Trump Is Right to Block IMF Aid for Iran

Bobby Ghosh

(Bloomberg Opinion) -- The Trump administration intends to block Iran’s application for a $5 billion emergency loan from the International Monetary Fund. Tehran claims it plans to spend the money on dealing with the coronavirus epidemic. But the U.S. has excellent grounds for rejection: It is confident a loan would make it easier for the regime to continue financing its vast network of terrorist groups and proxy militias across the Middle East. The U.S. says Iran has the funds to deal with the crisis, citing the billions of dollars in its sovereign-wealth fund; President Hassan Rouhani withdrew 1 billion euros from the fund for that purpose this week.

An American block on the loan application was expected, and senior regime figures have responded with spittle-flecked outrage at what they claim is the “crime against humanity.” Now, Rouhani is railing against what he sees as discrimination between nations, and reminding the international community of its “duties in this pandemic crisis.”

Rouhani is demanding that countries sympathetic to the Islamic Republic’s argument attempt an end-run around the American block at the IMF. Good luck with that. The U.S. accounts for slightly more than 16.5% of the IMF’s voting shares — an effective veto that Washington has jealously guarded against objections from other members.

It would take the combined clout of the European Union, China and Russia to persuade the rest of the world to stare down the Trump administration. But the U.S. is hardly alone. Trump can count on a solid phalanx of Arab states to back him. Some of these countries have sent Iran aid to fight the epidemic — and received grudging gratitude in return — but they will balk at giving Tehran access to $5 billion.

Iran’s behavior has not helped its cause. Despite the pandemic, it has not reduced support for sectarian groups and terrorist organizations; in places like Iraq, its proxy militias have stepped up their violence. This only strengthens the U.S. argument that, given access to IMF aid, the regime will funnel more money from its current spending on the epidemic toward such activities.

Nor has the Islamic Republic slowed its pursuit of nuclear technology since the virus began to infect tens of thousands of Iranians. Just last month, the United Nations’ nuclear watchdog reported that Iran was obstructing efforts to clarify past nuclear activities. Remember, the regime is now threatening to quit the nonproliferation treaty if its actions are brought before the UN.

To complete the trifecta of pernicious behavior, the Iranians are apparently offering to release an American hostage, Michael White, in exchange for the $5 billion, a ransom demand that dwarves the previous record, set by the Islamic State for a group of 26 Qataris.

Even as it keeps up its menacing behavior toward its neighbors and the U.S., the regime is not yet demonstrating sufficient seriousness in dealing with the epidemic at home. From the Supreme Leader on down, top officials still maintain that the coronavirus is an American biological weapon.

Rouhani, who blithely claims that sanctions have not affected his government’s ability to deal with the crisis, says some business activity can resume next week, despite warnings from health officials that the danger is far from over. Iran’s parliament has reconvened, even as the infection is still spreading among its members — the speaker, Ali Larijani, is among the latest to be quarantined with the virus.

Nonetheless, the international community does have a responsibility to help Iranians caught up in the crisis. And that can, as I have argued, be done in a way without empowering the regime: by providing assistance in kind, not cash, under close supervision by the UN and World Health Organization.

If the likes of Khamenei and Rouhani balk at this, they should be reminded of their duty toward Iranians.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

Bobby Ghosh is a columnist and member of the Bloomberg Opinion editorial board. He writes on foreign affairs, with a special focus on the Middle East and the wider Islamic world.

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