Iran continues to feel pinch from Western sanctions

Posted: Jan. 24, 2013 11:39 am Updated: Feb. 15, 2013 7:15 pm

IRANIAN PRESIDENT Mahmoud Ahmadinejad believes he has the answer to creating wealth and rendering Western economic sanctions powerless.

His immediate problem is that because of the West's embargo on Iranian oil and its other sanctions aimed at restraining Iran's nuclear program, oil and gas sales that have traditionally accounted for about 80 percent of Iran's export revenues are now at 45 percent and falling.

Not to worry, says Ahmadinejad. He has a plan: Iran will invent its way out of the embargo-caused economic crisis that grows more critical by the day.

Iran's president may dismiss the effect of the sanctions as a passing nuisance, but the country's large merchant class has not. Traders vote "yea" or "nay" on government policy with foreign currency. The vote this week has been overwhelmingly "nay," and the people are about to be hit with a big increase in income taxes to make up for lost foreign revenues.

The Iranian rial has hit a record low against the U.S. dollar and other hard currencies. On Tuesday, the exchange rate on the street was 36,200 rials to the dollar, an increase of 2,700 rials just since Sunday. The rial has lost 40 percent of its value since last year.

Ahmadinejad's solution: Iran's universities, inventors and scientists will churn out vast quantities of moneymaking inventions and technologies. The Iranian leader taunted the West, saying: "It's better if you don't buy ... Ten times more money will head to people's pockets through the inventions of our scientists."

He didn't say what kind of inventions. The only suggested products are high-tech spacesuits for Iran's Aerospace Research Institute. But the suits wouldn't be ready for eight years, and buyers haven't been exactly lining up with fistfuls of rials to put down deposits.

Iran has also said it will soon send monkeys into space, as a prelude to sending humans into space. In 2010 it launched a rocket into space carrying a mouse, a turtle and worms.

The U.S. and its allies are concerned that technology from the space program could also be used to develop long-range missiles that could potentially be armed with nuclear warheads. Iran denies it seeks nuclear weapons and says it wants only energy-producing reactors.

Iran could end this embargo by agreeing to reasonable restrictions and inspections of its nuclear program. But, apparently, national pride precludes this solution.