Governor Hemmati's remarks at virtual Middle East and Central Asian Governors meeting - 6 April 2021

As prepared for delivery;

Your Excellencies and dear colleagues

I welcome the opportunity to brief you on the recent developments in Iran and also briefly comment on IMF support to members.

First, on the virus and vaccines 

The pandemic has challenged all countries to the core and spared no one. Iran was hit hard early on, but we took actions to restrict mobility and implement social distancing and other health measures to contain the infection and death rates. Still, we have lost so many lives to the pandemic. Even the loss of one life is a tragedy. The unilateral and illegal US sanctions on exports of medical supplies and equipment to Iran, at the time when they were most needed, added to the human suffering. 

Widespread of vaccines access is still limited in Iran. However, with the uncertainty about US sanctions, we managed to take successful steps towards domestic production of vaccines. We have imported vaccines, started the vaccination and we hope to inoculate our people within a year after successful results in vaccine production are obtained. We believe that the vaccine is a public good and everyone around the world needs to get vaccinated to put an end to the pandemic. We urge those in surplus to donate vaccines to poor countries and for the rich countries to support the COVAX initiative. There is no place for vaccine nationalism, not morally and not economically.
Second, on the impact of the pandemic on Iran’s economy

Government’s policy response, including allocation of more than 10 billion dollars of budget and facilities in direct support of households and businesses, helped to contain the economic impact of the pandemic. Iran’s economy expanded by 2.2 percent, on an annual basis, during March-December 2020, and the recovery is continuing into 2021. While oil exports suffered because of US sanctions, non-oil exports increased. Oil exports have also gone up in recent months based on other approaches. The Iranian Rial was the first line of defense against the external shock and because of its depreciation, inflation has come under pressure. In addition to the funds provided by non-oil exporters, the Central Bank allocated 10 billion dollars of its own resources to procuring basic goods, medicine and medical supplies last year. As you know, Iran has substantial foreign assets, but unilateral US sanctions has cut our access to our reserves that are so needed to help the economy. 

Third, on Fund support to members

The IMF reacted quickly to help members. The creditability of the IMF, however, hinges on its ability to apply financial and technical support in an evenhanded manner to all members without exception.  Our request for emergency financing under the RFI is still pending after more than a year. This is Iran’s first request for IMF financial support in many decades. We request IMF staff and management to complete the work and submit our request to the Board as soon as possible.

Fourth, on IMF toolkit and SDR allocation

The IMF was able to respond to the needs of members by expanding its toolkit, increasing access limits to its emergency facilities, and providing debt service relief. However, the IMF should be equipped with all tools needed for any needs in coming months and years. The IMF should keep the adequacy of its resources under constant review. 

Finally, I would like to welcome the proposed general allocation of SDRs by 500 billion SDR that would provide the much-needed liquidity to middle income and low-income countries. We encourage richer members to recycle their unused SDRs in support of poorer members and make it truly an instrument to fight financing needs during the pandemic.
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