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Iran Turns to Sovereign Fund for Relief after Devastating Floods

Iran Turns to Sovereign Fund for Relief after Devastating Floods

Monday, 15 April, 2019 - 09:15
A half-mud-covered car in front of a house in Lorestan Province, Iran, April 4, 2019. (Reuters)
Asharq Al-Awsat
Iran’s supreme leader Ali Khameni approved on Monday the use of the country’s sovereign wealth fund for relief and construction efforts following devastating floods.

“Using the National Development Fund is authorized if no other sources are available,” he said in a letter to President Hassan Rouhani read out on Monday on state television.

However, he urged the government to explore other budgetary measures to fund the relief efforts before tapping the sovereign fund.

Rouhani last week asked Khamenei to release about $2 billion from the development fund.

The fund, established in 2000, collects some of the country's foreign revenue and uses it for emergency needs. It is worth about $92 billion, according to the Sovereign Wealth Fund Institute, which tracks the industry.

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

Iran’s worst floods in 70 years had killed at least 76 people and forced more than 220,000 into emergency shelters, state media cited ministers as telling lawmakers.

In Geneva, the International Federation of Red Cross and Red Crescent Societies said on Monday an estimated 2 million people needed humanitarian assistance as a result of the floods.

It had launched an international emergency appeal seeking 5.1 million Swiss francs ($5.1 million) to expand support by Iran’s Red Crescent to an additional 30,000 families - equivalent to about 150,000 people.

The floods have affected 4,400 villages, damaged 14,000 kilometers (8,700 miles) of roads and destroyed more than 700 bridges. They have left aid agencies struggling to cope and the armed forces have been deployed to help those affected.

Iran’s 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 its energy and banking sectors have halved oil exports and restricted access to some revenues abroad.

Iranian officials have repeatedly said the floods have not affected oil production and development, nor impeded the flow of crude through pipelines to client markets.

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