UN watchdog in crisis talks as Iran boosts nuclear fuel

Iranian President Hassan Rouhani and Iran's nuclear technology organisation chief Ali Akbar Salehi during the "nuclear technology day" in Tehran in April. (HO / Iranian Presidency / AFP)
Updated 07 July 2019

UN watchdog in crisis talks as Iran boosts nuclear fuel

  • Regime must be held accountable, says US
  • Iran has breached the limit of 300kg for stockpiles of enriched uranium

TEHRAN/VIENNA: The UN’s atomic watchdog has called an emergency crisis meeting to discuss Iran’s growing expansion of its nuclear program.

Tehran has already breached the 300 kg limit for stockpiles of enriched uranium under the 2015 nuclear deal, the Joint Comprehensive Plan of Action (JCPOA), and a senior aide to Supreme Leader Ali Khamenei threatened on Saturday to further boost its uranium enrichment.

The process “will increase as much as needed for our peaceful activities,” international affairs adviser Ali Akbar Velayati said. “For the Bushehr nuclear reactor we need 5 percent enrichment.”

The 2015 deal capped Iran’s enrichment maximum at 3.67 percent, sufficient for power generation but far below the 90 percent level required for a nuclear weapon.

Bushehr, Iran’s only nuclear power station, currently runs on imported fuel from Russia that is closely monitored by the UN’s International Atomic Energy Agency (IAEA).

Increasing enrichment closer to weapons-grade was “unanimously agreed upon by every component of the establishment,” Velayati said.

“We will show reaction exponentially as much as they violate it. We reduce our commitments as much as they reduce it. If they go back to fulfilling their commitments, we will do so as well.”

HIGHLIGHT

Analysts say Iran’s breaches so far mean little in terms of developing a nuclear weapon, but are ‘nuclear blackmail’ to pressure the other signatories to the JCPOA into helping Iran to avoid US economic sanctions.

The emergency meeting of the IAEA’s board of governors on Wednesday was requested by Ambassador Jackie Wolcott, the US representative to the IAEA and other international organizations in Vienna.

The US mission in Vienna described as “concerning” the IAEA’s latest report on Iran’s compliance with the JCPOA, confirming that Tehran had exceeded the permitted stockpile of enriched uranium.

“The international community must hold Iran’s regime accountable,” the US mission said.

Analysts say Iran’s breaches so far mean little in terms of developing a nuclear weapon, but are “nuclear blackmail” to pressure the other signatories to the JCPOA into helping Iran to avoid US economic sanctions.

However, a larger stockpile of enriched uranium combined with increased enrichment levels narrows the one-year window experts believe Iran would need to have enough material to build a nuclear bomb if it chose to do so.

“This would be a very worrisome step that could substantially shorten the time Iran would need to produce the material needed for nuclear weapons,” said Miles Pomper, a senior fellow at the Middlebury Institute of International Studies’ James Marin Center for Nonproliferation Studies.

“Both Iran and the Trump administration should be looking for ways to de-escalate the crisis, rather than exacerbate it.”


Yemen’s rival powers battle over banknotes

Updated 18 January 2020

Yemen’s rival powers battle over banknotes

  • The Houthis outlawed the use and possession of crisp new Yemeni riyal bills
  • The riyal stood at about 560 to the dollar across Yemen before the ban was announced in mid-December

SANAA/ADEN: Yemen’s warring sides opened a new front in their five-year conflict on Saturday - a battle over old and new banknotes that threatens to create two economies in the same state.

As of midnight, the Houthi movement which controls the capital Sanaa outlawed the use and possession of crisp new Yemeni riyal bills issued by its rivals in the internationally recognised government based in the southern port town of Aden.

The Iran-allied Houthis, who say people should only use the old bills, have defended the ban as a move against inflation and what they call rampant money-printing by the government.

The government has branded the ban an act of economic vandalism. And the population, as ever, have been left stuck in the crossfire.

Yemenis from both sides told Reuters the ban had effectively created two currencies with diverging values, adding to the turmoil in a state already governed by two powers and brought to its knees by the war.

In the one-month build up to the ban, people in Houthi-controlled areas have been queuing to try to exchange their new riyal notes for old, turning the grubby and torn bills into a prized and relatively scarce commodity.

The riyal stood at about 560 to the dollar across Yemen before the ban was announced in mid-December. The rate has since slipped a little in Houthi-controlled areas to around 582, but slumped much further to 642 in the south, an area now awash with new bills.

That relative strength might look like a boon for northerners, if only they could get hold of enough of the old notes in time to keep afloat in the largely cash-based economy.

“We go for the exchange and they won’t take [the new notes] from us. Or say they need three, four or five days,” craftsman Abdullah Saleh al-Dahmasi told Reuters on a Sanaa street a week before the ban came into force.

“The new one isn’t accepted and the old one is worn out, they have to find a solution,” the 27-year-old said.

A few days before the ban came in, around 20 angry men and women were turned away from one exchange which said it had filled its quota for the day. Many had been coming there for three days in the hope of swapping their cash.

North-south trade has become far more expensive as traders have to buy and sell two types of riyal - told apart by the state of the paper and the different sizes and designs.

TWO CENTRAL BANKS

Many people in Sanaa told Reuters they felt the ban was needed to constrain inflation. But they were facing difficulties in the short-term.

“When people saw that new currency come into circulation, they held onto it as it was new and shiny. But now it’s a problem that they have it,” said 28-year-old Abdallah Bashiri, a private sector worker in Sanaa.

In that city, legal exchanges will swap 100,000 Yemeni riyals (around $172) in new notes for electronic currency that can be spent on things like phone credit or electricity bills, for a small fee of around $1.50.

But things get more challenging when it comes to actual paper that can be spent in food markets. Sanaa residents said unofficial exchanges are offering to change 100,000 riyals of new notes into 90-96,000 riyals of the scarcer old.

After the Houthis stormed the capital Sanaa in 2014 and ousted the government of President Abd Rabbu Mansour Hadi, Yemen’s central bank split into two branches - one in Sanaa, under Houthi control, and one internationally recognised branch in Aden, which has access to money printers.

The Aden authorities have defended their decision to step up the printing of new money from 2017, saying it was an attempt to deal with a building cash crunch and pay public sector salaries.

“The Houthis ... did not consider the economic cost to society,” Yousef Saeed Ahmad, adviser to the governor of Aden’s central bank, told Reuters there this week.

“We hope the measures taken are short-term. They cannot be kept up because the economy is one, it is interrelated and commodities flow from Sanaa to Aden and vice versa. This measure will aggregate the living conditions of all Yemenis,” he said.

The Houthis have defended their ban as a way of defending the value of the currency.

“The Sanaa central bank had to take measures to stem the dangerous practices the Aden central bank was carrying out through their monetary policy,” said Sami Al-Siyaghi, in charge of foreign banking operations at the Sanaa central bank.

“The imposition of [Aden’s] monetary stance on us led to the collapse of the national currency against foreign currency ... With each new issuance you notice a commensurate collapse in the riyal against foreign currency,” Siyashi told Reuters.