Russia delays Iran nuclear plant to 2008

Russia delays Iran nuclear plant to 2008
by Reuters
25 July 2007

Russia has no chance of finishing Iran's first nuclear power station before autumn 2008, a year behind schedule, a Russian subcontractor helping to build the plant told RIA news agency on Wednesday. Russia has used the Bushehr nuclear plant as a lever in relations with Tehran which chilled this year after a row over missed payments for building the plant in southwest Iran.

Completion of Bushehr is likely to trigger a sharp reaction from the United States, which fears Iran's nuclear programme would be strengthened by the delivery of Russian nuclear fuel.

Atomstroiexport, the Russian state firm building the plant, said a shortage of payments from Iran was undermining confidence in the Bushehr project.

"Today we can say for sure that to launch the Bushehr nuclear plant this autumn is unrealistic," said Ivan Istomin, the head of a subcontractor called Energoprogress that is working for Atomstroiexport, RIA reported.

"A realistic time frame for starting the reactor... is moving to autumn 2008," he said.

Russian arms sales and nuclear cooperation with Iran have strained relations with Washington, which suspects Tehran of using seeking to develop atomic weapons under the cover of its civilian nuclear programme.

Moscow says Tehran does not have the capability to make nuclear weapons. But some senior officials are wary of relations with Iran and say Russia's interests are not served by Iran gaining nuclear weapons.

Iran says it has a right to develop its civilian nuclear sector and that its nuclear programme is not aimed at developing nuclear arms.

Mohammad Saeedi, deputy head of Iran's Atomic Energy Organisation, and Javad Vaeedi, Iran's deputy nuclear negotiator, were in Moscow on Wednesday for talks, an Iranian nuclear official told Reuters.

A Russian nuclear official said the talks would focus on "efforts to stabilise the situation around Bushehr."

CONFIDENCE UNDERMINED

Russia has said it will stick to the project, worth about $1 billion. But Atomstroiexport said Iran was still paying just a fraction of the $25 million a month needed to finish the plant.

"Confidence in the project has been undermined," said Atomstroiexport spokeswoman Irina Yesipova. "It is an unstable situation where there are lots of announcements but no money."

Iranian officials insist they have made payments on time and say Moscow is delaying because of Western pressure.

"There is just not sufficient financing and that has influenced confidence, the confidence of the Russian side and Russian subcontractors towards the Bushehr project and towards Iran," Yesipova said.

Russia in February delayed the launch of the plant - planned for September 2007 - citing payment problems. Russia also delayed sending nuclear fuel to Bushehr as it had earlier planned for March 2007.

Russia has traditionally been seen as Tehran's closest big-power ally but senior Russian officials have expressed exasperation with Tehran's negotiating tactics.

They cite the more extreme pronouncements of Iranian President Mahmoud Ahmadinejad, who has called for wiping Israel from the world's map.

Oil Revenues Are Alarming, Economists Warn Ahmadinejad

Fariba Sarraf - 2007.07.16
Rooz Online

A group of Iranian economists warned President Mahmoud Ahmadinejad that “oil revenues are alarming, and the government must not increase expenditure simply because revenues have increased.”

The same group of economists wrote a letter last year to President Ahmadinejad criticizing his government’s economic policies. Last month, they published a second letter calling on the President to “review the administration’s economic policies” and “take a fundamental step towards improving the nation’s economic conditions.” In response to that letter, individuals affiliated with the administration accused the economists of engaging in “politicking” and even fabricating data.

According to E'temad Melli daily, however, “After reviewing the letters, officials in the administration decided to invite the economists to the President’s office in order to discuss their concerns.”

In that meeting that lasted more than 5 hours according to a report published by the Iranian Student News Agency [ISNA], economists argued that the country was experiencing a second Dutch Disease as a result of the administration’s expansionary fiscal policies. They also raised their concern about the state’s increasing oil revenues in the past two years – exceeding 120 billion dollars – telling the President that they were worried about “losing an unprecedented opportunity.”

One of the economists present in that meeting, Zahra Karimi, told reporters, “It seemed as if Mr. President only wanted to say that our criticisms were not fair, and that his administration’s performance fares much better compared to that of previous administrations. He said that he looks forward to new data that will prove his administration’s claims.”

Sarmaye, a daily published by one of the disgruntled economists, Hasan Abdeh Tabrizi, quoted an economist present at the meeting – Dr. Meidari – as having said, “oil revenues are alarming. Oil is ominous and the government must not increase expenditure simply because revenues have increased.”

The Donyaye Eghtesad [“World of Economics”] publication quoted another economist present at the meeting: “It appears as if the administration regards two important financial institutions as obstacles facing the implementation of its desired policies: one is the Budgetary Management and Planning Organization of Iran, which oversees planning and budgetary procedures, hence controlling the allocation of resources among public institutions; and another is the country’s banking system, which plays a fundamental role in distributing funds to private and public firms. Perhaps these two institutions, the Budgetary Management and Planning Organization and the banking system, have not performed their duties as well as they should have given the country’s special economic conditions; but we do not approve of the government’s treatment of them either. With this kind of treatment, the country’s financial conditions will worsen even more.”

Iran's Gas Riots

Iran's Gas Riots
By Kenneth R. Timmerman
FrontPageMagazine.com
June 29, 2007

This week’s gasoline riots in Tehran were entirely predictable. They are also the clearest measure we have seen in recent times of the remarkable fragility of Iran’s Islamic regime.

Predictable, because they have been debated publicly in Iran for weeks and delayed several times, for fear of adverse public reaction.

A measure of the regime’s fragility because large numbers of Iranians have braved repeated threats to protest gas rationing and price hikes in one of the world’s largest petroleum exporting countries

Mahmoud Ahmadinejad came to power in August 2005 on promises that he would put more of Iran’s oil revenue on the tables of ordinary Iranians.

During the election campaign two years ago, he toured Iranian cities and towns, promising a new high school here, a municipal swimming pool there, a new factory, a new gymnasium, rural development, whatever.

Until now, he has been unable to deliver on those promises, squandering Iran’s windfall oil profits on public subsidies to such un-Iranian groups as Hezbollah and Hamas. People know this, and they resent it. And that is what ultimately led to this week’s gas riots, with petrol stations set ablaze in Tehran and in cities across Iran. http://thespiritofman.blogspot.com/2007/06/petrol-crisis.html

So far, the economic vulnerability of the regime has not translated into regime-threatening political vulnerability; but just wait, says one prominent Iranian businessman encountered in London, who sees similarities in what is happening in Iran today with the final years of the former shah.

During the late 1970s, he reminded me, the Iranian economy, flush with cash from high oil prices, was beset by high inflation, just as it is now. The shah’s answer was to find a few businessmen who had raised prices and throw them in jail, he said.

In April, the Research Center of the Iranian Majlis ( the rough equivalent of our Congressional Research Service) announced that inflation had risen by a stunning 22.4% for the calendar year that ended on March 21, and projected 24% inflation for the current year.

That is an unbelievably bad performance of what is supposed to be a populist government, especially when coupled to double-digit unemployment and the growing scarcity of foreign investment as the U.S.-led sanctions begin to bite.

Just as the former shah, the current regime is also seeking scapegoats: the United States and Israel (surprise, surprise). To make their case more convincing, they have singled out an Iranian businessman who fled the country on February 21, who was recaptured by Iranian intelligence agents three weeks later in a brazen extraterritorial operation in Oman.

Shahram Jazayeri was a cause celebre in Iran by the time he was dragged out of a small tourist hotel in Khasab, an Omani port in the Strait of Hormuz on March 14. Before fleeing Iran, he was sentenced to fourteen years on corruption charges,

Jazayeri made it known at the time that he had documents implementing family members of the Islamic Republic’s Supreme Leader, Ayatollah Khamenei, in business deals described by the court as corrupt. “That connection to the House of the Leader – the very summit of the state - made him radioactive,” Iranian analyst Shahriar Ahy told me.

Jazayeri’s family, whom I contacted in Canada not long after he was recaptured and tortured in Evin prison in Tehran, insisted that he had been framed and that his extensive network of businesses was legally sanctioned by the Iranian authorities. They insisted that he still hoped the courts would exonerate him. Fat chance.

Ayatollah Khomeini, the figurehead who spearheaded the shah’s overthrow, liked to say that the revolution wasn’t about the price of watermelons. It was his way of saying that the Iranian people would endure all kinds of economic hardship, if they identified with the regime.

But this week’s gasoline riots show that Iranians do care about the price of watermelons – at least, when they can see just how rich their country ought to be (because of high oil prices), and how little of that wealth is trickling down to them.

Consider this, the Iranian businessman in London told me.

When Iranians travel to Dubai, they are humiliated. They fly out of Mehrebad airport in Tehran, which was constructed some 45 years ago, and land in a modern, state-of-the-art fantasy-world in Dubai. To make the insult even more grating, unlike their native land, Dubai has no oil. No oil, and yet they are so rich!

The only reason Dubai is prosperous and Iran remains mired in poverty comes down to effective leadership – and the lack of it. And Iranians can see this every time they travel to the UAE.

Working quietly behind the scenes, the Bush administration has won agreement from bankers in Dubai to stop clearing Iranian government financial transactions. Because Dubai has become the economic lifeline connecting Iran to the outside world, this has been a major blow to the regime.

Just last week, sources in London told me, the British government agreed to a U.S. request to put pressure on the HSBC bank to stop clearing Iranian government financial transactions as well. Since HSBC handles approximately 50% of Tehran’s remaining international business, this is an additional heavy blow.

And the economic pressures are about to expand. While in London this week, I learned of a British government proposal, now being discussed as a draft United Nations Security Council Resolution, that would ban Iranian government-owned ships and aircraft from international travel.

According to Lloyd’s List of London, the proposed UNSC resolution, as currently drafted by Britain, would prohibit Iranian ships not only from landing at foreign ports but from transiting international waters. That is an extremely far-reaching sanction that would cut off an estimated 40% of Iran’s daily oil exports, at least in the short run.

The British measure “would effectively strip Iran of the right of innocent passage, enshrined in the United Nationals Law of the Sea Convention,” Lloyd’s List wrote on June 27

The most immediate target of these latest sanctions would be the National Iranian Tanker Company (NITC), which operates a fleet of around thirty http://www.nitc.co.ir/aboutus.htm Very Large Crude Carriers.

Iran could eventually contract with other shipping companies to lift their oil, but they would then have to compete with other exporters in the Persian Gulf and most likely would have to offer significant price incentives to get their oil on board.

All of this points to one simple fact, as far as U.S. policy toward Iran goes: financial sanctions have proven to be a far more effective tool than political pressures or political inducements, as fashioned by the State Department.

This regime in Tehran has never ceased a single act of bad behavior because the West has offered it a bribe. On the contrary: the greater the bribes, the more bad behavior we have seen.

Over the past six moths, as UN sanctions have slowly begun to bite, the State Department continued to hold out hope that the economic “pain” could be ended, if only the regime would suspend its uranium enrichment program.

Until now, the regime has said no. To show their resolve, Iran’s leaders chose instead to impose gasoline rationing, to spread the coast of sanctions across the population.

For the first time, the law of unintended consequences is working in the West’s favor. The popular reaction to the gas rationing has shown the regime’s vulnerability.

Now we need to take the next step and provide serious aid and political support to the pro-democracy forces inside Iran as they step forward to confront the regime.

The alternative to doing so will be war.

Petrol stations burn in protest at Iran rationing

Petrol stations burn in protest at Iran rationing
Nasser Karimi
June 28, 2007
The Guardian

Iranians set fire to a dozen petrol stations in Tehran in the early hours yesterday, angered by the sudden start of fuel rationing, a step that threatens to further increase the unpopularity of President Mahmoud Ahmadinejad.

After the violence security was strengthened at several stations, and there was calm as Iranians lined up to fill their tanks under the new restrictions, which limit private drivers to 100 litres (22 gallons) a month.

The government has been warning for weeks that it would start rationing, but the announcement on Tuesday, only three hours before the measure went into effect at midnight, sent Iranians rushing to fill up.

The rationing is part of a government attempt to reduce billions of dollars in subsidies it pays to keep petrol prices low. Iran is one of the world's biggest oil producers, but has few refineries and imports more than 50% of its petrol needs. The government says money saved from subsidies can go to building refineries, improving public transportation and job creation.

But a rise in petrol prices last month and now the rationing are feeding discontent with Mr Ahmadinejad, who was elected in 2005 on a platform of helping the poor and fixing Iran's ailing economy.

"This man Ahmadinejad has damaged all things. The timing of the rationing is just one case," said Reza Khorrami, a teacher who was among those lining up at a Tehran petrol station.

The short notice appeared to be aimed at preventing a rush to hoard petrol.

Yesterday a group of legislators tried to draft a bill for cancelling the rationing, but failed to win majority support.

Iran Cracks Down on Dissent

Iran Cracks Down on Dissent, Parading Examples in Streets
By NEIL MacFARQUHAR
June 24, 2007
New York Times

Iran is in the throes of one of its most ferocious crackdowns on dissent in years, with the government focusing on labor leaders, universities, the press, women’s rights advocates, a former nuclear negotiator and Iranian-Americans, three of whom have been in prison for more than six weeks.

The shift is occurring against the backdrop of an economy so stressed that although Iran is the world’s second-largest oil exporter [this is incorrect, it is the fourth-largest] , it is on the verge of rationing gasoline. At the same time, the nuclear standoff with the West threatens to bring new sanctions.

The hard-line administration of President Mahmoud Ahmadinejad, analysts say, faces rising pressure for failing to deliver on promises of greater prosperity from soaring oil revenue. It has been using American support for a change in government as well as a possible military attack as a pretext to hound his opposition and its sympathizers.[...]

Young men wearing T-shirts deemed too tight or haircuts seen as too Western have been paraded bleeding through Tehran’s streets by uniformed police officers who force them to suck on plastic jerrycans, a toilet item Iranians use to wash their bottoms. In case anyone misses the point, it is the official news agency Fars distributing the pictures of what it calls “riffraff.” Far bloodier photographs are circulating on blogs and on the Internet.[...]



The National Security Council sent a stern three-page warning to all the country’s newspaper editors detailing banned topics, including the rise in gasoline prices or other economic woes like possible new international sanctions, negotiations with the United States over the future of Iraq, civil society movements and the Iranian-American arrests. [...]

Analysts trace the broadening crackdown to a March speech by Ayatollah Khamenei, whose pronouncements carry the weight of law. He warned that no one should damage national unity when the West was waging psychological war on Iran. The country has been under fire, particularly from the United States, which accuses it of trying to develop nuclear weapons and fomenting violence in Iraq.[...]

The three Iranian-Americans are being held in the notorious Section 209 of Evin Prison, the wing controlled by the Intelligence Ministry, and have been denied visits by their lawyers or relatives. Iran recognizes only their Iranian nationality and has dismissed any diplomatic efforts to intervene. A rally to demand their release is set for Wednesday outside the United Nations.[...]

“People don’t want to come to conferences, they don’t even want to talk on the phone,” said Abbas Milani, the director of the Iranian studies program at Stanford University. “The regime has created an atmosphere of absolute terror.” [...]

Not that everyone has been intimidated. More than 50 leading economists published a harshly worded, open letter to the president saying his policies were bringing economic ruin. High unemployment persists, there has been little foreign investment and inflation is galloping, with gasoline alone jumping 25 percent this spring.

Gasoline rationing is expected within a month, with consumers so anxious about it, reported the Web site Ruz, financed by the Dutch government, that skirmishes broke out in long lines at some pumps on June 17.

Full article

Ahmadinejad Says Nuclear Work Nearing "Peak"

Iran's President Says Nuclear Work Nearing "Peak"
By REUTERS
May 24, 2007

Iran's nuclear work is nearing a ``peak,'' President Mahmoud Ahmadinejad said on Thursday, while the U.N. atomic watchdog chief said Tehran was probably at least three years from making atom bombs even if it chose to do so.

Ahmadinejad dismissed Western pressure on Iran to halt its nuclear drive. ``With God's help the path to completely enjoying all nuclear capacity is near its end and we are close to the peak,'' he told a rally in the central town of Isfahan.

``The Iranian nation today has industrial nuclear technology and ... it will never retreat even one step from this path.''Iran denies seeking nuclear weapons, as the West suspects, saying its program aims purely to generate electricity.

Underlining what he called the growing risk of a major confrontation between the West and Iran, International Atomic Energy Agency head Mohamed ElBaradei appealed for the two sides to restart negotiations on a compromise as soon as possible.

``I tend, based on our analysis, to agree with people like John Negroponte and the new director of the CIA, who are saying that even if Iran wanted to go for a nuclear weapon, it would not be before the end of this decade or sometime in the middle of the next decade. In other words three to eight years from now,'' ElBaradei told a news conference in Luxembourg.

``Iran needs to suspend its enrichment activities as a confidence-building measure but the international community should do its utmost to engage Iran in comprehensive dialogue,'' he told a conference on nuclear non-proliferation.

In a report on Wednesday, the IAEA said Iran was making substantial advances in uranium enrichment, but repeated there was no evidence it was trying to ``weaponise'' nuclear material. Several months ago, ElBaradei predicted Iran was four to eight years away from being able to produce an atom bomb.

U.S. President George W. Bush said Washington would work with European, Russian and Chinese leaders to impose a third, stronger round of U.N. Security Council sanctions against Iran.

``The first thing these leaders have got to understand is that an Iran with a nuclear weapon would be incredibly destabilizing for the world. It's in their interests that we work collaboratively to continue to isolate that regime.''

CAUTIOUS ON SANCTIONS

Asked at a news conference whether he felt more stringent sanctions should now be discussed, Russian President Vladimir Putin stressed the need for more diplomacy.

``We shall work in cooperation with our partners, as we have always done in the past, not to prevent Iran from developing modern technology but to prevent it from creating a nuclear weapon,'' he said in Luxembourg.

Big powers last year offered Iran trade, technical and other incentives if it stopped enriching uranium first. But Iran refused that precondition and talks were called off before the U.N. Security Council imposed
a first set of sanctions.

EU foreign policy chief Javier Solana is assessing the scope for returning to negotiations. He is expected to meet Iranian nuclear negotiator Ali Larijani in Madrid late next week.

But ElBaradei voiced concern Tehran was moving toward confrontation with the world by speeding up its nuclear work. He said his priority was a compromise capping Iranian enrichment short of ``industrial-scale'' to minimize the risk of bombmaking.

He has angered Western powers by saying, in published remarks, that their strategy of insisting on no enrichment at all to prevent Iran gaining nuclear knowledge had been ''overtaken by events'' since Tehran could already refine uranium.

Diplomats said the U.S., British and French ambassadors to the IAEA planned to meet ElBaradei in his Vienna office on Friday to deliver a ``demarche'' over his remarks, which they saw as questioning Security Council strategy.

A diplomat close to the IAEA said ElBaradei was not trying to undermine the Security Council or United States.

``He's just asking these leaders to deal with reality. He is pleading for direct dialogue, between the U.S. and Iran in particular, to resolve the situation now ... instead of posturing while the number of (enrichment) centrifuges goes up.''