Continuation of the 'Barter' Policy in the Islamic Republic; From Tea and Rice to Medicine and Wool

After the Minister of Oil of the Islamic Republic and some other officials announced the 'barter' of food and medicine with other countries in exchange for Tehran's debts, some countries have also officially announced the implementation of this process. The Sri Lankan government, one of the oil debtors to Iran, has announced that starting next month, it will begin 'shipping tea' to pay off its $250 million oil debt, which dates back to 2012. Reuters reported that this non-banking financial exchange is based on the '2021 agreement' between the governments of the two countries following the prohibitions and restrictions resulting from international sanctions against Tehran's risky nuclear, missile, and regional programs. According to the initial agreement in 2021, Sri Lanka was supposed to send '5 million dollars' worth of tea to Iran monthly over '48 months', which has recently been updated by officials of that country to '2 million dollars' worth of tea monthly. Last week, Javad Owji, the Minister of Oil of the Islamic Republic, also emphasized during a cabinet meeting regarding the 'achievements' of Ebrahim Raisi's trip to Venezuela that 'we do not have financial payments between us' and said, 'We do everything through the barter of shipments.' Previously, on April 5, Owji had mentioned the settlement of 'Iraq's gas debts to Iran', stating that [Iraqi officials] have conditions that the received funds must be exclusively allocated for 'purchasing medicine and essential goods.' Shortly thereafter, Iraqi government officials confirmed this and announced that no monetary repayment would be made against Tehran's currency claims, and only food and hygiene items would be sent. Meanwhile, on December 20, 2021, the secretariat of the Iran-China Joint Chamber of Commerce announced Mongolia's readiness to export 'natural wool' to Iran based on a 'barter transaction' mechanism in exchange for 'receiving oil.' Abdul Razak Dawood, senior advisor to the Prime Minister of Pakistan on commerce and investment, also previously mentioned in a meeting with Islamic Republic officials that 'we are aware of Iran's sanctions conditions,' stating: 'Pakistan has rice, and Iran has oil and petrochemicals that we can barter.' The severe increase in 'stagflation' in the Iranian economy and market, along with a noticeable decrease in foreign liquidity and the failure to fulfill Ebrahim Raisi's electoral promises from June 2021, has led the Islamic Republic to publicly resort to the 'oil for food and medicine' barter mechanism, contrary to the past. Previously, following the issuance of 'Resolution 986' by the United Nations Security Council in April 1995 and subsequent international sanctions against the Ba'ath regime in Iraq, the Oil-for-Food Program was implemented for Baghdad and continued until November 2003 when Saddam Hussein's regime fell. Additionally, John Bolton, former U.S. National Security Advisor, has also discussed various issues, including the impact of sanctions against the Islamic Republic, in an interview with the Persian section of Voice of America. Bolton stated regarding the impact of international sanctions on the Islamic Republic and the Iranian economy: 'Keep in mind that the Iranian economy is currently in very bad shape. Sanctions are only one reason for this situation. The main reason is really economic mismanagement by the Ayatollahs.'