Iran ‘feeling the strain’ as sanctions bite

Iran has plunged into economic crisis since President Donald Trump pulled the US out of the Joint Comprehensive Plan of Action (JCPOA) - with the riyal suffering as a result. (AFP)
Updated 08 November 2018

Iran ‘feeling the strain’ as sanctions bite

  • Tehran posturing ignores grim economic reality, analysts say
  • Iran has plunged into economic crisis since President Donald Trump pulled the US out of JCPOA

LONDON: As the US vows to inflict “relentless pressure” on Iran with sanctions, analysts have questioned Tehran’s ability to withstand more blows to its already stricken economy.
Seyed Mohammad Kazem Sajjadpour, Iran’s deputy foreign minister and also its ambassador to the UK, this week insisted the country was well able to “manage” sanctions, having lived through eight years of restrictions during the Iran-Iraq war.
But experts on regional politics and economics said Sajjadpour was merely posturing.
“Iran’s public rhetoric about withstanding sanctions does not square with its economic reality,” said Dr. Lina Khatib, head of the Middle East and North Africa program at the Royal Institute of International Affairs (also known as Chatham House), where the ambassador addressed a gathering on Tuesday.
“Iran is already under financial strain due to both its adventurism in Syria and the US withdrawal from the nuclear deal, which reduced the Western private sector’s interest in Iran,” she said. “The reinstated sanctions will further erode Iran’s economic stature despite its claims of resilience.”
Iran has plunged into economic crisis since President Donald Trump pulled the US out of the Joint Comprehensive Plan of Action (JCPOA) — better known as the Iran nuclear deal — earlier this year.



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With little or no purchasing power and almost no foreign suppliers prepared to deal with them, Iranian businesses have been crippled. Customers struggle against the rising cost of goods and exorbitant prices demanded by black marketeers, and there is a growing trade in human organs.
The banking system has all but stagnated and Iran’s currency has lost more than two-thirds of its value against the US dollar since March.
On Wednesday, US National Security Adviser John Bolton warned of additional sanctions on Iran, but gave no details, while Hassan Rouhani, Iran’s president, admitted that the nation faces a “war situation” and compared Trump to Iran’s old enemy, Saddam Hussein.
But despite all the evidence of the hardship suffered by ordinary Iranians, Sajjadpour insisted the country was on the up, pointing out that it has 4.5 million university students, still produces 200,000 engineers each year and was continuing to build institutions.
“Iran is a confident nation,” he said.

Gulf expert Dr. Neil Quilliam does not entirely dismiss Sajjadpour’s assessment, but said that the challenges today were different.
“Sajjadpour quite rightly pointed out that Iran has had bigger challenges in the past, including the eight-year Iran-Iraq war and previous rounds of sanctions to which all major powers signed up. Nevertheless, times have changed and the Iranian economy is more fragile than at any time before, so the government will come under considerable domestic pressure to negotiate with the US,” he said.
The likelihood of that happening rests very much on the midterm elections in the US, he said. Trump’s Republican party has retained control of the Senate, but the Democrats now hold a majority in the House of Representatives.
Success for Trump would encourage a move toward the negotiating table, said Quilliam.
“But if the Democrats do well, then the Iranians will do their best to hold out for two years and try to draw the EU further away from the US.”
It is no secret that the European backers of the Iran nuclear deal were dismayed when Trump announced he was pulling the US out.
Sajjadpour, who was formerly his country’s ambassador to the UN and is currently president of the Institute for Political and International Studies, the research branch of Iran’s foreign ministry, accused the Trump administration of treating Iran like a plaything while ignoring its own “political civil war” at home.
He insisted Iranian politics was focused inward — “We don’t worry about who is in the White House” — and denied the nation posed a threat. Iran has repeatedly been accused of being the world’s leading state sponsor of terror.


Netanyahu to cut US trip short after rocket attack near Tel Aviv

Updated 41 min 23 sec ago

Netanyahu to cut US trip short after rocket attack near Tel Aviv

  • Netanyahu said the incident will evoke a strong Israeli reaction
  • Palestinian rockets rarely reach an area at that distance from Gaza

MISHMERET/JERUSALEM: Israeli Prime Minister Benjamin Netanyahu said on Monday that he is to cut short his trip to the United States after a rocket attack near Tel Aviv.

“In light of the security events I decided to cut short my visit to the US,” Netanyahu said, calling the attack a heinous crime that would draw a strong Israeli response.

He said he would meet with President Donald Trump in the coming hours and then fly back immediately.

A rocket fired from the Gaza Strip hit a house in a community north of Tel Aviv and caused it to catch fire, wounding seven Israelis, authorities and medics said.

Israel’s army said the rocket was fired from the Palestinian enclave run by Islamist movement Hamas, raising the risk of another escalation between the two sides just ahead of April 9 Israeli elections.

The house hit was located in the community of Mishmeret, police said. Medics said they were treating one Israeli with moderate wounds and four others injured lightly.

Mishmeret is more than 80 kilometers from the Gaza Strip and rocket fire from the Palestinian enclave at that distance is rare.

Monday’s incident comes after two rockets were fired from Gaza toward Tel Aviv — also rare — on March 14.

No damage or injuries were caused, but Israel responded to that and further rocket fire by hitting what it said were around 100 Hamas targets across the Gaza Strip.

Four Palestinians were reported wounded in those strikes.

Both Hamas and its ally Islamic Jihad denied they were behind the March 14 rocket fire toward Tel Aviv, raising the possibility they were launched by fringe groups.

Israel’s military said they were launched by Hamas, but later there were Israeli media reports that the army’s preliminary assessment was that they had been fired by mistake during maintenance work.

The reports were a sign that Israel was seeking to calm tensions. The military had refused to comment on the reports at the time.

Monday’s rocket comes just days ahead of the March 30 one-year anniversary of Palestinian protests and clashes along the Gaza Strip’s border with Israel.

An informal truce between Hamas and Israel had led to relative calm along the border of the blockaded strip, but recent weeks have seen another uptick in violence.