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Monday, June 22, 2020

US Sanctions versus Iran’s fight against COVID-19 pandemic

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Aditi Mohta
Aditi Mohta
MENA

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Article Contributor(s)

Aditi Mohta

Article Title

US Sanctions versus Iran’s fight against COVID-19 pandemic

Publisher

Global Views 360

Publication Date

June 22, 2020

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Coronavirus patients at Imam Khomeini Hospital, Tehran

Coronavirus patients at Imam Khomeini Hospital, Tehran | Source: Mohsen Atayi via Wikimedia

Iran is the hardest-hit country by the coronavirus pandemic in the middle east. The contagion was first detected on 19 February 2020 in the holy city of Qom, and thereafter spread quickly across the country. As of 18th June 2020, it had over 9000 coronavirus related fatalities. The virus attacked all the 31 provinces of the country not discriminating between the common man and the people at high places including the members of the Parliament, religious leaders and senior ministers. The crisis touched most parts of the country, but it most severely impacted working and the poor class. 

The Iranian government has been criticized for its response towards the pandemic. The health care policy, which has been politicized, has preferred denial and misinformation as a response to the crisis the pandemic brought with it. Questions have also been raised about the role of US sanctions in crippling Iran’s economy, public health facilities and public health facilities. All these factors, when combined, have disabled Tehran (the capital of Iran) from providing the best response to the pandemic. 

What do the sanction laws say?

According to the Office of Foreign Assets Control, the US has “consistently maintained broad exceptions and authorizations to support humanitarian transactions with Iran.” The first significant sanctions were imposed in 1995 by Bill Clinton, and in 2001 exemptions for medical goods and medicine first came into effect. These sanctions have periodically widened the scope of products for exemption, and by 2012, the exclusions included agricultural products and most foods. After the world powers, including the US, reached a deal with Iran on its nuclear programme in 2015, the sanctions were lowered against Iran. This approach was abandoned after Trump withdrew the US from the deal and sought to force Iran’s leaders to change their anti-US policy. .

The US sanctions are enforced through a wide array of instruments. Financial sanctions prohibit US banks from transacting with Iran, which limits Iran’s access to dollar-denominated transactions. Secondary sanctions measures also target non-US entities that have dealings with Iran, thus at a risk of facing prosecution in the US. These sanctions make transactions with Iran lengthy and complicated, and even impossible in some cases

There are some exemptions from sanctions for humanitarian assistance (sale of agricultural commodities, food, medicine and agricultural services). Despite these exemptions, sanctions have severely impaired Iran’s ability to be able to finance humanitarian imports. Given the volume of complexity and due diligence involved, most banks are reluctant to deal with Iran. This makes it difficult to find a way to pay for purchases difficult for Iran. Also many items require additional authorization because the US considers them as “dual-use” (the things might also be used for defence- for example, the sort of oxygen generators that are needed in life support machines used to treat coronavirus cases). Lastly, the sanctions on Iran’s oil exports led to a decline in revenue, further weakening Iran’s currency, which has left the country vulnerable and with fewer resources to pay for non-sanctioned items as well. 

All these put together have directly caused shortages of medical equipment and impacted Iran’s health sector negatively. This has also impacted the capability of Iranian healthcare sector to effectively manage the COVID-19 situation.

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February 4, 2021 5:07 PM

Expat Exodus In The Middle East

The COVID-19 pandemic has hit people and economies worldwide, sparking a global recession and financially destabilising millions of people. In the Middle East, dipping oil prices have only worsened the threat to the economy. Businesses are shutting down, and many are trying to survive by cutting the salaries or laying off of workers. Large segments of the workers in these countries are expatriates, and many have struggled to make ends meet as unemployment soared.

The development of the Gulf countries has always been intertwined with their large expat populations. These workers are often vital to the economy, not just as part of the workforce but also as consumers by enabling successful malls, restaurants and other forms of recreation and tourism. Countries like Saudi Arabia gain valuable non-oil revenue in the form of increased Value Added Taxes (VAT) and by imposing a monthly fee on migrants who want to sponsor family members.

Many of these workers are from developing Southeast Asian countries such as India and Pakistan, and contribute greatly to their home country’s economy in the form of remittances, i.e sending money back home. Those who are facing unemployment or salary cuts are eager to be repatriated, especially since in many Gulf countries visas, rent, and even phone lines are linked to jobs, and expats have little to no social safety nets to fall back on.

“Panicked” Indians applying to go back home crashed the Dubai aviation ministry’s website for applications in the process. The consulate says it has received around 200,000 applications for repatriation of expats from as many as 12 countries.

For some, closing businesses are forcing them to go home. For others, the cost of education is the major concern. The Emirates group, Uber’s Middle Eastern counterpart Careem, and hotels are some of the few major employers considering laying off large portions of their staff or reducing salaries.

Dubai has been one of the hardest hit, as expats form an estimated 92% of the population. Dubai based movers estimate that they’re getting up to seven calls a day to ship belongings abroad. It is extremely hard to gain permanent resident status in countries such as the UAE, and the costs of living and education are quite high and often provided by employers, which has made leaving the only option left for many laid-off workers across all fields.

The UAE has tried to offset the damage by granting automatic extensions to expiring work permits, waiving of work permit fees and fines, and providing interest-free loans and repayment breaks.

Meanwhile, governments in Kuwait and Oman are trying to mould the exodus into an opportunity to boost local employment. On the other hand, the Saudi Arabian government has been criticised for not taking enough measures to protect the local workforce.

While the Gulf countries have been trying to decrease their dependence on oil wealth and foreign workforce, it is not something that can be accomplished soon, especially given the great dependence of the Gulf economies on both those factors.

There is still too unavoidable a gap between the current skill of local workers and the training needed to compete with foreign professionals, making it hard to simply employ domestic workers in place of foreign ones. The pandemic, however, might not leave much of a choice.

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