Fuel price problems in Syria, Jordan, and Iran

You would think that Iran would build more refining capacity as quick as it can or make deals with countries that do have the refining capacity trading oil for fuel.
It is interesting that whether a country is an enemy of the US (Iran, Syria) or an ally (Jordan) they are making moves to become more market oriented in their economies. Elites globally are now becoming capitalist who want to profit from the global economy and thus begin to alter their countries to play by the rules of global capitalism at least to a certain extent.

A fuel pinch
Sep 3rd 2007
From the Economist Intelligence Unit ViewsWire

Iran, Jordan and Syria each need to cut fuel subsidies


The flip side of the Middle East oil boom has been the exponential rise of the costs that most of the region's governments have faced in subsidising domestic energy demand—which is growing by more than 5% per year across the region. However, tackling these subsidies comes at a political price, as the governments of Iran, Jordan and Syria have recently become painfully aware. In Iran, the imposition of gasoline rationing provoked sporadic riots and has contributed to the increase in tensions within the government, as reflected in the recent replacement of the oil and planning ministers and the central bank governor. The Jordanian finance minister recently resigned after he was prevented from raising gasoline prices, and the Syrian government is bracing itself for a backlash as it prepares to announce steep increases in fuel prices.

Double rations
Iran's move to curb fuel consumption through rationing was motivated to a large extent by national security considerations, as the failure of the domestic refining sector to keep pace with rampant increases in demand has made Iran increasingly dependent on imports of petroleum products. Prior to the rations going into effect at the end of June, Iran was consuming some 75m litres of gasoline per day, while its refineries were producing on 44m litres/day. The gasoline import bill in the 2006/07 financial year was more than US$5bn. The rations appear to have succeeded in moderating demand, although it is too early for a consistent to pattern to have emerged. However, the government has refused to make available extra fuel at market prices to drivers that have used up their rations, and has decided instead to double the 100-litre/month ration for private cars for the late-summer holiday season. The price of subsidised gasoline has been increased (from 9 to 12 US cents per litre), but this is still only a fraction of the effective import price of about 50 US cents/litre. The rations have, moreover, been presented as a temporary measure, to be imposed for four months. Ultimately, Iran will be unable to address the interlinked problems of subsidies and smuggling unless the basic price of gasoline is increased by a substantial margin.

Blame Iraq
The political fall-out from Iran's ration scheme has been, to a large extent, an exercise in shifting blame from the centre of power—the president, Mahmoud Ahmadinejad, and the supreme leader, Ayatollah Ali Khamenei—to ministers and civil servants. In the cases of Jordan and Syria, Iraq has proved a useful scapegoat amid the controversies over fuel subsidies. Jordan benefited for years from supplies of cut-price oil from Iraq, but these have dried up since the 2003 invasion, and the government has been obliged to increase fuel prices several times to prevent the budget deficit from ballooning out of control. The finance minister and deputy prime minister, Ziad Fariz, resigned in late August after his recommendation that a fresh round of fuel prices was needed was turned down by the prime minister, Marouf Bakhit. With a general election scheduled to take place in November, Mr Bakhit's position was understandable, although Mr Fariz warned that without a price hike, the fiscal deficit is likely to be in the region of US$1bn, almost double the original target. The government is banking on Gulf Arab states to provide some relief.

In Syria, the government has invoked the additional demand pressures caused by the influx of 1.5m Iraqi refugees among its justifications for trimming fuel subsidies, which are estimated to cost the state more than 10% of GDP.

Bashar's test of nerve
Although the Iraqi influx has undoubtedly contributed to the budgetary pressures in Syria, the critical issue is the decline in Syria's own oil production from a peak of almost 600,000 barrels/day in the late 1990s to about 380,000 b/d now. According to government figures presented by the IMF in its recently released Article IV report, Syria's oil balance—crude oil exports minus petroleum product imports and royalties to foreign operating companies—has moved from a surplus of US$2.5bn in 2003 to a projected deficit of US$53m in 2007.

The Syrian president, Bashar al-Assad, has entrusted Abdullah al-Dardari, the deputy prime minister for economic affairs, with the task of pushing through the cuts in fuel subsidies, as part of a strategy of transforming Syria into a market economy and weaning the state off its former reliance on oil export income. Mr Dardari has taken credit for the robust performance of Syria's non-oil economy over the past three years, which has been based on a combination of domestic liberalisation, strong investment flows from the Gulf Arab states and capital inflows associated with the Iraqi influx (estimated at US$2.5bn between 2004 and 2006 by the IMF). However, Mr Dardari now runs the risk of being targeted by critics of any fuel price increases that are put into effect. The question then will be whether Mr Assad will continue to provide political cover for the standard bearer of his economic reforms, or whether Mr Dardari will suffer the same fate as his fellow ministers in Jordan and Iran. The Syrian government is aiming to soften the blow of the fuel price hikes by awarding cash compensation of US$250 per family and increasing civil service salaries by 15-20%. If the stratagem works, Mr Dardari could be rewarded by becoming Syria's first non-Baathist prime minister since the party seized power in 1963.

CIA meddling in Iran, Syria, and Lebanon

Of course when it is the US it is never meddling. By definition only US defined enemies meddle. The US is even able to occupy Iraq without meddling. The US uses terrorist groups within and without Iran without meddling or even harming the war on terror.

CIA running black propaganda operation against Iran, Syria and Lebanon, officials say Larisa Alexandrovna
Published: Monday June 4, 2007






Some intelligence sources more wary of covert Pentagon operations

The Central Intelligence Agency has received approval at least twice in the last several years to conduct an “information war” against several countries in the Middle East, including Iran, Lebanon and Syria, according to current and former intelligence officials.

In addition, the Bush Administration has been running operations out of the Defense Department that are not subject to Congressional oversight, intelligence sources say. These programs appear murkier, and have included support for an alleged terrorist group in Iran.

A recent ABC News report revealed that President George W. Bush had signed a presidential finding giving the CIA the authority to conduct “non-lethal” covert operations against Iran. Former and current intelligence sources tell RAW STORY, however, that there have been “at least two” presidential findings over the past few years which have empowered the agency to run an “open-secret” information war against Iranian interests, mainly leveraging resources and assets “within the United States and France.”

Although the resources – people, groups, organizations – were not identified, sources say that they are not terrorist organizations or groups using violent tactics to achieve their goals. “It's a propaganda operation,” said a former intelligence case officer who wished to remain anonymous due to the sensitive nature of the information. “It is not new or aggressive,” the source added, explaining that the operation has been going on for some time and has Congressional funding and oversight.

CIA spokesman Paul Gimigliano would not comment about the allegations made in the ABC report or discuss the existence of the presidential findings identified to RAW STORY.

“The CIA does not, as a matter of course, publicly discuss allegations of covert action, whether the assertions are wrong, right, or somewhere in-between,” Gimigliano said. “That's one reason why the term ‘covert action’ still exists.”

“But it's important to remember that, through the Congress, there is vigorous oversight of secret intelligence activities,” he added.

According to current and former intelligence officials, the various presidential findings are not limited to Iran. Several countries within the Middle East – including Syria and Lebanon – as well as groups such as Hezbollah, are being targeted through what sources call “black propaganda” efforts.

Iran is being targeted by the CIA's activities with a “pro-democracy” message, sources say, and the agency is supporting overt “pro-democracy” groups.

The program’s particulars are highly classified. Intelligence sources stress, however, that the groups being used are rather mainstream and the operations are almost entirely restricted to information warfare.

Sources would not identify what mechanism was being employed to distribute the propaganda, if it included news media, individuals or organizations, or whether that information was seeping back into domestic news reports.

One former intelligence case officer did explain that the CIA's program is operating largely outside of the Middle East and is aimed at identifying potential allies, as well as using already existing well known groups through whom information can be delivered. The type of “information” and the “groups” and “organizations” involved were not identified.

ABC News may have reported the presidential finding as “new” because of the recently passed massive intelligence budget. Under the bill, roughly $50 million was appropriated for the “Democracy Fund” and the “Broadcasting Board of Governors,” both earmarked for Iran operations.

Sources close to the Select Senate Committee on Intelligence would not discuss any aspect of the CIA program or comment on anything relating to the presidential findings.

“This is an area I simply cannot get into,” said one source.

Pentagon operation supporting terrorist group kept from Congress

RAW STORY has also learned that the Pentagon is continuing to conduct more aggressive “black” operations, approved by the National Security Council and the Office of the Vice President.

Current and former intelligence officials would not identify new specific covert programs running out of the Pentagon, though sources stressed these are far riskier and more truly covert operational activities against Iran than the activities of the CIA.

These operations started almost immediately after the Iraq war and have continued for several years. Because they can be considered part of a military operation, they are not subjects to the same requirements for Congressional authorization as the activities of the CIA.

The majority of these efforts to destabilize Iran through a covert war of aggression have been carried out by the Department of Defense, largely steered by the Office of the Vice President and by then-Secretary of Defense Donald Rumsfeld.

A series of RAW STORY reports has identified some of the “off book” or black operations running out of the Pentagon over the last several years. In 2003, the Defense Department began working with terrorist and dissident groups in an effort to destabilize Iran, bypassing traditional intelligence channels. One of the assets the Pentagon used was a terrorist organization known as Mujahedeen-e Khalq (MEK), which was being “run” in two southern regional areas of Iran, including a Shia region where a series of attacks in 2006 left many dead and hundreds injured.

These activities have often been guided by the same individuals whose actions during Iran-Contra were the reason for a 1991 law on covert activities which for the first time clearly defined covert activities and how their oversight should be handled.

During Iran-Contra, the Reagan White House – via the National Security Council – sold weapons to Iran, an avowed enemy of the United States, and used the money to fund various terrorist and dissident groups, collectively called the Contras, to fight a proxy war against the government of Nicaragua.

Sources say that MEK has been used for intelligence collection, an activity which has traditionally fallen under the CIA. The administration also appears to be looking the other way as groups such as MEK commit acts of violence.

Intelligence sources interviewed for this article all expressed concern over the lack of attention to the Pentagon’s covert activities. Some believe illegal activities like those of the Iran-Contra days are now being hidden under the loophole of “traditional military activities” to avoid Congressional oversight.

Steven Aftergood, director for the Federation of American Scientists Project on Government Secrecy, says this loophole exists in Congressional oversight with regards to military covert activities.

“CIA covert actions have to be authorized by a written presidential finding, which must be provided to Congress,” Aftergood said. “By contrast, DOD operations, including clandestine or covert operations, are not subject to this procedure.

“As a result,” he added, “there may be a temptation to opt for a purely military action to take advantage of the loophole in congressional notification requirements.”

Covert economic warfare may not be limited to CIA

Another former intelligence official said that the CIA has been cleared to target Iran's economic interests, but that the approval is limited to non-aggressive activities. The CIA “has been empowered to put economic pressure on Iran,” the former intelligence officer stated, but would not elaborate on what the meaning of “pressure” is.

Yet some suggest that the economic element of the covert program is either far more aggressive or is being attributed to the CIA when in fact another agency may be running it.

Foreign intelligence sources say that economic pressure is aimed at Iran's oil-rich economy, with US efforts serving to “persuade” financial institutions, oil companies, and international investment interests to pull out of Iran and even drop already existing energy projects.

These sources cite the example of an unnamed company that is being denied financing for energy projects inside Iran by international banks, indicating that many more such examples exist.

Other possible forms of pressure would include less subtle activities, such as intercepting supply convoys and confiscating equipment. Foreign sources are not sure if this covert activity is in fact part of the CIA program.

The Department of Defense did not respond to comment on this story.

Muriel Kane contributed to the research for this article.

Larisa Alexandrovna is the Managing Editor of Investigative News for Raw Story and regularly covers intelligence and national security. She can be reached at larisa@rawstory.com.

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Iraq to close borders with Iran and Syria

It remains to be seen what effect if any this will have on violence in Baghdad and elsewhere. I imagine that whatever illegal traffic there is passes through other places than border crossing points. This will simply cause huge distruption in trade and other traffic for three whole days.


Iraq to shut borders with Iran, Syria
Tue Feb 13, 2007 12:21 PM ET



By Ross Colvin and Ibon Villelabeitia

BAGHDAD (Reuters) - Iraq will shut its borders with Iran and Syria for 72 hours and extend the hours of a nightly curfew in Baghdad as part of a U.S.- backed plan to rein in unrelenting violence, an official said on Tuesday.

The new measures were announced during another day of violence in the Iraqi capital in which a suicide bomber blew up a truck rigged with explosives near a Baghdad college, killing 18 people just a day after bomb blasts ripped apart two crowded city markets.

The border closure moves are the clearest sign yet from the government of Shi'ite Prime Minister Nuri al-Maliki that a crackdown against militants who are tearing Iraq apart was picking up.

The official in charge of the security plan, Lieutenant- General Abboud Qanbar, who announced the moves on Iraqiya state television, gave no timeframe. But a government official said an announcement would be made when the frontiers had been closed.

Qanbar gave no reason for the measures, but American and Iraqi officials have accused Syria of not doing enough to stop alleged foreign fighters from crossing into Iraq.

On Sunday, senior U.S. military officials in Baghdad presented what they called growing evidence of Iranian weapons being used to kill their soldiers and implicated the "highest levels" of Iran's government in the training of Iraqi militants.

Weapons from Iran are also being smuggled across the border into Iraq, they said.

The suicide bomber detonated his small truck in a parking lot between the College of Economic Sciences, a private university in western Baghdad's residential Iskan district, and a large foodstuff warehouse belonging to the Trade Ministry.

The blast in the mainly Shi'ite area set cars ablaze and destroyed a nearby home.

The attack, which also wounded 40 people, followed devastating bombings at two markets on Monday that killed at least 77 people and maimed scores.

VEHICLE CURFEW EXTENDED

Qanbar said a nightly vehicle curfew in Baghdad would be extended from 8.00 p.m. until 6 a.m. It now runs from 11.00 p.m. until 6.a.m. He did not say what would happen to violators.

The government would also force people illegally living in homes belonging to residents who had fled sectarian violence to leave, Qanbar said.

Baghdad's international airport, which has been closed down in security operations in the past, would not be affected.

U.S. military officials say the Baghdad crackdown is in its early stages and that "fully-fledged" sweeps of neighborhoods to hunt for militants and illegal weapons have not yet begun.

President George W. Bush has said he is sending more than 17,000 more troops to Baghdad for the push, which is seen as a last chance to avert all-out civil war between the country's majority Shi'ites and minority Sunnis.

Previous attempts to halt bombings and death squad killings in the capital have failed.

Critics say it is too little, too late, and war-weary Iraqis, exhausted by four years of war, question whether it can end the conflict between the country's now deeply divided Islamic sects. Bush is also facing criticism at home from Americans who oppose sending more troops.



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