Iranian regime inundated by coronavirus already reeling from sanctions, protests

The novel coronavirus has made its way around the world, sparing none as it strains public health systems, disrupts commerce, tanks economies and forces millions of people into isolation.

But the virus has hit one country particularly hard: Iran.

Even though analysts say the numbers are understated, Iran has reported one of the highest contraction and death rates from COVID-19 outside of mainland China and Italy. The Johns Hopkins University coronavirus tracker Wednesday afternoon tallied over 1,100 deaths and more than 17,000 infected. Exile groups critical of the regime say the real number is much higher — well over 6,000 to date.

Where the U.S., Europe and much of East Asia boasted solid economies and relative stability when the virus hit, Iran faced a perfect storm of challenges even before the first case was reported: a plunging domestic market, violent street protests, a strangling U.S.-led campaign of economic sanctions, rising political apathy and increasingly tattered social welfare nets. Just as the COVID-19 crisis was emerging, a global price war deeply lowered the value of oil, Iran’s most critical export.

A large chunk of the cases of COVID-19 have been traced to Iran. Even top Iranian officials acknowledge that a worst-case scenario would overwhelm the country’s hospitals and public health services and result in perhaps 1 million deaths or more. The crisis has even put a damper on one of the high points of the Iranian calendar: the celebration of Nowruz, the Persian new year.

Iranian Supreme Leader Ayatollah Ali Khamenei issued an edict this week prohibiting unnecessary travel. Many Iranians traditionally make the holiday trek to the northern provinces of Mazandaran and Gilan, which are two of the worst hit with COVID-19.

That represents another blow to morale and the economy. During last year’s holiday, some 25 million travelers filled hotels, creating 1.2 million temporary jobs and $1.2 billion in revenue, The Associated Press reported, citing the moderate Iranian daily newspaper Hamshahri.

A significant number of senior members of the Islamic republic and the Cabinet have been infected with the coronavirus, and at least four have died. An increasingly cynical Iranian public believes the government is covering up the true death toll from the outbreak.

The string of bad news presents perhaps the most significant challenge to the theocratic leadership’s hold on power since the 1979 revolution. Top figures in Tehran have gone into overdrive to deflect blame.

Iranian Foreign Minister Mohammed Javad Zarif on Tuesday pointed to crippling Trump administration sanctions on the country as a cause for the massive spread of the virus.

“Unlawful US sanctions drained Iran’s economic resources, impairing ability to fight #COVID-19. They literally kill innocents,” Mr. Zarif said on Twitter. He appealed to European nations to ignore the American sanctions preventing virtually all trade and investment with Iran.

“It is immoral to observe them: Doing so has never saved anyone from future U.S. wrath. … Join the growing global campaign to disregard U.S. sanctions on Iran,” Mr. Zarif tweeted.

The U.S. has offered assistance to Iran to help combat the massive spread of the coronavirus in “numerous ways,” Secretary of State Mike Pompeo told reporters during a Tuesday briefing.

“We’re trying to help,” he said. “We have an open humanitarian channel to facilitate legitimate transactions even while ensuring our maximum pressure campaign denies terrorists money.”

Iran’s leadership, Mr. Pompeo said, “is trying to avoid responsibility for their grossly incompetent and deadly governance.”

Iran’s regime has long defied predictions of imminent collapse, but outside analysts say the situation today looks and feels different.

For the first time in 40 years, the country has sought a $5 billion loan from the International Monetary Fund to underwrite its response to the pandemic, highlighting the fragility of Iran’s economy amid the paralyzing U.S. sanctions.

String of blows

The year began with the stunning U.S. military operation that killed top Iranian Gen. Qassem Soleimani, followed by government’s fumbling response to the accidental downing of a Ukrainian passenger plane in the attack’s aftermath. Iranians were already on edge after violent, nationwide protests broke out in November in response to the Iranian government’s announcement of a 300% increase in heavily subsidized fuel prices.

The demonstrations quickly snowballed into a much broader anti-regime movement in cities across the country with demands for political reforms and a curb on influence by neighboring Iraq in the country’s domestic affairs.

Since the Soleimani killing, Iran has come to the verge of war with U.S. forces in Iraq, held nationwide parliamentary elections that attracted record low turnout and then got caught in Saudi Arabia’s global oil price war that, as of Wednesday, pushed oil prices to their lowest point in 18 years.

The February parliamentary elections were widely seen as a repudiation of the regime despite intense efforts by Iranian leaders to pump up turnout. In an effort to bolster voter participation — ultimately just 42% of eligible voters cast ballots — the government downplayed the significance of the coronavirus spread. Public health analysts said that was one primary reason for the massive outbreak in the country.

Authorities even called off Friday prayers in all provincial capitals — unprecedented since the revolution — out of public health concerns.

“The Islamic Republic had defied the predictions of regime change proponents who presaged its economic and political collapse,” Virginia Tech economist Djavad Salehi-Isfahani, a nonresident senior fellow at the Brookings Institution, wrote in Foreign Affairs on Wednesday. “But the COVID-19 crisis has no silver lining, and the virus is unresponsive to the instruments of power that the Islamic Republic has amassed.”

As Iran faces the fallout of the uprisings and the escalating coronavirus crisis, the country has grappled with staggering drops in its oil market. Because of a Saudi-Russian price war in a time of abundant global supply, oil prices plunged 30%, with barrels trading around $30 each, marking the most significant single drop since the 1991 Persian Gulf War.

Analysts warn that oil demands are falling rapidly and unpredictably because of the pandemic and the impacts are likely to span energy markets around the world.

“The current oil price collapse reflects a rare confluence of both demand destruction and massive oversupply hitting at the same time,” said Neil Brown, managing director of the Council on Foreign Relations’ KKR Global Institute.

“We’re seeing the coronavirus impact deepen in three of the four key demand markets globally. And that’s on top of what was already a weakening demand picture with economic slowdown,” he said.

The compounding issues are shaking the pillars of an already unstable Iranian government, and analysts say the situation could lead to a leadership shift when moderate President Hassan Rouhani steps down next year — if not before.

“The coronavirus is putting increasing pressure on the regime,” said Nicholas Carl, an Iran analyst at the American Enterprise Institute.

The virus is exacerbating domestic unrest, economic turmoil and other issues and could ultimately lead to Mr. Rouhani’s ouster, he said.

“The pressures that this virus is putting on them really could just make a lot of the problems that are already sort of facilitating this political shift that much worse,” he said, “and it really adds momentum to this shift.”


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