Overview: Iran Analysis Weekly Report June 05, 2016
05 June, 2016
Vistar Business Monitor
The new Iranian parliament has been sworn in at its opening session in Tehran.
The 290-member Islamic Consultative Assembly held its first meeting on May 28 with a fresh crop of reformist and moderate lawmakers who are expected to back President Hassan Rouhani’s efforts to modernize Iran's economy and social policies.
Their victories ended the 12-year dominance of conservative hard-liners in the parliament.
Negotiations on the composition of Parliament continued. The Guardian Council eventually won a three-month dispute over Minoo Khaleghi, a reformist candidate, who the council said must not enter Parliament although she had won the election. In addition the Council managed to annul two reformist seats from Azarbaijan, one of which was given to a conservative candidate and the other will be decided on in the mid-term election. These changes are of much significance as only the vote for the deputy speaker position depended on four ballots only.
Therefore, the administration and reformists must accept that they would lose some of their seats in the parliament; however, they can compensate this defeat by trying to approach moderate conservatives and independent lawmakers in parliament. In General, the composition of the 10th parliament seems to be contributing to political stability in the country, but this stability could continue if the Omid faction can get closer to moderate conservatives.
Parliament elected principlist Ali Larijani as interim speaker on May 29 and permanent speaker on May 31. He defeated Mohammad Reza Aref, a reformist who had never served in Parliament before this election. Larijani’s retention of the speakership is not a surprise, nor is it a defeat for President Hassan Rouhani. It is, however, an indication that the new parliament is not as fundamentally different from the old one as some Western observers have suggested.
Parliament also elected the presiding board. At the first glance, the board is composed of 7 conservative lawmakers and 5 moderates, but in practice there are 10 pro-administration lawmakers on the board. This could be a reflection of what is going on in Parliament as well. That means Parliament is not ready to take radical reformist measures, but it could play a key role in supporting the administration in its pro-reform programs. That is why conservative media, which were cheerful of having Dehghan – a hardliner – elected as a board member, got shocked and became silent on the following day when they realized that Ali Larijani, Masood Pezeshkian and Ali Motahari are speaker and deputy speakers of the 10th Parliament, respectively.
During a ceremony marking the anniversary of the death of Grand Ayatollah Ruhollah Khomeini Ayatollah Khamenei warned that “while attracting foreign investment is good and necessary,” Iran must avoid complete integration into the global economy. Mr. Khamenei stressed that such integration is tantamount to being “swallowed” by “the global economy, of which America is the leader.” Ayatollah Khamenei and President Hassan Rouhani have disagreed historically on the necessity of Iran’s global integration to the revitalization of its economy. He further criticized the possibility of a productive U.S.-Iran relationship outside of the nuclear deal by calling trust in the U.S. a “big mistake” and asserting that U.S. interests are “180 degrees opposed” to those of Iran.
On the economic note, in the 26th Monetary and Foreign Exchange Conference held in Tehran, Central Bank of Iran Governor Valiollah Seif revealed that the money supply exceeded 10 quadrillion rials at the end of the last year, 1394 (March 2015 – March 2016), up 30% compared with that of 1393 (March 2014 – March 2015). This is the fact while the money supply had increased in 1393 by 22.3% compared with that of a year before (1392). This means the hike rate last year is 7.7% higher than that in the year before.
According to the Statistical Center of Iran (SCI), the economic growth rate was 1.0% taking into account the oil revenue and 0.9% without taking into account the oil revenue in 1394. According to the SCI report, growth rate was 5.4% in the agriculture sector, - 2.2% in the industry sector, and 0.2% in the service sector.
Table of Contents
Notes
Overview
News Highlights
Politics and International Affairs
Economy
Trade and Agreements
Economic Affairs
Macro-economy
Money Supply Exceeds 10 Quadrillion Rials
Growth Rate at 1% in 1394
How the Government Can Improve the Economy in 1395 (March 2016 – March 2017)
The Current Situation and Challenges
Policy Priorities in the Coming Months
Why is the Exchange Rate Reform an Urgent Priority?
What Should the Exchange Rate be Right Now?
Main Economic Indicators during Rouhani’s Term
Conclusion
Macro-economic Data
Oil and Gas
Weekly Review
Iran Plans to Attract $185 Billion in Foreign Investment with New Contracts
Domestic Affairs
Iranian Parliament has Sworn in, Majles Presiding Board Elections
More Reformists Disqualified
Ali Larijani Elected Majles Permeant Speaker
Why Was Larijani Elected Again
Supreme Leader: Integrating Iran into the Global Economy Is Not an Honor
Key Political and Economic Calendar
International Affairs
Laws, Regulations and Policy Updates
Sanctions
Would the Obama Administration Go Along with a Re-Authorization of the Iran Sanctions Act? 32
Financial Markets
Tehran Stock Exchange
Foreign Exchange Market
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