Should the United States lift sanctions on Iran?

Analysis by Dina Richani, Staff Writer

April 27th, 2020

Tehran’s stripped and sanctioned economy abandons COVID-19 lockdown and resumes major shops and businesses. President of the Islamic Republic Hassan Rouhani stated on Saturday that the country should commence with economic initiatives while taking the worst economic situations into consideration. 

However, the pandemic casts doubts on the ethicality and effectiveness of the U.S. Office of Foreign Assets Control (OFAC)’s sanctions imposed on the Middle East’s focal point of COVID-19, Iran. With a crippling economy serving as a catalyst, the nation is said to be struggling to abide by containment policies to contain the outbreak that has infected thousands of people.

Sanctions permit buying of humanitarian supplies like medications, but not the machines required for a proper response to the Coronavirus. Although 70% of pharmaceutical companies are owned by Iranians domestically, managing transactions has been the centrepoint of the problem, causing scarcity in coronavirus equipment. Up until the 24th of April, Iran has witnessed 88,194 recorded cases with 5,574 deaths. 

Desperate to fight the coronavirus, Iran has asked the U.S. to lift sanctions, legally referred to rather as economic coercions, and reached out to international organizations for further opportunities for aid. On March 6th, due to the demolished oil profits and secluded banking system, Iran attempted to seek help from the IMF, requesting a $5 billion loan. Although the U.S. said it would stop and prevent such a request, on April 15 the IMF’s director for the Middle East and Central Asia said that they are taking measures to go ahead with the aid, despite the U.S. vocal concerns.

Various actors have addressed the Trump administration to stress on the humanitarian matter at hand and lift sanctions. Beginning of April, Executive Director at Human Rights Watch, Kenneth Roth stated “But it is wrong and callous for the Trump administration to compound Iranians’ misery by depriving them of access to the critical medical resources they urgently need”.  Senator Chris Murphy notified the current administration that it will be accountable for “the deaths of innocent people” while persisting with the sanctions. 

The Trump Administration contradicts that U.S. sanctions are limiting Iran’s capability of importing medical equipment, stating that they are immune to humanitarian goods. Trump stated on Iran's Sanctions Relief Scam that “although U.S. sanctions are not preventing aid from getting to Iran, the United States maintains broad authorizations that allow for the sale of food, agricultural commodities, medicine, and medical devices by U.S persons or from the United States to Iran.” “Iran refused the United States’ offer of humanitarian assistance and medical supplies to the Iranian people to help address the coronavirus outbreak.” “However, the regime is still calling for sanctions relief. Clearly, their priority is access to cash, not medicine.” 

“While claiming that the regime doesn’t have enough money to take care of its own people, demanding sanctions relief, claiming they don’t have money for medicine for their own people, when we know they’re really taking the wealth that they have and spending it on terror,” the Secretary of State Michael R. Pompeo said in an interview with Larry O’Connor. 

The IMF produced a recent report which confirms that Iran's economy has been witnessing a negative trajectory in their GDP for the past consecutive years, yet to decline by 6% in 2020, preceding a 4.9% in 2018 and a 7.6% in 2019. Surprisingly though, despite the fall in GDP, the IMF predicts that Iran will witness a 3.1% growth GDP in 2021. 

This comes as a shock because of the multiple crises that Iran has been facing such as sanctions, the pandemic and now the low oil prices. However, the IMF believes that due to the country's experience in having three consecutive years of decline in growth, this gives Iran a motive to introduce new structural reforms and focus on building their economy in ways they have not done priorly. 

In the present circumstances, this is the time where Iran can revive its economy through looking at new structural reforms to catch up. For instance, Iran can diversify and look away from their traditional sources of revenue. Regardless of the sanctions, the IMF stresses that it can witness a low growth regardless. But at the moment, the country is witnessing the pandemic’s financial strain more relative to other nations in the region, with alarming unemployment rates yet to come. According to the government spokesman Ali Rabiei, four million Iranians will be unemployed after the lockdown. For that reason, Rouhani has loosened up quarantine measures, gradually reopening companies to compensate for the fragile economic state.

Now is time to put differences aside and unite in order to fight the deadly pandemic. The UN Human Rights Chief, Michelle Bachelet said “At this crucial time, both for global public health reasons, and to support the rights and lives of millions of people in these countries, sectoral sanctions should be eased or suspended. In a context of global pandemic, impeding medical efforts in one country heightens the risk for all of us.”