Flag of Iran

Iran country brief

Introduction

Australia has maintained a continuous diplomatic presence in Iran since our Embassy opened in Tehran in 1968. Iran opened an Embassy in Canberra in 1971 and has maintained a presence in Australia since then.

Political overview

The 1979 Islamic revolution transformed Iran, abolishing the monarchy and establishing an Islamic Republic. The political system now comprises both elected and unelected institutions. The Supreme Leader is Iran's highest political authority and is chosen by the Assembly of Experts, a body of 86 clerics (elected on a regional basis). The President, the unicameral Islamic Consultative Assembly (or Majlis) and municipal councils are elected every four years on the basis of universal suffrage. Electoral candidates are vetted by the Guardian Council, which consists of six clerics appointed by the Supreme Leader, and six legal figures, appointed by the Head of the Judiciary and approved by the Majlis.

The Supreme Leader is responsible for choosing the head of the judiciary, setting general state policy, declaring war and peace, commanding the armed force (including appointment of commanders, control of intelligence and security agencies) and holds the authority to initiate changes to the constitution.

The Majlis has the power to initiate bills but the Guardian Council must approve all bills passed by the Majlis as consistent with Islamic law and the Iranian Constitution. The Expediency Council (with ex officio members including the President and members appointed by the Supreme Leader) can, however, pass a Majlis bill into law, overriding the Guardian Council.

Elections in June 2005 saw Mahmoud Ahmadinejad, a conservative, elected as President. In his early presidency, Ahmadinejad presented himself as a restorer of the revolutionary ideals of Ayatollah Khomeini. Ahmadinejad’s re-election on 12 June 2009 gave rise to widespread anti-government protests and claims of election fraud from opposition candidates. Iranian security forces violently suppressed protests in Tehran and other cities following the election and on the Ashura religious holiday on 27 December 2009. Dozens were killed and thousands detained.

Iran’s upcoming presidential election is expected to be held on June 2013. Under Iran’s constitution, Ahmadinejad is not eligible to run for a third term.

Economic overview

Iran is a significant regional economy with a large and fast-growing population (estimated to be over 75 million) and some of the world's largest oil and gas reserves.

The economy is heavily dependent on hydrocarbon exports and dominated by the oil industry, economic growth is strongly influenced by oil market developments. Around 80 per cent of total export earnings are generated from oil revenues. A goal of Iranian economic policy over the last 20 years or so has been diversification of the economy away from dependence on oil earnings.

Large state-owned enterprises dominate key industry sectors, and organisations controlled by charitable religious foundations also account for a significant share of GDP. The private sector is generally confined to small and medium enterprises. The IMF has recommended that earlier efforts at economic reform be renewed to improve economic performance. President Ahmadinejad was elected on the promise of improved income redistribution but has not advanced this systematically to date.

International sanction measures and declining Iranian oil production have contributed to a drop in Iran’s GDP growth in 2011 to -0.9% in 2012. Inflation has also risen dramatically in recent years up from 21.3 per cent in 2011 to 25.2% in 2012. The Statistics Centre of Iran announced average unemployment in Iran for the Iranian year (ending 20 March 2012) of 12.3 per cent, although the real figure is thought to be higher.

Bilateral relationship

Australia's bilateral relationship with Iran is long-standing, with a historically strong trade relationship. We continue to engage in dialogue on a range of important issues, including Iran's nuclear program, terrorism, regional issues and human rights.
The Australian Government has consistently reinforced with Iran Australia's long-standing opposition to the proliferation of nuclear weapons and the need to comply with UN Security Council Resolutions (UNSCR) on its nuclear program. Australia fully implements four UNSC resolutions (1737, 1747, 1803 and 1929) imposing sanctions that prohibit a range of activities, including the supply of certain dual use goods and services to Iran, the procurement from Iran of certain military and dual use goods and services, and travel and financial sanctions against designated persons and entities who are engaged in Iran's proliferation sensitive activities.

Since October 2008, Australia has also maintained additional autonomous sanctions in relation to Iran. These include travel and financial restrictions against individuals and entities not specifically designated by the UNSC, but which contribute to Iran's proliferation sensitive nuclear or missile programs or assist Iran violate its obligations under UNSC resolutions. The Australian Government announced additional autonomous sanctions in January 2013.

The Australian Government remains deeply concerned about the human rights situation in Iran, including the use of capital punishment, in particular for juvenile offenders; violations of political and media freedoms; and discrimination against religious and ethnic minorities. The Government has repeatedly and strongly urged the Iranian authorities to respect the human rights of its citizens. Australia has expressed these concerns in multilateral fora, including the UN General Assembly and the UN Human Rights Council.

Bilateral economic and trade relationship

The value of Australia's two-way trade with Iran was $269 million in 2011-2012. Traditionally, Iran has been one of Australia's leading wheat export destinations. Other Australian agricultural exports to Iran include barley, animal oils and fats, meat and butter.

Australia's exports to Iran amounted to $206 million in 2011-2012. Primary export items included barley, wheat and meat (excl beef). It is likely that a portion of Australia's exports to Iran are transshipped through Dubai and are not captured by these figures. Imports from Iran amounted to $63 million over the same period. Australians considering commercial or other dealings with Iran should familiarise themselves with the operation of the United Nations Security Council Resolution-mandated sanctions regime and Australia's autonomous sanctions, and seek independent legal advice before making commercial decisions.

Updated March 2013