Iran's parliament sacks economy minister

Masoud Karbasian is second minister to lose vote of confidence over economy crisis

epa06973409 Iranian Economy and Finance Minister Masoud Karbasian (R) speaks to defend himself during an impeachment session at the Iranian Parliament in Tehran, Iran, 26 August 2018. Media reported that parliament sacked Karbasian as Minister of Economy and Finance as Iran is facing an economic crisis. The parliament impeached Economy Minister Masoud Karbasian and on the day voted to sack him.  EPA/ABEDIN TAHERKENAREH
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Iran's parliament voted on Sunday to impeach the economy minister following a sharp decline in the rial currency and the continuing deterioration of the country's economic situation.

Masoud Karbasian lost the vote of confidence, which was carried live on state radio, by 137 votes to 121, with two abstentions, becoming the second minister in President Hassan Rouhani's cabinet to be impeached this month.

He was summoned to parliament to explain his ministry's inadequate handling of the economic crisis, as he faces criticism for his failure to prepare the country's economy ahead of renewed US sanctions.

The impeachment comes after the United States reimposed economic sanctions on Iran over its nuclear programme and funding of proxy groups across the Middle East.

In early August, Iranian politicians voted out the Minister of Labour, Ali Rabiei, and last month Mr Rouhani replaced the head of the central bank.

Mr Rabiei lost a confidence motion in parliament by 129 votes to 111, giving the president three months to replace him. For years, Tehran has struggled with high rates of inflation and joblessness, despite a slight improvement following the 2015 nuclear deal with world powers, which lifted international sanctions and saw foreign investors rush to put their money into the country's economy.

Yet, with the United States abandoning the nuclear deal in May and reimposing sanctions, Mr Rouhani's hopes of attracting vast sums of foreign investment appear dead in the water.

Major European firms, including France's Total, Peugeot and Renault, and Germany's Siemens and Daimler, have all announced their departure since the US announcement.

Critics of Mr Rouhani's government say it squandered the opportunities presented by the nuclear deal, which now looks increasingly moribund after the US pulled out of the agreement in May and began reintroducing sanctions.

"Inefficiency and lack of planning have nothing to do with sanctions," said one conservative MP, Abbas Payizadeh, in a speech ahead of the vote.

"Wrong decisions have harmed the people and led to individuals looting public assets," Mr Payizadeh said.

Mr Rouhani, a political moderate, can still count on the support of a substantial reformist bloc in parliament, but even some of its key figures have grown disillusioned.

"What have we done with this nation? We made them miserable and wretched," said Elias Hazrati, of the reformist Hope faction in parliament.

"The middle class are moving towards poverty," Mr Hazrati said, who broke ranks to vote in favour of the impeachment.

Protests linked to the tough economic situation in the country began last December, spreading to more than 80 cities and towns and resulting in violent confrontations with security forces. Sporadic demonstrations, led by truck drivers, farmers and merchants in Tehran’s bazaar, continue to rock the country. Protesters have accused Iran's leaders of using state money to fund regional conflicts at the expense of its own people.

For the US, the re-imposition of sanctions allows Washington to focus on countering Iran's destabilising activities in the Middle East, particularly through Hezbollah, according to Republican Congressman Ted Budd, who serves on the House Financial Services Committee and its Terrorism and Illicit Finance Subcommittee.

However, Iran might seek to to circumvent sanctions through Qatar, Mr Budd warned in an article for Fox News on Sunday, recalling Doha's "continued support of state-sponsored terrorism efforts".

"It’s of increasing concern that Iranian banks are moving their foreign exchange operations to the Qatar National Bank. We know Iran’s access to foreign currencies is an essential part of the government’s funding and support for terrorism," he wrote.

"As our Treasury Department continues to bring back sanctions against Iran, the department should pay attention to these issues and keep a close watch over the actions of both the Qatari and Iranian governments, as well as Hezbollah’s illicit activities around the world."