April 26; 2020
It has been nearly two months since Iran requested the International Monetary Fund (IMF) for financial support through the fund’s Rapid Financing Initiative (RFI), but so far neither help nor a clear answer has been received.
In early March, IMF announced the allocation of $50 billion funding, under the emergency RFI program, for helping countries affected by the coronavirus pandemic; and Iran, as one of the major countries affected by the disease, immediately applied for a $5-billion loan.
As the processing of Iran’s loan application has been prolonged over the normal required time and rumor has it that the IMF has rejected Iran’s application, a senior official at the fund announced that the IMF is actively consulting with member states and all requests must be investigated based on standard IMF policies.
However, claiming that Iran has adequate financial resources to deal with the virus, the U.S. administration has opposed Iran’s request and many believe that the U.S. opposition is the main reason for IMF’s stalling.
In this regard, Tehran Times conducted an interview with Ferial Mostofi, a senior member of Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA), who is also the head of Tehran Chamber of Commerce, Industries, Mines and Agriculture (TCCIMA)’s Investment Committee.
Does Iran really need the fund?
The U.S. believes that Iran has enough resources to contain the virus and even if it didn’t, the sanctions have not blocked the country’s access to healthcare and medical products.
So we asked Mostofi, as a businesswoman and as a representative of the country’s private sector, does Iran really need this loan?
Well, even before the outbreak of coronavirus and its economic consequences, Iran was already facing economic pressure. It was expected that the country would face budget deficit due to the U.S. sanctions and the significant reduction of oil exports; and now, with the pandemic being added to the equation, the country’s economic situation is much more problematic and saying that Iran does not need the fund as much as others is absurd, she said.
What the funding should be spent on?
“First and foremost, Iran needs this money to battle the virus and save people’s lives, human lives matter, if the government had enough resources [as they claim] to support people financially to keep them in lockdown, then the virus could have been contained much sooner and much easier,” she said.
Here it should be noted that although Trump administration officials continue to insist that food and medicine are exempt from U.S. sanctions, evidence suggests that unilateral sanctions are collectively targeting the public since limitations on trade and the unwillingness of financial institutions to process transactions related to Iran have resulted in staggering prices and shortages of medicine inside the country.
“This money can also be injected into the country’s production sector and encourage both demand and supply sides of the market and consequently result in economic growth.”
The government also needs to support the low-income classes and people who have lost their jobs, battling coronavirus is not just about containing the virus, the government should be able to support people as well, so it needs financial support more than any other nations in the region, Mostofi emphasized.
The International Monetary Fund needs to put politics aside and process Iran’s requests for financial aid just like other nations.
With the recent developments, the IMF seems to be looking for a way to reassure the U.S. about the purposes and directions of the loan to Iran, however, the United States still opposes the allocation of any loans to the Islamic Republic.
Despite the U.S. illegal pressures and Iran’s insistence on its legitimate rights, we must wait to see if the IMF will eventually give in to the Washington pressures or will be able to maintain its independence as an international body.