Figures released by the Central Bank of Iran (CBI) suggest that liquidity growth which reached an alarming level of 40 percent in the middle of the current Iranian year to March 2008 has become slow.
The top bank announced that liquidity grew by 35.7 percent in the 12 months to November 21, 2007, exceeding 1,510 trillion rials. The economy is wrestling with runaway inflation triggered by high liquidity.
Many experts expressed apprehension about the national economy being plagued with inflation in the past and called on the government to find a solution by taking into account the views of economists and experience of the previous administrations, reported MNA.
Liquidity grew between 40 and 50 percent in the past two years and this contributed to the high inflation.
Iran’s foreign reserves reached over 685,000 billion rials ($76.1 billion) during the same period, up 29.4 percent compared with the figures for the 12 months to November 21, 2006. The figure was more than 529,000 billion rials during the same period in 2006.
Government debts to CBI also rose 4.2 percent during the same period to 15.4 percent.
Deposits in private banks increased by about 19 percent during March 21-November 21, 2007.

With the ratification of the money-laundering law by the Parliament in late January, money laundering is now considered a crime and those engaged in it will be dealt with in accordance to the law.
Prior to the ratification of the law, foreigners had labeled Iran as a haven for dirty money and they used this excuse to prevent the development of Iranian banking system, Fars news agency wrote.
Sanctions imposed by Paris-based Financial Action Task Force (FATF) against several Iranian banks are among such actions.
Deputy governor of Central Bank of Iran said that CBI had taken extensive measures before the approval of the law. It has also formed a committee in this regard, Hossein Qazavi added.
The specialized committee for combating dirty money has increased its activities in recent months, he said, explaining that special forms have been prepared and sent to banks to do the necessary measures.
According to him, once CBI detects offenses involving dirty money, it should report it to the judicial authorities so that they can take necessary measures, he underlined.
Money laundering should be considered a crime and those who intend to give a legal face to it would be considered culprits.
The legal framework of Iran’s money laundering ratification is similar to legislations around the world, the official pointed out.
It does not contradict the exculpation rule based on which individuals are the owners of their money unless the contrary is proved, he underlined.
Highlighting that the recently-ratified law covers the banking system, bourse, customs administration, insurance companies and other organizations, he said that the secretariat of High Money Laundering Council is to be formed within the Ministry of Economic Affairs and Finance in an effort to implement the law comprehensively.
Currently, CBI has started negotiations with international organizations. Once the law is notified, its bylaws would be adjusted and notified to the Ministry of Economic Affairs and Finance.
Qazavi described the absence of a law to fight money laundering as one of the main excuses of FATF. Once the law is ratified, there is no justification in imposing sanctions against Iranian banks, he concluded.

A Persian idiom goes: ’One who has a clean record is not afraid of audit’. Ratification and enforcement of Money Laundering Law in the run up to the 29th anniversary of the Islamic Revolution (February 1-11) are clear indications that financial and monetary market are becoming more transparent.
The World Bank and International Monetary Fund (IMF) have spearheaded an extensive campaign against money laundering in recent years. An IMF report suggests that dirty money makes up about five percent of gross domestic product (GDP) of countries (over one trillion dollars). Money laundering has in recent decades been recognized as a crime by the world financial and monetary organizations.
Money laundering is applied to financial transactions related to organized crime and illicit activities. The money made from white-collar crimes such as embezzlement, insider trading, bribery and computer fraud is called ’grey’, the one from drug smuggling ’dirty’ and those from trafficking and tax evasion ’black’.
Monetary experts opine that money laundering has destructive impacts on the economy, leading to runaway inflation and uncontrolled liquidity. Money laundering harms sound economic enterprises, making commercial, production and business environment unhealthy, unsafe and uncompetitive.
Iran has delayed in joining the rank of countries combating money laundering but two issues should be taken into account. First; banking and monetary regulations have been enforced in a way that they potentially prevent apparent money laundering and make clandestine activities of money launderers almost impossible.
During the years, even a single case of money laundering in Iran’s banks, most of them state run, has not been reported by the world’s leading monetary and financial bodies. Second; implementation of Money Laundering Law is closely tied to certain legal, economic, cultural and social preparations. Iran is now ready to implement the law.
A regulation has been ratified to help the Central Bank of Iran in its thorough control of the flow of money in non-interest funds, financial and credit institutions. The financial and budget systems of the government and numerous state companies have also been amended.
In other words, the country has been slow in ratification of Money Laundering Law to prepare the ground for its implementation. It seems even prior to the ratification of this law, there were nothing to make international bodies concerned about Iran. The International Monetary Fund also closely monitored process of ratification of the law in the country. IMF experts held numerous meetings with Iranian officials and planners to help them draw up a thorough and comprehensive law.
It is a fact that Iran has suffered huge losses emanating from activities in some neighboring countries. Young Iranians have fallen victims to drug smuggling and goods and foreign exchanges illegally enter the country through borders with Afghanistan, which is the world’s number one opium producer. The country is also a victim of the violence in Iraq.
Iran deems itself a victim of foreign money launderers. Contrary to what western countries claim, the Islamic country has suffered a lot from official and unofficial financial terrorism such as unilateral sanctions imposed on Iranian banks by the US and its European allies.

Water is desalinated to convert to fresh water suitable for animal consumption or irrigation, or, if almost all of the salt is removed, for use by humans.

Currently about 750,000 cubic meters of water are treated using desalination technologies, said deputy head of Agricultural Jihad Ministry’s Engineering Research Center for research affairs.
Saeed Shakhesi put the amount of water desalinated globally at over 45 million cubic meters per day, IRNA reported. Saudi Arabia, which desalinates over seven million cubic meters of water per day, ranks first in the world while Iran’s position is between 10th and 12th, he compared.
Desalination refers to any of several processes that remove excess salt and other minerals from water. Water is desalinated to convert to fresh water suitable for animal consumption or irrigation, or, if almost all of the salt is removed, for use by humans.
Thermal, membranous and reveres osmosis technologies are among the desalination methods.
Thermal desalination is not economical since the cost is over 10,000 rials per cubic meter, he said. While, membranous desalination cost is half this amount, he added.
Water production through reverse osmosis desalination is more economical, he said, proposing that renewable energies and agro wastes should be used to supply the entry required for desalination process in an effort to lower the expense.
Shakhesi evaluated the leftovers and wastes in the agriculture sector at between 50-200 million tons annually, which could supply 25 percent of the country’s energy requirement.
According to him, currently about 90 percent of energy required for water desalination is provided by fossil fuels.
“Water desalination used to be 300,000 cubic meters per day in the past six years. Given the use of latest desalination technologies, this figure has increased to 750,000 cubic meters per day.“
He predicated that domestic water production through desalination methods would rise to one million cubic meters per day by 2016.
On the problems of using desalination technologies, he said that the majority of desalination process is done in southern regions.
Since salinity of Persian Gulf waters is very high, releasing the remaining salt and organic materials into the sea would create environmental hazards, he said. Also, the fish and eggs should not be trapped in desalination systems, he concluded.
An international conference on water desalination opens in Tehran today. The two-day confab organized by Ministry of Agricultural Jihad is aimed at development in the nation’s coastal areas. The gathering is sponsored by 10 research and executive organizations. Modern desalination technologies will top the agenda of the conference.

Iran is the third consumer of gold in the world, Chairman of Tehran Gold and Jewelry Union Koroush Goharbin said, adding that the price of gold in the country is higher than the international rate.
“As per the law, unprocessed gold and gems are entitled to a four percent import tariff rate. This rate makes gold production costs higher.“
Those involved in gold and jewel sector have for the past three years called on the government to either grant them an exemption from tariffs or bring the rate down, he told Iran Daily on Thursday.
The proposal is under study by the Majlis economy commissions but so far no decision has been taken in this respect and ’we are witnessing high gold price at home’.
Goharbin proposed the government grant a tariff exemption for raw materials of products that have the potential of being exported and see how these items can make their way into
the world market
successfully.
Over 3,000 small and large factories are involved in making gold and jewels in the country and their products are exported to the Persian Gulf Arab states. A small number of Iranian-made gold and precious ornaments are also exported to Europe. Although Iran is rich in gold reserves, domestic production is unable to meet demand by producers.
“Until a few years ago, Iran supplied a part of Turkey’s market. But the neighboring country has now stopped imports in view of the support provided by the Turkish government to its gold industry.“
Goharbin urged the Iranian government to help gold producers to avert further losses.
The government, he said, should remove tariffs imposed on machineries used in gold industry and extend soft loans to importers. This industry wants to secure a foothold in the international and regional markets and the objective cannot materialize without state support, the expert concluded. “

The country's oil tanker capacity will reach 4.78 million tons in 2009.

South Korea will deliver 16 oil tankers to Iran in the first four month of 2009, managing director of National Iranian Tanker Company (NITC) said, adding that with the addition of the new vessels, the country’s oil tanker capacity will reach 4.78 million tons.
According to ISNA, Mohammad Souri announced that NITC ordered a 318,000-ton tanker named ’Danesh’ from Daewoo, 317,000-ton tankers ’Mehran’, ’Minab’ and ’Mersad’ from Samsung and 317,000-ton tankers ’Hirmand’ and ’Haraz’ from Hyundai. It also placed orders for 164,000-ton tankers ’Saman’, ’Sadat’ and ’Salar’ from Hyundai-Samho of Korea. He said that the tankers will be ready for delivery by the end of 2008.
The official noted that three tankers: ’Davar’, ’Dadgar’ and ’Sam’ will be delivered to Iran by first four months of 2009, observing that the total fund for the purchase of the Korean oil tankers is $2.05 billion.
Criticizing the performance of domestic ship builders, he said that major shipyards usually deliver the first ship one year after the order is placed and they hand over subsequent ships every 45 days.
However Iranian companies do not deliver the first ordered ship even in four years, he regretted.

Building houses on land which are leased by the government for 99 years would create a balance in the market.

The government’s policies to regulate the market have been instrumental in stabilizing housing price until June 2008, observed the head of the Union of Real State Consultants, Mostafa Qoli Khosravi.
He told MNA that conditions in the housing market should be studied after this period, adding that new strategies should be adopted if prices go up again.
Irrational increase in prices of houses in the year to March 2007 has led to a seasonal stagnation in the sector, he noted.
Current stagnation has increased the price of residential units in a number of areas while in some other regions it has gone down, he said, adding that the names of the areas will not be announced to prevent brokers taking advantage of the situation.
Khosravi said that at present rents are stable, noting that the rent is determined by the owners so real state agents only intervene to help owners and tenants reach an understanding.
He noted that real state agents are not involved in determining housing price and rents, rather they have a duty to reduce prices while considering the interest of both parties.
Home buyers and sellers, he said, decide the actual prices so the prices which are printed in various publications cannot be considered as a pattern.
The initiative taken by the government to build houses on land which are on lease for 99 years would lead to a balance in the market.
He stated that presently 10 to 15 percent of the residential units are unoccupied, adding the figure was 30 percent during the tenure of the previous
government.
An economic daily, Donya-ye Eqtesad, estimated that the rate of increase in rent in Tehran has exceeded 100 percent in the one-year period between July 2006-July 2007 (26 July 2007). The paper had reported a similar 100 percent increase in housing costs in Tehran between July 2005-July 2006 (31 July 2006).
House price hikes prevent people from purchasing houses and lead to recession in the housing market in the long run. Eighty percent of the domestic capital flow pertain to the housing market, which is considered the main driving force of the economy. Recent housing price hikes have also had an effect on the prices of commodities.