Economy
Wed, Jan 16, 2008
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Bird Flu Vaccine Deal
With Indonesia
Legal Action
Against Turkmenistan
Separate Gas Pipeline to Turkey
Cold Damages Flowers, Greenhouses
Call for Promoting Productivity
Irano-Greek Commission to Be Formed
Unemployment Down
Rate Higher Among Youth, Women

Bird Flu Vaccine Deal
With Indonesia
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A sanitary veterinary worker collects blood samples from a hen in the village of Murighiol, 350 km east from Bucharest, Romania, November 29.
Indonesia and Iran have reached a tentative deal to co-produce bird flu vaccines, Indonesia’s health minister announced Tuesday. Siti Fadilah Supari said Iran has an advanced pharmaceutical industry, which would be capable of producing bird flu vaccines using Indonesian virus.
The tentative agreement, made available to The Associated Press, was signed in Tehran in November and stipulated that the ’parties agreed to cooperate in the field of ... vaccine production’ without specifying bird flu. Details of how the two nations would cooperate were not immediately clear, but Supari said a concrete plan should be ready by the time Indonesian President Susilo Bambang Yudhoyono visits Iran later this year.
Health Minister Kamran Baqeri Lankarani said in late November that five new drugs had been produced in the country.
He pointed out that the Health Ministry is currently working on registration of these drugs and it is hoped that the medicines will be marketed by March, MNA reported.
Lankarani told reporters that Iran is among the first two countries in eastern Mediterranean region in terms of biotechnology. “The government has focused on investing on human resources with a scientific approach in biotechnology so that the capacity of admitting postgraduate university students in these courses has doubled,“ he added.
Commenting on the mass production of the new AIDS drug called IMOD, the minister noted that the drug can treat about 5,000 to 6,000 AIDS patients.
The newly-discovered herbal medicine for HIV/AIDS, IMOD, was developed from locally grown medicinal plants by young Iranian scientists in 15 research centers after four to five years of hard work. Produced through nanotechnology, the IMOD is the fifth generation of medicines invented to combat AIDS in the world.
Lankarani pointed out that the company which manufactures IMOD is also working on marketing it for international markets.
Deputy minister, Ali Alavi, earlier said that quality of medicines produced by domestic pharmaceutical companies has improved by 30 percent.
Alavi stated that Iranian-made pharmaceutics are able to compete in the global market. Lower prices coupled with high quality are the advantages of Iranian drugs compared to products of other countries supplying medicines to Middle East and African markets, the official explained.
Medicine exports topped $61 million in the year to March 2007, he said, adding that the ministry is targeting markets in Afghanistan and Iraq.

Legal Action
Against Turkmenistan
Separate Gas Pipeline to Turkey
Iran will take international legal action against Turkmenistan for stopping gas deliveries since last month, chairman of the Majlis Energy Commission disclosed.
Talking to IRNA, Kamal Daneshyar said Tuesday that foreign and oil ministries are following up the issue which led to gas disruptions in Iran’s northern region, especially at a time the country is hard hit by freezing weather and heavy snowfall. “Iran has not officially submitted its complaint to the Turkmen side but is deciding to do so.“
Stressing that the country can legally demand compensation from Turkmenistan due to the halt in daily deliveries of up to 23 million cubic meters of gas which Ashkhabad blames on technical fault. It has since said that Tehran’s failure to meet some payments was delaying pipeline maintenance.
Iran, which has the world’s second largest gas reserves but still imports some gas, insists it is up to date with payments. Iranian officials say Ashkhabad wants to double the price.
Main reason for the stoppage, contrary to what Turkmen says, is to increase the price, Daneshyar observed.
“It is also likely Turkmenistan has stopped gas deliveries under pressure from other countries,“ the lawmaker said without naming the countries, adding, “However, this assumption has not been proved yet.“
Meanwhile, an Iranian official described Turkmenistan’s action in its bid to change the terms of the contract as ’immoral’ in view of the unusually cold winter, Iranian state radio said on Tuesday.
Iran’s Deputy Oil Minister Akbar Torkan said Ashkhabad wanted to change the terms of an existing gas contract. “The contract is transparent. Turkmen officials want to cancel it and put forward new demands,“ Torkan told state radio. “Cutting off gas supplies in the coldest days of the year is immoral.“
State media earlier said Iran had a 25-year contract running to 2024 but had signed another agreement for additional supplies since the original 25-year deal was signed.
Meanwhile, the stoppage of gas supplies by Turkmenistan coupled with sharp rise in domestic gas consumption made Iran halt gas supplies to Turkey.
The Turkish daily Today’s Zaman reported Tuesday that in search of a final solution to recurrent gas problems with Turkey, Iran has decided to construct a new pipeline to carry its natural gas to the Turkish market so that the gas flow will not be affected by sudden changes in Iran’s domestic market.
Ahmad Nourani, the undersecretary for economic and commercial affairs at the Iranian Embassy in Ankara, has said there are sufficient reserves to double gas supplies to Turkey.
However, he said that since the current pipeline between Turkey and Iran was connected to Iran’s domestic natural gas network, gas flow may drop depending on weather conditions and natural gas consumption. “A new pipeline to Turkey will be laid,“ he said, adding that the project was in the development stage but that completion of the pipeline may take time. “Based on the agreement, We have legal obligations. But compelling reasons are at stake, something very common in all international agreements,“ he said.
Turkey signed a natural gas agreement with Iran in August 1996 for the purchase of 10 billion cubic meters of natural gas per year for 25 years.

Cold Damages Flowers, Greenhouses
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Over 50 percent of flowers in Tehran province were damaged in the recent freezing wintry weather.
Unprecedented cold weather in recent weeks has damaged 10 percent of the semi-modern and traditional greenhouses and over 50 percent of flowers in Tehran province, the head of provincial Flowers and Flora Association said.
Gholamhossein Soltan-Mohammadi told ISNA that greenhouses in the cities of Varamin, Savojbolagh and Pakdasht were the worst hit.
Last week, greenhouse owners, especially in Varamin, told the national TV that such heavy snowfalls were unprecedented for the normally dry region. They said their heavily damaged greenhouses were insured against quakes and storms and not against snowfalls.
“Over 50 percent of the flowers produced in greenhouses were damaged due to low gas pressure,“ he added.
Owners say due to low gas pressure, their greenhouses made of plastic could not withstand heavy snowfalls.
Since renovation of the damaged greenhouses will last several months, it would lead to further losses for flower growers.
Soltan-Mohammadi recalled that the exact amount of damages have not been measured yet.
Referring to a drop in export, he noted that the target set for flower exports will not materialize. “Flowers have been exported only by planes these days due to disruptions in road transportation.“
Meanwhile, Ali Kia-Darbandsari, chairman of Shemiran Horticultural Union, said that there was not much damage to flowers in Shemiran and Khojir gardens. However, greenhouse tomatoes were damaged due to freezing weather, he concluded.

Call for Promoting Productivity
Abundant oil reserves as well as oil-dependant and state-run economy of Iran have left less room for productivity.
Expressing this, Hassan Sadeqi, an economist, told ISNA that productivity only makes sense in a production-based and industrial economy while it is meaningless in wholesale economy, he added.
The expert said that productivity rate is directly linked to the economic system of a country.
He pointed out that the workforce productivity rate is high in Europe, followed by the Far East, Pacific, Middle East and Africa. Sadeqi explained that productivity rate rises in countries such as South Korea, Japan and China which pay more attention to work.
Since working is the only source of income for people in these countries, harder work means better living conditions and brighter future for them, he elaborated.
According to him, since the government depends on oil revenues in the oil-based economy, the role of workforce is less evident leading to lower productivity.
The economist said that given the national economy’s high dependence on oil revenues, the wholesale economic is dominant.
Therefore workforce in Iran and industrial countries cannot be compared with each other, he added.
Sadeqi cautioned that the country is distancing itself from industrial economy which would lead to reduction in productivity rate of the workforce.
If state officials want to materialize the goals of Vision 2025 and the Fourth Five-Year Economic Development Plan (2005-2010), they should try to drive the country toward productive and industrial economy, he noted.
A part of domestic economic growth should be achieved by improving the productivity rate, he underlined.
The economist concluded that the productivity rate could rise once the economic structure changes and productivity culture is promoted.
Article 6 of the Fourth Five-Year Economic Development Plan (2005-10) stipulates the performance of the state executive organizations to be assessed on productivity indices while allocating financial resources. Ratification of the article indicates the significance of production in planning in the years up to March 2010. This means productivity was neglected in the past three development plans.
Productivity which is the amount of output created (in terms of goods produced or services rendered) per unit input used, is inextricably linked to economic growth and increase in welfare.
Productivity involves economic efficiency. In relation to the business world, it refers to generating output whether gross revenue or value-added through efficient utilization of resources inputs (labor, capital, materials).

Irano-Greek Commission to Be Formed
Deputy foreign minister for European affairs and Greek deputy foreign minister agreed in Athens late Monday to set up Iran-Greece economic commission.
Ali Baqeri, in a meeting with Petros Doukas, said the upcoming meeting of the commission, which is aimed at expanding cooperation between private and state sectors of the two countries, will convene in the Greek capital, IRNA reported.
Greek imported $2.2 billion worth of goods from Iran during January-September 2007. Its main imports included crude oil, dried fruits (mainly nuts), iron, steel, carpet, crystal and other commodities. Greek exports to Iran were rather limited and, during the same period, stood at around $7 million.
“Iran and Greece can make joint investments and capitalize on human resources to improve cooperation in shipping, transportation, industrial and agricultural sectors.“
Baqeri said the latest reading of Article 44 of the Constitution has opened doors for foreign investors and tradesmen including Greek entrepreneurs to invest in Iran’s key economic sectors.
Tehran and Athens traditionally enjoy a cordial relations emanating from their rich culture and civilization.
Doukas, for his part, noted that given the cordial ties between the two nations, bilateral trade are well below satisfactory and added that there are excellent opportunities to strengthen economic ties.
He stressed his country’s interest in cooperation with Iran in all fields, with special focus on investment in oil, gas and refinery projects. He pointed out that agreements on safeguarding investments and developing shipping between the two countries are in the final stages of approval by the Greek Parliament.

Unemployment Down
Rate Higher Among Youth, Women
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Western province of Lorestan had the highest number of unemployed last fall.
Unemployment rate reached 9.8 percent in autumn, 1.8% down compared with the figures for the same season last year, according to the Statistics Center of Iran (SCI).
According to SCI, 21.6 percent of the population aged between 15 and 24 were jobless in autumn, showing a 3.1-percent drop compared with the figure for the same period last year, Fars news agency reported late Monday.
Western province of Lorestan had the highest number of unemployed population (18.9 percent), followed by southwestern Kohkiloyeh-Boyerahmad province (18 percent). The provinces of Khorasan Razavi (5.9 percent) and West Azerbaijan (6.7 percent) had the lowest number of jobless population respectively.
The center said that an estimated 6.7 percent of the working population worked less than 44 hours per week.
For the first time in a decade, Iran’s unemployment rate recorded a single-digit figure this summer. According to the center, the unemployment rate reached 9.9 percent after being above 10 percent for over a decade.
In other words, autumn’s unemployment rate declined by one percent compared with that of summer.
A report released by IRNA earlier this week quoting SCI said that unemployment among the young population was much higher than the national rate in spring.
While unemployment rate nationwide stood at 10.7 percent last spring, the rate was 20 percent among youth aged between 15 and 20.
Women, youth and the educated make up a majority of over 2.9 million jobless Iranians, while the number of university graduates without jobs is five percent higher than the national rate.
The southwestern province of Kohkiloyeh-Boyerahmad had the highest number of jobless population (34.6 percent) in spring. “Unemployment rate stood at 29.2 percent among men, and 51 percent among women in this province,“ the report stated.
The figure further showed that youth unemployment rate exceeded 20 percent in 15 provinces, while for women, it was higher in 26 provinces.
In recent years, the number of female job-seekers has increased compared to the figures recorded in previous years, the report added.
While women’s employment is one of the most important economic issues in Iran, it has rarely been brought up in economic discussions. Iran like other developing countries has a low rate of women employment.
Reasons cited for the low employment among Iranian women are most importantly illiteracy or lack adequate education and skills, and the fact that a large number of Iranian women are housewives. In recent years, the fact that women have outnumbered men in universities should make officials think about changing male-dominated job patterns.