Sanc­tions hurt Iran’s sick

As U.S. penal­ties take their toll, medicine be­comes scarce for many

Los Angeles Times - - NEWS - BY MELISSA ETE­HAD AND RAMIN MOSTAGHIM melissa.ete­had@la­ Times staff writer Ete­had re­ported from Los An­ge­les and spe­cial cor­re­spon­dent Mostaghim from Tehran.

The first wave of U.S. sanc­tions against Iran was loom­ing when doc­tors gave Aram Rawan­shad the bad news.

It was early June when she learned she was suf­fer­ing from en­dometrio­sis, a painful dis­ease that oc­curs when tis­sue grows out­side the uterus. It was too late for surgery, and doc­tors warned her to act fast be­fore the dis­ease spread.

Rawan­shad, a 42-yearold writer from Karaj, Iran, was given a pre­scrip­tion and urged to stock up be­fore sup­plies ran out. She re­fused. “I told the phar­ma­cist that if I buy more than one month’s sup­ply, other pa­tients would be de­prived,” she said.

Though it was a kind ges­ture, it came at a cost. The next month, when she re­turned to the phar­macy, the medicine was sold out.

Sky­rock­et­ing in­fla­tion, a short­age of raw ma­te­ri­als and fewer im­ports have made med­i­ca­tions in Iran both scarce and costly.

Al­though hu­man­i­tar­ian goods, such as medicine and food, are ex­empt from U.S. sanc­tions, se­vere re­stric­tions on Iran’s fi­nan­cial in­sti­tu­tions have forced the out­side world to re­con­sider do­ing busi­ness with the Is­lamic Repub­lic.

Ex­perts fear the lat­est round of sanc­tions will make the sit­u­a­tion worse.

A month af­ter the U.S. Trea­sury Depart­ment lev­eled sanc­tions against 20 Ira­nian fi­nan­cial in­sti­tu­tions, the Trump ad­min­is­tra­tion reim­posed sanc­tions against Iran’s en­ergy, bank­ing and ship­ping in­dus­tries.

Whereas pre­vi­ous ad­min­is­tra­tions that slapped sanc­tions on Iran made it a point to en­cour­age com­pa­nies to con­tinue hu­man­i­tar­ian trade, the Trump ad­min­is­tra­tion has not.

“Com­pa­nies that are look­ing at po­ten­tial cus­tomers will feel like it’s a huge headache to sell to Iran,” said El­iz­a­beth Rosen­berg, a se­nior fel­low at the Cen­ter for a New Amer­i­can Se­cu­rity and the for­mer se­nior sanc­tions ad­vi­sor at the Trea­sury Depart­ment.

Al­though Iran’s Health Min­istry pro­vided do­mes­tic man­u­fac­tur­ers with for­eign cur­rency at sub­si­dized rates, the soar­ing costs of raw ma­te­ri­als such as card­board, alu­minum and lac­tose, which is used to sweeten pills, have in­creased the price of do­mes­tic medicine by nearly 50%, ac­cord­ing to Si­avash Saa­dat, a 65-yearold man­ager of a phar­ma­ceu­ti­cal com­pany in Tehran.

An­a­lysts and Ira­nian phar­ma­ceu­ti­cal com­pa­nies worry that pa­tients with cancer and other se­ri­ous dis­eases, such as Rawan­shad, are most at risk.

Af­ter search­ing Tehran for medicine, Rawan­shad fi­nally found a phar­macy that had it in stock. She bought a three months’ sup­ply, but an­tic­i­pates she’ll have to turn to the black mar­ket in the fu­ture.

“Deal­ers and mid­dle men are buy­ing [medicines] and hoard­ing them. This also in­creases the prices,” she said. “Peo­ple are at the mercy of deal­ers in the black mar­ket who are prof­it­ing from the scarcity of im­ported medicine.”

Ira­nian of­fi­cials, ea­ger to re­as­sure frus­trated cit­i­zens, have de­nounced the U.S. sanc­tions, call­ing them il­le­gal, and vow they will sur­vive the eco­nomic cri­sis.

Sec­re­tary of State Michael R. Pom­peo said U.S. sanc­tions are meant to force Iran to “aban­don its de­struc­tive ac­tiv­i­ties,” adding that the sanc­tions are tar­get­ing the gov­ern­ment, not Ira­nian peo­ple.

But the re­al­ity is far more com­plex.

Af­ter years of fis­cal mis­man­age­ment and cor­rup­tion, global banks have been hes­i­tant to do busi­ness with Iran’s fi­nan­cial in­sti­tu­tions. Even when the Obama ad­min­is­tra­tion lifted the sanc­tions against two dozen Ira­nian banks as part of the land­mark nu­clear ac­cord, it made lit­tle dif­fer­ence.

One of the bright spots had been Par­sian Bank — a rep­utable pri­vate-sec­tor bank that has been a vi­tal con­duit for Euro­pean com­pa­nies to con­duct hu­man­i­tar­ian trade with Iran. But it too was swept up in the new round of sanc­tions.

The U.S. Trea­sury Depart­ment said it hit Par­sian with sanc­tions not be­cause of any il­licit ac­tiv­ity but be­cause of a firm that used its in­vest­ments from the bank to pro­vide money to Iran’s Rev­o­lu­tion­ary Guard.

Richard Nephew, se­nior re­search pro­fes­sor at Columbia Univer­sity’s Cen­ter on Global En­ergy Pol­icy, said com­pa­nies will see the re­stric­tions against Par­sian Bank as a warn­ing to break off trade with Iran.

“The Trump ad­min­is­tra­tion is go­ing af­ter ev­ery­one at all lev­els of the food chain. It’ll scare peo­ple you may not wish to scare, like hu­man­i­tar­ian busi­ness­peo­ple,” Nephew said.

Brian Hook, U.S. spe­cial rep­re­sen­ta­tive for Iran, said it falls on Tehran to make other coun­tries and for­eign in­sti­tu­tions feel com­fort­able deal­ing with Iran.

“The bur­den is not on the United States to iden­tify safe channels. The bur­den is on the Ira­nian regime to cre­ate a fi­nan­cial sys­tem that com­plies with in­ter­na­tional bank­ing stan­dards to fa­cil­i­tate the sale and pro­vi­sion of hu­man­i­tar­ian goods and as­sis­tance,” Hook said.

Mean­while, some of Iran’s poor­est and most vul­ner­a­ble are brac­ing for what’s next.

The price of most com­modi­ties in Iran — not just medicine — has in­creased af­ter years of eco­nomic mis­man­age­ment, in­fla­tion and the col­lapse of Iran’s cur­rency, which has lost more than half its value since the start of 2018, said Steve Hanke, pro­fes­sor of ap­plied eco­nom­ics at Johns Hop­kins Univer­sity.

Hanke es­ti­mates that Iran’s an­nual in­fla­tion rate is around 270%, com­pared with 13% in Jan­uary be­fore Pres­i­dent Trump pulled out of the nu­clear deal and be­gan hit­ting Iran with se­vere sanc­tions.

Sepi­deh Saa­dat, a phar­ma­cist in Tehran, is in charge of buy­ing medicine for her grand­mother, who suf­fers from Parkin­son’s and Alzheimer’s dis­eases. In the com­ing months she an­tic­i­pates that she’ll have no other op­tion but to buy it on the black mar­ket.

“Deal­ers in the black mar­ket are an­tic­i­pat­ing fur­ther de­val­u­a­tion of the rial, and so they are buy­ing medicine from Turkey and sell­ing it some­times for 10 times the cost,” she said. “Those who can­not af­ford it are doomed to die painfully.”

Ex­perts say the next six months will be telling about whether Ira­nian au­thor­i­ties are able to with­stand the lat­est round of sanc­tions.

“Will Iran be able to evade sanc­tions and is the Trump ad­min­is­tra­tion go­ing to im­pose new ones?” Nephew said. “Those are the things we don’t have an an­swer to.”

AFP/Getty Images

AL­THOUGH medicine is ex­empt from U.S. sanc­tions, they limit ac­cess by dis­cour­ag­ing busi­ness with Iran.

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