Tehran, Iran – As economists, politicians, and pundits mull the threat of “swift and severe” United States economic sanctions against Russia should the latter invade Ukraine, one country that has long been in Washington’s crosshairs does not have to ponder what such punitive measures can do – Iran.
Some 655 Iranian entities and individuals were sanctioned under the administration of former US President Barack Obama, according to data compiled by the Center for a New American Security (CNAS). But the most brutal punishment kicked off in 2018, after former US President Donald Trump’s administration unilaterally withdrew from the Iran nuclear deal with world powers and Iran’s banks were cut off from the Society for Worldwide Interbank Financial Telecommunication – SWIFT, the global financial messaging system.
That was just the opening salvo in the Trump administration’s “maximum pressure” campaign that aimed to force Tehran back to the nuclear negotiating table by crippling Iran’s economy.
In 2020 Washington levied more designations against Iranian banks, effectively severing the country’s financial sector from the rest of the global economy. That same year, the Paris-based Financial Action Task Force (FATF) – the global money watchdog – placed Iran on its blacklist.
And those were just the major headline grabbers. The Trump administration targeted Iran’s economy with more than 960 sanctions, according to CNAS – a barrage that continued unabated as Iran’s healthcare system buckled under the most brutal waves of COVID-19 infections seen in the Middle East, and despite myriad appeals by world leaders to offer Tehran a temporary reprieve for humanitarian reasons.
Annual inflation in Iran is running north of 42 percent [File: Majid Asgaripour/WANA (West Asia News Agency) via Reuters]
All of those sanctions are still enforced by the current administration of US President Joe Biden.
Today, no sector of Iran’s economy has been spared by Washington’s punitive measures, which helped propel the country into a two-year recession and continue to impact every aspect of day-to-day life.
Annual inflation is running north of 42 percent, according to Iran’s statistical office. The national currency, the rial, has lost more than half of its value in the past three years. Oil exports fell from roughly 2.5 million barrels per day in 2017 to less than 0.4 million barrels per day in 2020, according to the US Energy Information Administration – though they did start to slightly recover last year.
In a speech to a group of businessmen and manufacturers on Sunday, Supreme Leader Ayatollah Ali Khamenei said the data of the past decade, especially those for economic growth, inflation and foreign direct investments, are “unsatisfactory”.
But Iran’s economy did not totally collapse. It started to return to growth – albeit from a low base – last year, thanks to an easing of cross-border trade, COVID-19 restriction rollbacks, and a sharp rebound in the price of oil.
Having proven more resilient and diversified than some predicted, Iran’s economy grew 2.4 percent in 2020-21, said the World Bank, and is forecast to grow 3.1 percent in 2021-22.
‘Resistance economy’
The administration of President Ebrahim Raisi has set a considerably more ambitious goal. He is targeting a growth rate of 8 percent.
The conservative president aims to achieve that through the “resistance economy” doctrine, which mainly consists of boosting self-sufficiency, and trade ties with regional neighbours as well as China and Russia.
But even as that policy – which includes “nullifying” sanctions in parallel to negotiating efforts in Vienna to lift them – has returned the economy to a degree of growth, challenges remain.
“A continuation of the banking sanctions and Iran’s FATF blacklisting will limit the potential of Iran’s international trade,” says Bijan Khajehpour, managing partner at Eurasian Nexus Partners (EUNEPA).
A continuation of the banking sanctions and Iran’s FATF blacklisting will limit the potential of Iran’s international trade.
Khajehpour told Al Jazeera that if the banking restrictions remain in place, the cost of financial transactions will remain high, making imports and exports more expensive. It would also limit the types of markets and companies Iran is able to engage with.
“Therefore, the Iranian economy won’t prosper, though it may be able to generate low-level growth,” he said.
But to sustain that growth, Iran requires major infrastructure investments that Khajehpour says the country can only afford if sanctions are lifted.
Raisi’s proposed budget for the next Iranian calendar year beginning in late March, which assumes sanctions remain in place, is forecasting a boost in oil income and a 60 percent increase in tax revenues, including from combating rampant tax evasion.
Still, Iran is expected to run a sizable budget deficit – a fiscal imbalance that existed even before Trump’s sanctions.
China and Russia
The bulk of projected oil income is expected to come from China, which remains Iran’s top buyer.
Exact shipment data is unavailable as exports under sanctions are kept secret and the oil is marked as originating from Malaysia, Oman, and the United Arab Emirates.
However, in mid-January, China officially announced its first import of Iranian crude oil since December 2020 in defiance of US sanctions.
And the market is still swinging in Iran’s favour. Last week, oil prices were at their highest level in more than seven years, thanks to tight supplies and concerns over escalating tensions between Russia and the West over Ukraine.
The news came roughly at the same time as the Raisi administration announced its oil exports had increased by 40 percent compared to the final month of President Hassan Rouhani’s administration in August.
Iranians walk down a market street in Tehran, Iran [File: Majid Asgaripour/WANA (West Asia News Agency) via Reuters]
January was also a busy month in terms of Iranian efforts to boost political and economic bilateral ties with China and Russia.
Iran’s Foreign Minister Hossein Amir-Abdollahian said during a trip to Jiangsu, China that a 25-year comprehensive cooperation accord signed in 2020 has entered the implementation stage, although he did not elaborate on what exactly that means.
Meanwhile, Raisi met with Russian President Vladimir Putin in the Kremlin, where the two leaders backed closer ties, and their officials signed a number of agreements that the Iranian side said would have tangible results in the foreseeable future.
‘Too optimistic’
Warmer relations with China and Russia cannot however fully offset the stranglehold of US sanctions, says energy journalist and analyst Hamidreza Shokouhi.
“There are rivalries between Russia and the US – as we see now in Ukraine – and China and the US, and these will naturally have some impacts, but it would be too optimistic to depend on these countries’ abilities to nullify sanctions,” he told Al Jazeera. “The more Iran becomes dependent on these countries, as it has already become to a degree, naturally it increases China and Russia’s maneuvering power on Iran and this is not a good thing for Iran at all.”
In the energy sector, Shokouhi believes that for now, Iran can only depend on China for limited oil sales, and on Russia mainly for a potential development of and investments in energy projects, although sanctions are likely to curb that potential.
Last week, Iran’s Economy Minister Ehsan Khandoozi announced that Russia has agreed to allocate a new line of credit to develop the Sirik power plant in Hormozgan as a result of Raisi’s trip, but he did not disclose details.
The first agreements for developing the power plant were signed after the nuclear deal with world powers was initially clinched in 2015, but the plant has been among several similar energy projects undertaken by Russia and China that remain incomplete.
Neighbours and Vienna talks
According to EUNEPA’s Khajehpour, trade with regional neighbours can continue to contribute to Iran’s economic growth, but there are limits. For example, at times trade can entail barter agreements that are limiting for Iranian firms.
“Nonetheless, experience has shown that companies which enter export markets, even regional ones, are likely to develop other international markets,” he said.
“So, one can view the growing regional trade as a medium-term platform for strengthening Iran’s exports to international markets.”
But both Khajehpour and Shokouhi emphasise that Iran needs the nuclear negotiations in the Austrian capital to be successful if it wishes to unlock its economic growth potential.
“It appears the people and the business community in Iran are all eager for an agreement on the nuclear deal so there can be a sliver of hope for the economy,” said Shokouhi. “If there’s no agreement, I can’t imagine a bright outlook for the economy under these harsh circumstances.”
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – Canada’s main stock index was up more than 250 points in late-morning trading, led by strength in the base metal and technology sectors, while U.S. stock markets also charged higher.
The S&P/TSX composite index was up 254.62 points at 23,847.22.
In New York, the Dow Jones industrial average was up 432.77 points at 41,935.87. The S&P 500 index was up 96.38 points at 5,714.64, while the Nasdaq composite was up 486.12 points at 18,059.42.
The Canadian dollar traded for 73.68 cents US compared with 73.58 cents US on Thursday.
The November crude oil contract was up 89 cents at US$70.77 per barrel and the October natural gas contract was down a penny at US2.27 per mmBTU.
The December gold contract was up US$9.40 at US$2,608.00 an ounce and the December copper contract was up four cents at US$4.33 a pound.
This report by The Canadian Press was first published Sept. 19, 2024.
VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.
Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.
The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.
“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.
“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”
Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.
The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.
The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.
Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.
More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.
Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.
“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.
Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.
“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.
Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.
Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.
Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”
“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.
This report by The Canadian Press was first published Sept. 18, 2024.
