Iran refuses to shut down economy despite accelerating pandemic

Despite an acceleration in coronavirus cases in Iran, the government has refused to reimpose lockdowns and shut down the economy. The President, while making these statements, said that the people of Iran do not want a shutter down again. The Iranian economy is in deep trouble, as it is being strangulated by sanctions imposed by the US as well as oil production quotas by the OPEC.

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Iran said on Saturday that it cannot afford to shut down its sanctions-hit economy, even as the Middle East’s deadliest coronavirus outbreak worsens with record-high death tolls and rising infections.

Iran must continue “economic, social and cultural activities while observing health protocols”, President Hassan Rouhani said during a televised virus taskforce meeting.

Iran refuses to shut down economy despite accelerating pandemic 

“The simplest solution is to close down all activities, (but) the next day, people would come out to protest the (resulting) chaos, hunger, hardship and pressure,” he added.

The Islamic republic has been struggling since late February to contain the country’s COVID-19 outbreak, which has killed over 12,400 people and infected more than 252,000.

Deaths from the respiratory disease hit 221 on Thursday — a single-day record for Iran.

The country closed schools, cancelled public events and banned movement between its 31 provinces in March, but Rouhani’s government progressively lifted restrictions from April to reopen its sanctions-hit economy.

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The outbreak’s rising toll has prompted authorities to make wearing masks mandatory in enclosed public spaces and to allow the hardest hit provinces to reimpose restrictive measures.

Iran has suffered a sharp economic downturn after US President Donald Trump withdrew from a landmark nuclear agreement in 2018 and reimposed crippling sanctions.

The International Monetary Fund predicts Iran’s economy will shrink by six percent this year.

Iran refuses to shut down economy: President says people will not accept it

“It is not possible to keep businesses and economic activities shut down in the long-term,” Rouhani said, emphasising that “the people will not accept this”.

Health Minister Said Namaki warned on Wednesday of a potential “revolt over poverty” and blamed US sanctions for the government’s “empty coffers”.

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The reopening of the economy “was not over our ignorance (of the virus’ dangers), but it was due to us being on our knees against an economy that could take no more”, Namaki said on state television.

US sanctions targeted vital oil sales and banking relations, among other sectors, forcing Iran to rely on non-oil exports, which have dropped as borders were closed to stem the spread of the virus.

How Covid-19 is affecting Iran’s economy

With many Iranians feeling choked by hardship in the Middle East’s worst-hit country, experts warn Iran is experiencing possibly its toughest economic conditions since the 1980-88 war with Iraq due to two bitter challenges: the coronavirus, which has disrupted the country’s economic activities, affecting the incomes and lives of millions of Iranians, and the U.S. sanctions, which were imposed two years ago, testing Iranian government’s capacity to adapt to.

Read more: Scholar of Iran calling coronavirus ‘divine punishment’ got infected himself

According to the Statistical Center of Iran, the average goods and services consumer price index has grown by 37 percent. Before the coronavirus, Iran’s national currency has lost more than 60 percent of its value during the past two years. Recently, it fell to 161,000 rials to the dollar.

The inflation is making most Iranians struggle to make ends meet and the call to reopen the economy is much more pressing despite the fact that the number of confirmed cases is steadily growing.

Coronavirus in Iran: The situation currently

As of today, the number of people infected by the Novel Coronavirus and suffering from the associated disease COVID-19 in Iran has crossed 253,000. There have been more than 12,000 deaths associated with the disease. A statistic to take heart from is the fact that 215,000 people suffering from COVID-19 have recovered. 

COVID-19 associated lockdowns have caused a slowdown in the international economy, with experts saying that it will shrink by as much as 6% this year. Estimates do not show it recovering before 2022. The World Bank has also sounded the alarm over the dismal economic situation that the world finds itself in, and has asked fiscal policy makers the world over to pay special attention to the economic fallout forecasted amid the pandemic.
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Iran’s economy has also been affected badly by coronavirus imposed lockdowns, and these lockdowns have further paralysed an economy that is already suffering from international sanctions imposed by the United States, and an oil production quota imposed by the Organization of Petroleum Exporting Countries (OPEC).

AFP with additional input by GVS News Desk