[R-G] IRAN: New IRGC Chief, Central Bank Governor, Oil and Industry Ministers

[Yoshie Furuhashi]

<http://www.stratfor.com/products/premium/read_article.php?id=294801>
Iran: New IRGC Chief
September 02, 2007 00 46  GMT

Iranian Supreme Leader Ayatollah Ali Khamenei on Sept. 1 replaced the
commander-in-chief of the country's elite military corps, choosing
someone from within the Islamic Revolutionary Guard Corps (IRGC).
Brig. Gen. Mohammad Ali Jaafari also was promoted to the rank of major
general. Khamenei appointed outgoing IRGC chief, Gen. Yahya Rahim
Safavi, as his senior military affairs adviser. Safavi had led the
IRGC for 10 years.

Jaafari has had an illustrious career within the corps. He was an IRGC
commander during the 1980-88 war against Iraq, and has commanded its
ground forces. Jaafari also has served as a deputy to Supreme National
Security Council Secretary Ali Larijani. Jaarafi participated in talks
between Iran and the United Nations' International Atomic Energy
Agency as well as in the negotiations Tehran and Washington held on
Iraq. He also is the founder and former head of the IRGC's Strategic
Centre, which was created in 2005.

The background of the new IRGC commander, and the timing of his
appointment, indicates that the Iranians are preparing to fill the
vacuum in Iraq once the U.S. military effects a drawdown/pullout. That
the Iranians have placed their top Iraq hand in charge of the elite
corps shows that Tehran is planning for operations in Iraq. It also
should be seen as diplomatic move to convince the United States that
they are serious -- they want Washington to know that if the United
States conducts airstrikes against Iran, they are prepared to unleash
havoc in Iraq.

<http://www.ft.com/cms/s/0/91f04328-53f9-11dc-9a6e-0000779fd2ac.html>
Reshuffle displaces Iran bank governor

By Najmeh Bozorgmehr in Tehran

Published: August 26 2007 18:32 | Last updated: August 26 2007 18:32

Ebrahim Sheibani, Iran's central bank governor, resigned on Sunday as
part of a continuing cabinet reshuffle that has included the oil and
industry portfolios.

Analysts said the reshuffle appeared to be an attempt by President
Mahmoud Ahmadi-Nejad to take advantage of higher oil revenues to speed
up implementation of his populist policies, including the lowering of
bank lending rates.

Mr Ahmadi-Nejad's pledge to offer cheap loans to lower-income people
during his high-profile provincial visits is viewed as potentially
decisive in retaining the electorate's support.

Iranian news agencies repor­ted on Sunday that Tahmasb Mazaheri, a
former economy minister, would be appointed the new central bank
governor on Tuesday. Mr Mazaheri is believed to be more sympathetic
than Mr Sheibani to the reform of bank regulations advocated by the
president.

One economist described Mr Mazaheri's appointment as "bad news" for
the money market, because of his support for the further lowering of
bank rates and wealth re-distribution. "He may even try to run ahead
of the government," said the economist.

In May Mr Sheibani opposed the government's policy of lowering bank
lending rates to 12 per cent from 14 and 17 per cent by state and
private banks respectively. Mr Ahmadi-Nejad directly intervened to
enforce the new rate despite strong opposition by bankers that it was
two digits below the official inflation rate and much below a real
inflation rate estimated to be at least 20 per cent.

Critics argue that banks cannot weather the multi-billion-dollar
loans. But those arguments have fallen on deaf ears.

"Our [state] banks are in fact loss-making now," one banking official
said. Mr Sheibani opposed the rate cut but "agreed to carry out the
policies in order to keep his position", Mansour Bitar­af, the editor
of Jahan-e Sanat, a business daily, said. "Yet, that opposition slowed
the process," and therefore it was "not acceptable any more".

The change at the central bank is the third cabinet move this month
after Iran's oil and industry ministers also "resigned". There have
also been some changes at deputy ministerial level and the elimination
of several key policymaking bodies.

Iran's president shocked economists by dissolving the Money and Credit
Council, a monetary policymaking body, this month. That followed the
scrapping of the Management and Planning Organisation, the backbone of
planning and budgeting for six decades, last month.

Analysts see the moves as aimed at overcoming opposition within
government to excessive spending of Iran's oil income.

Iran earned $54bn (€39bn, £27bn) in oil revenues during the last
Iranian financial year that ended on March 20. The deputy central bank
governor, Mohammad-Jaafar Mojarrad, told the FT last week that oil
windfalls collected in a contingency fund would surpass last year's
$9bn by the end of this Iranian year.

"This government is getting richer every hour," said one western diplomat.

Some economists suspect the government is trying to win back popular
support dented by moves to ration petrol in June and by continuing
high inflation, unemployment and liquidity rates.

"It does not really matter who are the new figures and it is hard to
detect a new trend or strategy," said Saeed Shirkavand, a former
deputy minister of economy. "The recent changes represent the
government's admission of failure and effort to find the ones to
blame.

<http://www.metimes.com/storyview.php?StoryID=20070815-032914-4148r>
Replaced Iran minister lambasts Ahmadinejad
Salim Yassine
AFP
August 15, 2007

TEHRAN --  Iran's former industry minister, replaced in a government
reshuffle this week, has launched a stinging attack on the economic
policies of President Mahmoud Ahmadinejad, the Fars news agency
reported Wednesday.

Ali Reza Tahmasebi complained in his resignation letter that prices
had been frozen artificially, industrial plants suffered from
under-investment, and the ministry was enduring damaging personnel
changes.

"I submit my resignation to my brother [Ahmadinejad], so he can choose
someone who is more [in] line with his own views," said the letter.

The ex-minister's unvarnished attack on the president's economic
polices is highly unusual in a country where political exchanges, even
between foes, are often marked by the utmost restraint.

In another unusual move, Tahmasebi made his feelings clear by not even
bothering to turn up to Tuesday's handover ceremony attended by
Vice-President Parviz Davoudi and acting industry minister Ali Akbar
Mehrabian, media reported.

Tahmasebi was replaced Sunday along with oil minister Kazem Vaziri
Hamaneh in an unexpected reshuffle, seen as aimed at increasing the
president's control over his widely-criticized economic policy.

Ahmadinejad has been criticized across the political spectrum in Iran
for the country's high inflation, and for ploughing extra revenues
from high crude oil prices into high-spending infrastructure projects.

In his letter, Tahmasebi cited an "emphasis on the freezing of prices
of industrial goods such as cement, sugar, dairy products, vehicles,
and home appliances, while the cost of all the other elements in their
production has increased."

He also complained that "the ministries of energy and oil could not
give factories the necessary water, electricity, and gas. This
emanated from a lack of investment in their expansion."

He added: "There is an emphasis on some changes in the structure of
some bodies of the ministry of industry, which I think will worsen the
current management profile in this sector."

Since coming to power, Ahmadinejad has removed several officials in
sensitive ministries and appointed his allies, to the outrage of
opponents who would prefer to see more technocratic nominations.

The clear disagreement between the ex-minister and the president was
emphasized by the fact Tahmasebi was not offered any other post in the
reshuffle.

Vaziri Hamaneh, however, was made the president's special advisor on
oil and gas affairs.

<http://www.economist.com/agenda/displaystory.cfm?story_id=9642293>
Getting a grip in Iran

Aug 14th 2007