of Homa, Varavi, and Shanol gas fields, and the 36- and 6-inch gas condensates transmission pipelines are also ready for inauguration,“ added the NICOC chief.

Since the beginning of the gasoline rationing plan, smugglers have targeted medicines which are subsidized.

Deputy health minister has announced that a gang involved in smuggling insulin has been discovered and warned against the rise in medicine smuggling.
“Since gasoline is rationed and sold via smart cards, mafia networks involved in smuggling pharmaceuticals are on the rise,“ Rasoul Dinarvand lamented.
Some have even penetrated the media to publicize false reports about medicine shortage and create conditions for facilitating the entry of contraband medicines into the country,“ the official pointed out.
Talking to Fars news agency, he assured that there is no shortage of drugs and ’only 20 pharmaceutical items for cancer are scarce due to delay in production by foreign companies’.
Dinarvand criticized some individuals involved in pharmaceutical sector for their incorrect remarks on the issue. “For example, they say medicine sanctions are imposed whereas no such thing has taken place.“
He assured the public that the country ’is not facing any medicine dilemma’.
“Smuggling gangs are always active. When they cannot smuggle one item they switch to another.
For this reason, drug mafias have become active more than ever.“
Dinarvand noted that since the beginning of the gasoline rationing plan, smugglers have targeted medicines which are subsidized. The difference between real and subsidized prices of these items has created the ground for smuggling.
The official vowed that Health Ministry would try to raise public awareness about proper use of pharmaceuticals.
Iran began a gasoline rationing plan from June 22 to stop lavish fuel consumption by over seven million cars nationwide.

Agriculture production will reach 107 million tons in the 2007-08 crop year.

Minister of Agricultural Jihad Mohammad Reza Eskandari said Iran is close to achieving self-sufficiency in almost all agro products.
Apart from oil seeds for which self-sufficiency requires more time, Iran can relatively meet all its demand for agricultural crops, the minister told MNA Monday.
“If our consumption pattern is rectified, we would face no problem in meeting domestic demand in most agro products except rice and sugar.“
The minister elaborated that the problem in supplying sugar and rice is because of the rise in per capital consumption.
Putting country’s agricultural crops demand at close to 110 million tons, Eskandari predicted that agriculture production will reach 107 million tons in the 2007-08 crop year.
He added that the ministry has requested the Commerce Ministry to export two million tons of wheat.
“We have surplus wheat production and Economy Council has authorized the Commerce Ministry to export one million tons of the strategic crop this year of which 400,000 tons have already shipped.“
The minister noted that requests have been submitted to Commerce Ministry to increase the amount to two million tons.

German Ambassador to Tehran Herbert Honsowitz has denied that his country’s exports to Iran have declined.
“If we look at statistics, we see part of German commodities came to Iran via United Arab Emirates in the past one and half a years,“ the envoy said in an interview with ISNA.
“In other words, we believe the transactions have not declined but for certain reasons UAE has replaced Germany,“ he said in reply to a question on measures taken by Berlin to safeguard its economic ties with Tehran. He, however, did not elaborate on these ’reasons’ although it is evident that German economic planners have bowed to US threats to exert pressure on Iran to suspend its civilian nuclear program.
Noting that some four billion dollars worth of German commodities were reexported to Iran via the Persian Gulf Arab emirate, Honsowitz explained that in the past one and half a years, Tehran-Berlin trade has been conducted indirectly (through UAE) rather than directly.
Turning to Article 44 of the Constitution which seeks large-scale privatization in Iran, the ambassador regretted, “German businessmen are unable to capitalize on opportunities created by privatization in Iran since economic relations between two countries are influenced by the current political climate.“
Asked why German banks pulled out of Iran, Honsowitz underlined that financial institutions are private in Germany; they are independent and ’their decisions are not related to the German government’.
The comments by the German ambassador are contrary to what Iranians believe. They opine that bowing to US pressure, the German banks decided to wind up businesses in Iran.
Deputy Central Bank of Iran governor, Mohammad Jafar Mojarrad warned this week that cutting links of German banks with the Islamic country would not solely affect Iran economy but would also harm industry and businesses of the European country as well.
Mojarrad, a former adviser to the IMF executive director, also earlier told Financial Times that Iran had weathered the impact of Washington persuading leading European banks to stop dollar transactions.

Iran has removed all restrictions on Czech goods which it imposed separately from the rules for exporters in the EU, Prague Daily Monitor quoted weekly Euro as reporting Monday.
Due to the restrictions, Czech exporters found it difficult to enter the Iranian market because until this August, every business transaction had to be approved by the Iranian Ministry of Foreign Affairs.
Czech commercial attachŽ in Tehran Jan Kouril and Bohemian Consulting head Jiri Kobza have confirmed the lifting of the embargo.
Iran slapped an embargo on Czech Republic at the beginning of 2003 due to the Persian-language broadcast of Radio Free Europe/Radio Farda, based in Prague.
Czech companies traded with Iran despite the embargo. They were using, for example, partners from third countries.
Some business transactions were delayed, however, due to the need for additional permits, and some were not completed.

Oil Minister Gholamhossein Nozari has said that oil output would increase by March 2008, adding the surplus would be supplied to the market only within the framework of the quota set by the Organization of Petroleum Exporting Countries (OPEC).
He told Moj news agency that domestic oil production has gone up by 150,000 barrels per day in the past two years, underlining that there would be no reduction in this level.
The minister reiterated that Iran’s oil output would reach 4.2 million barrels per day by March 2008.
He continued that national crude production currently stands at 4.1 million barrels per day. The minister elaborated that in addition to increasing production, the ministry plans to compensate for the decline in storage facilities which is about 350,000 barrels per year.
Nozari pointed out that presently domestic refining capacity is 1.6 million barrels per day. Once the refining systems are reformed and optimized and new refineries are built, a portion of the surplus output would be used for producing oil derivatives.
Asked whether OPEC members plan to sell crude oil in currencies other than the US dollar, he said the issue has not yet been finalized.
However, countries are free to sell their oil in any currency they deem fit and each country can make independent decisions on this, he concluded.
The third OPEC summit was held in the Saudi Arabian capital of Riyadh on November 17-18. Iran, Saudi Arabia, Algeria, Indonesia, Iraq, Kuwait, Angola, Libya, Nigeria, Qatar, the United Arab Emirates and Venezuela are the 12 members of OPEC. Ecuador rejoined the organization this year.