country overview
During the month of July, Iran’s negotiating teams were involved in two separate sets of discussions with representatives of the International Atomic Energy Agency (IAEA) in Vienna regarding a possible framework to resolve the remaining issues concerning Iran’s nuclear program and also with representatives of the United States in Iraq regarding mutual interests in seeing a secure and stable Iraq. The result of both negotiations looked promising.
In Vienna, both parties confirmed that the negotiations were constructive. This was more apparent when Iran allowed inspectors of the IAEA to visit its heavy water plant in Arak after months of denying them access. Generally, there was a positive view in Tehran that the Iranian nuclear dossier, which was referred to the UN Security Council, is being discussed again at the IAEA which is more of a specialist body.
In discussions with the US over Iraq, both parties continued with their old rhetoric in public, but during private discussions they agreed to set up a trilateral committee consisting of experts from Iran, Iraq and the US to look into possible cooperation in improving the deteriorating security situation in Iraq. Formation of this committee was the first tangible result of the US-Iran negotiations which had some significance. On the one hand, the US seems to have recognized Iran’s ability to strongly influence events in Iraq while Iran has recognized the need to have direct negotiations with the US over regional issues that concern the national interests of both countries.
The publication of the MENA (Middle East and North Africa) Report by the World Bank, in which some of the positive and negative aspects of the Iranian economy were discussed, was another noteworthy development in July. According to this Report, the rising figures of non-oil exports and foreign currency deposits are the positive elements of the Iranian economy while the high inflation rate and increased government expenditure figures are the worrisome indicators. This report puts Iran’s annual growth rate at 4.4% and 5.8% in 2005 and 2006 respectively.
Prepared by Turquoise. About Turquoise: Turquoise is a boutique investment bank based in Iran with offices in Tehran and London. Turquoise publishes Iran Investment Monthly with the aim of keeping its recipients updated on the latest macroeconomic developments in Iran, providing an in-depth analysis of the Tehran Stock Exchange as well as introducing new financial products and private equity opportunities to potential investors. For more information please visit: www.turquoisepartners.com/iraninvestment
