Page 4 - IRANRptDec19
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1.0 Executive summary
In an unprecedented move for a big country, Iranian authorities essentially turned the internet off on November 17 for nearly six days as a crackdown on protests against a dramatic hike in petrol prices escalated.
Iran’s petrol prices remain among the lowest in the world, even with the prices jumping a minimum-50%, and in some cases by up to 300%, under the government’s edict. Officials say the extra revenue generated is to be used to alleviate hardship suffered by lower-income Iranians in the face of the crushing sanctions directed at the country by the US in the row over the 2015 nuclear deal. However, Iranians have gotten used to ultra-cheap fuel in their oil-rich country and, amid the misery so many are going through under what officials refer to as Washington’s “economic war”, any introduction of a petrol price hike was bound to stir feelings.
Violence flared after the authorities suddenly hiked petrol prices by a minimum of 50%. Under the new fuel measures, each motorist that presents their ‘petrol card’ is allowed to buy 60 litres (13 gallons) of petrol a month at 15,000 rials ($0.13) a litre. Each additional litre then costs 30,000 rials. Previously, drivers were allowed up to 250 litres at 10,000 rials per litre. Officials said they would use the extra revenues generated on petrol sales to provide handouts to lower-income Iranians suffering amid the sanctions-led “economic attack” on the country from the US.
Iran on November 28 rejected as “irresponsible” comments by France that it is seriously contemplating triggering a complaints mechanism within the nuclear deal that could lead to “snap-back” UN sanctions. France relayed its latest standpoint following a European Union announcement earlier this week that officials from remaining nuclear deal signatories China, Russia, France, Germany, the UK and Iran will meet in Vienna on December 6 to discuss how to uphold the deal.
France is concerned by Tehran’s mounting non-compliance with the nuclear deal, abandoned by the US in May 2018. Under the accord, Tehran agreed to curb its sensitive nuclear work, thereby guaranteeing it would stay purely civilian, in return for the lifting of international sanctions. But US President Donald Trump withdrew the US from the pact, arguing it needed toughening up, and reimposed heavy sanctions on Iran. In reaction to what it says is the failure of the European powers to protect the Iranian economy from the US sanctions, Tehran has in recent months gradually decreased its commitments to the agreement in a pressure campaign to try to secure some economic assistance from the major EU states.
The impact of US sanctions on Iran’s economy is projected to peak this year, with growth resuming in 2020, according to the October issue of the World Bank’s twice-yearly Global Economic Prospects report. Iran’s economy is set to shrink by as much as 8.7% in 2019/2020 following on from the 2018/2019 contraction of 4.9% as crushing US sanctions continue to exact a heavy toll. It added that the Islamic Republic may eke out growth of 0.1% in 2020/2020.
Iran’s economy is expected to contract by as much as 9.5% this year, the International Monetary Fund (IMF) said on October 15 in the latest edition of
4 IRAN Country Report December 2019 www.intellinews.com