4 ★ FINANCIAL TIMES Friday13 March 2020
I N T E R N AT I O N A L
N A J M E H B OZO R G M E H R— TEHRAN
Iran said it has asked the IMF for $5bn of
emergency funding to help it fight the
social and economic impact of coronavi-
rus, leaving the multilateral lender to
take a decision on whether to lend to the
Islamic republic that is currently sub-
ject to sweeping US sanctions.
Last week the IMF said it had allo-
cated $50bn for countries struggling
with the outbreak and Iran is one of the
countries hardest hit. So far 429 people
have died and more than 10,000 have
tested positive in the country.
Abdolnaser Hemmati, Iran’s central
bank governor, said in a statementyes-
terday he had written to Kristalina
Georgieva, the IMF managing director,
on March 6 to request support from the
emergency fund.
“Considering the widespread preva-
lence of coronavirus in our country and
the necessity to forcefully continue pre-
ventive measures and medical treat-
ment and to battle against its economic
consequences, we demand to use $5bn
from the fast financing facilities, given
the size of the Islamic Republic of Iran’s
quota in the fund,” he said.
Last week,Ms Georgieva told theFinancial Times thatIran had not yet
requested assistance but suggested the
fund would be willing to help. “Of course
we want to serve the membership to the
extent that we can,” she said.
If funding is agreed it would be the
first financial arrangement between
Iran and the IMF since 1960.
While nearly all countries are mem-
bers of the IMF and all have voting pow-
ers, the US is the largest shareholder and
has an effective veto over many deci-
sions, raising the question of whether it
would seek to block any assistance.
US relations with Iran have rapidly
deteriorated since President Donald
Trump in 2018 withdrew from the
nuclear deal that Iran signed with worldpowers and Washington reimposed eco-
nomic sanctions on Tehran.
The two countries ame to the brinkc
of war in January after the US killed
Qassem Soleimani, Iran’s most powerful
military commander, with a drone
strike and Tehran retaliated with its
own air strikes against Iraqi bases hous-
ing US soldiers. Tensions may rise again
if Iranian-backed militias are blamed
for thedeaths of two American troops
and one British soldierin a rocket attack
against another Iraqi base this week.
Mohammad Javad Zarif, Iran’s foreign
minister,yesterday urged the fund
to act. “IMF/IMF Board should adhere
to Fund’s mandate stand on right side
of history & act responsibly,” he said ina post on Twitter. Mr Zarif has also
called on the UN to lobby the US to
remove the sanctions regime, which
Iran says has hampered its ability to
fight the outbreak.
In a letter to António Guterres, UN
secretary-general, a copy of which was
published in Persian-speaking media
yesterday, Mr Zarif said the sanctions
had created “serious obstacles” in the
country’s efforts to import medical
equipment and contain the spread of
the illness.
The US measures mean Iran is strug-
gling with shrinking foreign revenues
and is cut off from the global banking
system, making it difficult to import
many products.DAV I D E G H I G L I O N E— ROME
VA L E N T I N A R O M E I A N D B E N H A L L
LONDON
In the north Italian town of Guanzate,
Sergio Tamborini s taking a defianti
stance to the healthcare crisis that
threatens to engulf his textiles business.
“The easiest thing would be to put the
whole world under lockdown,” Mr Tam-
borini said. “But I decide to fight. It’s
time to fight. We are at war.”
His fabric manufacturing company
Ratti Spa works with large luxury
brands, producing more than 4m
metres of fabric a year. Exports account
for approximately 80 per cent of its sales
but it is located in Lombardy, the part of
the country most affected by Europe’s
worstcoronavirus outbreak.
The Italian government has imposed
the most drastic curbs deployed in
Europe so far to contain the spread of
the virus, telling Italians to stay at home
unless for emergencies or essential
work-related purposes.
Bars, restaurants, schools, universi-
ties, museums, sports centres and all
retailers apart from pharmacies and
food shops have been closed across the
whole country. People have to be kept
one metre apart, both in internal and
external areas.
The retail and wholesale sector
employs nearly 4m people, accounting
for about 15 per cent of jobs, andcon-
tributes about 12 per cent of gross
domestic product.
Even if enforcement appears patchy,
the toughest controls on personal move-
ment since the second world war will
play havoc with Italy’s already weak
economy, compounding supply disrup-
tions — such as those afflicting Mr Tam-
borini’s textile business — with a
demand shock that could drive many
smaller businesses to the wall and tip
Italy into a painful recession.
UBS, which had been expecting the
Italian economy to eke out growth of
0.3 per cent this year, now expects it to
contract by 0.4 per cent, or by 0.8 per
cent in a “negative scenario”.
The plight of consumers and busi-
nesses in the eurozone’s third-largest
economy would have been at the fore-
front of policymakers’ minds when the
European Central Bank’s governing
council metyesterday. The fear is that
the kind of economically damaging con-
finement imposed in Italy could soon be
required in many other parts of Europe.
“We are talking about bad, very bad
or crisis scenarios,” said one eurozone
policymaker.
TheItalian government opes thath
allowing people to move around for
work could save the economy from
grinding to a complete halt. But the
curbs could prove disastrous for the
many small companies in the services
sector, and particularly for tourism,
which accounts for 6 per cent of GDP.
About 1.7m people are employed in
accommodation and food services, a
sector that could suffer a 75 per cent fall
in output as a consequence of thenationwide quarantine, according to
Capital Economics.
Federalberghi, an association of
hotels, points out that many of these
workers are on contracts of less than
one year and do not qualify for redun-
dancy benefits. The retail sector is also
expected to be badly hit.
“It is the services industry that is
being completely crushed,” said
Brunello Rosa, chief executive of Rosa &
Roubini Associates, a consultancy.
“Imagine restaurants, cinemas, any sort
of personal service. This [consumption]
is not postponed but lost.”
Andrea Rucci said he had closed Play-
sound, a music recording business he set
up in Milan, until at least April 3. “The
situation is really bad,” he said. “I have
no money coming in at the moment.”
Fiat Chrysler as temporarily haltedh
operations at some of its plants in Italy
and is adopting measures to minimise
the risk of spreading the contagionbetween employees. Four plants will be
shut for two or three days a week.
“To enable greater spacing of em-
ployees at their workstations, daily
production rates will be lowered to
accommodate the adapted manufactur-
ing processes,” the groupsaid.
Rome has increased the scale of a
planned stimulus package tocushion
the economic blow to at least €25bn. It
will include funds for topping up wages
and support for exporters as well as
extra money for the health service.
Ministers are also examining a
scheme for banks to encourage them to
extend forbearance for companies and
households that struggle to repay loans.
Meanwhile Mr Tamborini is deter-
mined to keep investing, despite the
uncertainty about the future.
“The only things to do now are keep
our factories active as much as we can,
continue to invest and wait for the
return of a normal workflow,” he said.A M Y K A Z M I N— NEW DELHIIndian families were rushingyesterday
to repatriate their college-age children
studying overseas, after New Delhi
imposed some of the world’s most
draconian travel restrictions to stop
thespreadofcoronavirus.India said that from today it was sus-
pending visas for all short-term foreign
visitors — regardless of their nationality
or recent travel history — until April 15,
a lockdown aimed at preventing the
import ofcoronavirus nto the country.i
The Indian travel restrictions were
announced hours before US president
Donald Trump banned citizens of many
European countries rom entering thef
US for the next 30 days.
New Delhi says Indian citizens cur-
rently abroad will be granted entry,
though it has warned that returnees
could be subject to two weeks of quaran-
tine, depending on theirtravel history
and medical conditions.
But India has also suspended the “visa
free” entry privileges of “overseas
citizens of India” — individuals who are
ethnically Indian but are citizens of
other countries. Though they hold
foreign passports, many OCIs are long-
term residents of India, which does not
permit dual citizenship.
Authorities provide OCI identity
cards, which grant holders the right to
live and work in India, but New Delhi
has said OCIs willno longer be granted
visa-free entry into India fromtoday
until at least April 15. Hardest hit could
be Indian college students in the US and
Europe, many of whose universities are
nowclosing down.
“There has been panic among parents
on various forums about how to bring
their kids back,” said New Delhi resident
Sanjiv Kapoor, whose daughter, an OCI,
studies in Chicago. Shewas due to fly
backlast night, ahead of the suspension.
Mr Kapoor, a veteran aviation indus-
try professional, said many flights to
India were also likely to be cancelled or
reduced in light of the new travel
restrictions. “Even parents of students
who have Indian passports are starting
to get worried,” he said. “Theoretically,
they can come back but there might not
be any flights operating.”
Other foreign residents of India —
many of whom live in the country on
long-term business visas —were rushing
to return before thede facto orderb
closure takes effect today. Only
diplomats, UN officials and those with
employment visas will be permitted
re-entry from abroad, though visas
of foreigners already in India will
remain valid.
The ban on short-term foreign visitors
and New Delhi’s appeal to its own citi-
zens to avoid unnecessary overseas
travel come as the number of confirmed
coronavirus cases in India has risen to
73, including 16 Italian tourists.
Indian authorities say most of those
infectedare Indianswho have returned
from overseas trips and their close con-
tacts. They say there has so far been on
evidence of community spread.
Notebook age 8pM A X S E D D O N— MOSCOW
Vladimir Putin backed a measure that
couldlethimremainRussia’spresident
until 2036 because of the “extreme tur-
bulence”intheworld,theKremlinsaid
yesterday.
Mr Putin agreed to potentially extend
his 20-year rule because “many coun-
tries in the world, especially ours, are
engulfed in a highly unstable situation”,
Kremlin spokesman Dmitry Peskov told
reporters.
The comments were thefirst explana-
tion of Mr Putin’s rationale forsupport-
ing an amendmentproposed on Tues-
day by Valentina Tereshkova, the first
woman in space and a member of his
United Russia party, to reset the clock
on presidential term limits as part of
sweeping constitutional changes.
Ms Tereshkova’s seemingly spontane-
ous proposal was part of a highly chore-
ographed process that could see Mr
Putin stay on after his fourth term ends
in 2024. Both houses of parliament and
most regional legislatures approved the
amendments this week. Russia’s consti-
tutional court will rule on the bill before
a public vote set for April 22.
Lawmakers rushed through the
arcane constitutional changes inweeks
— adding on social benefits and sops to
conservative opinion— after Mr Putin
announced them in January and
removed longtime ally Dmitry
Medvedev as prime minister.
Though officials in charge of the con-
stitutional changes had previously ruled
out Mr Putin staying on as president, he
hurried to ddress the Duma immedi-a
ately after Ms Tereshkova’s proposal.
“There are precedents for elections
for more than two terms, including in
the United States,” Mr Putin said on
Tuesday. “When a country is going
through such upheavals and such diffi-
culties — in our case we have not yet
overcome all the problems since theUSSR, this is also clear — stability may
be more important and must be given
priority.”
Some of the turbulence is of Mr
Putin’s own making. Global markets
plummeted this week after Russia
ripped up a deal with Saudi Arabia to
keep oil prices high, prompting the price
of Brent crude’s biggest fall since the
1991 Gulf war.
The price war has hit Russian markets
equally hard, the rouble falling to four-
year lows and shares in state oil com-
panyRosneft, which lobbied for an end
to the production cuts, sliding by
25 per cent this week.
But Moscow is confident that prudent
macroeconomic policy leaves it in bet-
ter shape to weather the crisis than Riy-
adh or US shale oil producers.
“In times like these, having a stable,
secure, orderly government is very
important,” Mr Peskov said. The term
limits exception would not affect a new
amendment restricting future presi-
dents to two terms and would “be used
just once because of the situation”, he
added.
Viacheslav Volodin, Speaker of the
Duma, was more blunt.
“Today, given all the challenges and
threats in the world, our advantages
aren't oil and gas,” he said. “They can
fall in price. Our advantage is Putin, and
we have to protect him.”Tehran
Iran asks IMF for $5bn to fight coronavirus
Total of 429 have died and
more than 10,000 have
tested positive in country
Restrictions
India imposes
visa ban for
travellers to
halt spread
of disease
Economy blow. urbsC
Italy lockdown threatens small businesses
Tough controls on personal
movement compound supply
and demand disruption
One man and his
dog: shops are
shut in Milan’s
near-empty
Vittorio
Emanuele
Gallery
yesterday
DanielDal Zennaro/EPA‘It is the
servicesindustry
that is beingcompletely
crushed’Kremlin explanation
‘Turbulence’ drove Putin to back longer term
K AT R I N A M A N S O N— WASHINGTON
A N D R E W E N G L A N D A N D H E L E N WA R R E L L
LONDONTwo American troops and one British
soldier have been killed by rocket fire
on an Iraqi base hosting US-led coali-
tion forces in an attack that threatens
to reignite tension between the Trump
administrationandIran.Centcom, the US military command
covering the region, said that about 18
Katyusha rockets had struck the base,
known as Camp Taji, and the Iraqi secu-
rity forces found a rocket-rigged truck a
few miles away.
The US has yet to apportion blame for
the deaths of the American troops, who
were the first killed by a rocket attack
since the US and Iran came to the brink
of war in January after Qassem Soleim-
ani, Iran's most powerful commander,
waskilled by a US drone strike earn
Baghdad airport.
The US has previously blamed Iran-
backed Iraqi militias for launching rock-
ets at bases hosting American troops
and in the vicinity of the US embassy in
Baghdad’s Green Zone.
“Today’s deadly attack on Iraq’s Camp
Taji military base will not be tolerated,”
said Mike Pompeo, US secretary of state,
on Twitter following a call with UK for-
eign secretary Dominic Raab. “[Mr
Raab] and I agree — those responsiblemust be held accountable.” Boris John-
son, UK prime minister, described the
rocket attack as “deplorable” and spoke
of his “deep sadness” that a UK soldier, a
member of the Royal Army Medical
Corps, had been killed.
“Our servicemen and women work
tirelessly every day to uphold security
and stability in the region; their pres-
ence makes us all safer,” he said. “We
will continue to liaise with our interna-
tional partners to fully understand the
details of this abhorrent attack.”
There are400 UK military personnel
deployed in Iraq, andabout half of these
are stationed at the Taji base.
The killing of American personnel has
been considered a “red line” in Wash-
ington. The US has been locked in astand-off with Iran since President Don-
ald Trump, in 2018, withdrew from the
nuclear deal Iran signed with world
powers. “It is very serious. The presi-
dent already knows,” said the US offi-
cial, adding the US had capabilities
throughout the region to support the
base or conduct a counter-attack. In
addition to the three dead, a further
dozen soldiers were wounded in the
attack, including US personnel. The offi-
cial said the event was under investiga-
tion but indicated the scale of the assault
meant the US was considering whether
Iran-backed Iraqi militias might have
conducted it, rather than Isis.
In January, the US and Iran had come
close to war after a US civilian contrac-
tor was killedby rocket fire on an Iraqi
base housing American forces, which
triggered tit-for-tat attacks. The Trump
administration responded by launching
strikes against the Iran-backed Iraqi
militia it accused of firing the rockets,
killing at least 25. That led to protests
against the US embassy in Baghdad.
Days later, the US killed Soleimani.
Iran vowed revenge and fired more
than a dozen cruise missiles at two Iraqi
bases housing US troops, but none was
killed andWashington and Tehran
moved to de-escalate tension. But the
Islamic regime has vowed to drive US
troops out of the Middle East and has
identified Iraq s its main target.aIraq killings
Troop deaths risk reigniting US-Iran tension
maps4news.com/©HERECamp TajiBAGHDAD
Ba’quba kmIRAQ
Vladimir Putin: could stay in office
12 years beyond his term’s 2024 endMARCH 13 2020 Section:World Time: 12/3/2020- 17:30 User:john.conlon Page Name:WORLD3 USA, Part,Page,Edition:USA, 4, 1