iran’s economy

Middle East

Blackouts in Iran

It was hard to miss the dramatic picture and headline screaming “Blackouts becoming longer” in Etemaad-e Melli. It alleges the Energy Ministry is minimizing the real impact of the blackouts, citing unofficial reports that power cuts are now reaching eight hours in some places. It’s shaping up to be a hot summer and its not even August yet.

Ahmadinejad’s gas rationing program, which caused riots when it was introduced in June of last year, is still in effect, and is reported to have stoked the black market for petrol. Former energy minister Kazem Vaziri Hamaneh warned that Iran was facing an energy “catastrophe” as he was replaced in a cabinet reshuffle two months later.

This type of storyline tends to arouse those in the US Congress who see energy as a pressure point and the nutty idea that America could enforce some type of gasoline blockage against Iran, which would make them give up nuclear. Given that Iran argues it needs a self-sufficient nuclear power capacity to ease its energy problems and hedge against foreign energy meddling, I doubt this would work.

View from Iran has more on Iran’s economic situation, and Iran Nuclear Watch is closely following the extremely misguided HR 362 sanctions act that would require the U.S. to lead an “international effort” to blockade petroleum products going into Iran.


Thou shalt use energy saving bulbs

Iran’s Tabnak news site had an interesting story today about a letter they wrote to an ayatollah asking him to justify using huge light displays at religious festivals while Iran was facing an energy crisis and power cuts. Here’s my rough translation of his response:

Response of Ayatollah Mokaram Shirazi:

It is right that devotees of the Imam use energy-efficient bulbs and light-strings and make other arrangements so as not to exert a pressure on other worshipers due to power cuts while they are paying homage to the blessed birth; they should also use less energy at home in order to compensate for the light displays.

They even reproduced his handwritten response (below).    That is some fantastic handwriting. 


CRS on Iran’s economy

Today I’m reading the updated CRS report on Iran’s economy (PDF).  If you are looking for a summary of English language press coverage and EIU and IMF reports, you’ve come to the right place.  Analysis that makes informed judgments about the tough questions facing US policymakers, not so much.  Allow me to play senator: 



Senator Ward (D-MD):  How is Iran’s economy doing?  Give me the big picture.  


CRS:   While some analysts maintain that Iran’s economy is performing robustly, others suggest that the economy is underperforming, given the country’s vast resources. 

Sen. Ward:  Thank you. How big an impact are sanctions having?  


CRS:   Analysts debate the extent to which Iran’s economic policies are a result of poor decisions by the Iranian government and sub-optimal choices taken by the government in response to U.S. and international sanctions. Some economists believe that the sanctions augment the government’s tendency toward state-led rather than private sector-oriented market policies.  


 Sen. Ward:  Could sanctions just be pushing finance onto the grey market?


CRS:   While some assert that the use of hawala [informal money transfers] shows that Iran is able to successfully circumvent international sanctions, others suggest that the increased use of hawala is a sign of the sanctions’ effectiveness in making it more difficult for Iran to finance transactions.

Sen. Ward:  That was fascinating.  But what are the options facing me as a US policymaker?  


CRS:   Members of Congress appear to be divided about the United States’ course of action with respect to Iran.   

Sen Ward:  Remind me to double your budget next year.



I don’t envy the writers of these reports.  They must feel political pressure to not make analytical judgments on the Iran sanctions question (Are they working?) that the US has been avoiding for decades.  In terms of sourcing, I doubt complete answers to these questions will be found in IMF figures or the Washington Post.  This type of research could be enriched by looking at economic / business coverage in the Iranian press. Doing this right would take a staff of several Persian speaking analysts, which I doubt is in the cards for CRS now.  Maybe they should have their budget doubled.