As coronavirus spreads across the globe, almost no country has been hit more severely than Iran. The government’s early reluctance to impose social distancing measures has brought harsh results as the number of infections rise by the tens of thousands. While it appears Tehran has begun to shift course, this belated awakening to the threat has done enormous economic damage that, combined with new U.S. sanctions, will restrain Iranian regional ambitions for years to come.
FOOT DRAGGING ON CRISIS CONTAINMENT
The Iranian government’s persistent refusal to take serious measures to halt the spread of the virus has made Iran the worst-hit country in the Middle East. Even now, the government has refused to quarantine major cities or impose widespread closures. Mohammad Hossein Ghorbani, the deputy minister of health in Gilan, said in a radio interview, “I have had several conversations with state officials in response to repeated requests for a full quarantine in Gilan province, but the NSC... persuaded us to give up."
This stance appears to stem from ignorance of the danger at the highest levels of Tehran’s hierarchy. As recently as Nowruz, Ayatollah Khamenei blamed the coronavirus in part on supernatural entities, saying, "We have jinn and human enemies that help each other. The intelligence services of many countries work together against us." And yet, the stubborn facts of the pandemic remain. As of March 30, the official tally by the Iranian Health Ministry stands at 41,495 Coronavirus infections and 2,757 dead. Unofficial estimates peg the total number of Iranians infected with COVID-19 at over 70,000, while as many as 4,762 people have died.
TEHRAN BEGINS TO PIVOT
Yet in recent days, after months of downplaying the threat of the virus, early signs have emerged that Tehran has awoken to the severity of the problem began to spread. In remarks on State TV, Iran’s first Vice President, Eshaq Jahangiri gave mild inkling of what lies ahead: “If necessary, we might impose tougher measures as our priority is the nation’s safety and health.”
More significantly, President Rouhani pledged on Saturday to dedicate one-fifth of the state budget to the fight against the spreading pandemic, announcing in a public address, “We are in difficult conditions, in conditions of sanctions, but we have allocated 20 percent of our budget this year to corona ... and this might be surprising for the world from a country under sanctions.”
Perhaps the first tangible expression of this newfound approach has come from the margins of state power, in the judiciary. On March 17, the Iranian Justice Ministry announced that it had temporarily released about 85,000 people from jail, out of concern that coronavirus might spread unchecked within crowded prisons. This week, Judiciary spokesman Gholamhossein Esmaili went still further, declaring, "The second wave of the temporary release of prisoners had already started and their 100,000 prisoners’ furloughs have been extended until April 19."
IRAN’S ECONOMIC WOES
The economic costs of Tehran’s early stumbles will likely act as a drag on Iranian ambitions going forward. This week, the Deputy Minister of Cultural in charge of tourism, Mr. Vali Taymuri, estimated that the epidemic will cost $200 million to the country’s tourism industry in three months. The head of the airlines association told ILNA the coronavirus crisis will cost another $200 million in damages to his industry by early April.
Financially, coronavirus has struck at a particularly inopportune time for Iran, as global oil prices continue a historic plunge. In the estimate of one analyst, prices “will, in all likelihood, continue downward” as global consumption of fuel had dropped by as much as 10 million barrels per day, driven by widespread adoption of social distancing and decreased economic activity.
Atop both of these burdens, U.S. sanctions continue to impose a new albatross on Tehran. On March 26, the U.S. Treasury Department issued a statement announcing targeted sanctions on over 20 “front companies, senior officials, and business associates … [that] provide support to or act for or on behalf of Iran's Islamic Revolutionary Guards Corps (IRGC) and its branch for elite operations abroad, the Quds Force (QF).” This comes as retaliation for earlier provocations by Iranian-backed militias in Iraq such as Kata’ib Hezbollah and Asaib Ahl al-Haqq.