ninme

Telegraph – Iranian banks feel the heat. By Con Coughlin

Here we have a country that is awash with oil – Iran produces 4.3 million barrels a day and possesses the world’s second largest known oil reserves – and yet it cannot provide sufficient quantities of refined material to meet the needs of its 65 million people.

The reason for this ludicrous state of affairs is simple. The regime’s insistence on diverting too much of its energy and resources in pursuit of the holy grail of nuclear enrichment, and the subsequent UN economic sanctions that policy has attracted, means the ayatollahs are unable to maintain the oil-refining facilities.

Mr Ahmadinejad, of course, still clings to the fiction that the sanctions have made no impact on the Iranian economy, insisting that they are merely part of a campaign of psychological warfare being waged by the Bush Administration to provoke dissent.

But the reality of Iran’s economic condition – inflation is running at 17 per cent and the government has failed to meet any of its growth targets – was brought home to the country’s long-suffering populace when the government announced it was rationing petrol to 100 litres a month for each household – the equivalent of two full tanks for the average family car.

For once, the regime was unable to contain the anger of ordinary Iranians, who took to the streets in their tens of thousands to vent their rage. It is estimated that 30 per cent of the nation’s petrol stations have been destroyed in the orgy of violence and destruction that swept the country, the worst outbreak of anti-government protests for more than a decade.

You know, oh never mind. I don’t know why I bother. I was going to say something snarky about a western journalist finding the energy to go to Iran for a few days but they won’t so never mind.

There are encouraging signs that the sanctions have thrown the regime into panic. The latest evidence that Mr Ahmadinejad is feeling the heat comes from banking experts advising the UN, who say Teheran has recently ordered the withdrawal of millions of dollars worth of deposits from Iranian-owned banks based in Europe, a pre-emptive move to prevent the funds being frozen by any toughening of UN sanctions.

One official told me this week that the Iranian government had ordered the transfer of “significant cash deposits” to Iran. …

As with imposing petrol rationing, withdrawing funds from Europe to Iran smacks of desperation. “Make no mistake, this is a frantic money transfer operation,” explained one official advising the UN. “If Iran withdraws all its funds from these banks, they could fold.”

The money retrieved from Europe may help to ease the Iranian government’s difficulties in the short term, but it will not be enough to restore its reputation for economic competence.

Which is good news for those who believe that regime change in Teheran is the only way to avoid the catastrophic consequences of military conflict over Iran’s nuclear programme. The sanctions against Iran are working: let’s have more of them.

Hmm.