During the Organisation of Petroleum Exporting Countries--OPEC--conference in Qatar earlier this month Iran was one of the leading "hawk" countries demanding a maximum increase in the price of oil.
During the Organisation of Petroleum Exporting Countries--OPEC--conference in Qatar earlier this month Iran was one of the leading "hawk" countries demanding a maximum increase in the price of oil. A look at the present level of industrialisation and military spending in the country shows why Iran is hungry for every cent of oil money it can come by.
SYNOPSIS: Because with Iran's ruler, the Shah, steering the course, the race is on to industrialise the country before the oil runs out. To achieve this objective Iran is spending every oil dollar it earns. In fact, this year, it has actually gone into debt--by more than a billion U.S. dollars.
This means that Iranian oil, unlike Arab oil, does not contribute to the West's balance of payments problem. And that's one reason why Iranian officials feel that have cause to complain--as they see their development plans shrink because of Western inflation. This cement complex, built by a Danish company, is typical of the problem. One plant finished last year cost 25 million U.S. dollars. But a new, identical plant now going up will cost 50 per cent more.
The reasons for this is that the cost of machinery has gone sky high over the past few years. And machinery is mainly what Iran is importing. Iranian officers allege that prices for military hardware from the United States--like this new F-14 fighter-bomber for example--have gone crazy, with increase coming every few months and--on some items--every few weeks. The price of a new F-14 went up this month by six per cent, without any new gadgetry.
Iran's army has an enormous helicopter programme--and here again costs have risen sharply. One project went up by 27 per cent this month and almost 50 per cent during the past year. Spare parts have also become much more expensive--with prices on some items rising by as much as two thousand per cent this year. As a result Iran is looking elsewhere for weapons--even the Soviet Union.
But prices have gone up every-where. However, Iran hopes to be finished with oil price haggling within 20 years--by cutting off oil exports entirely. By then its reserves will be dwindling, but the hope is that industrialisation will be paid for.