Use of Sovereign Fund for Flood Relief Authorized

EghtesadOnline: Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei has given the administration conditional permission to withdraw from the country's sovereign wealth fund for relief and reconstruction after devastating floods.

News ID: ۷۴۷۰۷۲

16 April 2019

In response to President Hassan Rouhani's request, the Leader wrote in a letter dated April 12 that using the National Development Fund of Iran is authorized if no other sources are available.

"The administration should immediately take necessary measures by using 5% of the national budget that have been earmarked for compensating losses caused by disasters, changing the priority order set for the allocation of development budget and using insurance and bank facilities," he was quoted as saying by his website.

Ayatollah Khamenei added that he would approve tapping the sovereign wealth fund to assist relief efforts if these resources prove insufficient, according to Financial Tribune.

On Sunday, Interior Minister Abdolreza Rahmani-Fazli said weeks of heavy rain across the country have caused an estimated $2.5 billion in damages to roads, bridges, homes and farmland.

Iran's worst floods in 70 years had killed at least 76 people and forced thousands of people into emergency shelters.

Request for $2 Billion

The Leader's letter did not mention an amount, but Morteza Shahidzadeh, the head of National Development Fund of Iran, said earlier that Rouhani had asked to withdraw $2 billion and the Leader had in principle agreed.

In Geneva, the International Federation of Red Cross and Red Crescent Societies said on Monday that an estimated two million people need humanitarian assistance as a result of the floods that inundated 25 of Iran's 31 provinces, Reuters reported.

It had launched an international emergency appeal seeking 5.1 million Swiss francs ($5.1 million) to expand support by the Iranian Red Crescent Society to an additional 30,000 families—equivalent to about 150,000 people.

The floods have affected 4,400 villages and damaged 14,000 kilometers of roads, 150,000 housing units and hundreds of bridges. They have left aid agencies struggling to cope and the armed forces have been deployed to help those affected.

The government has said it will pay compensation to all those who have incurred losses, especially farmers, but the state budget is already stretched as US sanctions on the OPEC producer's energy and banking sectors have halved oil exports and restricted access to some revenues abroad.

Foreign Minister Mohammed Javad Zarif said earlier this month that US sanctions—reimposed after Washington quit a 2015 nuclear deal between Iran and six world powers—were impeding aid efforts to flood-stricken towns and villages.

"Blocked equipment includes relief choppers: This isn't just economic warfare; it's economic TERRORISM," he said on Twitter.