Economy
Wed, Dec 26, 2007
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Special Funds for Unfinished Dams
More Workers on Payroll
Serious Concern Over Inflation Rates
By Sadeq Dehqan
Ministry Defends
Lower Cellphone Tariff
Orumieh Lake Drying Up
HEPCO Produces Gas Facilities

Special Funds for Unfinished Dams
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Seimareh dam project in the western Ilam province
Parliament on Tuesday approved the priority of a plan to withdraw money from the Oil Stabilization Fund to complete unfinished dams and water projects.
The plan, once ratified by the Majlis, will authorize the government to withdraw two billion dollars from OSF, a contingency fund for the time of low oil prices, to build dams and develop watershed networks, reported IRIB.
The government is obliged to pay back revenues earned from these projects to the public coffers.
The fund would be given to the energy and agricultural jihad ministries to plug budget deficits encountered at the beginning and final stages of projects such as dam construction, expansion of irrigation and water networks, urban and rural sewage system and providing machineries for farms.
Parliamentarians also voted down a request to discuss the double and single urgency of a bill for converting temporary contracts of workers with 10 years of work experience to permanent contracts.
According to Fars new agency, Majlis representatives voted 76 to 54 with 30 abstentions and rejected double-urgency of the bill in their open session on Tuesday.
As per the parliament executive bylaw, at least two thirds of the lawmakers should vote for double urgency plan or bill for Majlis to place it on its high agenda.
Following the lawmakers’ refusal to debate the single-urgency of the bill (79 votes for, 36 against with 15 abstentions), the bill would to be placed on the Majlis agenda as an ordinary one.
If the bill is ratified, all factories and enterprises, covered by the Labor Law as well as those entitled to civil, military and special employment laws will have to convert temporary contracts of employees who have more than 10 years of work records to permanent ones.
The bill, signed by 114 MPs, aims at providing job security for employees.
Secretary General of Worker House Alireza Mahjoub said earlier that workers on temporary contracts need job security more than anything else.
He regretted that the labor population has yet to attain such basic rights.
He called on the parliamentarians to place the bill to regulate activities of contracting companies and upgrade rules governing temporary contracts on the Majlis agenda.
Meanwhile, Majlis representatives on Tuesday approved the double-urgency of a bill for determining the status of high councils, merging them and amending their structures.
The bill stipulated reinstating High Council of Science, Research and Technology and the High Council of Information Technology and merging high councils of space, information dissemination and informatics with the High Council of Information Technology.

More Workers on Payroll
Minister of Labor and Social Affairs Mohammad Jahromi said that unemployment rate dropped by 1.2 percent this fall compared to the figures for the same season last year.
The minister told IRNA Monday on the sidelines of a meeting to commend exemplary entrepreneurs in Mashhad, South Khorasan province, that unemployment reached 10.4 percent during September 23-December 21 against 11.6 percent recorded last fall.
For the first time in a decade, Iran’s unemployment rate reached a single-digit figure this summer.
According to the Statistics Center, unemployment rate reached 9.9 percent after hovering above 10 percent for more than a decade.
Jahromi noted that the ministry has put support and development businesses with quick economic returns on its agenda to create more jobs.
Until December 21, the minister said, these businesses created jobs for over 817,000 workers.
He added that these institutions had a share of 30 to 40 percent in creation of jobs this year.
Meanwhile, latest report released by Economist Information Center (EIC) predicted that four million workers will join Iran’s job market within the next five years causing unemployment rate to reach 15 percent.
The EIC’s December report estimated Iran’s working population at 24.3 million during the year to March 2007, 25 million this year and 25.6 million in the year to March 2009.
The figure would stand at 28.3 in 2012.

Serious Concern Over Inflation Rates
By Sadeq Dehqan
Economists are expressing increasing concern about runaway inflation which is moving towards the 20 percent mark with many blaming poor measures to check the excessive flow of liquidity into the economy for the problem.
While according to the Central Bank of Iran (CBI), inflation reached 19.1 percent in the month to November 21, unofficial sources have put the figures at 25 percent or more.
Meanwhile, the top bank put liquidity at the alarming level of 1,450 trillion rials at present.
In an interview with Iran Daily, many experts expressed apprehension about the national economy being plagued with inflation since the past and called on the government to find a solution by taking the views of economists and experience of the previous administrations into account.
Mohammad Hossein Mahdavi-Adeli, a university instructor, stated, “In a state-run economy like ours in which the government handles 80 percent of economic enterprises, any decision has an influence on inflation.“
The government should pay heed to this fact and make prudent decision which would have the least negative impact on inflation, the economist stated.
It should benefit from the experiences of other countries in spending its growing oil revenues in way that petrodollars are used for the development of the national economy, Mahdavi-Adeli stated.
Referring to the impact of liquidity growth, the expert noted that when the rate outstrips economic growth, this contributes to inflation.
Putting economic growth at five percent at present, Mahdavi-Adeli pointed out that liquidity grew between 40 and 50 percent in the past two years and this contributes to the high inflation.
He added that bourse could play an effective role in reducing high inflation by absorbing the idle capital provided liquidity is channeled into the stock exchange properly.
Mahdavi-Adeli also blamed previous governments for failure to control inflation through scientific methods, leading to depreciation in the value of the national currency.
Commending some of measures taken by the Ahmadinejad administration in reining in inflation, the academician criticized state banks for excessive issuance of travelers checks (TCs) which only aggravated inflation.
He elaborated that banks issued TCs excessively since the country faces shortage of high-denomination banknotes and these checks are replaced them.
The expert called on banking officials to issue high-denomination paper bills such as those for 200,000 or 500,000 rials and five-million-rial traveler checks.
Another economist Mehdi Taqavi said that state policies on the economic front has not led to a rise in investment.
Economists and the print media maintain that for reducing inflation rate, liquidity should first be brought down, he added.
“This is while the country is facing unemployment and inflationary recession and supply and not demand is on the rise.“
Taqavi, an economy professor of Allameh Tabatabei University, said that the national economy depends on imports and rise in the global price of goods creates problems for it as well.
Political shocks inflicted on the country every once in a while also force foreign investors to leave the country, he noted.
“This is not the first time the country is grappling with such high inflation. We had witnessed a rate of above 49 percent during the tenure of former president Akbar Hashemi Rafsanjani.“
Taqavi called on economic policy makers to study the measures taken by the Rafsanjani administration to curb inflation.

Ministry Defends
Lower Cellphone Tariff
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Tariffs for cellphone imports increased from six to 60 percent.
After one and half years, import tariff on cellphone handset was brought down to 25 percent from the earlier 60 percent.
The deputy minister for industry and mines told Fars news agency Tuesday that the tariff was revised following expert studies.
Mohammad Javad Danesh-Marnani said that excessive tariff rates levied on mobile phone handsets imported into the country pushed up smuggling and prices.
Asked whether the revision means that earlier decision was ’wrong’, the official said, “We were not in the ministry when the decision was taken. But we think 25 percent is the best tariff rate for imported brands.“
Meanwhile, a member of the Majlis Industry and Mine Commission said that the ministry did not take into account two main issues when deciding on a ten-fold increase in rate.
Less than two years ago, cellphone import tariffs were raised from six to 60 percent.
Hamid Reza Fouladgar recalled that the government took the decision to support domestic producers. “That was a good move but two issues were not taken into account.“
The first, he said, was that domestic companies were unable to meet the demand for cellphone handset and the second was rise in smuggling since supply outstripped demand.
The lawmaker elaborated that the decision caused prices of mobile phone handsets to rise, leading to excessive import coupled with smuggling.
Fouladgar maintained that the new rate would offset the previous condition while supporting domestic production.
More than two domestic companies have so far produced over 300,000 mobile phone handsets.

Orumieh Lake Drying Up
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Salinity in Orumieh Lake has risen
by 33 percent.
Orumieh Lake has reached the lowest level in the past 40 years, secretary of West Azarbaijan Natural Disasters Taskforce warned.
Addressing those in charge of specialized working groups across the province, Nader Qazipour said that unless something is done to overcome the problem, about 25 kilometers of the shores of the lake would face environmental problems creating ecological damage to West Azarbaijan province, reported IRNA.
He proposed that the lake’s water level should be raised to 5.1 meters so as to breathe a new life into the ecosystem of national park alongside the lake.
The official put the water shortage in the lake at over 7.5 billion cubic meters. The waters behind the dams can only affect the height of the lake by 17 centimeters, he pointed out.
Emphasizing the need to form provincial working groups particularly in industries and mines sector, he called for salt extraction from the lake for the survival of the national park.
Referring to the launching of Orumieh Lake Crisis Taskforce in the province, he said that the secretariat of the taskforce would be located in provincial Department of Environment.
The salinity in the lake has risen over 33 percent, leading to a decline in the number of artemia species. Presently, the number of artemia in the lake has decreased to one in every liter of water. This is while, about 4,000 artemia can thrive on one liter in favorable conditions.
Orumieh Lake is the country’s largest producer of artemia.

HEPCO Produces Gas Facilities
For the first time in the country, Heavy Equipment Production Company (HEPCO) has manufactured the facilities of input-output system of 25-megawatt gas pressure regulation stations.
According to a fax sent to Iran Daily by the company’s Public Relations Office, the total weigh of the units stood at 2800 tons.
Most of the executive operations of the project including cutting, welding, pickling, insulating, assembling and packaging were conducted by HEPCO group.
The facility will be used to transfer sour gas from Asalouyeh in Bushehr province through the Fifth Nationwide Gas Pipeline for injection into the oil wells in Aghajari (Khuzestan province) to increase crude output.
It also aims to transfer sweet gas from Asalouyeh to major cities through the Third Nationwide Gas Pipeline for household and industrial use.
HEPCO group is to manufacture 72 units, of which 50 have been made and delivered. The project will save $11.5 million of hard currency for the country.
HEPCO is an Iranian company producing road construction equipment for markets in Iran and the Middle East. It also produces mining machinery as well as parts for oil and gas installations. The company, which is affiliated to the Industries and Mine Ministry, was established 16 years ago in Arak, Markazi province.