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Iran Report: October 27, 2003

27 October 2003, Volume 6, Number 43

TEHRAN RELUCTANTLY CONSIDERS ADDITIONAL PROTOCOL... Foreign ministers from France, Germany, and the United Kingdom -- Dominique de Villepin, Joschka Fischer, and Jack Straw, respectively -- met with Supreme National Security Council Secretary Hojatoleslam Hassan Rohani on 21 October in an effort to encourage Iran to address the international community's concerns about its nuclear activities. Their offer to Tehran is similar to one made in August -- that Iran cooperate with the International Atomic Energy Agency (IAEA), sign the Additional Protocol of the Nuclear Non-Proliferation Treaty (NPT), and cease uranium enrichment, Reuters reported on 21 October. In exchange, the Europeans would recognize Iran's right to a civilian nuclear program, provide it with technical assistance, and guarantee Iranian access to nuclear fuel imports.

That same day, the European visitors and the Iranian government issued a declaration on Iran's nuclear program (for the full text, see Tehran "has decided to sign the IAEA Additional Protocol and commence ratification procedures [and] will continue to cooperate with the [IAEA] in accordance with the protocol in advance of its ratification." Iran, furthermore, "decided voluntarily to suspend all uranium enrichment and reprocessing activities in advance of its ratification."

The visiting foreign ministers, in turn, informed Tehran that they recognize Iran's right to peacefully use nuclear energy in accordance with the NPT. They do not see the Additional Protocol as a threat to any signatory's "sovereignty, national dignity, or national security." The IAEA director-general's confirmation of Iranian cooperation, in turn, will lead to discussions on longer-term cooperation on nuclear-power-generation issues, and eventually "Iran could expect easier access to modern technology and supplies in a range of areas."

Rohani was less emphatic subsequently than the declaration originally indicated. He said during a 21 October press conference that Iran is "prepared to take the necessary steps to accede to the Additional Protocol," and added that this must not endanger Iran's "national security, national interests, or national prestige," state television reported. Iran "voluntarily" decided to "temporarily suspend its enrichment activities in order to create a new atmosphere and gain the confidence of industrial countries," he said.

Rohani then told a 23 October gathering of Tehran Province Friday prayer leaders that the government does not want to sign the Additional Protocol and said the suspension of uranium enrichment could last less than a month, ISNA reported. "We do not want to sign the declaration; we have not yet signed the protocol either; we only made an announcement to say that we are ready to sign the protocol," Rohani said. As for suspending uranium enrichment, he said, "we leave our hand open; we may do so for a month, or perhaps for a shorter or longer time; there is no suspension yet."

Rohani is not the only Iranian who is unenthusiastic about the Additional Protocol. About 120 university students -- members of the Student Basij -- rallied near the Saadabad complex in Tehran on 21 October to protest Iranian acceptance of the Additional Protocol and the presence in Iran of the French, German, and British foreign ministers, ISNA and IRNA reported. The Movement in Defense of Iran's Independence announced on 23 October that it would stage a rally after the 24 October Friday prayers against Iran's signing the Additional Protocol, ISNA reported. "The objective of the rally is to condemn the exertion of pressure on the Islamic Republic of Iran to accept the Additional Protocol," the movement announced. "We believe that the gang leaders of global arrogance intend to weaken Iran and prevent it from peaceful application of nuclear technology." About 1,500 people participated in this event, agencies reported. Other demonstrations took place in Qom and Karaj.

Protests such as this are very unlikely to have any impact on Tehran's willingness to sign the Additional Protocol -- because Supreme Leader Ayatollah Ali Khamenei has the final say in such matters and has apparently given his blessing. Government spokesman Abdullah Ramezanzadeh said on 22 October that all the negotiations related to the Additional Protocol were, in IRNA's words, "in line with the views and approval of" Supreme Leader Khamenei. The legislature must approve the signing of the protocol, followed by Guardians Council approval. Asked if such approval would be forthcoming, Ramezanzadeh said, "Given the fact that what has been accomplished so far has been approved by the highest authority in the land, it is not likely to face any difficulty."

Khamenei does seem rather skeptical about Western motives, however. He told a 22 October gathering of university students that certain Western states' allegations about the Iranian pursuit of nuclear weapons are, in fact, meant to prevent the Iranian acquisition of nuclear technology, IRNA reported. The objective is to make Iran dependent on Western technological advances, Khamenei said. Iran does not need nuclear weapons, he added, because its strength lies in its "capable human resources...armed with knowledge, faith, and perseverance." (Bill Samii)

...HAS SOME EXPLAINING TO DO... So far, Tehran at the very least is going through the motions of cooperating with the IAEA. Tehran promised IAEA Director-General Mohammad el-Baradei that it would provide "full disclosure of all its past nuclear activities," reported on 21 October. Two days later el-Baradei announced, "Iran has decided to provide full disclosure of all its past activities, and I was assured that the report I got today is a comprehensive and accurate declaration," RFE/RL reported. Iran's IAEA representative, Ali Akbar Salehi, added, "We have submitted a report that fully discloses all our past activities, peaceful activities, in the nuclear field."

Documentation aside, Tehran does have some explaining to do. According to a 22 October Reuters report from Vienna, where the IAEA is based, many of the environmental samples taken at the Kalaye Electric Company and at Natanz have different types of weapons-grade highly enriched-uranium (HEU) particles. An anonymous "Western diplomat" explained the significance of this: "The more different types of enriched uranium they [the IAEA] find in Iran, the more difficult it is for Iran to explain it away with contamination." Iran has claimed that the HEU came from secondhand equipment it bought on the black market, and there is speculation that Pakistan is the country of origin.

There are recent allegations of Indian involvement in Iranian nuclear activities, too. Y.S.R. Prasad, former chairman and managing director of the Nuclear Corporation of India, began an assignment in Iran after his July 2000 retirement, New Delhi's "Hindustan Times" reported on 23 October, citing a "classified government document." "He is believed to have helped Iran build technical and physical infrastructure for its nuclear power plants."

IAEA inspectors arrived in Iran on 25 October. The IAEA board of governors will discuss on 20 November if Iran has provided the required full accounting of its nuclear program. (Bill Samii)

...AND PROMPTS FURTHER SKEPTICISM. An absence of confidence in Tehran's declarations about its nuclear activities prompted the crisis that led up to the 21 October visit of European foreign ministers to Iran. That visit resulted in promises of greater Iranian cooperation with the IAEA and complete transparency on Tehran's behalf, but some Western experts -- among them the European foreign ministers themselves -- remain skeptical about Tehran's intentions.

The European foreign ministers spoke of the Tehran declaration as a successful example of a common European foreign policy and the outcome of European cooperation, but they seem to have adopted a "wait-and-see" attitude concerning the manner in which the declaration is implemented. British Foreign Secretary Jack Straw said in a 23 October interview with BBC's Radio 4 that his trip to Iran was "successful as far as it went." "But as I said in Tehran on Tuesday [21 October] evening," Straw added, "the words are important but the tests of the words is action." France's Dominique de Villepin wrote in the 23 October "Le Figaro" that international agreements have been circumvented in the past and could be circumvented in the future. De Villepin added, "[Iran's] commitments will naturally have to be verified and put into action."

The 21 October deal greatly reduces the risk of Iran producing a weapon from highly enriched uranium (HEU), according to a 22 October "Policywatch" by Patrick Clawson, deputy director of the Washington Institute for Near East Policy. However, Clawson warns, plutonium is the other route to making a nuclear weapon; the deal makes completion of the Bushehr nuclear-power station more likely, and Bushehr will produce spent fuel that could be reprocessed to yield plutonium.

"The deal ensures that Iran will be the next member of the nuclear club," National Defense University's Professor Ray Takeyh writes in the 23 October "International Herald Tribune." Takeyh notes that Iran is approaching self-sufficiency in producing the technology needed to assemble a nuclear device. Furthermore, it would take the IAEA "at least two years" to complete its survey and begin inspections of Iran under the Additional Protocol, by which time Iran could be on the threshold of a nuclear breakout.

"This particular deal won't prevent Iran from making the bomb," Wisconsin Project on Nuclear Arms Control Director Gary Milhollin writes in the 23 October issue of "The New York Times." Although Tehran has promised to suspend uranium enrichment, Milhollin writes, it can continue making the centrifuges that could enrich uranium in the future, complete the factory that produces uranium gas for the centrifuges, and build a heavy-water reactor.

The deal is laudable because it got Iran to suspend its uranium-enrichment program, adhere to the Nuclear Non-Proliferation Treaty (NPT), and agree to tougher inspections, Nonproliferation Policy Education Center Executive Director Henry Sokolski wrote on 24 October in "The Wall Street Journal Europe." Yet the deal also raises important questions, according to Sokolski: "What does the suspension cover and how long will it last"; "Will the suspension be monitored, and if so, how"; and "Will this understanding accelerate Iran's reactor program?" Other questions asked by Sokolski include: will the agreement facilitate greater nuclear cooperation with Iran, how will the agreement affect the authority of the IAEA, and how will the agreement affect Iran's nuclear weapons capabilities?

The deal should not lead us into "a false sense of security about the Iranian proliferation threat or unwarranted confidence in current nonproliferation measures under the [NPT]," Senator Richard Lugar writes in the 24 October "Los Angeles Times." The chairman of the Senate Foreign Relations Committee recommends that Iran submit to "super inspections" that would include "unfettered freedom for inspectors, unsupervised interviews of nuclear scientists and engineers,...and unrestrained aerial surveillance." (Bill Samii)

IRAN EAGER TO PARTICIPATE IN IRAQI RECONSTRUCTION. Iranian Foreign Minister Kamal Kharrazi arrived in Madrid on 23 October to participate in the two-day international conference of donors for Iraq's reconstruction. When he announced his plans to attend the event on 22 October, Kharrazi said, "We have already started our constructive activities in Iraq," Reuters reported. "Our companies are already active there and we will help with Iraq's reconstruction."

There are questions about how constructive the Iranian presence really is. Sir Jeremy Greenstock, the U.K. special representative to Iraq, criticized the role of the Iranian-backed Badr Corps in Iraq and said that Tehran has been warned that its activities in Iraq are "unacceptable," "The Guardian" reported on 23 October. "There are elements in the Badr Corps who are malign and interested in using violence against the coalition," he said. "There are others who are actually there to support the Shia community in a more defensive capacity whom we might be able to enroll to ensure community law and order. We are making it very clear to Iran that that is unacceptable, that [there] will be further marks against them [for] stirring it up in Iraq and we will deal with the violence on the ground accordingly."

Kharrazi avoided such controversial topics in his 24 October speech at the conference. He said, according to the Islamic Republic News Agency (IRNA), that Iran would contribute to Iraq's reconstruction and is ready to cooperate in the areas of commerce, development, finance, investment, and tourism. He added, "Iran attaches great importance to peace, security, stability, development, and economic prosperity in Iraq."

He also said, "We stand ready to supply our electricity and gas to Iraq and to facilitate its oil exports through our oil terminals or enter into a swap arrangement that can amount to 350,000 barrels per day," according to the text of his speech as reported by Reuters.

An estimated $55 billion over four years is needed for Iraq's reconstruction, and on the eve of the conference some European members of the international community, as well as other states, seemed hesitant about the provision of funds. Donor contributions ahead of the conference stood at: United Kingdom $908 million (over three years), Spain $300 million (over three years), Australia $103.5 million (approximate), Denmark $50 million, Japan $1.5 billion, the United States $20.3 billion, the European Union $235 million, and Germany $59 million -- totaling $23.6 billion. The World Bank had said it would offer $3 billion to $5 billion in loans to Iraq as well.

On the second day of the conference, many donors increased their original pledges of support. Japan increased its grant pledge by offering another $3.5 billion in medium-term loans to Iraq, while Australia pledged an additional $14 million, Reuters reported. The Italian government also offered an additional contribution of 200 million euros ($235.5 million) over "a few years," Italian Foreign Minister Franco Frattini said.

The International Monetary Fund (IMF) pledged up to $4.25 billion, substantially more than expected. IMF Managing Director Horst Koehler said the IMF could make $850 million available as emergency post-conflict assistance, dpa reported. Saudi Arabia announced that it would offer a $1 billion financing package to Iraq that includes $500 million in project finance and $500 million as an export facility, Reuters reported. Earlier, South Korea pledged $200 million and Canada $150 million, AP reported on 24 October.

Conference organizers announced at a closing press conference on 24 October that donor states pledged at least $33 billion for the reconstruction of Iraq, the U.S. State Department's Bureau of International Information Programs ( reported. According to the report, Secretary of State Colin Powell described the outcome as "very successful." (Bill Samii, Kathleen Ridolfo)

ALGERIAN PRESIDENT VISITS IRAN, RENEWS LONG-BROKEN TIES. Algerian President Abdelaziz Bouteflika left Tehran on 20 October, IRNA reported, having arrived in the Iranian capital two days earlier. This was the first visit by an Algerian president to the Islamic republic in at least two decades; Tehran and Algiers severed relations in the early 1990s over allegations of Iranian support for Islamist terrorists.

During the trip Bouteflika met with Supreme Leader Ayatollah Ali Khamenei, Expediency Council Chairman Ayatollah Ali Akbar Hashemi-Rafsanjani, President Hojatoleslam Mohammad Khatami, parliament speaker Hojatoleslam Mehdi Karrubi, Foreign Minister Kamal Kharrazi, and Defense Minister Ali Shamkhani. Bouteflika also visited the tomb of the father of Iran's Islamic revolution, Ayatollah Ruhollah Khomeini.

Khatami said on 19 October that Iran and Algeria hold similar views on Iraq and on the Palestinian issue, according to IRNA. Khatami added that both countries are "fighting against terrorism."

Rafsanjani noted on 20 October that Algeria's struggle against French colonialism was a model for Iran, IRNA reported. Bouteflika warned, "The Third World and Islamic world interests do not mean anything for the neo-colonialist imperialists." He spoke glowingly about the technological and industrial achievements that he saw in Iran.

The visitors signed five memoranda of understanding relating to cooperation in industry, legal issues, and transportation, according to dispatches. (Bill Samii)

OIL AND GAS DOMINATE PAKISTANI PRIME MINISTER'S VISIT. Pakistani Prime Minister Mir Zafarullah Khan Jamali arrived in Tehran on 21 October and left on 23 October. Before leaving Islamabad, he hinted that petroleum and commerce would be the main topics of discussion by pointing out that he would be accompanied by Commerce Minister Humayun Akhtar Khan and Petroleum and Natural Resources Minister Chaudhry Norez Shakoor Khan, according to a report by Pakistani government-run television station PTV World.

Shakoor Khan had expressed the hope that this trip would lead to greater Iran-Pakistan cooperation in the oil and gas arena, IRNA reported on 20 October. Potential areas of cooperation include onshore and offshore exploration and pipeline projects, as well as refinery modernization. He added that Iranian businessmen would be invited to "take advantage of investment opportunities and potentials in oil and gas sectors particularly in exploration and production." The two sides will also address the cross-border smuggling of petroleum products, he said. Referring to a proposed natural-gas pipeline from Iran to India, Shakoor Khan said that this would benefit the region in social and economic terms and it would contribute to peace in the region.

Jamali met with President Khatami and Vice President Mohammad Reza Aref-Yazdi on 21 October, Islamabad's "The News" reported on 22 October. Khatami reportedly mentioned his talks with President Pervez Musharraf at the previous week's Organization of the Islamic Conference (OIC) summit in Malaysia, and Jamali noted that Iran and Pakistan play an important role in the OIC and the Islamic community.

Foreign Secretary Riaz H. Khokhar said afterwards, "The News" reported," that the two sides discussed Afghanistan and Kashmir, as well as the importance of reconstruction in Afghanistan. The Pakistani side also expressed concern about Indian activities in Afghanistan. Khokhar went on to say that Pakistan called for further discussions on its proposed agreements in six areas. One of these agreements addresses defense issues. The other agreements cover animal husbandry; cooperation in compressed natural gas; cultural exchanges; customs, science, and technology cooperation; and double taxation.

Jamali met with Supreme Leader Khamenei, First Vice President Mohammad Reza Aref-Yazdi, and Roads and Transport Minister Ahmad Khorram on 22 October, IRNA reported. Khamenei called for greater unity among Islamic states in light of the threats facing Muslim nations, particularly the Afghan, Iraqi, and Palestinian ones. He warned that enemies, led by the United States, fear such an Islamic convergence and are sowing discord. Aref-Yazdi announced Iran's readiness to fulfill Pakistan's gas and electricity requirements, and he added that Iran is ready to cooperate with Pakistan in establishing peace and security in Afghanistan.

On the last day of his visit to Tehran, Jamali met with Expediency Council Chairman Ayatollah Ali-Akbar Hashemi-Rafsanjani, who said that participation in Afghanistan's reconstruction is a "humanitarian act," IRNA reported.

Jamali flew to Mashhad from Tehran on 23 October to visit the shrine of Imam Reza, and from there he returned to Islamabad. On his return, Jamali announced at an airport press conference that Pakistan has agreed to the laying of a gas pipeline between the two countries, "The News" reported on 24 October. The pipeline is intended to transport gas to India, but Jamali said that New Delhi is hesitating on the project. IRNA also reported that Jamali said Iran and Pakistan have set a trade target of $1 billion. He added, "Experts will meet in about three months to take follow-up action on proposals agreed between the two countries including cooperation in oil and gas, customs, tariff, and export of Pakistani rice to Iran." Jamali said that another border crossing between the neighboring states would be opened at the Sarwan, Sistan va Baluchistan Province-Panjgur, Marwan District, Baluchistan Province point.

Meanwhile, according to "The Washington Times" on 22 October, Pakistan is providing nuclear-weapons technology to Saudi Arabia, whose leadership fears that Iran's quest for a nuclear-weapons capability cannot be deterred. Citing a consistently reliable anonymous Pakistani source, the daily reported that in exchange for its nuclear know-how, Pakistan would receive free or cheap Saudi oil. (Bill Samii)

KHATAMI CONGRATULATES AZERBAIJANI COUNTERPART. President Khatami made a congratulatory telephone call to the new president-elect of Azerbaijan, Ilham Aliyev, on 19 October, and expressed the hope that the two countries' relations would improve during Aliyev's presidency, IRNA reported. In light of the competitive relationship between the neighboring states, nothing in the two countries' relationship is ever that simple.

A commentary in the 22 October issue of "Mardom Salari" claimed that there is an Iranian diplomatic policy of immediate, rather than planned, approval of new leaders. The commentary noted that regardless of their suppression of public protests, "the need for cooperation has become the first priority of all officials under any circumstances." This priority has led to cooperation with governments that back separatists, such as Azerbaijan's; "unstable governments, such as the Taliban, which enjoyed Iran's support while on the verge of collapse"; and Saddam Hussein's government.

"Iran News" editor Mohammad Soltanifar also discussed relations with Azerbaijan in an interview that appeared in the 20 October "Mardom Salari." He described Khatami's phone call as "diplomatic custom and courtesy." Soltanifar was less forgiving of Aliyev. He foresaw that Ilham Aliyev would continue his father's policies with respect to the Caspian Sea's resources, and as a former oilman, he would go even further and that one can expect the U.S. presence in Azerbaijan to expand.

Aliyev's victory in the 15 October presidential election struck many observers as bogus (see "RFE/RL Caucasus Report," 20 October 2003). There were reports of ballot stuffing, voter intimidation, and denial of access to polling places, among other violations of election rules. Preliminary returns gave Prime Minister Aliyev almost 80 percent of the vote, with Musavat Party Chairman Isa Qambar coming in second place with 12.8 percent. Yet Qambar claimed to have won the election, with 60 percent of the vote.

After the election, furthermore, there were reports of human rights violations. Human Rights Watch (HRW) on 22 October expressed its concern over a "massive and brutal crackdown" against Azerbaijani opposition leaders. The authorities arrested many opposition leaders, including Azerbaijan Democratic Party (ADP) Secretary-General Sardar Jalaloglu, Umid Party Chairman Iqbal Agazade, and Halq Party leader Panah Huseynov, RFE/RL reported. Isa Qambar himself was placed under house arrest.

Leila Yunus, chairwoman of a Baku-based nongovernmental organization called the Institute for Peace and Democracy, told RFE/RL that many of the oppositionists are being tortured. Yunus said that the Azerbaijani police are particularly fond of using the bastinado, as well as psychological torture.

Meanwhile, the Iranian Embassy in Baku has denied accusations that it supported Azerbaijani opposition organizations during the election. The Azerbaijani Foreign Ministry had protested that on 14 October Sahar television showed Musavat Party Chairman Qambar's campaign materials, the ANS television station reported on 15 October. Ambassador Ahad Qazai expressed his regrets and said that Sahar TV's action did not reflect the government's stance.

Qazai on 18 October acknowledged a protest note related to Qambar's campaigning on Sahar Television, Space TV reported. Qazai criticized Sahar TV but added that all presidential candidates were invited to speak and only the opposition turned up. Qazai stressed that this did not reflect government policy.

"Iran denies any link with these parties, their supporters and their press outlets and regards this as an attempt to disrupt relations with Iran in the run-up to Ilham Aliyev's election as president," an Iranian Embassy statement said according to Baku's "Ekspress" on 23 October.

Qazai and then-Prime Minister Aliyev met on 15 September, Azerbaijan's Channel 1 TV reported. Aliyev said he was confident that the two countries ties would get stronger. (Bill Samii)

SUPREME LEADER ADDRESSES PROVINCIAL AND NATIONAL ISSUES. Ayatollah Ali Khamenei arrived in Zanjan Province on 13 October, and in the following days he addressed both local and international issues in his speeches.

During a 13 October speech in the city of Zanjan, Khamenei said that one of his major objectives in visiting various provinces is to draw the attention of officials to local problems, state radio reported. Khamenei added that every part of the country has problems, "but there are resources and possibilities in these regions which are the key to solving these problems." Khamenei went on to say that two recent opinion polls of Zanjan residents -- one conducted by provincial officials and the other conducted by officials from Tehran, the capital -- had very similar results. When people were asked about their main problem, he said, they cited "unemployment, inflation, and their standard of living."

During his 13 October speech in Zanjan, Khamenei urged public officials to maintain unity and warned that Iran's enemies are trying to create divisions among state officials, state radio reported. "We do not want America and other international arrogant powers to be in charge of this nation and this country," he added. Khamenei went on to say that the "global arrogance" (the United States) "intends to dominate Iran," and although it was kicked out of Iran once, "it intends to come back." The U.S., according to Khamenei, wants to have "a series of devoted puppet regimes in this region" in order to "have its oil supplies" and so Israel will not be threatened.

In a 14 October speech to the province's students and scholars, Khamenei said that the effort to block Iranian access to nuclear technology reflects the desire of the U.S. to return to Iran, state television reported. Khamenei said, in state television's words, "wise resistance against the greedy states" is the only way to protect Iran's honor, dignity, and freedom. Khamenei warned the students that, in state television's words, "[the] enmity of the octopus-like system of global arrogance toward the Islamic revolution was a natural enmity" and that the revolution clashed with the global powers' interests. He encouraged student organizations to maintain unity and to be vigilant.

Khamenei attended a review of military units in Zanjan Province -- the Islamic Revolution Guards Corps (IRGC), the Basij Resistance Force, the regular army, and the police -- on 15 October and lauded the memory of the province's martyrs. Also in attendance were IRGC chief Major General Yahya Rahim-Safavi and provincial IRGC commander Brigadier General Fazilatpur, state television reported. Khamenei said in his speech that international bullies are raising a fuss about the Iranian nuclear program and accusing Iran of having military objectives. He denounced this as hypocritical because the "warmongers" launched two world wars in a 20-year period, and said they are now launching wars "for the benefit of leech-like capitalists" and to encourage the arms trade. Khamenei said that Iran would withstand its enemies' bullying and avarice. (Bill Samii)

LANDLORDS FACE NEW TAX RATES. Minister of Housing and Urban Development Ali Abdol-Alizadeh said on 13 October that 660,000 housing units are planned for delivery by 21 March 2004, IRNA reported. Some of these will be made available on a "rent to buy" basis, while the rest are cooperatives. Abdol-Alizadeh predicted on 17 September that over one million housing units would be built by March 2007, in order to meet demand from youth and to keep prices down, IRNA reported.

Yet an editorial in "Etemad" on 19 October stated that the price of housing in Tehran has increased 150 percent in the last two years. The editorial warned of capital flight from the housing sector and said that the construction sector is facing a recession.

Taxes may contribute to the price hikes, too. In September the Office of National Financial Affairs announced new tax rates for owners of rental properties, the business section of "Kayhan" reported on 18 September. In order to apply the new taxes, every rental space must be measured. For Tehran, the income on any residential property, including balconies and parking and storage areas, is taxable if the size of the property equals or exceeds 150 square meters. Atriums and uninhabited cellars are not to be taxed. The same specifications apply throughout the rest of the country, except that the tax will only be applied to properties of 200 square meters and more. If a landlord has a single property of 200 square meters, only 150 square meters would be subject to tax.

A report on the Housing and Urban Development Ministry's performance from 1997-2002 was released during the Government Week in late August. During that five-year period, 3 million houses were constructed and 35,000 rental houses for young couples and female breadwinners were built, IRNA reported on 2 September. Funds from the Imam Khomeini charity were used to build 12,000 residential units for the vulnerable class, and 350,000 rural residences were renovated. The people's need for spiritual shelter was also not ignored -- according to the report, 60 mosques were built during the five-year period. (Bill Samii, Jack Helm)

IRAN CONFRONTS INCOME DISPARITIES AND INFLATION. The Management and Planning Organization's (MPO) deputy director for social affairs, Mohammad Hussein Vaez-Mahdavi, said during a 22 October seminar in Tehran that the richest 10 percent of the Iranian population earns 17 times more than the bottom 10 percent, IRNA reported. "In Iran 15 percent of the people are below the relative poverty line and 1.2 percent earn less than a dollar a day," Vaez-Mahdavi added. The MPO official added that Iran's fourth five-year development plan, which will take effect in March 2005, has specific policies to alleviate poverty.

The inflation rate in Iran stood at 14.6 percent in the sixth month of the Iranian year, which began on 21 March, and the wholesale-price index also rose, by 16.8 percent, IRNA reported on 19 October. IRNA did not provide details on the timeframe, but it said that this upward trend has continued for two years, with manufactured goods and foodstuffs becoming more expensive. Among the tools the government plans to use to control inflation, according to IRNA, are raising taxes, issuing bonds, and revising banking policies. IRNA reported in September that the inflation rate was 16.7 percent (see "RFE/RL Iran Report," 29 September 2003). (Bill Samii)

IRANIAN PETROLEUM MINISTER TO FACE PARLIAMENTARY QUESTIONING OVER NORWEGIAN DEAL. Ardabil parliamentary representative Nureddin Pirmoazen said that the legislature would like to question Petroleum Minister Bijan Namdar-Zanganeh about allegations that a Norwegian oil company paid bribes to an Iranian firm, "Mardom Salari" reported on 20 October.

The allegations, which now are being investigated by the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime, are that Statoil paid some $15 million to Horton Investments, an Iranian-owned consulting company associated with National Iranian Oil Company official Mehdi Hashemi, who is Expediency Council Chairman Ayatollah Ali Akbar Hashemi-Rafsanjani's son (see "RFE/RL Iran Report," 22 and 29 September and 6 October 2003). Several Statoil officials have resigned over the case.

Pirmoazen said the bribery case was "so disturbing that it could not remain hidden from the sharp eyes of the nation's representatives," and if the allegations are proven, then the petroleum minister would face a no-confidence motion.

Iranian investigators were to meet with Statoil officials on 14 October, "Dagens Naeringsliv" reported the same day.

Eleven days later, the Iranian petroleum minister complained that Oslo refuses to disclose the evidence Tehran has demanded, IRNA reported on 25 October, citing "Iran Daily." Namdar-Zanganeh said that, so far, the Petroleum Ministry has not uncovered any evidence of financial corruption in its dealings with Statoil. Namdar-Zanganeh added that he would not get into details until the investigators return from Norway and submit their final report. (Bill Samii)