Analysis |

As Iran Tries to Project Business as Usual, the Coronavirus Inflames Tensions

The Islamic Republic is facing a massive economic crisis, internal fissures and distrust over the official coronavirus statistics, not to mention its foreign woes

A photo of Dr. Zvi Bar'el.
Zvi Bar'el
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Iranian President Hassan Rohani.
Iranian President Hassan Rohani speaks with a picture of Iran's supreme leader, Ali Khamenei, behind him, at a cabinet meeting in Tehran, Mar. 4, 2020.Credit: Official Presidential Website/Reuters
A photo of Dr. Zvi Bar'el.
Zvi Bar'el

The announcement this week by the Iranian Revolutionary Guards of their first successful launch of a military satellite after three failed attempts competed with the news of stores reopening in the Islamic Republic. It’s hard to gauge the extent to which Iranians are excited about the technological achievement. What was more apparent were scenes of Tehran’s streets filled with relieved shoppers and shopkeepers after a long coronavirus lockdown.

Iran is cautiously trying to return to routine, having seen a decline in the daily coronavirus death toll and in the number of new cases of the virus. The official toll stands at more than 5,000 dead and 85,000 infections, but the Iranian parliament’s research department says the real figures are twice those numbers. Tehran’s mayor is calling on the government to release separate figures for the capital, in the belief that his city has a higher rate of infection than the rest of the country, and out of concern that reopening shops there could lead to a worse outbreak than in other areas.

Corona keeps Bibi in power and unmasks the MossadCredit: Haaretz

In light of the severe economic crisis that the regime is facing, with seven million workers seriously impacted, it is vital for the regime to project a sense that it is in control of the outbreak and to present optimistic data justifying a resumption of economic activity. As in many countries in the region, the real figures are a closely guarded secret, as if they were highly valuable intelligence.

In addition, as in Israel and the West, decision-making on an exit strategy is subject to both political and economic considerations. Therefore the timing of the space satellite launch and news of domestically produced military drones being delivered to the army were intended to convey to the public and the world at large that it’s business as usual in Iran.

But things are far from routine in Iran right now. Inside the regime, President Hassan Rohani has been engaged in a bitter dispute with the Revolutionary Guards and the Justice Ministry over how the government spent billions of dollars intended for the import of basic products. According to an official financial audit, $4.8 billion that was allocated to importers has simply “disappeared.”

The money was evidently paid out but the goods were never imported, and much of the money was transferred to importers of luxury vehicles, in violation of directives. Rohani viewed the audit report as a deliberate attempt to harm him and his government and has demanded to know why the government comptroller was examining the financial conduct of the Revolutionary Guards, the Justice Ministry and the military.

The conservative wing of the Iranian parliament has sharply criticized the government’s handling of the coronavirus crisis, accusing it of waiting too long to impose a lockdown, of failing to procure protective gear and testing kits in a timely manner, and now, of hastening to reopen businesses in a manner that poses the risk of a new outbreak.

In response, Iran’s Mehr news agency published a long list on its website of steps the government has taken – along with dates – to deal with the virus. They include decisions to shut the country’s airports and borders, to close schools and universities, to limit travel among Iranian cities and to bar pilgrimages to holy sites, along with an economic aid program that was coordinated with the central bank.

There are also reports that Rohani was in favor of accepting aid from the United States and any other country that was willing to help Iran, but that the Revolutionary Guards and the supreme leader, Ali Khamenei, vetoed taking American assistance.

The Revolutionary Guards’ ‘inventions’

This week Revolutionary Guards commander Hossein Salami unveiled a new “invention” – a device that can purportedly identify if someone is infected with the coronavirus from a distance of 100 meters (330 feet). The demonstration of the gadget on state television aroused additional conflict between the Guards and the government, with the Health Ministry spokesman blasting the television network for essentially broadcasting an advertisement in the guise of a medical invention.

“The effectiveness of the device is unproven and it has not received Health Ministry approval,” the spokesman said. And yet, the Revolutionary Guards were again able to garner a bit of political capital at the government’s expense over it.

Volunteers wearing face masks to curb the spread of the coronavirus sew face masks at the Hafez theatre in Tehran, April 15, 2020. Credit: Ebrahim Noroozi,AP

It should be noted that other medical inventions from the Revolutionary Guards, including a new type of mask and ventilators, were abandoned shortly after they were unveiled when they were found unsuitable.

Iran’s simultaneous effort to halt the spread of the virus and to restart its economy and assist the various sectors that have been seriously impacted by the shutdown has required it to find new channels of funding, which have included dipping into the national reserves to the tune of $1 billion. For years, this fund was funneled cash from surplus profits derived from the difference between the country’s oil revenues and the government’s expenditures.

It was designed to ensure Iran’s future survival and not to pay for ongoing expenses that are supposed to be covered by revenue from taxes and exports. For the first time in 60 years, Iran has also requested a $5 billion loan from the International Monetary Fund. The approval of the loan requires American consent, which is far from assured, despite pressure on Washington from European countries and members of Congress.

Iran is also currently negotiating with European countries about expanding the use of the mechanism that was set up to bypass American sanctions.

It was used this month for the first time in connection with two deals for the sale of pharmaceuticals. But even if these funding channels come through, Iran will have to address an array of needs costing tens of billions of dollars, which is beyond what the state budget can handle.

Handout photo from Iran's Revolutionary Guard Corps website shows Gen. Amir Ali Hajizadeh, the head of the Guard's aerospace division, during the launch of the Nour military satellite. Credit: Sepah News/AFP

Iran is believed to have a substantial financial cushion in secret funds overseen by Khamenei, the supreme leader, and by the Revolutionary Guards, but the question is if Khamenei will decide to touch them to help the government run the country, or if he would rather that a further chunk be taken out of the national reserve fund, since that would not hit him and his close associates in the pocket.

Same foreign policy

The heavy pressures at home have not yet spurred Iran to alter its foreign policy, either in relation to its nuclear program or its involvement in the regional conflicts in Syria and Yemen. This week, a three-way virtual meeting among Iran, Russia and Turkey was held to discuss coordinated policy in Syria. Iran’s deep involvement in Iraqi politics has also not been suspended as a result of the coronavirus pandemic, and in Yemen, Houthi and Saudi forces continue to battle it out.

“Iran is currently combating two viruses. One is the coronavirus and the other is the American sanctions,” Mahmoud Vaezi, President Rohani’s chief of staff, said this week.

But on both of these fronts, Iran needs international support, which could compel it to soften its positions. And it’s happening just as the country is preparing for a presidential election that is expected to be held in June of next year. The internal struggles currently being waged are an indication that the election campaign has already begun.

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