Posted on 02/21/2010 8:25:23 AM PST by AdmSmith
Ahmadinejad's import mania drives farmers to bankruptcy; industrial workers arbitrarily denied wages.
Ahmadinejad's import boom is buoyed by two key, interrelated factors: an artificially high exchange rate and a drastic reduction of tariffs on imported goods. The result is a spate of bankruptcies across large swaths of the Iranian economy, a precipitous fall in exports, and economic hardship for millions of laborers.
The actual rate of exchange for the rial should be at least four times lower than the present official rate. This means, instead of the official 9,200-1 rate, the actual ratio should be around 36,800 rials per dollar. It is not hard to see why this is so. According to a study published by the now-banned newspaper Sarmayeh last July 13, the change in the official rate of inflation from 1989 to 2008 was around 30.75%, whereas the corresponding change in the exchange rate was just 7.93%. This means that imported goods are much cheaper today in Iran than they really should be.
In general, the import boom is aimed at keeping inflation at bay--presumably you target the cheapest goods in the world for your imports. Secondly, as precedents over the past 31 years have demonstrated, a high flow of imports helps bolster the dominant faction du jour both financially and politically. Under Ahmadinejad, the import craze has taken on truly insane proportions.
Today, even women's traditional attire like chador comes from abroad, all government agencies have been instructed to use imported food staples for employees' meals, and many Chinese goods are cheaper in Iran than anywhere in the world outside China itself. No wonder domestic producers can no longer effectively compete with the flood of foreign goods.
(Excerpt) Read more at pbs.org ...
“How would it be possible for the banking system to show any profit with $48 billion worth of loans in arrears,” the Ettelaat newspaper quoted Governor Mahmoud Bahmani as saying.
Referring to a lending spree in recent years, he said: “Of course, the reality must be accepted that the opening up of the banking system's resources sack in the past few years has brought them (the banks) to the brink of crisis.”
Iranian governments have in the past often instructed state banks to provide low-interest loans to various sectors in order to boost the economy, saddling the banking system with non-performing loans.
Separately, a pro-reform daily said a shortage of cash at some state bank branches in Tehran and the city of Isfahan on Saturday and Sunday had caused queues and “tension and anger” among customers.
The Bahar daily did not give a reason for the cash shortage. There was no immediate comment from officials on the report.
Citing witness reports from an unnamed bank branch in western Tehran on Sunday, Bahar said: “The customers were told there was no cash ... the bank's doors was eventually closed to customers, as a result of which a customer was injured.”
http://business.maktoob.com/20090000425058/Iran_banks_have_$48_bln_in_bad_loans_cbank/Article.htm
Melli and Mellat bank are mentioned here http://www.fincen.gov/statutes_regs/guidance/html/fin-2008-a002.html
Iran is facing big inflation.
.....Iranian governments have in the past often instructed state banks to provide low-interest loans to various sectors in order to boost the economy,......
So, now we know.
Barney Frank, the Queeeah from Massachusetts, learned how to make loans to the destitute from the Mullahs in Iran
According to Iranian oil officials, the recovery factor ratio of oil production in the country is 24 percent while in many countries is about 48 percent and in Norway it reaches to 65 percent.
They say that the ratio in some Iranian oilfields including Soroush is 7 percent and in some others like Ahvaz is up to 35 percent. As rotating member of National Iranian Oil Refining and Distribution Company (NIORDC) says in some countries this percentage has raised to 48. Even some oil producing countries in the Middle East which in terms of quantity possess reservoirs potentially equal to Iran have been able to reach higher percentages.
Based on the same information by employing the brand new technologies, Norway currently has boosted the recycle ratio of its oil production to 65 percent. By the end of the Fifth Development Plan, Iran is supposed to add 2.5 percent to its recovery factor ratio. Even so, the Islamic Republic would still lag so much behind the other countries.
With a 24 percent recovery factor ratio and by taking into account the volume of Iranian crude oil reserves which is estimated to be 560 billion barrels, the country can actually produce 134.4 million barrels. But if the modern technologies are employed, the recovery factor ratio will rise to 48 percent and Iran's production will be doubled to 268.800 billion barrel.
At the moment each barrel of Iran's crude oil is sold 65 dollars. With a 24 percent recovery factor ratio, the country's total oil revenues will be about 9 trillion dollars. But through applying the brand new technologies and reaching to a 48 percent recovery factor ratio, the country's oil earnings would be increased by 18 trillion dollars.
More about the fruit industry
http://iranfacts.blogspot.com/2010/01/oil-for-orange.html
Workers unemployed in Iran’s power industry increased
The head of worker syndicate told ILNA that 3 factories have been shutdown due to financial crisis and 1500 to 2000 workers have been unemployed.
He added other productive unites and factories face dire situation which effect workers.
Underlining the statistics he adds that due to financial crisis Iran factories only have 20 to 30 percent productive capacity.
Losing foreign markets and low tariffs for domestic production have put Iran market at the hand of foreigners which put the future of power industry in danger.
http://www.ilna.ir/fullStory.aspx?ID=108816
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