I have become death, the destroyer of worlds
J Robert Oppenheimer
Is it the ‘End of Days’? It’s difficult to keep one’s mind from wandering onto such paths of thought these days, especially as so many of us self-isolate and have more time than ever to contemplate what it all means.
There have been many articles published in the wake of the devastating coronavirus in Iran. Some of these were extremely bleak in nature, as most of the news is also. But now that the destruction wrought by this pandemic has entered the United States’ own backyard many of those same voices have been strangely silent.
The economic devastation caused by the coronavirus pandemic could quite easily surpass the devastation wrought by the disease itself. Although a prediction cannot be sure at this point, since the virus is still running its course, particularly in the United States, some conclusions can be drawn.
In Iran, whose economy has already been weakened considerably by the economic sanctions imposed on it by the US, the effect could possibly be even more severe. The virus itself has already caused an incredible amount of damage in terms of sick people and loss of life, numbering in the thousands. This has been exacerbated by the government’s incompetence but also by a shortage of medical supplies that was created by those same US sanctions. Though it was meant to weaken the government, the sanctions have once again done far greater harm to the people than their purported target. But to see the effect of the current crisis on Iran, we have to look at some context.
Partly as a result of the pandemic, oil prices have recently sunk through the floor. In normal times this would be bad for Iran’s economy as oil is its number one export. But since exports have virtually come to a halt, the effect is arguably less dramatic. America, on the other hand, has only recently become the number one oil exporter in the world and is being severely hammered by the drop in oil prices.
Iran’s population has few debts and a majority of Iranians (70%) own their own home. This stands in contrast with America where people are highly indebted and the increasing unemployment puts many workers in a more difficult situation. Iran’s unemployment was already high, whereas America’s unemployment is now predicted to rise to levels not seen since the Great Depression.
Having been battered by sanctions from the US since 1979, Iran has by necessity developed a resilient economy. It is less dependent on exports and more focused on self-reliance. And whereas Iran is practically self-sufficient when it comes to food production, the US often relies on a foreign workforce – Mexican laborers. This situation could become increasingly dire due to President Trump’s draconic immigration policies.
Iran has a very young population. Elderly people, that is age 65 and above, constitute only about 5% of the entire population. By contrast, in America, this group comprises about 15% of the population, three times as much. Members of this age group are among the most vulnerable in this pandemic and the larger numbers in the US could prove to be an important factor throughout the course of the epidemic.
This is not to say that Iran doesn’t have enormous problems but for Iran, it is not a new thing and this time it is not the only country having these problems. Far from it.
The sanctions of the US have shown no signs of being let up. Right-wing hawks in the US hope that the coronavirus epidemic will be yet another nail in the coffin of the hated regime. Officially, aid for humanitarian purposes doesn’t fall under the embargo, but in reality, it is very difficult to get much needed medical assistance to the Islamic Republic. Many providers are afraid of economic retaliation from the US if they trade with Iran even under these extreme circumstances.
The crisis could also work in the regime’s favor where it can more easily push back on demonstrations that every well thinking person would now deem irresponsible because of the necessary social distancing. Only back in November 2019 did the country see large demonstrations after fuel prices saw a hike of 300%. Large gatherings to demonstrate against the regime are now problematic.
In crises, people look for leadership and it can hand the regime some legitimacy for the use of tools to suppress its population, all in the name of fighting the crisis. Lockdowns and the restrictions of people’s movements are ostensibly to stop the spread of the virus but also make it much harder for the opposition to the regime to organize themselves.
Originally, many analysts pointed out that one of Iran’s initial problems was the closing of the borders with neighboring countries once the scale of the coronavirus epidemic became clear. This hit home as Iran had just become increasingly reliant on barter trade with its neighbors as trade with more distant Europe and East Asia became more difficult under the embargo. Now that those same nearby countries have their own community transmitted cases of COVID-19, Iran no longer stands out with this problem. Indeed, all over the world borders are now closed.
One of the reasons Iran was an early victim of the pandemic was its trade with China where both import and export figures hover around 30%. It seems evident that the unwillingness of the government to stop traffic with China may have worsened the epidemic in its early days. Now China is one of the first countries to recover and try to start up its economy again. This bodes well for Iran as soon as it’s able to get back on its own feet again.
In a world where epidemics have turned out to become one all-encompassing pandemic, there are no longer winners and losers.
More on the topic: The Race for the Cure