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Iran urges IMF to approve loan despite US opposition

Iranian President Hassan Rouhani urged the International Monetary Fund on Wednesday to give the sanctions-hit country a $5 billion emergency loan to combat its novel coronavirus outbreak, Tehran’s first request for IMF aid since Iran’s 1979 Islamic Revolution.

Rouhani also said some businesses will remain closed until further notice, after the authorities announced last week that they will begin to ease a shut-down order from April 11.

Iran has banned intercity travel and shut non-essential businesses to fight its coronavirus outbreak. The authorities have said some businesses whose operations do not create a big risk of spreading the virus will be allowed to reopen from Saturday. They have not given a detailed explanation of which businesses fall into that category.

“High-risk businesses will remain closed until further notice,” Rouhani said. “We should continue fighting the disease while our economic activities continue as much as possible.”

The Islamic republic is battling one of the world’s deadliest coronavirus outbreaks which it says has killed more than 3,993 people and infected more than 64,586 although there has been speculation that the Iranian government has under-reported the toll and the real number of deaths and infections could be higher.

Iran has said it needs the funds to continue fighting the virus. But the United States, which effectively holds a veto at the IMF, is reportedly set to block the loan, arguing Iran will use the funds for military purposes – specifically to finance a number of militant groups in states throughout the Middle East, including the Shiite Hezbollah group in Lebanon and Huthi rebels in Yemen.

Iran has also sent thousands of fighters to back the government of dictator Bashar al-Assad in Syria’s civil war, and frequently threatens the destruction of Washington’s main ally in the region, Israel. It has also been engaged in a regional struggle for political hegemony with another US ally, Saudi Arabia.

“I urge all international organisations to fulfil their duties,” Rouhani said during a cabinet meeting. “We are a member of the IMF… if there’s going to be any discrimination between Iran and others in giving loans, neither we nor world opinion will tolerate it.”

Iran announced on March 12 that it had requested the loan. The country has not received assistance from the IMF since a “standby credit” issued between 1960 and 1962, according to IMF figures.

The IMF’s Rapid Financing Instrument (RFI) is an emergency programme that aids countries faced with sudden shocks such as natural disasters. According to the IMF’s website, an RFI “is available to all member countries facing an urgent balance of payments need”.

‘Maximum pressure’

An IMF official has said the Fund is in dialogue with Iran, with talks aimed at understanding Iran’s needs and what is required for the loan request to be processed.

“If they do not act on their duties in this difficult situation, the world will judge them in a different way,” Rouhani said.

In a tweet on Sunday, the secretary of Iran’s Supreme National Security Council, Ali Shamkhani, accused the United States of blocking Tehran’s loan request from the IMF.

US officials have said that the sanctions it has imposed on the Islamic Republic do not target medicine for Iran, and that Washington had offered to help Tehran face the outbreak. Iran dismissed that offer as ridiculous.

US Secretary of State Mike Pompeo said in a recent interview that Iran would use any economic relief to pursue nuclear weapons and back Shiite militias in Iraq that the administration blames for a wave of attacks on bases used by US troops.

“You see the way… the regime is treating their people in this time of enormous crisis. You see the way that they continue to spend money,” Pompeo told conservative radio host Hugh Hewitt.

US President Donald Trump’s administration has waged a campaign of “maximum pressure” on Iran since it withdrew from a landmark nuclear deal in 2018. It has since imposed wave after wave of crippling sanctions that target key sectors of Iran’s economy such as oil sales and banking.

Iran has repeatedly called on the Trump administration to reverse its sanctions policy, which has been opposed even by some US allies, particularly since the COVID-19 pandemic hit. Medicines and medical equipment are technically exempt from the US sanctions but purchases are frequently blocked due to the unwillingness of banks to process purchases for fear of incurring large penalties in the United States.

“It will go down in history that the White House, which was engaged in economic terrorism so far, is now a terrorist in health issues, too,” Rouhani said.

European nations recently delivered medical goods to Iran in the first transaction under the Instex financing mechanism set up to get round US sanctions. But that delivery occurred after more than a year since Britain, France and Germany first announced the creation of Instex and Iran has questioned European governments’ commitment to seeing it through in defiance of the Trump administration. Source