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Tehran, Washington Trade Blame For Iran's Deepening Economic Woes

SINGAPORE -- U.S. Secretary of State Mike Pompeo speaks to the media about the upcoming meeting between U.S. President and North Korean leader, in the J.W. Marriott in Singapore, June 11, 2018


Iranian President Hassan Rohani in a fiery speech has blamed Washington for the nation's deepening economic problems while nearly two-thirds of Iran's legislators issued a letter demanding that he change his own economic management team.

Rohani's address on state television late on June 27 came after U.S. Secretary of State Mike Pompeo blamed what appeared to be widespread protests over the unravelling economy in Iran this week on the government in Tehran, which he said is "squandering its citizens' resources" on "adventurism" in the Middle East.

Rohani in his address called on Iranians to maintain unity and "bring America to its knees," saying, "We will take problems. We will take pressure. But we will not sacrifice our independence."

But the move by nearly a two-thirds majority in Iran's parliament to demand that Rohani make economic management changes signalled that the president could face trouble at home a little more than a year after he was re-elected on a promise to boost Iran's economy and push for social change.

Lawmakers have the power to dismiss ministers or to declare, through a two-thirds majority vote, the "incapacity" of the president, which could pave the way for his dismissal by Iran's supreme leader.

In a letter published by state media on June 27, 187 of Iran's 290 members of parliament urged Rohani to act quickly to change his economic management team, saying "the poor performance of senior officials in charge of the economy over the past few years has led to the population's increased distrust."

Rohani should bring in new advisers who offer "dynamism" and an "understanding" of the economic situation, they wrote, warning that parliament otherwise might "take a decision on the matter."

Rohani has been under increasing pressure as the rial has plummeted by nearly half in the last six months, helping feed a spiral of rising prices cited by protesters on the streets and in Tehran's Grand Bazaar, where traders staged a rare strike earlier in the week.

The currency's fall accelerated after U.S. President Donald Trump announced last month that he was pulling the United States out of Iran's nuclear deal with world powers and reinstating U.S. sanctions against Tehran.

Oil markets, where Iran sells about 2.5 million barrels a day of crude oil, also have been roiled by the prospect of renewed sanctions in November, which analysts say could cut Iran's oil exports by as much as 800,000 barrels a day, further adding to the nation's economic woes.

In a statement issued late on June 27, Pompeo blamed the economic "suffering" on Tehran's policies of funding a military intervention in Syria and providing financing for its allies in the Middle East, Lebanon's Hizballah, the Palestinian Hamas group, and the Huthi rebels in Yemen.

"it should surprise no one that protests continue in Iran. The Iranian people are demanding their leaders share the country’s wealth and respond to their legitimate needs," said Pompeo, who had posted some of his remarks on Twitter earlier in the day.

"The world hears their voice," he said "The people of Iran are tired of the corruption, injustice, and incompetence from their leaders."

But instead of reforming, Pompeo said Iran's leaders have moved once again as they did earlier this year to stifle the protests through a police crackdown.

Tehran's Grand Bazaar traders returned to work on June 27 under the gaze of a large detachment of riot police amid a call by Supreme Leader Ayatollah Ali Khamenei for stepped up law enforcement in response to the protests.

"We condemn the government’s same futile tactics of suppression, imprisonment of protestors, and the denial of Iranians’ frustrations," Pompeo said.

The economic woes have also given an opening to Rohani's hardline critics to denounce his policy of openness with the West, with some accusing him of damaging the economy.

Rohani's economic program had produced limited progress after global economic sanctions were lifted in 2016 under Tehran's 2015 nuclear deal with world powers.

But unemployment in the country remained high -- especially among its large population of young people under 30 -- and with the unravelling of the rial and U.S. move to reimpose sanctions, many of those gains appear in danger of receding.

With reporting by Reuters and AFP

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