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Frank Gallagher

Tough Times Ahead for the Iranian Economy - Brookings Institution - 0 views

www.brookings.edu/...0406_iran_salehi_isfahani.aspx

Iran Economy Inflation Debt Blance of Payments Brookings

shared by Frank Gallagher on 09 Jun 09 - Cached
  • Iran’s economy is facing at least three large imbalances. The most acute is in the balance of payments.
  • Already some candidates are whispering that they favor lowering the exchange rate (increasing the value of the rial relative to other currencies) in order to fight inflation. These candidates would lead voters to believe that they can have their cake and eat it too
  • In these times of frozen international credit markets and economic sanctions against Iran, the second option of foreign borrowing is less likely than it was in the 1990s, but the risk of state-owned enterprises racking up foreign debts using short-term credit from eager overseas suppliers is not altogether gone. This is precisely what they did in the early 1990s, which deepened the post-oil boom slump and halted Rafsanjani’s reforms. Anticipating devaluation and government bailout, these enterprises incurred $10 billion in new short term debt alone between 1991 and 1993. Their actions forced the highly anticipated devaluation of the rial by a factor of 27 during the same period and forced the government to accept this debt as its own.
  • ...5 more annotations...
  • Repeating the past is more likely to come in the form of the politically more palatable option of simply cutting imports. Such a policy will be costly in terms of jobs and growth, but will unfortunately appeal to any one of the current leading candidates (Mehdi Karroubi, Mir Hossein Moussavi, and Ahmadinejad), all of whom have strong dirigiste tendencies and would welcome the power over the private sector which comes with overseeing the allocation of the anticipated $40 billion of oil earnings to industries and individuals.
  • The second imbalance is in the government budget.
  • if the past is any guide, investment will take the biggest hit.
    • Frank Gallagher
      Frank Gallagher on 09 Jun 09
       
      This pattern has been repeated during Ahmadinejad's term. Soft loans were given out in order to spur the construction of new businesses, but investment levels fell as the new money was either consumed (from imports) or poured into the real estate bubble.
  • The third imbalance is in the country’s financial markets
  • Frank Gallagher on 09 Jun 09
     
    Good backgrounder on the economic hurdles for whoever wins this Friday
Frank Gallagher

Qalibaf Interview - FT - 0 views

www.ft.com/...ff-11dc-abcb-0000779fd2ac.html

iran qalibaf politics neocon technocrat tehran

shared by Frank Gallagher on 04 May 09 - Cached
  • we have not put any development project on hold. We decide on a project and push for its completion.
    • Frank Gallagher
      Frank Gallagher on 04 May 09
       
      Comparison to Rafa's construction jihad?
  • Shora-Yaari, or assisting councils.
  • We have divided Tehran into 380 neighbourhoods with defined geography. People have elected their representatives to these councils to take over some development work. The work might be small-scale but is important. This helps people take part [in the city’s development] from their doorstep.
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  • A series of medium-scale projects have been carried out by the municipality’s representative offices in [22] zones. The third level is for big projects which are done at national level, like Milad Tower, construction of highways, giant junctions and cultural centres like Azadi Cinema [the original building was burnt down in 1997] over 10,000 square metres of land. Rebuilding the cinema will take less than 18 months and we are going to hold the Fajr Film Festival this year there in co-ordination with the culture ministry.
  • in Artists House
    • Frank Gallagher
      Frank Gallagher on 04 May 09
       
      WTF! Neocons in Artists House?! Surely a set piece?
  • A: The government owes money to us on two fronts. The government like other people has to pay taxes for its buildings, like ministries, because they are inflicting costs on the city. The government doesn’t meet this part. The government owes us 500bn tomans in this respect, which in some cases go back to five or seven years ago. Unfortunately, the debts are going up.
    • Frank Gallagher
      Frank Gallagher on 04 May 09
       
      Du to clash with Ahmadinejad?
  • This agreement was made when Mr [Morteza] Haji was the minister of education [in the previous reformist government].
    • Frank Gallagher
      Frank Gallagher on 04 May 09
       
      Explicitly points out cooperation with reformist predecessor
  • As a matter of principle, I don’t believe in populism and fooling the masses. If you look into my background, you don’t find such moves. Wherever I’ve worked, it has been completely principled, logical, scientific and systematic.
  • It is an invaluable experience at the age of 19 and 20 to be in charge of 15,000 people during [Iran-Iraq] war [1980-1988]. This happens to few people.
  • I said my first plan was to go to war front to die but I didn’t die.
    • Frank Gallagher
      Frank Gallagher on 04 May 09
       
      Nod to Basiji martytdom
  • Frank Gallagher on 04 May 09
     
    Excellent detail on his management of the city. Drops a lot of soundbites, positioning himself as a pragmatic technocrat but also a loyal follower of the revolution. Slick.
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