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Iran Report: October 18, 2004

18 October 2004, Volume 7, Number 36

WANTED: A REFORMIST PRESIDENTIAL CANDIDATE. Former Behshahr parliamentary representative Ali-Asqar Rahmani-Khalili, who is a member of the central council of the Militant Clerics Association (Majma-yi Ruhaniyun-i Mobarez, MRM), said on 13 October that his organization will hold a special meeting on 17 October to decide on a candidate for the upcoming presidential election, Fars News Agency reported.

Reformist political organizations were hoping that former Prime Minister Mir-Hussein Musavi would agree to run. According to a 12 October MRM statement cited by Fars News Agency, Musavi has refused all appeals that he become a candidate. He reportedly announced his decision during a meeting with President Hojatoleslam Mohammad Khatami, MRM Secretary-General Hojatoleslam Mehdi Karrubi, and Hojatoleslam Mohammad Asqar Musavi-Khoeiniha.

Rahmani-Khalili described Musavi's decision as understandable, given the country's political climate. The future of the system future is at stake, he said, and "we should choose a person who understands regional and international challenges and he should try to remove the obstacles in our way." The candidate should have the right character for dealing with regional tensions and challenges, Rahmani-Khalili said.

"The ground has been prepared for [Expediency Council Chairman and former President Ayatollah Ali-Akbar] Hashemi-Rafsanjani's candidacy," Rahmani-Khalili said.

Speaking the same day to a meeting of political leaders who were calling for him to run, Hashemi-Rafsanjani said there is still plenty of time before candidates must register for the May 2005 presidential election, the Islamic Republic News Agency (IRNA) reported. The secretaries-general of the Islamic Labor Party, Labor House, Islamic Civilization Party, and other organizations were at the meeting. Hashemi-Rafsanjani went on to say that he favors the participation of "young and highly skilled manpower."

In an 8 October meeting with clerics in Qom, Hashemi-Rafsanjani reiterated his stance that he will be a candidate only if it is necessary, the Iranian Students News Agency (ISNA) reported. "I have said repeatedly before that if no one else is prepared to run for the presidency, I will be prepared to enter the arena again to manage the country in sensitive circumstances; however, at present, I am waiting for another suitable person to do the job.... I am still waiting for a suitable person to run for the presidency." (Bill Samii)

MORE CABINET MEMBERS COULD BE INTERPELLATED. Now that the conservative-controlled legislature has drawn first blood by interpellating Roads and Transport Minister Ahmad Khoram, there is speculation about whom it will go after next.

Rudsar parliamentary representative Assadollah Abbasi has warned that the agriculture jihad minister will face a no-confidence motion if he does not solve tea farmers' problems, "Aftab-i Yazd" reported on 9 October (on the crisis facing the tea industry, see "RFE/RL Iran Report," 19 April 2004).

Parliamentarians are gathering signatures to interpellate Education and Training Minister Morteza Haji-Qaem, "Sharq" reported on 6 October. According to this report, Haji-Qaem is one of three ministers to whom the conservative Abadgaran coalition expressed opposition at the outset. There is less consensus on Haji-Qaem than there was on Khoram, according to the report, although Haji-Qaem did have to submit to legislative questioning under the previous parliament. Among the complaints about Haji-Qaem are personal incompetence, hiring incompetent administrators in Fars Province, bribery, and corruption, "Sharq" reported. (Bill Samii)

VICE PRESIDENT'S RESIGNATION ACCEPTED. President Khatami has accepted the resignation of Vice President for Legal and Parliamentary Affairs Hojatoleslam Mohammad Ali Abtahi, the Iranian Labor News Agency (ILNA) and Radio Farda reported ( Abtahi, who tried to quit in February after the Guardians Council rejected the candidacy of many incumbent legislators and thousands of others, reiterated his desire to resign in early October, after the legislature interpellated Roads and Transport Minister Ahmad Khoram (see "RFE/RL Iran Report," 11 October 2004). Former Tehran parliamentarian Majid Ansari succeeds Abtahi, according to IRNA. (Bill Samii)

UNEMPLOYMENT REACHES 27 PERCENT. National Youth Organization head Rahim Ebadi told "Sharq" of 14 October that "currently, the unemployment rate has reached 27 percent." He went on to say that the government is trying to reduce the unemployment rate to 15 percent and added that half of his organization's assets go toward creating work opportunities for young people.

The World Bank's Country Brief on Iran states, "The rate of unemployment dropped in 2004 for the second year in a row, reaching 11.2 percent (from 14.7 percent in 2002)." Approximately 700,000 jobs must be created annually to account for new entrants in the work force, according to the World Bank, but only about 500,000 have been created.

"Stubborn, double-digit, unemployment is currently the Islamic Republic's most acute single economic concern," economist Jahangir Amuzegar wrote in the 11 October issue of the "Middle East Economic Survey." (Bill Samii)

EXPATRIATES' INVESTMENT ENCOURAGED. Economic Affairs and Finance Minister Safdar Husseini said in a 4 October meeting in New York that Iranians would get priority access and investment guarantees when investing in Iran, IRNA reported. Husseini made this statement during a meeting with Iranians living in the United States who have expressed an interest in the oil sector, stock exchange, animal husbandry, hospital construction, pistachio imports, and airport services.

Intelligence and Security Minister Hojatoleslam Ali Yunesi addressed this topic in a 4 October interview on state television. "Iranians living abroad possess a good wealth of wisdom and ideas as well as financial wealth," he said. "There are many billionaires among them." Yunesi said expatriate Iranians should be confident in the security of their investments. "We in fact prefer our compatriots to invest there," Yunesi said. "That security has already been established." (Bill Samii)

EU HUMAN RIGHTS CRITICISM UNWELCOME. The European Union's stance on human rights is coming in for criticism from the Iranian government.

The EU's External Relations Council met on 11 October and announced afterward, "The council remains deeply concerned that despite this commitment [to strengthen respect for human rights and promote the rule of law], serious violations of human rights are continuing to occur in Iran," according to a press release ( The council noted that UN human rights inspectors have visited Iran several times, but their recommendations have not been implemented and the situation has deteriorated since February.

Foreign Ministry spokesman Hamid Reza Assefi on 12 October dismissed the EU statement as inaccurate, Fars News Agency reported. "The Islamic Republic of Iran has institutionalized the improvement of human rights in its political and social progress based on its religious teachings and beliefs, indigenous cultures, and national strategies," Assefi said. "It has made great achievements in that regard." Assefi accused the EU of "double standards" and bemoaned the state of Muslims in Europe. Assefi failed to contrast the number of Muslims who seek refuge in Europe with the number of Muslims who seek refuge in Iran. (Bill Samii)

IRANIAN INTELLIGENCE IS ACTIVE INTERNATIONALLY. The Czech Republic's Security Information Service (BIS) in 2003 tracked the activities on its soil of intelligence services from states suspected of "covertly supporting terrorist organizations," according to the Czech intelligence agency's annual report. "Among the most frequently observed intelligence services are those of Iran, North Korea, and several states of the former USSR," CTK quoted the report as saying on 14 October.

In Baghdad, Iraqi intelligence chief Muhammad al-Shahwani claimed on 14 October that 27 staffers at the Iranian Embassy are conducting espionage, and that they recruited the assassins of 18 Iraqi intelligence personnel, Al-Sharqiyah television reported. The Iraqi official said documents secured in raids on 29 September linked Iran with the killings.

Al-Shahwani added that according to these documents, Iran has provided money for the creation of a television production company headed by an Iranian named Jafar Pishqadam, "Al-Zaman" reported on 13 October. Moreover, Iran finances and supplies five radio stations and some newspapers, and these business entities gather intelligence for Iran's Islamic Revolution Guards Corps. Another document found by Iraqi intelligence states that Iran has provided $45 million for the militias affiliated with Iraqi political parties. (Bill Samii)

IRAN, IRAQ REPORTEDLY SIGN BORDER-CONTROL AGREEMENT. Following complaints from Baghdad and Tehran about porous frontiers, the two sides have signed a border-control agreement, ILNA reported on 11 October, citing the daily "Al-Sabah al-Jadid" and sources at the Iraqi Foreign Ministry. More than 400 Iranians are being held in Abu Ghurayb, Al-Basrah, Al-Hillah, Al-Kut, and Al-Najaf, Iranian state television reported on 11 October, citing statistics provided by the Iranian Embassy. The Iranian charge d'affaires in Iraq, Mustafa Kazemi-Qomi, said 98 percent of those Iranians were arrested for illegal entry. On 11 October, an Iraqi police officer said that "78 Iranian, Syrian, and Jordanian citizens were arrested when the Iraqi city of Al-Yusifiyah came under attack," ILNA reported. Earlier the same day, the Iranian Embassy announced the release of 130 Iranians in Al-Kut, ILNA reported. (Bill Samii)

KAZAKHSTAN AND IRAN CONSIDER COUNTERTERRORISM AND COUNTERNARCOTICS. Supreme National Security Council Secretary Hojatoleslam Hassan Rohani arrived in Astana on 11 October for a two-day visit, IRNA reported, and met with Kazakh Defense Minister Colonel General Mukhtar Altynbaev the same day. During the meeting, Rohani expressed his objection to the presence of foreign forces in the Caspian Sea region and said littoral states should prevent the sea's militarization. Rohani met earlier that day with President Nursultan Nazarbaev and Foreign Minister Qasymzhomart Toqaev, Almaty's Khabar Television reported. They reportedly discussed counterterrorism and counternarcotics and are reportedly considering an agreement on these topics. The two sides also discussed economic cooperation, the Caspian Sea legal regime, and the environment. (Bill Samii)

INTELLIGENCE MINISTER VISITS TAJIKISTAN. Intelligence and Security Minister Yunesi arrived in Dushanbe on 7 October for a three-day visit, IRNA reported. The Iranian Embassy announced that Yunesi will follow up on issues raised when President Khatami visited Tajikistan in early September, including counterterrorism and counternarcotics (see "RFE/RL Iran Report," 20 September 2004). Yunesi met with President Imomali Rakhmonov on the first day of his visit and is also scheduled to meet with his counterpart, Security Minister Khayriddin Abdurahimov. (Bill Samii)

TEHRAN TALKS OUT OF BOTH SIDES OF ITS MOUTH ON AFGHAN ELECTION. The Iranian government is continuing to take a two-pronged approach to events in neighboring countries. The relatively moderate Foreign Ministry has congratulated Afghanistan on its first election, which took place on 9 October. Official government radio, however, is sending a different message to the Afghan people, with Dari broadcasts from northwestern Iran denouncing Hamid Karzai as a U.S. stooge and playing up alleged election violations.

Two weeks before the Afghan election, Iranian Foreign Ministry spokesman Hamid Reza Assefi stressed the importance of the event, IRNA reported on 26 September. "We believe that broad-based election, in which all people with differences of views are allowed to choose their [candidates], is [a] very important and effective step towards stability, prosperity, and economic growth of Afghanistan," he said.

Two days after the election, Assefi said that Tehran views the event as a "positive move," IRNA reported on 11 October. Assefi said the all-inclusive nature of the 9 October election contributed to national solidarity, political stability, and economic development in Afghanistan. He expressed Iran's readiness to support Afghanistan's democratic efforts, and noted that Afghan refugees in Iran participated in the election. The International Organization for Migration, which organized refugee voting in Iran and Pakistan, said less than 40 percent of eligible refugees in Iran voted, the "Daily Times" reported on 12 October.

Iranian Ambassador to Afghanistan Mohammad Reza Bahrami sent a letter to Afghan Transitional Chairman Hamid Karzai congratulating him, the election organizers, and the Afghan people on their election, Kabul's Radio Afghanistan reported on 11 October. "The successful arrangement for Afghanistan's first-ever direct presidential election was a long stride toward the establishment of a lasting peace, strengthening the foundations of stability, and paving the way for comprehensive development in Afghanistan," Bahrami's letter stated, IRNA reported.

In contrast with these expressions of support, Iranian state radio's Dari-language service, which is based in the northeastern city of Mashhad, tried to discourage participation in the election and denounced the incumbent candidate. Mashhad radio reported on 4 October, "because of the U.S. and other Western countries' apparent and clear support for Karzai..., [his] rivals and the country's political observers have described the election contest as unfair." The next day, Mashhad radio reported, "Karzai has imposed an unfair contest on other candidates by taking advantage of government resources and enjoying the support of the United States and other Western countries." The report underlined U.S. Ambassador Zalmay Khalilzad's alleged support for Karzai, and it added, "Doubts about the election campaign in Afghanistan will certainly put a big question mark over the credibility of the election and the legitimacy of the future president." Citing an anonymous "informed source," Mashhad radio claimed on 6 October that the U.S. Embassy was buying voting cards because, "Washington wants its favorite to become president."

On election day, Mashhad radio cited candidates' allegations of fraud. The next day, an Afghan journalist named Sayyed Essa Hosayni Mazari was quoted as saying there were electoral violations, and he added that the Joint Electoral Management Body favored one candidate. And in the following days there were more reports about candidates' complaints.

"America is throwing its absolute weight behind the president of Afghanistan, and [U.S. Ambassador] Zalmay Khalilzad is making his utmost efforts in Kabul to secure his [Hamid Karzai's] victory," Mashhad radio announced in an 11 October broadcast. "And Karzai's personal use of all government facilities to get rid of rivals and to stay in power for longer were the other factors which made it clear to the people that nobody else but Karzai is the winner."

Mashhad radio went on to describe the issue as a choice between Western democracy and Islamic values, and it suggested that the election is meant to legitimize "an occupation and the appointment of the occupiers' favorite government." It concluded, "It is indisputable that the occupiers, who have not spared a crime to achieve their goals in Afghanistan, will take out from people's ballot boxes the name of the person whom they have already appointed."

Vote counting began on 14 October, and according to an anonymous senior official cited by AP, turnout was about 75 percent. A final tally is not expected until the end of October. Hard-line Iranian state radio, meanwhile, is doing its utmost to undermine the entire process. (Bill Samii)

TEHRAN DISSATISFIED WITH PROGRESS AT NUCLEAR FACILITY. Construction on the Bushehr nuclear facility's first power-generating unit is complete, an anonymous spokesman for Russia's Atomic Energy Agency told ITAR-TASS on 14 October. "It only remains for the Russian specialists to assemble the unit's control and safety equipment," most of which is Russian but some of which must be secured in third countries, according to the spokesman. Commissioning of the power unit will take place in mid-2005 and it will commence full operations in 2006, he added.

The Russian official's comments followed Atomic Energy Agency Director Aleksandr Rumyantsev's discussion on the Bushehr project with a visiting delegation of Iranian parliamentarians led by National Security and Foreign Policy Committee head Alaedin Borujerdi on 14 October, Interfax reported.

In Tehran on 10 October, Supreme National Security Council Secretary Rohani told Russian Foreign Minister Sergei Lavrov that the Bushehr project should be completed as soon as possible, Fars News Agency reported.

Vice President for Atomic Energy Gholamreza Aqazadeh-Khoi, the chief of Iran's Atomic Energy Organization, said on 12 October during a visit to the Bushehr nuclear facility, "I think the progress of the project is slow and there has been a major delay in the project," state television reported. He ascribed this to the Russian contractors' lack of familiarity with the facility's Western design, repeated changes to the plan, and the need to replace German equipment with Russian equipment. Aqazadeh said the project will be inaugurated in the year beginning on 21 March 2005.

MAJORITY OF IRANIANS BACK NUCLEAR DEVELOPMENT. In a little more than one month the board of governors of the International Atomic Energy Agency (IAEA) will meet to discuss Iran's nuclear program and the extent of Iranian cooperation with the nuclear watchdog. Washington and the major European powers are, meanwhile, trying to hammer together a sufficiently enticing proposal for Iran to forego enriching uranium, a process that could yield fuel for a nuclear power station -- or for an atomic bomb. The Iranian public and the country's officials seem very reluctant to forsake what they see as a legal right.

Anonymous "European and American diplomats" say that the White House and European powers are discussing offering Iran a package of incentives in exchange for suspending its uranium-enrichment activities, as well as sanctions if Iran rejects the Europeans' incentives, "The New York Times" reported on 12 October. These alleged incentives would include access to nuclear fuel from Russia for the Bushehr nuclear reactor, as well as parts for Iran's aging civilian aircraft fleet. The spent fuel would be shipped back to Russia for reprocessing. A possible sanction, if Iran rejects the offer, is the imposition of economic penalties by France, Germany, Japan, the United Kingdom, and the United States.

Later on 12 October, State Department officials said that representatives from the Group of Eight (G-8) industrialized countries (Britain, Canada, France, Germany, Italy, Japan, Russia, and the United States) will meet in Washington on 15 October to discuss the possible incentives, AFP and CNN reported.

U.S. Deputy Secretary of State Richard Armitage and Undersecretary of State for Arms Control John Bolton are scheduled to participate in the G-8 meeting in Washington, Reuters reported. Speaking in Tokyo on 13 October, Armitage voiced serious concern about Iranian activities. He said, "The Iranians...have made a decision apparently to hide, to continue to hide their program and indeed, in addition to that, they have made some very scurrilous statements publicly," Reuters reported. Armitage added, "We hold the view that Iran needs to be brought to account and we would like to move to the UN Security Council after the November [IAEA] board of governors' meeting."

The outcome of the meeting was that the Europeans would again ask Iran to refrain from enriching uranium in exchange for a benefits package that includes the provision of nuclear fuel, lifting some EU economic penalties, and increasing trade opportunities, "The Washington Post" and "The Washington Times" reported on 16 October. U.S. officials seem skeptical about the outcome of this offer, with an anonymous official telling "The Washington Post," "It's safe to say that American expectations are fairly low, based on Iran's miserable track record, including its almost instantaneous breaking of the last agreement we had with them."

In Iran, public sentiment appears to support the country's nuclear pursuits and oppose Western demands for restraint. A recent nationwide poll found that nearly 79 percent of respondents oppose complying with Western or IAEA demands that Iran restrain its nuclear pursuits, Mehr News Agency reported on 10 October. Sixty-seven percent said Iran should continue its nuclear pursuits under any circumstances. Sixty-five percent of respondents said pledges made by European countries are not trustworthy, and 80 percent said the United States and other Western countries are pressuring the IAEA. Nearly 75 percent of respondents said they support investment in Iran's nuclear-energy program. The poll's sample size was not mentioned.

Meanwhile, in a letter to President Khatami and speaker of parliament Gholam-Ali Haddad-Adel, 1,375 university lecturers said that Iran must stand up to the "bullying" of the United States and some European powers, state television and Mehr News Agency reported on 10 October. The letter said every country has the right to enrich uranium and use nuclear energy peacefully, and characterized the recent IAEA resolution on Iran as a violation of national sovereignty.

Such views are resonating with Iranian politicians. Supreme National Security Council Secretary Rohani told visiting Russian Foreign Minister Lavrov on 10 October that if Iran's right to enrich uranium and engage in other nuclear activities is blocked it will abandon the Nuclear Non-Proliferation Treaty (NPT), Fars News Agency reported. Rohani described uranium enrichment as Iran's "legitimate right."

Foreign Minister Kamal Kharrazi said on 12 October that Iran will not forego enrichment activities indefinitely, and added that confidence building now is in Europe's hands, Radio Farda reported ( Kharrazi proposed that Iran would guarantee that it would never produce a nuclear weapon if Europe recognizes Iran's right to enrich uranium.

Foreign Ministry adviser Javad Mansuri said on 13 October that the European Union's proposal that Iran completely suspend uranium enrichment is illegal and unfair, Mehr News Agency reported. Mansuri said the EU and the IAEA have not fulfilled their pledges to Iran, and there is no guarantee that the EU would fulfill future pledges.

A conservative member of the legislature's National Security and Foreign Policy Committee, Hamid Reza Hajibabai, said on 13 October, "Ordering Iran to stop accessing nuclear technology is a dream of America and the European Union which will never come true and there is no one in the Islamic Republic of Iran who would want or could stop [Iran's] access to nuclear technology," Fars News Agency reported. European "pledges and promises" are pointless, he said, adding that Iranians will not forget Europe's failure to fulfill earlier pledges. He said Iran will insist on control of the complete nuclear fuel cycle.

When asked about a possible Iranian reaction to the 15 October meeting of G-8 officials and the planned European offer of concessions in exchange for not enriching uranium, Supreme National Security Council official Hussein Musavian said on 17 October, "We reject the proposal to freeze our enrichment activities and will only accept proposals that are in our national interest and within the framework of the NPT," ILNA reported. Musavian did not rule out talking to the Europeans, saying, "Ensuring the world that Iran's uranium enrichment will not be diverted toward military applications is an issue that can be negotiated."

Foreign Ministry spokesman Assefi was more cautious. He said on 17 October: "We haven't received a proposal from the Europeans yet.... As a result, we can't make a judgment about the proposal," state television reported. He said that Iran is open to negotiations. (Bill Samii)

TEHRAN REJECTS KERRY NUCLEAR PROPOSAL. Supreme National Security Council official Hussein Musavian on 10 October denied a Reuters report that he welcomes U.S. Democratic presidential candidate Senator John Kerry's proposal on the Iranian nuclear program, IRNA reported.

The Kerry campaign website says, "a nuclear armed Iran is an unacceptable risk to the national security of the United States and our allies in the region," and it says the United States must work with its European allies in making sure Iran does not acquire the technology to develop weapons ( It proposes offering nuclear fuel to Iran and taking back the spent fuel, and if Iran declines this offer it will demonstrate the country's true intentions. The Kerry campaign also backs International Atomic Energy Agency investigation of the Iranian program, and it says it would encourage Iran to "agree to a verifiable and permanent suspension of its enrichment and reprocessing programs." The matter should be referred to the UN Security Council if Iran does not cooperate.

Musavian said Iran is not interested in being drawn into what he characterized as campaign-related issues. In a fax to IRNA, Musavian added, "We are rejecting direct negotiations with Washington about Iran's nuclear program due to the United States' antagonistic policies." (Bill Samii)


By Sojida Djakhfarova

At a press conference during his recent visit to Tehran, Russian Foreign Minister Lavrov said that Russia does not support the idea of referring Tehran's nuclear case to the United Nations and will continue nuclear cooperation with Iran. According to reports, Lavrov, who was discussing Russian President Vladimir Putin's possible visit to Iran, also said that Russia will sign an agreement with Iranian officials about the return to Russia of spent nuclear fuel in the near future. Lavrov expressed satisfaction about Iran's cooperation with the IAEA and said that he hopes cooperation of this kind will continue.

In its latest resolution, the IAEA demanded that Iran stop all uranium enrichment immediately and provide a clear picture of all its nuclear programs by 25 November. In response, Iran has said all its nuclear activities are of a nonmilitary nature and it is only concentrating on the production of nuclear energy.

Russia is always a sizable factor in the international community's dealings with Iran. In the past, Moscow has asked Iran -- often with considerable pressure -- to reduce or limit its nuclear activities. But many observers believe that such pressure from Moscow is mostly cosmetic, intended only to appease the IAEA and reduce international pressure on Iran.

In an interview with RFE/RL's Radio Farda, Piruz Mujtahedzadeh, a professor of geopolitics at Tehran's Tarbiat Mudariss University and chairman of the London-based Urosevic Research Foundation, said he believes it is in Iran's interest to stop uranium enrichment so that " reduced and the case of Iranian nuclear programs is not brought before the UN."

Other analysts, however, believe that there are two major factors dictating Moscow's policy toward Iran on the nuclear issue: First, Russia's $800 million contract to build the Bushehr nuclear power plant; and second, and more importantly, due to a number of geopolitical considerations, Russia would under no circumstances want to lose its special relationship with Iran.

Victoria Panfilova, an analyst and writer for "Nezavisimaya gazeta," in an interview with RFE/RL's Tajik Service, said on 11 October that in Iran there are many factors that could enflame internal resistance to the Islamic regime, such as common discord, religious or ethnic unrest, or border conflicts -- all of which could possibly lead to the fall of the Islamic regime. In Panfilova's opinion, in the case of regime change, a Westernized Iran could upset the geopolitical balance and drag other countries in the region toward the West.

But would Russia not be equally afraid of nuclear proliferation in a country with an unpredictable regime? "Nuclear proliferation is not in Russia's interest and Russia does not want these weapons to fall into the hands of extremist groups," Panfilova said. "But this doesn't mean that Russia would blindly follow U.S. interests in the region, interests that are not often in line with Russian interests." Panfilova believes that ultimately Russia should culture a more neutral position toward Iran.

In an interview with RFE/RL's Tajik Service, Russian analyst and regional expert Aleksandr Omnov said he believes that cooperation between Moscow and Tehran is not intended to be an alliance against Washington. Moscow and Tehran have common interests but, he says, Moscow wants to have good relations with both Iran and the United States.

Today, Moscow's position concerning Iran's nuclear programs is that Tehran should follow the regulations set out by the IAEA and the NPT. Some experts believe that Russia might be persuaded to stop exporting nuclear materials to Bushehr if enough international pressure is exerted on Moscow. However, other observers have noted that international pressure has had little effect on Russian-Iranian relations in the past -- and the future is unlikely to be any different.

(Sojida Djakhfarova is a senior producer in RFE/RL's Tajik Service.)

IRAN ANNOUNCES POSITION ON CASPIAN LEGAL REGIME. Mehdi Safari, Iran's special envoy for Caspian Sea affairs, said on 13 October at a conference in Tehran that Iran is entitled to 20.4 percent of the sea's resources, IRNA reported. The division of resources has not been determined yet, he said, and Iran's share would be between 20.4 and 25.5 percent on the basis of commonly accepted formulas. Safari said Iran is insisting on "the principle of equitable distribution." He dismissed the bilateral agreements that other littoral states have entered into. Safari went on to say that the Caspian Sea should be demilitarized, and he noted that Iran held military exercises there only after other countries did so. "Moreover, the military exercises were held for the sole purpose of preparing for the defense of the country's coastlines, fighting terrorism," and similar aims. (Bill Samii)


By Houchang Hassan-Yari

Intense competition for unimpeded access to the world's natural resources is continuing and is likely to increase, according to the 21 April edition of "Jane's Foreign Report." The current unprecedented surge in fuel prices illustrates the growing need for a greater supply and consequently demonstrates the volatile nature of the energy market.

The Caspian Sea could meet some of that demand, because it has sizeable proven and possible oil and gas reserves ("proven reserves" are defined as oil and natural-gas deposits that are considered 90 percent probable, and "possible reserves" are defined as deposits that are considered 50 percent probable). The littoral states of the Caspian Sea -- Russia, Kazakhstan, Turkmenistan, Iran, and Azerbaijan -- collectively have an estimated 10 billion-32 billion barrels of proven and another 233 billion barrels of possible oil reserves. In comparison, Saudi Arabia has 261 trillion barrels of oil, while the United States, China, and India's proven oil reserves are respectively 22.677 trillion, 18.25 trillion, and 5.371 trillion barrels. The proven natural-gas reserve of the five Caspian countries is an estimated 170.4 trillion cubic feet (4.83 trillion cubic meters) while their possible reserve is 293 trillion cubic feet (8.30 trillion cubic meters).

Like the Persian Gulf, Nigeria, Venezuela, and other regions rich in energy resources, the Caspian Sea is becoming a battleground for states and business entities with competing interests. Eni, BP, ChevronTexaco, Caltex, LUKoil, and Royal Dutch Shell are the main companies actively developing Caspian Basin oil and gas as they continue building pipelines to transport those hydrocarbons to international markets. The United States, China, Russia, Iran, several European countries, and to a lesser extent Japan are interested in exploring and investing in Caspian resources as a supplement to Persian Gulf supplies.

The situation in the Persian Gulf has increased pressure on Caspian countries and oil companies to contribute to global oil supplies. The Persian Gulf contains 715 billion barrels of proven oil reserves, representing over half (57 percent) of the world's oil reserves, and 2,462 trillion cubic feet (69.72 trillion cubic meters) of natural gas reserves (45 percent of the world total), according to the Energy Information Administration's "International Energy Outlook 2003." At the end of 2003, Persian Gulf countries maintained about 22.9 million barrels per day of oil production capacity, or 32 percent of the world total. Perhaps even more significantly, the Persian Gulf countries normally maintain almost all of the world's excess oil production capacity. As of early September, excess world oil production capacity was only about 0.5-1 million barrels per day, all of which was located in Saudi Arabia.

Since the demise of the Soviet Union and emergence of independent states in Central Asia and the Caucasus, a major issue in the Caspian Basin has been the division of the energy resources that lie beneath the sea. Other sources of regional tension include the complex unsettled legal status of the sea; the existence of unresolved conflicts in Russia, Azerbaijan, and Armenia; terrorism; and increasing Islamic militancy. The landlocked position of Azerbaijan, Kazakhstan, and Turkmenistan causes further tension, as all three countries depend on their neighbors' good will in order to export their oil and natural gas to international markets.

In terms of reserves, production, and access to international markets, Russia and Iran are in better positions than their neighbors. The CIA "World Factbook 2004" put Russia's proven oil reserves at 51.22 billion barrels, its proven natural-gas reserves at 47.86 trillion cubic meters (1 January 2002), and its natural-gas exports at 205.4 billion cubic meters (2001 estimates). It puts Iran's proven oil reserves at 94.39 billion barrels (1 January 2002), its proven natural-gas reserves at 24.8 trillion cubic meters (1 January 2002), and its natural-gas exports at 110 million cubic meters (2001 estimate).

Regardless of how much oil is produced, there will still be enough customers. For example, China's rapid economic growth means the country's energy needs are increasing. China already uses a great deal of foreign energy, and in a decade or so it is expected to be totally dependent on the Persian Gulf and the Caspian Sea area for its energy needs. Russia and Kazakhstan are both already eyeing the expanding Chinese market. The United States, Europe, India, Japan, South Korea, and many other countries will also be seeking alternative supplies of oil. Guaranteed access to energy resources is becoming an important component of foreign policy for these states and is gaining even more prominence in light of the continuing insurgency in Iraq, as well as the expanding U.S. presence in the Caspian region at the expense of Iran, Russia, China, and India.

Caspian Sea Basin energy assets have the potential to significantly reduce consumers' reliance on Middle Eastern oil. Yet this raises the prospect of crises and conflicts that directly involve China, Iran, Russia, and the United States. The actual production of oil and gas is not the only potential source of competition between international actors; for the last decade there have been disputes over the best routes for pipelines that would transport oil and gas to markets. Iran promotes itself as the most economical route from Central Asia, while the United States promotes the export of Caspian oil via Georgia and Turkey.

(Houchang Hassan-Yari is the head of the Department of Political and Economic Science at the Royal Military College of Canada.)