Under Sanctions, the Iranian People Battle With COVID-19
Steve Bell: The Iranian people are facing a health emergency that is compounded by Trump’s efforts at regime change in their country
The outbreak of Covid-19 in Iran has been particularly severe. Like many governments, the Iranian government appears to have been hesitant in its initial response. But US imperialism’s “maximum pressure” campaign of sanctions has had a major impact upon Iran’s economy and social services. The Iranian people are facing a health emergency produced by the virus but compounded by Trump’s efforts at regime change in their country. It is evident that the Iranian people are capable of seeing off both these assaults. Yet the international community needs to help them minimise the losses they face.
How the outbreak developed
The initial outbreak appears to have begun in Qom, an important centre of shrines and influential religious leaders. Although different explanations have been offered, it was probably pilgrims or tourists who carried the virus there. On February 19th, the health ministry announced that two elderly people had died from the virus in the city. A further epicentre emerged in Gilan, apparently as a result of students returning from overseas.
The virus spread quickly; 12 deaths were reported by February 24th. The government’s first response was against the quarantine of cities. Despite the initial outbreak in Qom, the shrines there weren’t closed till mid-March. On February 25th the government reported that the Deputy Health Minister, Iraj Harirchi, had contracted the virus. The subsequent death of fifteen government officials and confirmed cases amongst a large number of legislators indicated that the regime could lose control of the outbreak. More extensive restrictions on public gatherings, travel, schools and workplaces were introduced.
But from the outset the government’s response was hampered by the US sanctions. On February 24th, Ramin Fallah, vice-president of the Iran Union of Importers of Medical Equipment, stated “Multiple international companies are ready to supply Iran with corona (virus) test kits, but we can’t send money to them”. US financial sanctions mean that international banks are reluctant to risk facilitating Iranian trade, for fear of losing trade with the US as a result of being sanctioned.
Some of the initial delay appears to have been due to the government’s anxiety to ensure the parliamentary (Majles) elections were held on February 21st. Such anxiety is also a product of the US’s campaign to delegitimise the institutions and laws of the Iranian state. The electoral processes have been a particular target of US disinformation and covert intervention.
The tardiness of some of the actions undoubtedly contributed to the size of the outbreak. By 15 April, there have been 74,877 cases with 4,683 deaths. This is being trumpeted as the worst outbreak in the Middle East and North Africa. In absolute numbers this is true, although the outbreak in Turkey may soon surpass Iran’s total. In relative, per capita, terms the outbreak in Israel is worse. By April 15th, Israel had registered 11,235 cases with 110 deaths. Iran’s population is ten times larger than Israel, giving a comparative total of over 110,000 cases in Israel. Israel’s health service is in considerable better shape, so the fatality rate there is just 1 per cent in comparison to Iran’s 6.25%. Is it surprising that the Trump/Johnson/Bolsanario/Netanyahu axis has performed badly in a public health crisis?
The economy after sanctions and before the virus
When the US government unilaterally withdrew from the Joint Comprehensive Plan of Action (JCPOA) nuclear agreement, they imposed sanctions on Iran. These were outside of the framework of the UN, and only had legal basis in US law. But the dominance of the US in international finance means that by default both companies and nation states have cut their trade with Iran.
The impact of renewed sanctions on Iran, from November 2018 in particular, resulted in a severe blow to Iran’s economy. According to the IMF, the Iranian economy contracted by 9.5 per cent in 2019. But the underlying strength of the Iranian economy was demonstrated by the projection of the IMF that it would rebound by returning to 0.1 per cent growth in 2020.
In the “Bourse and Bazaar” publication, “Iran’s Year Under Maximum Pressure”, we get some concrete evidence of how generally sanctions have been hurting the Iranian people. The report finds that, after May 2019, oil exports fell from 2.8 million barrels per day, to an average between 300,000 to 500,000 barrels per day. This has enormous impact upon government revenues which sustain the economy and population. As recently as 2012, revenue from oil was $120 billion. In 2020 the figure will be less than $10 billion.
The loss of oil revenues reduces Iran’s foreign exchange and has resulted in a 60 per cent reduction in the value of the national currency, the rial. In turn this stokes inflation which reduces the living standard of the population – particularly those on low or fixed incomes.
Despite these problems, the resistance economics of the country meant that jobs were created. While trade was reduced, especially with the EU, Iranian manufacturing and the large service sector attempted to fill the gap. In 2019 there was an increase in employment, with a record 25 million Iranians employed. However, while employment has risen income has fallen. There has been a twenty per cent reduction in purchasing power since 2018.
All of this was before the virus arrived. The severity of its impact is such that the Iranian government statement of March 18th expects unemployment to rise to five million (twenty per cent of the workforce). It further estimates an 18.5% contraction in the whole economy.
The seriousness of the situation is highlighted by the Iranian government’s decision to apply to the IMF for $5 billion assistance. This will be the first request for such assistance by Iran since the period 1960-62. It is incredible that the US government is considering vetoing this request. President Rouhani put it thus: “We are paying the International Monetary Fund and the World Bank our share, and part of our reserves are at their disposal, and it is not and will not be acceptable to us if they discriminate against us when considering our application for the loan. It will not be acceptable to world public opinion either”.
Europe’s response – helpful and perhaps not
The EU, and in particular the E3 powers (Britain/France/Germany), have opposed Trump’s breach of the JCPOA. Most recently, they opposed they opposed the sanctions against Iran’s petrochemical companies on March 19th, and against 20 Iranian companies, officials and individuals on March 26th.
But much of the EU policy has been focused on persuading Iran against its phased, and entirely legitimate, disengagement from JCPOA limits, in response to the US non-compliance. These steps have seen increases in reprocessing and enrichment levels beyond those envisaged in the JCPOA. In part Iran has been trying to push the EU to uphold its trade with Iran, rather than surrender to Trump’s bullying.
But rather than confront the US administration, the EU has turned to pressing Iran. Earlier this year, the E3 governments threatened to invoke the “snap back” mechanism for re-imposing UN sanctions against Iran, unless is ceased disengagement. This threat has been set aside for the moment, following the intervention of the EU Commission.
The E3 have set up a financial mechanism, the Instrument in Support of Trade Exchange (INSTEX), to facilitate financial payments to and from Iran outside of financial settlement systems dependent upon dollars. After an exceedingly long gestation, the mechanism was used for the first time in late March for the sale of 500,000 euros of blood treatment medication to Iran. Despite its inadequacy, the mechanism has potential. Mikhail Ulyanov, Russia’s Permanent Representative to International Organisations in Vienna, indicated that the Russian government’s view was that the EU should “think about extending the range of participating states of INSTEX beyond EU borders for common benefit. If it happens, then the prospect of the return of Iran to full compliance with JCPOA will be much brighter”.
EU response – now completely unhelpful
On 7th April, French President Macron told Iran that France and its European partners were ready to cooperate with Iran. This is not actually self-evident, following the decision, on March 15th, of the European Commission to introduce new regulations that mean export controls on personal protective equipment (PPE). These controls prevent the export of face masks, face shields, surgical gowns, gloves and other equipment to non-EU countries and prioritising the trade of these goods within the EU.
A policy of “EU first” will have a dangerous impact upon developing countries. A report from Global Trade Alert found that “no nation in Africa, the CIS region, the Middle East, and South Asia exported medical ventilators”. There may well be domestic producers in these areas, but the “likelihood that any domestic producer can deliver cutting edge medical ventilators is slim.” The EU accounts for half of global ventilator exports.
The impact upon Iran will be significant. In the study published by the European Leadership Network/Bourse and Bazaar titled “European supply chains are global lifelines”, Esfandyar Batmanghelidj writes “In 2018, the European Union exported $870 million worth of pharmaceutical products to Iran – equivalent to 70% of global sales to the Islamic Republic and compared with just $53 million in exports from China, Iran’s largest overall trading partner”. He adds “EU exports of CT scanners, x-ray machines, and related technologies were valued at $87 million in 2018, sixteen times higher than the Chinese total in the same year and accounting for 68 per cent of global exports to Iran in that category”.
Clearly, the EU decision could seriously damage Iran, and other developing countries in fighting the virus. Iran has already taken a hit from the previous impact of Trump’s sanctions. PPE exports to Iran peaked in the period 2016-17 when secondary sanctions were lifted under the JCPOA. Trump’s election slowed this trade, before its collapse after secondary sanctions were introduced in November 2018. Instead of protecting limited supplies in Europe, the EU ought to be expanding the production of medical equipment for the developing world and Europe.
Martin Wolf, the Financial Times influential columnist, highlights the problem. On April 14th, he wrote: “Help with the health response is essential … Yet so too is economic help for poorer countries via debt relief, grants and cheap loans. A huge new issue of the IMF’s special drawing rights, with transfer of unneeded allocations to poorer countries is needed. The negative-sum economic nationalism that has driven Donald Trump throughout his term as US President, and has even emerged in the EU, is a serious danger. We need trade to flow freely, especially (but not solely) in medical equipment and supplies. If the world economy is broken apart, as happened in response to the Depression, the recovery will be blighted, if not slain”.
The Iranian people mobilise despite sanctions
The Iranian people have endured all the efforts to impose regime change in the past forty years. The common purpose is not so much support for a particular government, but support for Iran’s independence from imperialism. Likewise now, all the resilience of the Iranians is directed to finding and creating the resources to overcome the virus, despite the worsening sanctions. The two major expressions of this are a mobilisation of state resources, and a mobilisation of civil society resources.
The regime’s initial reluctance to close down the inessential features of the economy has given way to consistent efforts to create a framework to overcome the virus. The recently published budget allocates twenty per cent of the $36.6 billion annual spend to tackle the social impact of the virus. All inessential businesses were shut down, so the government has allocated $5 billion for interest free loans to the ten affected business categories. Equally, small businesses in retail and street vendors received interest free loans worth about $474, to be repaid over a 30-month period. 4 million will benefit from this.
For workers and vulnerable families, the government has provided a series of cash measures. A one-off cash handout of $240 has been given to 23 million households. Civil service salaries are to increase by 50 per cent – civil servants are among the poorer sections of society. There is a programme for the employment of single mothers in workshops. 85,000 prisoners have been released from the dangers of infection in prisons.
The government set up 80 testing centres by March 19th. The Vice-President for Science and Technology, Sorena Saffari, confirmed that the country is now building “coronavirus medical equipment such as CT scan rooms, masks, all types of medicines and ventilators”. It is manufacturing 40 advanced ventilators a day. It is producing 2 types of diagnostic kits which should be produced in sufficient numbers for domestic use and export. Both the regular army and the Islamic Revolutionary Guards Corp have been deployed in building hospitals and quarantine facilities.
Iranian civil society has also responded energetically. One initiative has been the campaign called “nafas” which means “breath” but is also the base for the idiom “trust in oneself”. 200 companies are involved so far, donating medical equipment, services and cash. Last week it provided 55 ventilators for hospitals in Golestan, a province facing a severe outbreak. It has purchased 1000 oxygen cylinders for hospitals; imported 500,000 N95 masks from China, with another 120,000 dues. It has built a clinic in Tehran capable of testing 300 patients a day. Another business initiative is from Farabourse, a small securities exchange in Tehran. It has organised crowd funding certificates which are used to purchase medical devices and products.
An article in the Tehran Times estimated that over 10,000 volunteer groups are organising support for older and vulnerable people. These groups are made up of over 125,000 people, including 230 groups of medical science students. Five hundred workshops have been established producing 500,000 masks a day. 300 medical centres in 17 provinces have been set up, involving 800 medical science university students, offering health services and training. There are likely to be many less reported initiatives.
Iranian society has had to deal with a forty-year siege against its right to decide its own form of state and governance. It has developed great resilience and capacity to innovate. It recovered from the eight years of Iraq’s imperialist backed war on Iran, rebuilding entirely from its own resources. Such fortitude is now being displayed in the struggle with the virus and sanctions.
The benefits of an independent Iranian state
One difficulty much western opinion has with Iran is that it overlooks the fact that the Islamic Republic has, whether under ‘reformist’ or ‘conservative’ governments, acted as an agent for economic development. Consequently, living standards and social provision have increased considerably over the past four decades.
A full examination can be found in Kevan Harris’s book “A Social Revolution: Politics and the Welfare State in Iran”. Some highlights will suffice for now. Life expectancy for Iranians increased from 51.1 years in 1980 to 76.2 years in 2018. Behind this was a notable decline in infant and maternal mortality since the last Shah. The birth-rate has decreased very substantially, from an average seven children per household in 1979 to just two per household by the end of the 1990’s. In 1983, less than 30% of the rural population had access to primary health care. By 2010 nearly 100% coverage had been achieved. Female literacy rose from 42.3% in 1975/6 to 97.7% by 2012.
These developments were funded by the state prompting economic development and expansion. In 1985, Iran’s economy was functioning at 56% of the Middle East and North African average. In 2014, it was functioning at 126% of that average. This is a success story which demonstrates the importance of national independence. Of course, there are many criticisms and failings that can be highlighted. But refusing to acknowledge the real achievements and efforts of the Iranian people simply aids the imperialist war mongers who would remove Iran’s real independence tomorrow.
“The regime is about to collapse” (again)
The actual struggle of the Iranian people is ignored in the pro-imperialist media and circles. Instead, there are endless variations on the theme of the imminent, or shortly expected, “collapse of the regime”. Trump’s “maximum pressure” is premised on this supposed fragility of a state leading 84 million people, purely through repression and catastrophic mismanagement. This is to ignore the lived experience of generations of Iranians.
In the last hundred years, we could sketch four generations. The first, and oldest, grew up with stories of British and Czarist troops occupying the country and overturning the popular Constitutional Revolution. The next generation watched Iranian oil being produced to fill the accounts of the British Treasury, under Shah Reza Khan installed with the aid of the British government. The third generation learnt of the overthrow of the elected President Mussadeq by the British and US governments, and their support for Shah Mohammad Reza who built an army against the nation. And the final generation learnt of the support of the US/British/French/German governments for Saddam Hussein’s invasion and war on Iran, whilst they grew up with sanctions and international hostility.
If you believe “maximum pressure” will work then you believe that the Iranian people don’t know their own history. Time and again over the past century, and before, the people have demanded respect for their sovereignty. They are not going to surrender it to the current US administration just because it is particularly belligerent and boorish.
None of this depends upon the Iranian government. Amongst Iranians there are both critics and defenders of the government. But there is an overwhelming majority in favour of Iranians defining their future, rather than Washington, London or Paris.
No hindrance to Iran’s fight against Covid-19 – End sanctions now!
The continuation, and extension, of US sanctions in this time of pandemic is dangerous and unpopular. Trump has received representations from governments in China, Russia, Britain and France seeking amelioration. The UN has called for sanctions to be lifted. Defeating the virus demands international cooperation – allowing it to flourish in any one country threatens its neighbours and the rest of the world.
It is not then surprising that even inside US establishment circles there is serious disquiet. Joe Biden, the Democrats likely nominee for President has called for an easing of sanctions. He suggested authorising “broad licences to pharmaceutical and medical devices companies” and “creating a dedicated channel for international banks, transportation companies, insurers and other service firms to help Iranians access life-saving medical treatment”.
On April 6th, an impressive array of international figures published a statement which said “Targeted sanctions relief would be both morally right and serve the health and security interests of the United States, Europe, and the rest of the world” (1). Amongst the signatories were Madeline Albright (Former US Secretary of State & Ambassador to the UN); Hans Blix (former Swedish Foreign Minister and Director General of the International Atomic Energy Agency); four former NATO Secretary Generals, Willy Claes, Jaap de Hoop Scheffer, Abders Fogh Rasmussen and George Robertson; along with 18 other comparable figures from the US and Europe.
Sanctions are a form of warfare against civilian populations. Ending the sanctions is essential if the Iranian people are to overcome the virus and chart their own future. Equally, it is essential for those outside of Iran for it to overcome the virus. In an article published by the Carnegie Endowment for International Peace, Jarrett Blanc nicely illustrates the interconnections. “The prompt for reconsidering the costs and utility of sanctions is obvious: in a global pandemic, no population is safe until every population is safe, so if sanctions meaningfully damage the public health response anywhere, they need to be carefully reassessed. For example, return migration from Iran to Afghanistan is fuelling the epidemic in a violent, poorly governed, ill-resourced country that still hosts thousands of US troops and civilians, now themselves vulnerable to the virus. Even U.S. purchases of medical equipment from Russia were complicated by sanctions, involving a sanctioned manufacturer and financial firm”.
It is vital that anti-war activists keep pushing against the military threats to Iran. Sanctions are an essential part of these threats. Keeping up the pressure for their removal is our elementary duty in the time of Covid-19. Stop the War calls upon all to sign and share our petition and use the lobbying tool to contact your MP.
- (1) Statement organised by the European Leadership Network and The Iran Project