Rouhani: Iran cannot shut down economy despite worsening coronavirus outbreak

Iran has suffered a sharp economic downturn after US President Donald Trump withdrew from a landmark nuclear agreement in 2018 and reimposed crippling sanctions. (WANA via Reuters)
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Updated 11 July 2020

Rouhani: Iran cannot shut down economy despite worsening coronavirus outbreak

  • Iran must continue ‘economic, social and cultural activities while observing health protocols’
  • The International Monetary Fund predicts Iran’s economy will shrink by six percent this year

TEHRAN: Iran said on Saturday that it cannot afford to shut down its sanctions-hit economy, even as the Middle East’s deadliest coronavirus outbreak worsens with record-high death tolls and rising infections.
Iran must continue “economic, social and cultural activities while observing health protocols,” President Hassan Rouhani said during a televised virus taskforce meeting.
“The simplest solution is to close down all activities, (but) the next day, people would come out to protest the (resulting) chaos, hunger, hardship and pressure,” he added.

However, he called for big gatherings such as weddings and wakes to be banned to stem a rise in coronavirus infections.
Shortly after Rouhani’s televised speech, a police official in Tehran announced the closure of all wedding and mourning venues in the capital until further notice.
The Islamic republic has been struggling since late February to contain the country’s COVID-19 outbreak, which has killed over 12,400 people and infected more than 252,000.
Deaths from the respiratory disease hit 221 on Thursday — a single-day record for Iran.
The country closed schools, canceled public events and banned movement between its 31 provinces in March, but Rouhani’s government progressively lifted restrictions from April to reopen its sanctions-hit economy.
The outbreak’s rising toll has prompted authorities to make wearing masks mandatory in enclosed public spaces and to allow the hardest hit provinces to reimpose restrictive measures.
Iran has suffered a sharp economic downturn after US President Donald Trump withdrew from a landmark nuclear agreement in 2018 and reimposed crippling sanctions.
The International Monetary Fund predicts Iran’s economy will shrink by six percent this year.
“It is not possible to keep businesses and economic activities shut down in the long-term,” Rouhani said, emphasizing that “the people will not accept this.”
Health Minister Said Namaki warned on Wednesday of a potential “revolt over poverty” and blamed US sanctions for the government’s “empty coffers.”
The reopening of the economy “was not over our ignorance (of the virus’ dangers), but it was due to us being on our knees against an economy that could take no more,” Namaki said on state television.
US sanctions targeted vital oil sales and banking relations, among other sectors, forcing Iran to rely on non-oil exports, which have dropped as borders were closed to stem the spread of the virus.


Creditors take action against Al Jaber in decade-long saga

Updated 23 September 2020

Creditors take action against Al Jaber in decade-long saga

  • The downturn in the Gulf construction sector has triggered a number of corporate restructurings as companies are forced to reschedule debt, raise fresh borrowing or enter insolvency protection

DUBAI: Creditors have started to enforce claims against Abu Dhabi-based Al Jaber Group, in a dispute triggered by a construction downturn in the UAE more than a decade ago.

Al Jaber, a contractor with interests across a range of sectors, has struggled since building up debt in the wake of a UAE real estate crisis and began talks with creditors in 2011.

Abu Dhabi Commercial Bank, which is working as restructuring and security agent, said in a document dated Sept. 21 which was seen by Reuters, that it had instructions from the majority of creditors to proceed with claims against Al Jaber.

A representative for Al Jaber did not immediately respond to a request or comment. ADCB declined to comment.

The move follows delays in restructuring agreements, under which Al Jaber was to appoint a new board and sell companies and assets such as the Shangri-La hotels in Dubai and Abu Dhabi.

In exchange, creditors had agreed to extend the maturity of a 5.9 billion dirhams ($1.61 billion) loan, cut interest rates, and provide additional revolving debt.

The initial enforcement action now being pursued by creditors includes the “acceleration and demand for payment of amounts outstanding” under the previously agreed debt restructuring, a source familiar with the matter said.

Enforcement will also allow creditors to claim against Al Jaber’s chairman under a 4.5 billion dirham loan to the company.

Several UAE companies have sought to extend debt maturities or agree better terms in recent years to avoid defaults, after an oil price crash hit energy services and construction.

The coronavirus crisis has added to the strain and Arabtec Holding, the UAE’s biggest listed contractor, this week will discuss options including dissolution after the pandemic hit projects and led to additional costs.

Meanwhile, Dubai-listed construction firm Drake & Scull is working to reach an agreement with its creditors in an out-of-court process.