US sets Iran oil sanction deadline as protests continue in Tehran

Shops in Tehran's Grand Bazaar shuttered on Monday as part of strikes and protests against economic hardship. (AFP)
Updated 26 June 2018
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US sets Iran oil sanction deadline as protests continue in Tehran

  • Traders in Tehran’s Grand Bazaar continue strike
  • State Department says world must stop buying Iranian oil by Nov 4

The United States warned countries that they must stop buying Iranian oil before Nov. 4 or face a renewed round of American sanctions.

The deadline was set as strikes and protests continued in Iran on Tuesday after the deteriorating economic situation sparked shopkeepers and traders to close down their businesses.

A senior State Department official said the US would not be “granting waivers” to any country and described tightening the noose on Tehran as “one of our top national security priorities.”

The third day of demonstrations sparked President Hassan Rouhani to scramble to reassure Iranians that the country can withstand the financial pressures of new US sanctions.

Iran emerged from decades of crippling sanctions after signing the nuclear deal with world powers in 2015. 

While the economic benefits hoped for by many failed to materialise, businesses fear a return to the dark days of full US sanctions that are expected after Donald Trump said last month that the US would pull out of the deal.

Fars news agency reported that parts of Tehran’s Grand Bazaar were on strike for the second day, after traders massed outside parliament on Monday to complain about a sharp fall in the value of the national currency.

Video footage posted on social media showed protesters setting fire to garbage dumpsters in Tehran streets to block riot police from attacking them, Reuters reported.

Pictures also showed shopkeepers were on strike in other cities including Arak, Shiraz and Kermanshah.

On Monday, police patrolled the bazaar in Tehran following clashes with protesters angered by the rial's collapse, which is disrupting business by driving up the cost of imports.

Rouhani said on Tuesday the government would be able to handle the economic pressure of new US sanctions.

Defending his economic record, Rouhani said the government’s income had not been affected in recent months, and the fall in the rial was the result of “foreign media propaganda.”

“Even in the worst case, I promise that the basic needs of Iranians will be provided. We have enough sugar, wheat, and cooking oil. We have enough foreign currency to inject into the market,” Rouhani said in a speech broadcast live on state television.

Iran’s rulers are nervous about fresh unrest, particularly related to economic hardship. 

In late December, large demonstrations about the lack of improvement in the economy spread to more than 80 Iranian cities and towns. At least 25 people died in the unrest, the biggest expression of public discontent in almost a decade.

Demonstrators initially vented their anger over high prices and alleged corruption, but the protests took on a rare political dimension, with a growing number calling on Supreme Leader Ayatollah Ali Khamenei to step down.

They also chanted against the excessive spending on Iran’s foreign military operations in countries like Syria, while people at home struggled to make ends meet.

Theodore Karasik, a senior advisor to Gulf State Analytics, said the eruption of the new phase of Iranian rioting is now being seen throughout the Iran.  

“The country is entering a phase of discontent with the existing regime,” he told Arab news. 

“The protests are getting louder and more violent and increasingly targeting the regime itself.”

That the new protests are centred around the powerful traders in Iran’s bazaars, is particularly significant Karasik said. 

“The protests and the closures of bazaars throughout the country are at the heart of not only the 1979 revolution but also the Tobacco Protests against a British monopoly in 1891–92, and the Constitutional Revolution of 1905-1911.”

Washington is to start reimposing economic penalties on Tehran in coming months after Trump quit the agreement, The nuclear deal lifted sanctions in return for curbs on Tehran’s  nuclear program.

This may cut Iran's hard currency earnings from oil exports, and the prospect is triggering a panicked flight of Iranians' savings from the rial into dollars, Reuters said.

Iran’s judiciary chief warned on Tuesday that the “economic saboteurs,” who he said were behind the fall of rial, would face severe punishment, including execution or 20 years in jail.

“The enemy is now trying to disrupt our economy through a psychological operation. In recent days some tried to shut down the Bazaar, but their plot was thwarted by the police," Ayatollah Sadeq Larijani was quoted as saying by Fars news agency.

Tehran's prosecutor Abbas Jafari-Dolatabadi said some protesters near the bazaar were arrested on Monday and would not be released before going to trial.

The Iranian government is implementing new plans to control rising prices, including banning imports of more than 1,300 products, preparing its economy to resist threatened US sanctions.

Rouhani, who is under pressure to change his economic team, said the fresh US sanctions were part of a "psychological, economic and political war", adding that Washington would pay a high price for its actions.

“Withdrawal was the worst decision he (Trump) could make. It was appalling. It hurt America's global reputation,” he said.

 

 


Treasury Secretary: US ‘could not be happier’ with Bahrain outcome

Updated 27 June 2019
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Treasury Secretary: US ‘could not be happier’ with Bahrain outcome

  • Mnuchin confident of raising the first $4 billion soon

MANAMA: Jared Kushner’s “workshop” aimed at securing economic prosperity for Palestine closed with optimistic forecasts from President Donald Trump’s special adviser that it could be the basis for a forthcoming political deal with Israel.

Kushner told journalists at a post-event briefing: “I think that people are all leaving very energized, very pleasantly surprised at how many like-minded people they see. It is a solvable problem economically, and the reason why we thought it was important to lay out the economic vision before we lay out the political vision is because we feel we need people to see what the future can look like.

“The Palestinian people have been promised a lot of things over the years that have not come true. We want to show them that this is the plan, this is what can happen if there is a peace deal.”

The next stage, before a political deal is attempted, will be to get feedback from the event and agree to commitments for the $50 billion package for Palestine and other regional economies.

“I think you need $50 billion to really do this the right way, to get a paradigm shift,” Kushner added.

US Treasury Secretary Steven Mnuchin said: “I could not be happier how this has gone,” adding that he was “highly confident we will soon have the first $4 billion. It’s going to be like a hot initial public offering.”

Most of the attendees at the event in Manama, Bahrain, gave Kushner’s economic proposals a serious hearing and agreed it was a useful exercise. Mohammed Al-Shaikh, Saudi minister of state, said: “Can it be done? Yes it can, because it was done before. In the mid-1990s to about the year 2000 there was a global coordinated effort by the US and other countries. I was at the World Bank at the time. I saw it. If we could do it then with significantly less money we can do it again.”

Others warned, however, that there was still a long way to go on the political aspects of the Israeli-Palestinian relationship. Tony Blair, the former British prime minister and Middle East peace envoy, said a political deal was essential.

“This is an economic plan that, if it is implemented, is going to do enormous good for the Palestinian people. But it isn’t a substitute for the politics. There will be no economic peace. There will be a peace that will be a political component and an economic component. The economy can help the politics and the politics is necessary for the economy to flourish.

“The politics has got to be right in this sense as well. The obvious sense people talk about is how do you negotiate the contours of the boundaries of a Palestinian state in a two state solution,” Blair said.

Christine Lagarde, managing director of the International Monetary Fund, highlighted the work the fund has done in conflict situations. “We had an exceptional result in Rwanda, and a good economic outcome in Mozambique,” she said. But she contrasted this with disappointing results in other African conflicts.

Lagarde said that the aim of the economic plan should be to create jobs. “The focus should be on job-intensive industries, like agriculture, tourism and infrastructure.”

Willem Buiter, special economic adviser to US banking giant Citi, said there were obstacles to the Kushner plan succeeding. “Necessary conditions for any progress are peace, safety and security. And there must be high-quality governance and the rule of law in Palestine,” he said.

HIGHLIGHTS

• Jared Kushner believes the conflict is a ‘solvable problem economically.’

• The senior adviser vows to lay out political plans at the right time.

• Expert urges external funding in the form of grants or equity, rather than loans.

He also suggested external funding should be in the form of grants or equity, rather than loans. “We should not burden a country trying to escape from its past with high debts,” he added.

Some attendees warned of the risks to investor funds in the current political situation in the Middle East. 

But Khalid Al-Rumaihi, chief executive of the Bahrain Economic Development Board, said: “Risk is not new to the region. We’ve tackled it for the past 30 to 40 years, but that has not stopped investment flowing in.

“Investors trade risk for return, and the Middle East has learned to cope with risk and conflict. There are pockets where the risk is high and Palestine is one of them. But I remain positive. The return in the region is higher to compensate for the risk,” he added.

At a session of regional finance ministers, Mohammed Al-Jadaan of Saudi Arabia said: “The region is in desperate need of prosperity and hope. There is a way forward, but you need political commitment.”

UAE Finance Minister Obaid Al-Tayer added: “We are decoupling politics from economics. If it’s the only initiative on the table we should all give it a chance.”