Head of Monetary and Banking Research Institute has predicted inflation rate will reach about 20 percent by the end of the current Iranian year to March 2008 unless the Central Bank of Iran (CBI) adopts precautionary measures.
Every three months, the center makes a prediction on inflation rate based on economic indices, Ahmad Mojtahed, head of the institute which is affiliated to CBI, told MNA on Friday.
If the situation continued as the institute predicted, inflation would reach more than 17.5 percent, he added.
“Excessive withdrawal of CBI financial resources changed the condition and created the possibility that inflation rate could reach over 20 percent by March rather than the 17.5 percent forecast.“
Mojtahed observed given that in the two-three months to the end of year, the government’s payments go up, it would be possible to tame inflation near or at 17.5 percent if the CBI takes proper measures.
Some resources withdrawn from CBI have been repaid. “This shows some measures taken by the top bank have borne fruit,“ the official maintained.
“If the government tries to enforce financial discipline by the end of year, it is possible to control the rate at less than 20 percent.“
Economists are expressing increasing concern about runaway inflation which is moving towards the 20 percent mark with many blaming poor measures to check the excessive flow of liquidity into the economy for the problem.
While according to CBI, inflation reached 17.2 percent in the month to December 20, unofficial sources have put the figures at 25 percent or more. Meanwhile, the top bank put liquidity at the alarming level of 1,450 trillion rials at present.
This has made the government and the Majlis work together to check the rate.
Earlier, government spokesman, Gholamhossein Elham stated that the Ahmadinejad administration is working on short- and long-term plans to bring prices down.
Mojtahed further criticized this year’s cut in profit/lending rate, saying that the move had no positive impact on the economy and led to increase in the activities of the middlemen.
“In light of the current trend in inflation, it doesn’t seem, we would have a further cut in the lending rate,“ he concluded.

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Jahromi added that by implementing job security policies, the ministry could secure 500,000 endangered jobs until December 31, 2007 and this had a positive influence on unemployment rate.
He blamed the country’s economic mindset and mismanagement as obstacles to creation of production clusters, given that partnership in economic activities is looked down upon in Iran. “Therefore we tend to manage things individually and because one person has limited capital, he does not succeed in achieving the targets.“
After all, statistics show that the government was successful in controlling unemployment, he opined, adding that though there is a large gap between the estimates for the Fourth Five Year’s Economic Development Plan (2005-2010) and statistics provided for in 2006-7.
According to Fourth Plan estimates, if 900,000 new job opportunities were created annually, unemployment rate would reach 8.4 percent by the end of the Plan.
However, 2006-7 statistics show that 1.2 million jobs should be created for bringing the unemployment rate under control.
On the subject of inflation, Jahromi said, “If we want to lower the inflation rate, we should increase production and channel banking facilities to production.“
He contended that by adopting proper banking and financial policies and boosting domestic production there would be nothing called inflation.

Iran currently has 85 active dams and another 171 are to be constructed in the near future.

A dam is a barrier that divides waters. Dams generally serve the primary purpose of retaining water, while other structures such as levees and dikes are used to prevent water flow into specific land regions.
Iran had just about 27 dams a year before the 1979 Islamic Revolution, but the figure reached 548 in 2007!
According to Fars news agency, the country has the much needed technical capabilities and know-how in the construction of durable, complex and modern dams. For the same reason, it is now ranked third after China and Turkey in terms of constructing dam.
Nowadays, many Iranian engineers are in charge of constructing major and complex dam building projects in Africa and Asia. The number is expected to rise in the coming years.
Iran has attained self-sufficiency in technical knowledge for constructing dams. By mastering the complex technology, the country is now able to execute major development projects domestically and internationally.
The objectives of constructing dams in Iran include providing water for irrigation or urban water supply, improving navigation, creating a reservoir of water to supply industries, generating hydroelectric power, setting up recreation facilities or habitat for fish and wildlife, control flood and containing effluent from industrial sites such as mines or factories. Few dams serve all of these purposes but some multi-purpose dams built after the 1979 Islamic Revolution serve more than one.
Since 1979, dam construction industry entered a new phase: The aim was to attain self-sufficiency in implementing major development projects nationwide.
Under the First Five-Year Development Plan (1989-1994), major steps were taken to this end. The Energy Ministry made intensive efforts to provide water for irrigation, control floods and contain effluent from industrial sites. As a result, the number of dams constructed in the first two decades of the revolution (1979-99) went up from about 13 to 60.
Currently, the Energy Ministry aims to construct 70 major dams and implement 48 major irrigation projects across the nation. It is safe to conclude that the country has indeed reached self-sufficiency in terms of designing, supervising, constructing, managing and exploiting dams.
Latest official statistics put the number of dam projects in Iran since 1947 at 1,184, of which 492 dams are still under assessment, 144 under construction, and 548 in use.
The same statistics show that the country built few dams before the revolution, but in 1995 the number reached 42! Also the country reviewed construction of 491 dams during the same period, whereas before the revolution there only one dam project was under consideration!
In short, the country has now 548 dams which are supplying water to over two million hectares of farmland. After the construction of the remaining 1,184 dams, the Energy Ministry will be able to supply water to well over 4.4 million hectares of farmland.
According to the latest World Bank report, the total capacity of dams in Iran is over 39.2 cubic kilometers (cu.km.). Water resources of the dams also stand at around 28.5 percent of the total water reservoirs of the country. However, the total capacity of dams in Egypt is 169 cu.km., in Iraq 50.2 cu.km., in Jordan 0.1 cu.km., in Lebanon 0.3 cu.km., in Libya 0.4 cu.km., in Morocco 16.1 cu.km., in Syria 15.9 cu.km. and in Tunisia 2.9 cu.km.
As per the World Bank report, organizational motivation and strategic development policies are behind the continuation of the policy of constructing dams in Iran and Algeria.
Iran currently has 85 active dams and another 171 are to be constructed in the near future. The dams can supply the much needed water to over three million hectares of farmland and other irrigation purposes.

Iran has committed $4 million for the project.

Plans to establish a Zimbabwe-Iran tractor assembly plant have reached an advanced stage with Iran committing $4 million for the project.
Iran’s Ambassador to Zimbabwe Rasoul Momeni disclosed this on Friday while paying a courtesy call on Acting President Cde Joice Mujuru in Harare, the Zimbabwean newspaper The Herald reported Saturday.
“I am happy to say the deal is to be finalized. We are waiting for a delegation from Iran to sign a memorandum of understanding. We already have US$4 million for the project in our embassy account,“ he said.
Momeni said that the tractors would be fully assembled in Zimbabwe and that funds would be committed once the project was in place.
Iran’s commitment was a confirmation that Zimbabwe’s economy was agriculture based, he added.
Cde Mujuru, who said that the tractor deal included the assembling of motorbikes, told Momeni that Zimbabwe needed further support to ensure the success of its agrarian reforms.
Commenting on relations with Zimbabwe, Momeni lauded the excellent friendship between the two countries.
He said his discussions with Cde Mujuru focused on consolidating cooperation.
Calling for the lifting of sanctions imposed on Zimbabwe by Britain, the United States and their allies, Momeni said Zimbabwe did not need sanctions but help.
Meanwhile, Iran Khodro Diesel Co. will export 1,400 buses worth $140 million to Sudan in the next three years, the company’s managing director said.
Mohammad Nakhjavani noted that Sudan has a lucrative market and in important for the company in East Africa, Fars news agency reported.
“There is stiff competition between European and Asian companies in that region, yet the Sudanese selected Iran Khodro Diesel vehicles because of their quality and after-sale services,“ he added.
Iran Khodro Diesel and Sudan trade partnership began two years ago during which some 30 buses and several trucks were sold to that country. The company’s products are also exported to Gambia, the Ivory Coast and Senegal.

Deputy oil minister for planning affairs Saturday said in Tehran that Iran’s annual oil revenues reached $60 billion and the country should not wait for foreign capitals and investments in its projects.
Akbar Torkan, who made the remarks in a conference on financing oil projects, recalled that Iran had attracted $10 billion in foreign investments under the best conditions per annum, justifying that the country was not required to wait for overseas capitals and allow sanctions to paralyze its industry, PIN said.
Describing the oil industry as the main engine of the country’s economy as it played an essential role in achieving the goals, he added, “We could use the capacities of the oil sector to promote our diplomatic relations.“
According to the 20-Year Vision 2025, the country needed to remain the second-largest oil producer in the Organization of Petroleum Exporting Countries (OPEC) and try to be the second-largest gas producer in the world, said Torkan, adding ’we have not yet managed to achieve the second objective’.
The official added the 2025 Vision Plan also set the target of ranking first in petrochemical and technology sectors in the region.
“To this end, we have to make investments in the downstream and upstream sectors of the oil industry,“ said the official, adding, “According to the Fourth Five-Year Economic Development Plan (2005-2010), $107 billion must be invested in the two sectors.“
The head of Strategic Research Center for economic research told the conference that $175 billion would be required for the oil industry by 2015.
Mohammad-Baqer Nobakht reiterated that the country would have to make a $175-billion investment in different sectors of oil, gas and petrochemical industries as well as in energy conservation, refining, and distribution projects by 2015.
He predicted that the oil sector would require $50 billion, the gas industry would need $70 billion, refining and distribution $30 billion and energy conservation five billion dollars.
Nobakht said the country would need to increase the refining and distribution capacity to 5.2 million barrels per day by 2015, produce 8.5 million barrels of oil daily, and raise its gas output to 1.35 billion cubic meters a day.
The official added the value of petrochemical products would hit $20 billion by 2015.