International Community Must Establish Mechanisms to Sell Humanitarian Goods to Iran, Iranian Government Must Ensure Affordabilityجامعه بین‌المللی باید مکانیسم‌هایی برای فروش دارو و غذا به ایران فراهم کند؛ دولت ایران باید قابل دسترس بودن این کالاهای ضروری را برای شهروندانش تضمین کند

OCTOBER 22, 2018

Economic Mismanagement and Sanctions Combine to Endanger Economic and Social Rights of Iranians, Poor at Greatest Risk

October 23, 2018—With the full reinstatement of US sanctions on Iran on November 5, which will make financial transactions between Iranians and major economies in the world difficult and in many cases impossible, people’s access to humanitarian goods such as essential food items, medicine and medical supplies in Iran could be imperiled.

The Center for Human Rights in Iran (CHRI) calls on the international community to institute transparent financial mechanisms that will ensure trade in medicines and other essential humanitarian items will continue unimpeded with Iran.

CHRI further calls on the Iranian authorities to ensure that such goods remain accessible and affordable, even to those at the lowest income levels in Iran.

CHRI is deeply concerned that without such mechanisms and policies, the upcoming sanctions, in combination with sustained economic mismanagement in Iran, will seriously affect the social and economic rights of millions of Iranians.

“Access to medicines and food is a basic right for all people and should be protected irrespective of politics,” said Hadi Ghaemi, CHRI’s executive director.

“The international community should secure open paths to get these critical items into the country,” said Ghaemi, “and the Iranian government cannot hide behind the sanctions to evade its responsibility to ensure that medicines and food are accessible to all Iranians.”

U.S. government officials have repeatedly said the upcoming sanctions will not target humanitarian goods.

On October 3, in response to the UN’s International Court of Justice (ICJ) decision that the US “must remove” any impediments to the export of humanitarian goods and services to Iran, US Secretary of State Mike Pompeo said there were exemptions in US sanctions for humanitarian transactions and aviation safety.

The ICJ’s decision had stated that the US’s assurances regarding exemptions for humanitarian goods were “not adequate to address fully the humanitarian and safety concerns.”

ICJ President Abdulqawi Yusuf said the court’s order applied to medicines and medical devices, foodstuffs and agricultural commodities, and spare parts, equipment and repair services for civil aviation, and that the US must also ensure licenses and authorizations are granted and that payment for such goods and services are not subject to any restrictions.

Despite repeated assurances by US officials, ambiguity built into the US Treasury’s sanctions language requires immediate clarification and steps to ensure the unimpeded flow of humanitarian goods.

According to the US Treasury’s OFAC, trade in humanitarian goods is permitted “unless they involve certain persons on the SDN [specially designated national] List, including designated Iranian financial institutions or the Islamic Revolutionary Guard Corps (IRGC), or otherwise sanctionable conduct.”

There are concerns that Iranian private sector banks previously allowed to facilitate trade in humanitarian goods with Iran will now be considered “designated” financial institutions, which would effectively shut down this trade.

Indications that payment channels are being affected have already emerged. In a September 13 articlefor the European Council on Foreign Relations, Ellie Geranmayeh and James Miller wrote, “Several leading pharmaceutical companies currently engaged in Iran have shared with us their concerns that banks, insurance companies, and distribution channels that have facilitated humanitarian trade with Iran are getting cold feet, fearing they could fall foul of US sanctions.”

There have also been reports that bankers are preemptively pulling back amidst the uncertainty regarding secondary sanctions.

“The exemptions from sanctions for basic foods and medicines are meaningless if companies have no payment options for conducting trade in them,” said Ghaemi.

Shortages in Medicines Already Being Reported

There are already reports emerging of shortages in both life-saving and routine medicines in Iran, such as imported drugs needed for chemotherapy, blood diseases and other conditions.

The shortages are caused by a variety of factors, including economic mismanagement, corruption and hoarding. Yet the salient point is that the coming sanctions, which are expected to make financial transactions with Iran more difficult, will take place within a context in which there are already emerging shortages.

Some Iranian officials have openly admitted that responsibility for the shortages so far lies primarily with domestic mismanagement.

For example, in an October 2, 2018 interview, Nasser Riahi, chairman of the Drug Importers Union of Iran, said: “Drug shortages have nothing to do with sanctions. There was a temporary shortage a month ago, which was caused when the Central Bank did not allocate foreign exchange on time. The government was offering non-Euro currencies but the import transactions had to be done in Euros.

Offering non-Euro currencies such as the Chinese Yuan has been problematic for importers because those currencies are time consuming and have more costs associated with them. Naturally importers were not able to use those currencies and imports were delayed for a month.”

In addition, the government’s mishandling of the country’s currency has led to severe devaluation and thus inflation. Reports on inflation vary, as the rate differs between sectors, but overall inflation has jumped to 25%, with reports of an increase in the price of some essential items rising 50 percent and more. The impact on the affordability of essential items has been severe.

The Iranian press has reported extensively on various shortages. For example, Mohammad-Naeem Aminifard, a member of the Iranian Parliament’s Health Commission, told the semi-official news agency ISNA on September 2, 2018, “We are currently short of 80 pharmaceutical items.”

Hassan Ahmadi, head of the Kahrizak residential institute for older persons and persons with disabilities, said in an interview on October 1 that they had begun using cloth diapers, as they were no longer able to import disposable diapers.

Mojtaba Zareie, a senior academic at Shahid Beheshti University’s College of Medical Science and Technology noted on September 30 that patients with Parkinson’s disease in Iran were experiencing problems “in terms of high costs and drug shortages.”

Member of Parliament Mohammad Hossein Ghorbani, deputy chairman of the Parliamentary Committee for Healthcare Affairs, said in an interview on September 29, “Hospitals today are experiencing a tangible shortage of many kinds of drugs, medical equipment and consumer goods.”

The Rehabilitation Director at Iran’s State Welfare Organization, Hossein Nahvinejad, said in an interviewon September 2 that they could no longer import the goods needed to manufacture wheelchairs in the country.

The executive director of the Association of Deaf Families in Iran, Akram Salimi, said in an interview on September 27 that over the past year, the “price of hearing aids in the beginning of 2018 was 40 million rials, and now it is 100 million rials.”

On September 10, Abbas Kebriaiezadeh, head of the Syndicate of Iranian Pharmaceutical Industries noted that Iran produces 96% of the drugs it uses—but imports more than half the raw materials to make them. And earlier in the year, on May 16, the head of Iran’s Thalassaemia Society, Meysam Ramezani, said “Many patients cannot afford black market prices and risk side effects from locally-made equivalents.”

Idriss Jazairy, the UN Special Rapporteur on the negative impact of the unilateral coercive measures on the enjoyment of human rights stated in August 2018, “The current system creates doubt and ambiguity which makes it all but impossible for Iran to import these urgently needed humanitarian goods. This ambiguity causes a ‘chilling effect’ which is likely to lead to silent deaths in hospitals as medicines run out, while the international media fail to notice.”

Incoherent Policies Have Led to Deficit of Trust in Government by Iranians

As there are legitimate concerns that shortages will worsen with the November 5 full reinstatement of sanctions, it is even more urgent that the Iranian government address these issues. However, there is growing concern that similar to the international community’s inattention to the potential humanitarian impact in Iran, the Iranian government too is not prioritizing the legitimate needs and rights of the Iranian people to essential humanitarian items.

In comments that were severely criticized by Iranians on social media, Health Minister Hassan Ghazizadeh-Hashemi said in an interview with Iran’s State TV on September 26, 2018, “There are four special diseases whose expenses are entirely covered by the government. At one time they were costing the country seven billion tomans ($1.6 million USD); now it’s 400 billion tomans ($95 million USD)…. The medicine for SMA (spinal muscular atrophy) costs a billion tomans ($237,000 USD). The main instigator is the company that wants to import it. Will our people allow us to spend a billion tomans to extend life by two or three years?”

The health minister continued, “If they want us to do it then we have to cut costs somewhere else…. We have a lot of these diseases with very high costs and low life expectancy. Now I’m stuck between deciding to import powdered milk or medicine that might prolong life for up to two years. Do I have the right to do this by cutting funds for the rest of the people?”

This response, which was met with outrage on social media by Iranians, omitted the government’s central role in the country’s recent inflation-triggering devaluation—as well its willingness to continue the robust funding of other initiatives without reserve.

Iranian officials, including President Rouhani, have assured Iranians that the government will ensure the availability of essential goods once sanctions are in place. Yet there are no tangible signs of government policies to this effect. The government’s lack of financial discipline, corruption within the distribution system and the lack of proper oversight is already preventing people’s access to medicines and other essential items for which the government has allocated resources. There is a deep lack of trust in the Iranian authorities, after decades of economic mismanagement, unimpeded corruption and the economic missteps that have triggered the recent currency fluctuations and inflation.

In this climate, knowledge of the upcoming sanctions have contributed to uncertainty, hoarding and price spikes. The government of Iran has so far failed to establish mechanisms or policies to rebuild trust in the ability of the system to provide essential goods such as medicines and food to the most vulnerable, among others.

If past experience is a guide, then severe shortages in medicines and other essential goods are likely to follow the full reinstatement of sanctions in November. During Iran’s previous experience with sanctions in the 2012-15 period, there were acute shortages in critical medicines, despite the fact that these items were exempt from sanctions.

In a May 2018 International Journal of Health Policy review of the effect of the 2012-2015 sanctions, the scholar Fatemeh Kokabisaghi concluded: “The sanctions on Iran caused a fall of country’s revenues, devaluation of national currency, and increase of inflation and unemployment. These all resulted in deterioration of people’s overall welfare and lowering their ability to access the necessities of a standard life such as nutritious food, healthcare and medicine. Also, the sanctions on banking, financial system and shipment led to scarcity of quality lifesaving medicines. The impacts of sanctions were more immense on the lives of the poor, patients, women and children. Humanitarian exemptions did not protect Iranians from the adverse effects of sanctions.”

Global Record Reflects Vulnerability of Humanitarian Trade

UN human rights bodies and leading international figures have reviewed the historical record and consistently noted the negative humanitarian impact of sanctions.

A 2014 report for the UN OHCHR states: “A growing body of research…has demonstrated that …[sanctions] had disastrous humanitarian consequences for innocent people…vulnerable populations will pay the highest price… [and that] there should always be: Clear legal exemptions and expedited process for humanitarian goods (including food, medicines, medical inputs and equipment, and educational resources); and Fast-tracking licenses for humanitarian goods with streamlined financial and administrative procedures… .”

A 2017 UK-government commissioned report on the historical record on sanctions found that sanctions lead to an “increase in the poverty gap and deprived sections of the population feel the most impact.”

The report found that “between 1976 and 2012, UN sanctions led to a 25.5 percent aggregate decline in GDP per capita of the sanctioned countries.”

In a 2017 mission statement, the UN Special Rapporteur on the Negative Impact of Unilateral Coercive Measures on the Enjoyment of Human Rights said, “The inhabitants of a given country do not forfeit their basic economic, social and cultural rights by virtue of any determination that their leaders have violated norms relating to international peace and security.”

“Without measures to ensure medicines and other essential items are able to be brought into the country, Iranians’ most basic human rights will be violated,” said Ghaemi.