COVID-19-hit Iran asks IMF for aid amid US sanctions

Iranian officials confirmed they had asked the International Monetary Fund for a $5 billion (€4.5 billion) emergency loan. It was the first time in six decades for the country to do so.

The escalating coronavirus spread has claimed over 400 lives and infected over 10,000 people in Iran. The country struggles to fight back the crisis amid crippling sanctions.

Trump’s ‘maximum pressure policy’

Last week, IMF Managing Director Kristalina Georgieva pledged $50 billion for the fight against COVID-19. Georgieva said the money was available to help low-income countries and emerging economies respond to the pandemic.

Iranian Foreign Minister Mohammad Javad Zarif tweeted Thursday his country had applied for the emergency aid.

  “IMF/IMF Board should adhere to the Fund’s mandate, stand on the right side of history act responsibly,” he wrote.

However, granting $5 billion to Iran would undermine Trump’s maximum-pressure-on-Iran policy. The United States sits on the IMF’s decision-making board. If the organization agrees to the loan, the US might veto it.

Even if the IMF decision-making body responds positively to Iran’s application, there would be other technical obstacles before any money can flow.

Delivering aid to isolated Iran

Earlier in February, the Financial Action Task Force (FATF) voted to keep Iran on its blacklist. As the world’s top anti-terrorism and money laundering monitoring group, FATF has the power to cut off the Iranian economy from the international financial system. This means that any transactions related to the IMF’s  emergency loan to Iran can be blocked by other banks and financial channels.

The Iranian economy has been floundering amid US sanctions and plummeting oil prices. The coronavirus outbreak exacerbated the situation. The country’s neighbors stopped their non-oil trades. Oil prices have slumped. A major contraction may be just around the corner, according to analysts.

Earlier this week, Javad Zarif wrote an open letter to UN Secretary-General Antonio Guterres, making a public plea for sanctions relief and medical supplies. US officials noted, though, that the sanctions in place did not target medicine for Iran.

Tehran says that because of the US sanctions, central banks keep Iran from using its foreign exchange reserves. At the end of February, the Trump administration had agreed to a sanctions waiver to transfer humanitarian aid via a Swiss channel. But on March 11th, The Iranian Foreign Ministry spokesman claimed the US did not allow Iran to use that channel.

• Coronavirus in the Middle East: Lock down or play down?

  Iran: Bearing the brunt

  With a high number of deaths and cases, Iran has been a regional epicenter of the outbreak. Several top officials have been infected and there are concerns the number of cases are higher than reported. The government has canceled Friday prayers but health workers have complained they are under-equipped. Iran has asked the International Monetary Fund for emergency funding.

• Coronavirus in the Middle East: Lock down or play down?

  Saudi Arabia: strict measures

  Saudi authorities banned international religious pilgrims early on, leaving the Grand Mosque’s Kaaba in Mecca virtually empty. Other measures have involved sanitizing streets and mosques, closing schools and universities, an extensive travel ban and fines of up to 500,000 riyals (€120,000/$133,000) for people hiding health details. It has also locked down the Shiite-minority area of Qatif.

• Coronavirus in the Middle East: Lock down or play down?

  Egypt: Travel restrictions

  In Cairo, hundreds of Egyptians tried to get certificates showing they have a clean bill of health after Saudi Arabia announced new travel regulations. Although Egypt has only detected a low number of cases, more than 100 tourists returning from the country tested positive for the virus. Officials have limited sermons to 15 minutes and cancelled large public gatherings.

• Coronavirus in the Middle East: Lock down or play down?

  Israel, West Bank: Shielding themselves from the world

  Gatherings of less than 100 are still allowed, leaving visits to the Wailing Wall open. But Israeli authorities have virtually halted air traffic in and out of its territory and tourists are required to self quarantine. The city of Bethlehem has declared a state of emergency, emptying streets usually teeming ahead of Easter. Israeli researchers have said they are close to finding a COVID-19 cure.

• Coronavirus in the Middle East: Lock down or play down?

  Kuwait: Virtual lockdown

  As Kuwaitis kept their distance at this makeshift testing center, the country entered a virtual lockdown, with the entire workforce given a two-week holiday from March 12. All commercial flights have been suspended from Friday on, schools have been closed and gatherings at restaurants, malls and commercial centers have been banned.

• Coronavirus in the Middle East: Lock down or play down?

  Iraq: Coronavirus fails to dampen protests

  Iraq’s protest movement has set up its own makeshift disinfection stations to counter the spread of COVID-19. Although Iraq is highly prone to the outbreak due to its proximity and close relations with Iran, protesters have been defiant, saying the government is the virus. Elsewhere authorities have closed major public spaces and religious institutions have cancelled gatherings.

  Author: Tom Allinson

mg/hg (Reuters, AP)

Article source: https://www.dw.com/en/covid-19-hit-iran-asks-imf-for-aid-amid-us-sanctions/a-52763114?maca=en-rss-en-bus-2091-xml-atom