Economic Warfare is Fuelling a Pandemic: US Sanctions to Iran during COVID-19

 

In March 2020, to the dismay of the public health community, the US government imposed a series of fresh economic sanctions on entities trading with Iran. This is only six days after the World Health Organization (WHO) declared the outbreak “a global pandemic”.

While sanctions can have negative effects on population health in times of relative stability, they pose a serious threat to global health security during an infectious disease outbreak.  Iran’s health system, weakened by multiple sanctions over the years and restricted access to vital aid, presents a threat to the global community by impeding its ability to manage COVID-19 locally.  Despite pleas from Iran and other nations, the US has not committed to effective sanctions relief during this crisis but instead has expanded them.

Since the US government’s controversial withdrawal from the Joint Comprehensive Plan of Action (JCPOA) – an agreement towards lifting the Iranian nuclear programme – in May 2018, sanctions that restrict Iran’s banking and financial capacity have been reimposed to “to prevent Iran from ever developing a nuclear weapon”. Countries that have maintained trade relations with Iran have been threatened with similar restrictions. While the US has officially built exemptions into its sanction’s mechanisms for humanitarian imports, for example, in medicines and hospital equipment, over the years, the escalating banking restrictions and lack of access to financial institutions have directly and indirectly hurt Iran’s health system and subsequently its health outcomes.

The exclusion of Iran from international banking structures has resulted in enormous trade limitations. The consequent high rates of inflation, restricted access to foreign reserves and currency devaluation have resulted in increased living costs and unemployment, which has caused a hike in drug prices and treatment costs, reducing adherence to treatment and preventable morbidities. Service coverage by health insurance companies has also been limited.  The inability to import key raw materials and finished goods has led to supply chain backlogs and severe drug shortages; 44% of drugs that are classified as essential medicines by WHO were in short supply in 2016.

As a result, Iran is currently confronted by two concurrent threats: a public health crisis that is rapidly deteriorating and the fall out of longstanding economic sanctions from the US and other countries. As of 22nd June 2020, Iran had confirmed nearly 204,952 COVID-19 cases and 9,623 deaths: globally, one of the highest counts. The WHO warned that these numbers are likely an underrepresentation viii. While not unique to Iran, a shortage of beds, ventilators and personal protective equipment (PPE), compromised surveillance capacity, information restrictions, diagnostic kit import challenges and overall a sicker population have resulted in high hospitalisation and fatality rates. This exposes a tension between supranational politics and global health. As Dr Tedros Adhanom Ghebreyesus, Director-General of WHO reminded us recently, “this virus knows no borders, and we [the world] are only as strong as [its] weakest health system“.  A failure to control and mitigate the epidemic has already resulted in a number of preventable deaths, the amplification of the disease and the formation of outbreak hotspots in countries bordering or with warm ties to Iran. Moreover, if transmissions are not further controlled, it will be impossible to eradicate COVID-19 regionally and thus globally.

During the outbreak, attempts to mitigate the effects of sanctions have mostly failed, with only a few success stories through the recently established Swiss Humanitarian Trade Agreement (SHTA) and the Instrument in Support of Trade Exchanges (INSTEX). These are trading mechanisms for goods delivered to Iran. In February 2020, the Trump administration announced a sanctions waiver to allow humanitarian aid transactions to Iran via the Swiss channel.   Although, countries have since been able to provide some humanitarian goods using this channel, this hasn’t been without delay and the Iranian government insists that it does not match the urgent needs of the country during the pandemic.  On March 31st the first export of humanitarian aid from Europe was confirmed through the INSTEX mechanism. France, Germany and the United Kingdom were the countries behind this transaction and managed to do it without violating any of the current sanctions. Additionally, Iran has made an unprecedented request to the International Monetary Fund (IMF) for an emergency loan through a “rapid financial instrument”. The US has unsurprisingly signalled that it would vote to block any loans to Iran.

These examples demonstrate that joint international pressure must be exerted on the US and other governments so that effective mechanisms for banking and financial sanctions relief are implemented during an outbreak. It is also essential that the global community develops tools to allow these sanctions relieving mechanisms and financial instruments to be triggered much earlier. As the world is learning in real-time, delays even by a few days in managing an outbreak such as COVID-19 can have serious consequences on the number of cases and can cause undue pressure on health systems. Now more than ever, Iran, which is thought to be experiencing a second wave and other countries under sanctions, like Venezuela, North Korea and Syria must be able to trade with the international community through their banking systems and potential transnational partners should be reassured that they won’t be penalised.

We are aware that the removal of these sanctions will not completely relieve these countries of all its health systems challenges or indeed completely transform its COVID-19 health outcomes. The Iranian government has been accused of mismanaging national finances in the past, and a lack of transparency and a slow initial response to the COVID-19 outbreak will also have contributed to these poor outcomes. Nevertheless, evidence shows that lifting sanctions improved the Iranian economy and health system briefly from 2015-2018 when the JCPOA was in place. This demonstrates that sanctions are a key determinant of national and global health.

While the COVID-19 pandemic has reminded us of the interconnectedness of our globalised world, it has also exposed that an accordingly global and coordinated response is lacking. Without nimble and effective mechanisms for “sanctions relief” in countries like Iran, global and national health, including the US’s will be jeopardised.  After all, how useful is a policy designed to protect the world from the proliferation of nuclear weapons, if it exposes us to a pandemic for the foreseeable future?

About the authors:

Ines Hassan is a postgraduate researcher at the Global Health Policy Unit and the Global Health Governance Programme, University of Edinburgh. Twitter: DrInesHassan1

Mariana Soto Pacheco is a postgraduate researcher at the Global Health Policy Unit and the Global Health Governance Programme, University of Edinburgh. Twitter: MarianaSotoPac1

The views expressed are those of the authors alone and not necessarily those of their associated organisations.

Competing Interests: The authors declare no competing interests.

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