Contrary to expectations, Iran’s Supreme Leader Ali Khamenei has deferred allocating funds from reserves to deal with unprecedented flood damage in Iran.
The head of Iran’s Central Bank had said April 8 that it will be impossible to deal with the disaster relying on the current budget and money must be withdrawn from the National Development Fund (NDF).
Khamenei who was said to have initially agreed, issued a letter on Monday April 15 saying that funds from the current budget should be spent first and only in case of last resort NDF funds can be used.
It is not clear what sort of delay this decision will cause, specially for cash compensation to flood victims. The current budget was drafted with a lot of difficulty due to Iran’s financial crisis as U.S. sanctions have reduced its oil exports.
Recent floods caused by unprecedented heavy rains across Iran have generated an estimated 300-350 trillion rials damage in 25 provinces of the country, the Islamic Republic Minister of Interior said on Sunday, April 4.
The amount of damage in USD can reach $7 billion based on the country’s official exchange rate or $2.5 billion based on free market rates in Tehran.
Since in many cases the government has to allocate dollars for reconstruction, the official exchange rate is more applicable to calculating flood damages.
Abdolreza Rahmani Fazli also announced that more than 4,400 towns villages across Iran were hit and damaged by floods.
According to the Minister, hundreds of thousands of hectares of farms and agricultural lands are currently submerged under mud and water.
However, Rahmani Fazli has stopped short of giving more details on the damages in different sectors.
Meanwhile, the government’s official daily, Iran, reported on Sunday that the recent floods caused two trillion rials damage to industrial units and four trillion rials to roads across the country.
Daily Iran’s report also says that 89,000 homes have been demolished or severely damaged by the floods.
While earlier on April 8, the Minister of Agricultural Jihad, Mahmoud Hojjati, had talked about 6.7 trillion dollars damage to farms and agricultural lands, the chief of staff at Crisis Management office of the ministry, Mohammad Mousavi declared that the loss amounts to fifteen trillion rials. This equals $300 million based on the official exchange rate.
Based on Mousavi’s report, 30% of farms and agricultural lands have been totally destroyed, 159 hectares of greenhouses, 1,400 rural livestock farms, 52,000 apiary, 1,300 fisheries, 2,000 water pumps have been damaged, and 27,000 livestock died during the floods.
“The flood-hit people should receive the due compensation without holding back, and according to reasonable and swift assessment,” Rahmani Fazli said.
The Islamic Republic President Hassan Rouhani has also promised swift action by his administration to pay compensation.
However, the Islamic Republic has often failed to pay compensation or rebuild damages in past natural disasters, such as the earthquake in western Iran in 2017.
Based on the government’s plans, households in villages will get about $2,000 in grants and $8,000 in loans. City residents will receive $2,100 in donations and $10,000 in loans. These dollar amounts are calculated based on the official exchange rate.
Moreover, the Rouhani’s Administration has approved loans and credit-lines for the damaged industrial units.
According to the Minister of Industry, Mines, and Trade, Reza Rahmani, the industrial sector across the country has suffered damages up to $400 million.
The Deputy Minister of Roads and Urban Development (RUD), Kheirollah Khademi, has also announced that the damage to roads amounts to $800 million.
RUD minister, Mohammad Eslami has declared that 12,000 kilometers (approximately 7,500 miles) of roads have been damaged, and more than 700 bridges destroyed by landslides and flood water.
Earlier, the Minister of Energy, Reza Ardakanian, had estimated the flood damage to power facilities up to $420 million.
The unprecedented floods, which began on March 19, have killed at least 76 people, forced more than 220,000 people into emergency shelters, and left relief agencies struggling to cope.