Term Project: Iran

Country Profile

Islamic Republic of Iran

‫جمهوری اسالمی ایران‬
Jomhuri-ye Eslāmi-ye Irān

Flag Coat of arms

Motto: Independence, Freedom, Islamic Republic

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Capital
Tehran
(and largest city)
Official languages Persian
Constitutional recognition of the
Languages of Iran and their usage in Mass
Recognised regional languages Media.[1] The largest regional languages of
Iran are Azeri , Kurdish , Mazandarani ,
Gilaki , Arabic , Baluchi and Luri.
Demonym Iranian
Government Islamic republic (a "theocratic republic".)
Supreme Leader Ayatollah Ali Khamenei
President Mahmoud Ahmadinejad
First Vice President Mohammad Reza Rahimi
Speaker of the Parliament Ali Larijani
Area
1,648,195 km2 (18th)
Total
636,372 sq mi
Water (%) 0.7
Population
2009 estimate 74,196,000[5]
2006 census 70,495,782 (18th)
45/km2 (163rd)
Density
116.6/sq mi
Currency Rial (‫( )لاير‬IRR)
Time zone IRST (UTC+3:30)
Summer (DST) Iran Daylight Time (IRDT) (UTC+4:30)
Drives on the right
Internet TLD .ir
Calling code 98

Economy of Iran

Currency Iranian Rial (IRR)

Fiscal year 21 March - 20 March

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Statistics
GDP $830.06 billion (2009 est.); world
ranking: 17th (PPP) - nominal:
$331.76 billion
GDP growth 6.5%, real GDP growth (2008 est.)
GDP per capita $11,202 (2009 est.); world ranking:
73rd (by PPP)
GDP by sector agriculture (10.8%), industry
(44.3%), services (44.9%) (2008
est.)
Inflation (CPI) 15.0% (2009)
Population 18% (2006)
below poverty line
Labor force 24.35 million (2008 est.); note:
shortage of skilled labor
Unemployment 12.5% according to the Iranian
government (2009 est.)
External
Exports $95.09 billion f.o.b. (2008 est.)
Export goods petroleum (80%), chemical and
petrochemical products (4%), fruits
and nuts (2%), cars (2%), carpets
(1%), technical services
Main export partners China 18.5%, Japan 15.4%, Turkey
6.9%, South Korea 6.8%, Italy 4.9%
(2008)
Imports $67.25 billion f.o.b. (2008 est.)
Main import partners China 13.5%, UAE 9.8%, Germany
9.1%, South Korea 6.1%, Russia
5.6%, Italy 5.1%, France 4.2%
(2008)
Credit rating B for sovereign risk (June 2009)
Foreign reserves $97 billion (31 December 2008
est.)

Iran 2009 GDP Breakdown

Industry & Mining, 11.30%
Services, 48.50%
Oil & Gas, 27.00%
Agriculture, 10.20%
Construction, 5.00%

Iran Credit Rating

Iran Fitch Credit Rating

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According to "Tehran Times", British rating agency 'Fitch' lowered

the risk rating on Iran long-term foreign obligations, government's short-
term loans and credit ceilings from B+ to BB- in a report released last week.
Central Bank of Iran (CBI) said that the change in rating means that the
Fitch has lowered by one notch its credit risk assessment on Iran. Iran's
credit improvement stems form lowest level of government debt and foreign
denominated obligations among the countries which it surveyed, the report
added.

Moody’s Credit rating

The US credit rating agency announced last week that it has raised
the outlook on Iran’s B2 foreign currency ceiling from ‘stable’ to ‘positive’.

Iran Economy:

The economy of Iran is dominated by oil and gas exports which

constituted 50% to 70% of government revenue and 80% of export earnings
between 2006 and 2008. It has a large public sector, with an estimated 60%
of the economy directly controlled and centrally planned by the state. A
unique feature of Iran's economy is the large size of the religious
foundations, or Bonyads, whose combined budgets are said to make up as
much as half that of the central government.

Combination of price controls and subsidies, particularly on food

and energy, continues to weigh down the economy, and contraband,
administrative controls, widespread corruption, and other rigidities
undermine the potential for private sector-led growth. President Mahmoud
Ahmadinejad has proposed replacing energy subsidies with targeted social
assistance. However, previous government-led efforts at reform - such as
fuel rationing in July 2007 and the imposition of the value-added tax (VAT)
in October 2008 - were met with stiff resistance and violent protests.

High oil prices in recent years have enabled Iran to amass nearly
US$ 97 billion in foreign exchange reserves. Yet this increased revenue has
not eased economic hardships, which include double-digit unemployment
and inflation. According to the Central Bank of Iran, inflation climbed to
15.0% as of November 2009. The economy has seen only moderate growth.
Iran's educated population, economic inefficiency, and insufficient foreign
and domestic investment have prompted an increasing number of Iranians
to seek employment overseas, resulting in significant "brain drain".

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Sectors in Iran

Sectors Details(Million Rials)

Investment
Capital Income Assets EPS(Rls)
National Investment
2,900,000 728,554 4,130,957 212
Company of Iran (NICI)
Industry and Mine
1,500,000 245,758 2,988,944 184
Investment Co.

Agriculture
Capital Income Assets EPS(Rls)
Magsal Co. 12,500 4,371 60,542 0

Petroleum
Capital Income Assets EPS(Rls)
Oil Industry Investment
850,000 56,110 757,158 87
Co.
Behran Oil Co. 180,000 465,382 45,929 3,444

Banking and
insurance(Specilaized
Capital Income Assets EPS(Rls)
govt. owned Banks)

Keshavarzi Bank 2,000,000 271,571 25,985,370 590

Industry and Mine Bank 400,000 71,224 4,075,313 411
Mellat Bank 13,100,000 1,674,980 395,527,000 185
Karafarin Bank 2,000,000 271,571 25,985,370 590

Petrochemicals
Capital Income Assets EPS(Rls)
National Iranian Lead &
92,000 3,819 227,881 -812
Zinc Co. (NILZ)
Shishe va Gas Co. 74,844 17,008 245,156 300

Mining and
Capital Income Assets EPS(Rls)
metallurgy
Iranian Aluminium
165,000 187,980 5,207,348 1,564
Company
Morattab Industrial &
30,000 -83,313 393,042 0
Mfg. Co.

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Bank Keshavarzi (Agriculture Bank)

Bank Keshavarzi was founded in 1933 as Farming and Industrial

Bank. Today, having 71 years of experience, it serves as the only specialized
financial institution in the agricultural sector that holds over 1800 branches
nationwide and finances nearly 70% of the sector. Focusing on the
importance of electronic banking, BK has initiated its major project on the
electronic banking since 2001 under the title of MEHR, i.e. smart computer
management.

A brief description of BK's achievements is as follows:

1. Design, implementation and installation of Core Banking System (Mehr

Gostar) for the first time in Iranian banking system
2. Development and expansion of Quality Management System throughout
the bank
3. Constant reengineering of business practices and code of conduct, as well as
organizational flexibility
4. Concentration on human capital (training, empowering, and holding
customer-oriented workshops)
5. Utilizing the latest findings and achievements in bank marketing
6. Structuring relation management with main customers through special
agreements
7. Structuring Customer Relation Management (CMR)

BK's Innovations
1. Localization and Implementation of Core Banking Software (Mehr Gostar)
2. The first 24/7 call center
3. Implementation and installation of Customers Electronic Queuing System
4. Organaizing of the first group of member banks in SHETAB Network
5. Design and implementation of voice mail and communication terminal
between customers and BK's senior managers
6. Design and implementation of a website in banking system of the country
7. Design and implementation of Atiye (Future) Plan in banking system
8. Design and establishment of Kids Bank
9. Design and implementation of Customers Supervision Plan on Branch
Affairs
10. Design and issuance of credit cards

Achievements

1- BanK Keshavarzi has won the bank of the year award for
four successive years

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Bank Keshavarzi , Which has its roots in the

agricultural sector, continued its rapid transformation
into a modern , effective financial institution ,
through more than doubling its net profits in the year
as of March 2005 and winning the bank of the year
award for the fourth year in a row .
Bank Keshavarzi has continued ro innovate and
provide new products and services , such as call
centres and certificate deposit bonds . The bank is also the first to fully
automate all its banking services through a core banking system allowing
many new delivery channels.

EUROMONEY :BanK Keshavarzi has won the awards for

best bank in Iran
Bank Keshavarzi on the threshold of 73
anniversary of its establishment , is proud of offering
services to farmers , and agricultural operatives for
about three fourth of a century , and to all Iranian
people for over a decade . For more than 60 years , Bank
Keshavarzi had been functioning as a credit fund whose
performance led to extravagant and massive liabilities ,
dependency on other resources , and loss-incurring
status which left the bank on the verge of bankruptcy .
Consequently , the banks top management and stafff
have been following a new approach for eight years in
order to make transformative changes . the initial stages of the approach
were sparked with transformation of the bank into a learning organization ,
and then a team-oriented one today .

Winning ISO 9001 Certificate

Along with promoting services offered to customers

and creating values for them and the fact that quality system
management (ISO 9001:2000) gets along with process
orientation, customer-orientation, and continuous
improvement, and is the means of achieving higher
organizational objectives for quality, Bank Keshavarzi was
prosperous at establishing quality management system and
obtaining ISO 9001 of the series 2000 by the German company called
D.Q.S. as the first institute to certify quality management systems.

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Acknowledgement by Shahid Rejaee Festival

Bank Keshavarzi was also acknowledged as a commendable

organization selected out of the state organizations and institutes in the 7th
Shahid Rejaee Festival held in 2004. The festival is held annually in the
Government Week, in which top organizations and institutions are
nominated and nationally praised in a ceremony attended by Mr. President.
In the end, relying on the blessings of the Almighty Allah, cooperation and
participation of people, efficient support of the government and the
parliament, the General Assembly and Supreme Council of Banks, Ministry
of Economics and Finance, Ministry of Jihad-e-Agriculture, Central Bank of
Iran, and other ministries and organizations, especially continuous efforts
of the bank’s manpower that are assumed to be the best asset of the bank
along with customers, it is hoped that in the future we would be able to
come up with further achievements in financing the agriculture sector and
other related activities, and we could offer diverse and better services at
international levels to farmers, manufacturers, and the public.

Head office
SWIFT BIC: KESHIRIT
Tel : 009821-88250135 , 88280027 , 88253315
E-mail : tabibi@agri-bank.com , moshiri@agri–bank.com

Services

1. Qarz-Al-Hasanah Savings Accounts

2. Investment Deposit Accounts
3. Consultation, Evaluation, Supervision, Guarantee
4. Drafts, Traveler's,and Bank Checks
5. Electronic Services
6. Insurance Services and Relief Fund

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Bank of Industry and Mine

"Bank of Industry and Mine" as a developing bank is the most

important device and organization which endeavors for helping economic
growth through development of industries and mines. Its purpose is to be
an economic enterprise for applying banking procedures and capabilities,
developing and investing in order to advance Iran’s economic situation and
to prepare suitable grounds for cooperation and participation of private
sector by use of all potential facilities such as: organizations, processes and
appropriate devices in the field of industries, mines, modern technologies
and their associated services.

Our Bank
"Bank of Industry and Mine" as a development bank is the most
important organization which endeavors for helping economic growth
through development of industries and mines. Its purpose is to be an
economic enterprise for applying banking procedures and capabilities,
developing and investing in order to advance Iran’s economic situation and
to prepare suitable grounds for cooperation and participation of private
sector by use of all potential facilities such as: organizations, processes and
appropriate devices in the field of industries, mines, modern technologies
and their associated services.

Banking Services
BIM grants its facilities within framework of approved assignments
and is dependent on primary capital of applicant and actual progress of
project, and based on consultant report and project specialist approval.
By preparation of required executing possibilities and by BIM
recognition, facility payment will be started gradually through opening local
and foreign L/C for regular capital of project articles and flowing capital for
provision of raw materials.
In this case the rules for supervision on L/C would be based on
Assignments of Central Bank of Iran and official rules of International
Chamber of Commerce (INCOTERMS).
The pay-back period for facility will assign with respect to the
contract considered time. A comprehensive supervision on project will be
performed during pay-back period.

Mission and Structure

Mission and Structure of bank are defined according to article 5 as
following:

Mission
1. Determination and evaluation of industrial and mineral plans and related
services for awarding facilities towards enhanced resource assignment and
supervision on executed abovementioned plans.

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2. To reinforce and motivate real and legal entities in invest creation,

development, renewal and enhancement of industrial and mineral units
modern technologies and services through awarding facilities and
participation.
3. Innovation and creativity in financial internalization and development of
professional processes.
4. Accommodation and partnership in intensification and development of
money and capital market.
5. Contribution and assistance, technical, judicial, servicing financial and
other specialized fund such as: establishment small industries bank.
6. Financial support of plans, manufacturing and servicing units through
awarding facilities, investment and legal contribution.

Objectives
Objective of BIM as a developing bank is:
1. Applying developing banking procedures and to invest for economic growth
of country.
2. To prepare suitable circumstances for presence and participation of private
section by the use of all potential facilities such as: organizations, processes
and appropriate devices in the field of industries, mines, modern
technologies and their associated services.
3. Some of Bank's careers for achieving objectives are described here:
4. Determination and evaluation of industrial and mineral plans and related
services for awarding facilities towards enhanced resource assignment and
supervision on executed abovementioned plans.
5. Innovation and creativity in financial internalization and development of
professional processes.

Fitch Rating for Bank of Industry and Mine

Fitch Ratings has assigned Bank of Industry and Mine (BIM) a Long-
term rating of B+, Short-term B, Individual D, Support 4 and Support Floor
B+.

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Bank Mellat

Introduction
Bank Mellat was established on 1979/12/20 by virtue of the
resolution dated 1979/9/29 adopted by the General Assembly of Banks and
pursuant to the provision of article 17 of the Bill on administering the
Banks, with a paid up capital of Rls 33.5 bn as a merger of ten pre-
revolution private banks comprising: Tehran, Dariush, Pars, Etebarat
Taavoni & Tozie, Iran & Arab, Bein-al-melalie-Iran, Omran, Bimeh Iran,
Tejarat Khareji Iran and Farhangian.
Currently, the bank's capital amounts to Rls 13,100 bn and is one of
the largest commercial banks in the Islamic Republic of Iran, ranking
among the top 1000 banks of the world.

A Brief Look at Bank Mellat

The objective of the bank is rendering bank services throughout Iran

and facilitating domestic and foreign commercial affairs and involving in
production fields to render services to the economy of Iran. The term of
activity of the bank is unlimited and its head office is located in Tehran. The
capital of the bank at the beginning of establishment was designated as sum
of 33,500 million rials which at the being it is 13,100 billion rials. The
operations of the bank at the onset of its activities were include opening and
keeping current and savings account, accepting deposits, granting loans and
credits, carrying out foreign currency transactions, performing duties of
trusteeship, administration, attorneyship and representation and
performing other bank operations and commercial transaction which were
not prohibited by virtue of prevalent laws and regulations of Iran.

The most Significant Activities of Bank Mellat

Bank Mellat is ready to supply financial resource required by the
producers in the production sector, especially in the sector of converting
industries. One of the most significant foreign activities of bank system is
issuing various guarantees which is done within the foreign currency
policies of Central Bank of Iran in order to develop and facilitate the
presence of economic activists in the foreign sector.
Most of the export facilities of Bank Mellat are in rial form and are as
installment sales of domestic primary materials and export civil
participation; in the civil participation facilities, some facilities are granted
to the exporters prior to or after export of the goods which may be up to
70% of the price of the contract.

Various Services to the Exporters

1. Granting rial facilities in form of Export Civil Participation (prior to or after
export of the goods)

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2. Prior to the export of goods: equal to 70% of the rial value of the export
goods or the services stipulated in the object of contract of sales of goods or
services
3. After export of goods: through opening irrevocable L/C, maximum up to
90% of recovery of exit declaration of the goods and certificate of progress
or performance of the work
4. Granting foreign currency facilities out of foreign currency reserve fund
5. Opening sight term L/C and/ or refinance in the name of exporters for the
import of required primary materials, machinery and equipment

The Most Outstanding Achievements of Bank Mellat

1. Bank Mellat has been successful in ranking the first for the last four
successive years from personnel per capita in absorbing four major deposits
point of view in comparison to other Iranian commercial banks.
2. Bank Mellat has been successful in ranking the first from branch per capita
in absorbing four major deposits point of view in comparison to other
Iranian commercial banks.
3. All the branches of bank Mellat are equipped with online current account
(JAM), which accordingly, it has ranked the first among other Iranian
commercial banks.
4. Bank Mellat has been successful in ranking the first for last three successive
years from personnel per capita and branch per capita in absorbing total
resources point of view in comparison to other Iranian commercial banks.
5. Bank Mellat has been successful in ranking the second from absolute value
of growth of four major deposits point of view among other Iranian
commercial banks.

The Significant Honors of the Bank

1. Being appreciated by the esteemed President for successful performce of
Bank Mellat regarding implementation of scheme of cash-purchase of
wheat from the farmers
2. Being appreciated by the esteemed Minister of Commerce for successful
performce of Bank Mellat regarding implementation of scheme of cash-
purchase of wheat from the farmers
3. Being appreciated by the esteemed Minister of Economic Affairs and
Finance for successful performce of Bank Mellat
4. Being appreciated by the esteemed former President for successful
performce of Bank Mellat toward the realization of electronic banking
5. Being appreciated by the esteemed former Minister of Economic Affairs and
Finance for obtaining superior rank in the scheme of assessment of
performce of public banks of Iran

Modern Services of Bank

One of the modern services of Bank Mellat is the Mellat Current
Electronic System (JAM). Rendering distinct and around the clock services
such as internet drafts, periodic statement and 30 last turnovers, rendering
the balance and etc. through various channels like fixed telephone line,
mobile telephone, internet and ATMs are some of the outstanding

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particulars of this system. Also, Mellat Card which is a new and evolved
type of short-term investment deposit accounts, together with electronic
wallet, which has been designed and commissioned toward development
and expansion of electronic banking and toward responding to the bank
needs of customers and by using the state-of-the-art technologies and
communication technology. On the other hand, centered Mellat Card is
newest electronic card for gaining access to all centered accounts and
purchase of goods or services through the internet and POS systems. Also,
toward achieving the designated objectives and in order to develop and
expand electronic banking, Bank Mellat has presented the "Bank Mellat
Mobile Basket" consisting of two products of "Internet Banking via GPRS"
and "Electronic Banking Via SMS" that may be offered to any one of holders
of electronic accounts of this bank.
In order to keep up with global developments and use modern tools,
Bank Mellat, as a pioneer bank in actual electronic banking, has made great
strides, and to this end, it is looking to promote these capabilities in the
field of electronic public relations

The Central Bank of The Islamic Republic of

Iran
The Central Bank of Iran (CBI) was established in 1960 (1339 solar
year). As stated in the Monetary and Banking Act of Iran (MBAI), CBI is
responsible for the design and implementation of the monetary and credit
policies with due regard to the general economic policy of the country.

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Agriculture and foodstuff

Iran's agriculture sector reserves a share of

more than 17 percent in the gross domestic
product (GDP), announced Mohammad Torbati,
Iran's Census Headquarters representative to the
southwestern Iranian province of Kohgilouyeh-
Boyerahmad, on Tuesday, IRNA reported from
Gachsaran.

Torbati told IRNA that in the past two

years, agriculture sector reserved more than 20
percent share of non-oil exports and 25 percent of employment.

He said 90 percent of Iran's processing industries are dependent on

agriculture sector and more than 82 percent of foodstuff on the market
originated from agricultural activities. About 20% of the land in Iran is
arable. The main food-producing areas are in the Caspian region and in the
valleys of the northwest. Some northern and western areas support rain-fed
agriculture, while other areas require irrigation for successful crop
production.

Agriculture contributes just over 11% to the gross national product

and employs a third of the labor force. By 1997, the gross value of products
in Iran's agricultural sector reached $25 billion and by 2003, a quarter of
Iran's non-oil exports were agricultural based.

Wheat, the most important crop, is grown mainly in the west and
northwest; rice is the major crop in the Caspian region. Barley, corn, cotton,
sugar beets, tea, hemp, tobacco, fruits (including citrus), potatoes, legumes
(beans and lentils), vegetables, fodder plants (alfalfa and clover), spices
(including cumin, sumac, and saffron (world's largest producer)), nuts
(pistachios (world's largest producer), almonds, and walnuts), and dates are
also grown, and livestock is raised. Livestock products include lamb, goat,
meat, beef, poultry, milk, eggs, butter, cheese, wool, and leather. Honey is
collected from beehives, and silk is harvested from silkworm cocoons. The
northern slopes of the Alborz mountains are heavily wooded, and forestry
products are economically important; the cutting of trees is rigidly
controlled by the government, which also has a reforestation program. The
rivers that drain into the Caspian Sea are fished for salmon, salmon, carp,
trout, pike and sturgeon.

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Banking, finance and insurance

The government makes loans and credits available to industrial and

agricultural projects, primarily through banks. Iran’s unit of currency is the
rial. The official exchange rate averaged 9,326 rials to the U.S. dollar in
2007.However, rials are exchanged on the unofficial market at a higher
rate. In 1979, the government nationalized all private banks and announced
the establishment of a banking system whereby, in accordance with Islamic
law, interest on loans was replaced with handling fees; the system went into
effect in the mid-1980s.

The banking system consists of the central bank also known as Bank
Markazi, which issues currency and oversees all state and private banks;
several commercial banks that are headquartered in Tehran but have
branches throughout the country; two development banks; and a housing
bank that specializes in home mortgages. Accounts of the state-owned
commercial banks are dominated by loans to state and Bonyad enterprises,
large-scale private firms and four thousand wealthy/connected individuals
who don't always repay their loans. The government began to privatize the
banking sector in 2001, when it issued licenses to two new privately owned
banks.Iranian reserves in foreign banks in mid-February 2008 reached over
$81 billion.

The Tehran Stock Exchange trades the shares of more than 400
registered companies. The stock market capitalization of listed companies
in Iran was valued at $70 billion in 2008. According to experts, the
economy of Iran has many investment opportunities, particularly on its
stock exchange. Iran's electronic commerce will reach 10,000 billion rials
($1 billion) by March 2009.

Insurance premiums come to just below 1% of GDP. This is partly

attributable to low average income per head. Five state-owned insurance
firms dominate the sector, four of which are active in commercial
insurance. The leading player is the Iran Insurance Company, followed by
the Asia Insurance Company, the Alborz Insurance Company and the Dana
Insurance Company. In 2001/02 third-party liability insurance accounted
for 46% of premiums, followed by health insurance (13%), fire insurance
(around 10%) and life insurance (9.9%).

Manufacturing
Iran launched its second satellite Omid in 2009 aboard Safir. The
Iranian Space Agency announced it would spend $500 million on a
domestic space program between 2005 and 2010.

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The country’s major manufactured

products are petrochemicals, steel, and copper
products. Other important manufactures include
automobiles, home and electric appliances such
as television sets, refrigerators, washing
machines and other home appliances,
telecommunications equipment, cement,
industrial machinery (Iran has the largest
operational stock of industrial robots in West
Asia), paper, rubber products, agricultural
products and processed foods (including refined
sugar and vegetable oil), leather products and
pharmaceuticals. Textile mills, based on
domestic cotton and wool such as Tehran Patou
and Iran Termeh, employed about 400,000 people in 2000 and are
centered in Tehran, Isfahan and along the Caspian coast. Iran, with a
population of 70 million, requires 1.4 billion square meters of textiles
annually.

Over 300 trillion rials have been invested in the industrial sector

over the past few months (1 dollar is about 10,000 rials). The government
will implement 1,153 industrial projects at a total cost of 130.2 trillion rials
by March 2009. Meanwhile, over 90 trillion rials and 70.2 trillion rials will
be invested in the industrial sector by the private and state-run companies
respectively.According to a report by the Economist, Iran has been ranked
39th for producing $23 billion of industrial products in 2008.

Construction and real estate

The government announced a large dam building program in 2008.
Most dams in Iran, such as the Karun-3 dam shown are built for
hydropower, flood control and irrigation, but not for drinking water supply.

The annual turnover in the construction

industry amounted to $38.4 billion in 2005.
Until the early 1950s the construction industry
was limited largely to small domestic
companies. Increased income from oil and gas
and the availability of easy credit, however,
triggered a subsequent building boom that
attracted major international construction firms
to Iran. This growth continued until the mid-
1970s, when, because of a sharp rise in inflation,
credit was tightened and the boom collapsed.
The construction industry had revived somewhat by the mid-1980s, but
housing shortages and speculation have remained serious problems,
especially in the large urban centers as well as the poor quality of many
constructions, which need anti-seismic reinforcement and/or renovation.

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Iran has a large dam building industry. Today 70% of the Iranians own
homes. Construction is one of the most important sectors in Iran
accounting for 20–50% of the total private investment. One of the prime
investment targets of well off Iranians as tangible. Cement production
capacity is expected to increase from 54 million tons in 2009 to 64
million tons once eight cement factories become operational.

Energy, gas, petroleum and petrochemicals

Iran holds 10% of the world's proven oil reserves and 15% of its gas.
It is OPEC's second largest exporter and the world's fourth oil producer.

Iran holds 10% of the world's proven oil

reserves. Iran also has the world's second largest
reserves of natural gas (15% of the world's total),
mainly in South Pars; these are exploited
primarily for domestic use. Since 1913 Iran has
been a major oil exporting country. The chief oil
fields are found in the central and southwestern
parts of the Zagros mountains in western Iran. Oil
also is found in northern Iran and in the offshore
waters of the Persian Gulf. Domestic oil and gas,
along with hydroelectric power facilities, provide
the country with power. Iran built its first $1 billion nuclear power plant in
Bushehr in March 2009, called Bushehr 1.

Major refineries are located at Abadan (site of the country's first

refinery, built 1913), Kermanshah, and Tehran but fail to meet domestic
demand for gasoline. The oil refining industry of the country needs a $15
billion investment for its development over the next 5 years to become self-
sufficient and end imports. Pipelines move oil from the fields to the
refineries and to such exporting ports as Abadan, Bandar-e Mashur, and
Kharg Island. In the late 1990s, Iran's state-owned oil and gas industry
entered into major exploration and production agreements with foreign
consortia, notably in Asalouyeh among other projects.

With a fertilizer plant in Shiraz and the largest ethylene unit in the
world in Asalouyeh among other projects, Tehran expects to see a surge in
petrochemical exports from of $5.5 billion in 2007 to a total of nearly $9
billion in 2008.

Energy wastage in Iran amounts to six or seven billion dollars

(2008). The energy consumption in the country is extraordinarily higher
than international standards. Iran recycles 28% of its used oil and gas
whereas the figure for certain countries stands at 60%. Iran paid $84 billion
in subsidies for oil, gas and electricity in 2008.

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 Term Project: Iran

Mines and metals

Iran is among the top ten countries in the world in terms of diversity
of minerals. Close to 30% of the country’s investment has been made in the
field in recent years. 45% of the stock market's capitalization is in the
mineral industries.

Iran’s mining industry is under-

developed. Mineral production contributes only
0.6% to the country’s GDP. Add other mining-
related industries and this figure increases to
just 4%. Many factors have contributed to this,
namely lack of suitable infrastructure, legal
barriers, exploration difficulties, and
government control over all resources.

Although the petroleum industry

provides the majority of economic revenues, about 75% of all mining sector
employees work in mines producing minerals other than oil and natural
gas. These include coal, iron ore, copper, lead, zinc, chromium, barite, salt,
gypsum, molybdenum, strontium, silica, uranium, and gold (most as a
coproduct of the Sar Cheshmeh copper complex operations). The mines at
Sar Cheshmeh in Kerman Province contain the world's second largest lode
of copper ore. Large iron ore deposits lie in central Iran, near Bafq, Yazd,
and Kerman. The government owns 90% of all mines and related large
industries in Iran and is seeking foreign investment for the development of
the mining sector. In the steel and copper sectors alone, the government is
seeking to raise around $1.1 billion in foreign financing. The sector accounts
for 3% percent of the country’s exports.

Iran has recoverable coal reserves of nearly 1.9 billion short tonnes.

By mid-2008, the country produced about 1.3 million short tonnes of coal
annually and consumed about 1.5 million short tonnes, making it a small
net importer of coal. The country plans to increase hard-coal production to
5 million tons in 2012 from 2 million tons in November 2008. Main steel
mills are located in Isfahan and Khuzestan. Steel production capacity will
reach 17 million tons from 10 million tons in 2009 after the private and
state projects come on stream and 40 million tons in 2012. Iran became
self-sufficient in steel production in 2009.Aluminum and copper
production are projected to hit 245,000 and 383,000 tons respectively by
March 2009.

Energy

Iran ranks second in the world in natural gas reserves and also
second in oil reserves. It is OPEC's 2nd largest oil exporter. In 2005, Iran
spent $4 billion on fuel imports, because of contraband and inefficient
domestic use. Oil industry output averaged 4 million barrels per day

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 Term Project: Iran

(640,000 m3/d) in 2005, compared with the peak of six million barrels per
day reached in 1974. In the early 2000s, industry infrastructure was
increasingly inefficient because of technological lags. Few exploratory wells
were drilled in 2005.

Mines & Industries Sector GNP

According to "Tehran Times", the share of mines and industries

sector in gross national product (GNP) is currently between 23 to 25
percent which is expected to hit highest percentage i.e. 40 percent due to
the great opportunities in these sectors. The Head of Tehran's Mines and
Industries House said that given the current stand of mines and industries
sector in Iran's economy, the 23-25 share of these sectors in GNP is far from
what is expected

Summary - Economic sectors

Iran's economy clearly relies on its natural resources, and most
importantly, oil. Agriculture still contributed 21 percent to the GDP in 1999,
while industry accounted for 34 percent, and services for 45 percent. About
one-third of the labor force is engaged in agriculture (33 percent); industry
employs 25 percent of the workforce and 42 percent are occupied in
services. Except for petroleum and petrochemical industries, Iran also has
industrial production in steel, textiles, cement and other construction
materials, food processing (especially sugar refining and vegetable oil
production), metal fabricating, and armaments.

After the Islamic revolution in 1979, Iran nationalized all major

industries, banks, and insurance companies. It committed itself to heavy
investment in both the agricultural sector and selected industries, with the
ultimate goal of economic independence, but unstable internal conditions
and the war with Iraq made economic growth almost unattainable until the
mid-1990s. The revival of oil production helped stabilize national finances,
and free-market initiatives and reforms sparked a rise in domestic
agricultural and industrial production.

Economy Revolution

Iran's economy has not thrived since the revolution. Dependence on

petroleum exports is still strong.Per capita income fluctuates with the price
of oil reportedly falling at one point to 1/4 of what it was prior to the
revolution and has still not reached pre-revolution levels. Unemployment
among Iran's youth has steadily risen, with economic sanctions and internal
corruption to blame.Problems manifest themselves in international travel,
where one Iranian complained to an expatriate journalist: "What has come

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 Term Project: Iran

of us? Our currency is worthless. Those backward Arabs go to Europe with

rials, and we can barely visit Turkey with our worthless tomans!"

Gharbzadegi ("westoxification") or western cultural influence

stubbornly remains, brought by music recordings, videos, and satellite
dishes. One post-revolutionary opinion poll found 61% of students in
Tehran chose "Western artists" as their role models with only 17% choosing
"Iran's officials."

Iran crisis
1. Iran crisis of 1946
2. Iran hostage crisis
3. 2009 Iranian election protests

Crisis
Like many other open economies, Iranian economy was also affected
by the difficult condition of financial markets. Although many Iranian
analysts optimistically assessed the first round impact of the global
financial crisis on the Iranian economy negligible, soon the depth and width
of the world crisis hit all aspects of the financial market in Iran in a
meaningful way. However, the weak connections of the capital and financial
markets and institutions of Iran with their counterparts abroad proceeded
to less impact on operational indices of securities market in Iran. The most
effective impact of the world economic and financial crisis on the Iranian
economy took place in the oil sector as a result of the high dependence of
country's foreign exchange earnings on the oil revenue.
This impact resulted in sharp changes in the main items of the
external balance of payments of Iran in the second half of the fiscal year.
The first and most compelling transmission of the world economic crisis on
the economy of Iran was related to the sharp fluctuation and then decline of
oil prices in international market. With sharp oil price falls during the
second half of 2008 and the consequent decline in Iran's oil production and
export, the country experienced immense amounts of forgone foreign
exchange earnings. As oil refinery and petrochemical products constitute a
large portion of non-oil exports of Iran, the non oil export of the country
also suffered similarly at the second half of the year, leading to the
assessment that non-oil exports cannot compensate for declines in oil
exports at difficult conditions of international oil market. Of course the
weaknesses in commodities international prices and markets lowered the
import prices for trade tables which benefited the Iranian economy over the
second half of the year.

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 Term Project: Iran

Iran hostage crisis

The Iran hostage crisis was a diplomatic crisis between Iran and the
United States where 53 Americans were held hostage for 444 days from
November 4, 1979 to January 20, 1981, after a group of Islamist students
and militants took over the American embassy in support of the Iranian
Revolution.[1]
The episode reached a climax when, after failed attempts to negotiate
a release, the United States military attempted a rescue operation,
Operation Eagle Claw, on April 24, 1980, which resulted in a failed mission,
the crash of two aircraft and the deaths of eight American servicemen and
one Iranian civilian. It ended with the signing of the Algiers Accords in
Algeria on January 19, 1981. The hostages were formally released into
United States custody the following day, just minutes after the new
American president Ronald Reagan was sworn in.
The crisis has been described as an entanglement of "vengeance and
mutual incomprehension". In Iran, despite freezing of all Iranian assets
held in the United States (Executive Order 12170), the hostage holding was
widely seen as a blow against the U.S, and its influence in Iran, its perceived
attempts to undermine the Iranian Revolution, and its long-standing
support of the recently overthrown government of the Shah of Iran,
Mohammad Reza Pahlavi. The Shah had been restored to power in a 1953
coup against a democratically-elected nationalist Iranian government
organized by the CIA at the American embassy and had recently been
allowed into the United States for medical treatment. In the United States,
the hostage-taking was seen as an outrage violating a centuries-old
principle of international law granting diplomats immunity from arrest and
diplomatic compounds sovereignty in their embassies.

2009 Iranian election protests

Protests following the 2009 Iranian presidential election against

alleged electoral fraud and in support of opposition candidate Mir-Hossein
Mousavi occurred in Tehran and other major cities in Iran and around the
world starting June 13, 2009. The protests were given several titles by their
proponents including Green Revolution or Sea of Green, reflecting
unsuccessful presidential candidate Mousavi's campaign color, and also
Persian Awakening. The events have also been nicknamed the "Twitter
Revolution" because of the protesters' reliance on Twitter and other social-
networking Internet sites to communicate with each other. Islamic
politician Ata'ollah Mohajerani blasted the election as "the end of the
Islamic Republic". In response to the protests, other groups rallied in
Tehran to support Mahmoud Ahmadinejad.

THE END

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 Term Project: Iran

References

1. www.google.com.ir
2. International Monetary Fund Report on Iran
3. World Bank Report on Iran
4. www.nationsencyclopedia.com
5. www.Cia.gov - CIA - The World Factbook
6. www.Payvand.com
7. www.Iranbourse.com
8. www.ipo.ir - Iran Privatisation Organisation
9. www.tse.ir - Tehran Stock Exchange
10. Karafarin Bank - Annual report
11. w3e.bim.ir - Bank of Industry and mine
12. en.Wikipedia.org - The free encyclopedia
13. www.iran-daily.com
14. www.thebanker.com - banking and finance magazine.
15. www.fitchratings.com
16. www.bankersalmanac.com
17. www.Iranchamber.com
18. www.sci.org.ir - Statistical Center of Iran.
19. Bank Keshavarzi of Iran - Annual report
20. International Financial Statistics, IMF
21. Central Bank of the Islamic Republic of Iran www.cbi.ir
22. Bank Mellat www.bankmellat.ir
23. Ministry of Economic Affairs and Finance www.mefa.gov.ir
24. Ministry of Commerce www.moc.gov.ir
25. Export Promotion Centre of Iran www.iran-export.com
26. Iranian Trade Association www.iraniantrade.org
27. Iran Chamber of Commerce, Industries and Mines
www.iccim.org
28. Organisation for Investment, Economic & Technical Assistance
of Iran (OIETAI) www.investiniran.ir
29. Bank Markazi Jomhouri Islami Iran - Central Bank – Annual
Report
30. Article - Investment Prioritirs in Iran Economic Sector by
Hossein &Farzad Karimi

THE END

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