Overview: Iran Analysis Weekly Report August 21, 2016
21 Aug., 2016
Vistar Business Monitor
President Hassan Rouhani defended the nuclear agreement and announced that the Iranian economy reached 4.4 percent growth for the first three months of the Iranian calendar year. Rouhani contrasted the current state of the economy with its negative growth rate of 6.8 percent when he came into office in 2013. Rouhani also praised the nuclear agreement for facilitating economic progress. Rouhani has previously predicted that the economy would have a 5 percent growth rate in this Iranian year, which began on March 20, 2016. His defense of the nuclear agreement’s economic benefits coincides with a wave of domestic criticism of the deal ahead of the 2017 presidential elections. Supreme Leader Ayatollah Ali Khamenei recently questioned whether the agreement has had “any tangible effect on the people’s lives,” and Friday prayer leaders appeared to coordinate their sermons on August 5 to downplay the economic benefits of the deal.
Iran and Russia reportedly signed an agreement allowing Russia to use an Iranian air base to conduct airstrikes in Syria. Iranian news agencies circulated statements from the Russian Defense Ministry that Iran and Russia signed an agreement permitting Russia to use Nojeh Air Base in the northwestern province of Hamedan. The Russian Defense Ministry claimed that its long-range bombers deployed from Hamedan and struck facilities belonging to “the Islamic State and Jabhat al Nusra,” the latter now known as Jabhat Fatah al Sham, in Syria on August 16. Supreme National Security Council Secretary Ali Shamkhani “indirectly confirmed” Russia’s use of the Hamedan air base in a statement on August 16. Shamkhani called Tehran-Moscow cooperation “strategic” and added that the two countries “have an exchange of capacities and facilities.” The agreement to use Nojeh Air Base underscores Iran’s commitment to keep Syrian President Bashar al Assad in power. The Critical Threats Project previously reported on Russia’s apparent use of the base to station its aircraft in late November and potentially early December of 2015.
In that regards, officials defended Russia’s use of an Iranian air base to launch airstrikes in Syria as constitutional. Alaeddin Boroujerdi, the chairman of Parliament’s National Security and Foreign Policy Commission, asserted that Russia’s use of Nojeh Air Base in northwestern Iran “does not contradict the Constitution.” Article 146 forbids the establishment of foreign military bases in Iran. Boroujerdi stated that the base “has not become a Russian base” and claimed that Russian planes landed there only to refuel. Parliament Speaker Ali Larijani also “rejected speculation” that Iran “gave” Nojeh Air Base to Russia. The Russian Ministry of Defense announced on August 17 that it conducted air strikes from Iran for the second day in a row.
However, Approximately 20 parliamentarians delivered a letter requesting the review to Parliament Speaker Ali Larijani. They specifically requested a closed session of Parliament and cited Article 69 of the Constitution, which permits closed sessions for issues of national security. A reformist parliamentarian who signed the letter stated that the review will ensure that parliamentarians have “the necessary information regarding the reasons for this decision to allow Russia to use the base and its consequences.”
Parliament will review Iran’s oil and gas contract model following a wave of domestic criticism of the proposed contract’s terms. Principlist parliamentarian Behrouz Nemati announced that Parliament will review the Iran Petroleum Contract (IPC) in order to “remove” the contract’s “existing gaps.” Hardliners have criticized the IPC for granting foreign companies too much control over Iran’s oil reserves and failing to sufficiently guarantee the transfer of technology to Iranian companies. Despite such criticism, officials in the Rouhani administration have insisted that the IPC does not require parliamentary review, which would threaten to delay its implementation further.
The latest quarterly report by the Ministry of Roads and Urban Development shows that the average cost of renting a house in Tehran stood at 230,330 rials ($6.5) per square meter in the first quarter of the fiscal year (March 20–June 20), marking a year-on-year growth of 12.1%. Average rents during the Q1 were 0.3% lower compared with the previous quarter. The report shows that even neighborhoods with lower prices recorded a higher rise in their rents. District 18, located in southwest Tehran, and recorded the highest annual surge in rents at 15.4%. The area is known to have the cheapest homes in the capital. The average rent in District 1 in upscale northern Tehran was 401,000 rials ($11.2), the highest across the city. Its rents grew by 6% during the three-month period.
Statistical Center of Iran (SCI) has reported that the country’s GDP, excluding oil, reached 4.4 per cent in the first quarter of the current Persian year (began March 20). CSI announced recently that Iran’s constant-price Gross Domestic Product (GDP) stood at about 6.7 billion dollars including oil and 5.4 billion dollars excluding oil. The figures indicate a 4.4 increase in the country’s real GDP as compared with the same period in the previous year. The results imply that in the spring of the current year, agriculture, industry, services grew by 4, 8.8, and 2.9 per cent, respectively while the growth of industry section has been mainly due to the uplift in exports of crude oil and natural gas.
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