Overview: Iran Analysis Weekly Report April 24, 2016
Apr., 2016
Vistar Business Monitor
Parliament approved the details of the budget on April 19 after approving the outline of the budget on April 10. According to figures released, the state’s total budget will be $97 billion. This is $25 billion more than last year’s budget of $72 billion. The budget includes a forecasted price of $40 per barrel of oil and a daily oil production of 2.25 million barrels. The budget also stipulates the removal of subsidies for the top 30 percent of society (those with a monthly income greater than approximately $990). The Guardian Council still needs to approve the budget before it can be implemented. Guardian Council Spokesman Nejatollah Ebrahimian told reporters that the Guardian Council could start its review of the budget soon.
It was a wild week for the oil markets, with the collapse of Doha, a workers strike in Kuwait, and the seeming dissolution of any possibility of cooperation within OPEC. But oil prices have jumped to their highest levels in five months, breaking through a key threshold at the low-$40s per barrel. The price of OPEC basket of thirteen crudes stood at $40.11 a barrel on Thursday, compared with $38.58 the previous week, according to OPEC Secretariat calculations.
On the domestic political note, President Hassan Rouhani defended the nuclear deal against domestic criticism, underscoring the escalating rhetoric between the administration and its opponents over the success of the deal.
Rouhani called for Iranians to be patient regarding the economic benefits of the Joint Comprehensive Plan of Action (JCPOA), stating, “Only three months have passed since the JCPOA’s implementation. Some people think it has been 30 years. A great number of companies and foreign private sectors have come to Iran daily. Important contracts are being signed.”
Rouhani also responded to IRGC Commander Major General Mohammad Ali Jafari’s recent criticism of the nuclear deal, asserting that “one must tell those who are saying, ‘What has the JCPOA done for us?’ that the JCPOA has been recorded as a political and legal honor in the history of Iran.”
President Rouhani also distanced his administration from the decision to deploy 7,000 undercover agents tasked with reporting certain “moral transgressions,” including improper veiling, to police in Tehran. He claimed that “the administration implements some plans in the country, and others are implemented through other apparatuses like the Judiciary or other forces.”
The Foreign Ministry presented a report evaluating the implementation of the Joint Comprehensive Plan of Action (JCPOA) to Parliament’s National Security and Foreign Policy (NSFP) Commission on April 17. The Foreign Ministry is required to submit such a report every three months.
The report states that “a completely sensible and meaningful shift in Iran’s benefit has occurred in the international arena” as a result of the JCPOA’s implementation and praises the “numerous trips by senior political, economic, corporate, and personal delegations” to Iran as presenting “serious opportunities.” The report adds that since the nuclear agreement’s implementation, “we have seen a reduction in tensions and an increase in European and Asian countries’ interest in beginning nuclear cooperation. This was impossible for our country before the nuclear agreement.”
Iran commemorated Army Day on April 17 with a massive military parade in Tehran. Several vehicles that appear to be components of an S-300 surface-to-air missile system were featured in the parade, including a deployable radar and a command vehicle that seemed to be mounted on commercial rather than military chassis. The actual S-300 missiles were not observed during the parade.
On the international relations note, Iranians claim that financial sanctions still persist, despite the U.S.’s promise to remove them all after the implementation of the Joint Comprehensive Plan of Action (JCPOA). In fact, American and multinational banks and financial institutions fear that they might be subject of U.S. punishments if they start cooperating with Iranian banks. Iranians complain that U.S. officials do not try to help assure multinational banks that there is no risk in having relations with Iran’s banks.
Mohammad Javad Zarif discussed America’s obstruction of and Iran’s expectations for the Islamic Republic’s growth in the post-JCPOA period. He also met with Secretary of State John Kerry to discuss the implementation of the JCPOA in New York City on April 19. The two were scheduled to discuss regional developments as well, including the Syrian conflict.
Governor of Central Bank of Iran, Valiollah Seif, traveled to Washington to participate in the spring meetings of the International Monetary Fund and World Bank Group held April 15-17. The governor in a Bloomberg Television interview on April 14 said that the U.S. needs to tell European banks it is acceptable to trade with Iran. He discussed the ongoing economic challenges facing Iran in the post-JCPOA period. The Central Bank chief stated that Iran has gotten “almost nothing” from the nuclear deal, and that Iran “has been unable to tap about $100 billion held abroad.”
Table of Contents
Notes
Overview
News Highlights
Politics and International Affairs
Economy
Trade and Agreements
Economic Affairs
Macro-economy
Iran’s Parliament Approves $97 Billion Budget
Iran Experiencing Difficulties Getting Practical Value under JCPOA
Macro-economic Data
Oil and Gas
Weekly Review
Domestic Affairs
Tensions Continue among Iranian Centers of Power
Confrontation over JCPOA Persists
Rouhani Criticizes Decision to Deploy 7,000 Undercover Agents
Foreign Ministry Submits Report on JCPOA Implementation to Parliament
Forthcoming Challenges and Obstacles
Army Day
Key Political and Economic Calendar
International Affairs
Meeting Behind Closed Doors
Government Officials Criticize the U.S. for Post-JCPOA Problems
Laws, Regulations and Policy Updates
Sanctions
Financial Markets
Tehran Stock Exchange
Foreign Exchange Market
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