powers

The rules will make it easier for Israeli settlers to buy land in the occupied West Bank and give Israeli officials more powers to enforce its laws on Palestinians in the area.

Tehran, Iran – The Iranian government is putting into place contingency plans for basic governance as the threat of another war with the United States and Israel looms large.

President Masoud Pezeshkian gathered governors of Iran’s border provinces as well as his economy minister in Tehran on Tuesday to delegate some responsibilities to the governors if a war breaks out, state media reported. A working group was also formed, tasked with ensuring the increased flow of essential goods, particularly food.

The governors have been given authority to import goods without using foreign currency, engage in bartering and allow sailors to bring in products under simplified customs rules, according to the government-run IRNA news agency.

“In addition to importing essential goods, governors now have the authority to bring in all goods that are directly linked with the livelihoods of the people and the needs of the market in order to balance the market and prevent hoarding,” Pezeshkian was quoted as saying at the meeting.

“Through enforcing this policy, a considerable part of the pressures resulting from the cruel sanctions are neutralised,” he said in reference to harsh restrictions imposed by the US as well as United Nations sanctions reimposed in September, which the Iranian government blames for the economic crisis the country is going through.

But while the government resorts to focusing on the basics, nearly all of Iran’s 90 million people and all sectors of the country’s beleaguered economy continue to suffer from an unprecedented internet shutdown.

The digital blackout was imposed by the theocratic state on January 8 as nationwide protests reached a boiling point, followed by the killings of thousands of Iranians.

The intranet set up to offer some basic services during the state-imposed shutdown is slow and has failed to shore up online businesses. Traditional shops are also struggling to bring in customers.

Economic trouble persists

Amid a large deployment of armed security personnel, most shops are now open in Tehran’s Grand Bazaar – where the protests against the poor economic conditions started on December 28 – and other downtown business districts.

But a shopkeeper at the Grand Bazaar told Al Jazeera that business activity is a fraction of what it was several weeks ago.

“There’s not much life and energy in the markets these days,” he said on the condition of anonymity. “The worst thing is that everything is still so unpredictable. You can see that in the currency rate too.”

Iran’s rial has been in freefall after markets partially reopened this week, degrading trust in the national currency.

The rial hit a new all-time low of about 1.6 million per US dollar on Wednesday. Each greenback had changed hands for about 700,000 rials a year ago and about 900,000 in mid-2025.

However, Central Bank of Iran chief Abdolnasser Hemmati said at the meeting with the governors in Tehran that the currency market was “following its natural course”.

He said $2.25bn worth of foreign currency deals have in recent weeks been registered in a state-run market set up to manage imports and exports, which he described as an “acceptable and considerable figure”.

The comments from Hemmati – who was also the Central Bank chief from 2018 to 2021 and was impeached as economy minister in March – immediately drew fire from the ultraconservative Keyhan newspaper, whose editor-in-chief is directly appointed by Supreme Leader Ali Khamenei.

The newspaper said his comments run counter to the reality in the tumultuous currency market as well as Hemmati’s promises of price stability for essential goods when he re-emerged as the Central Bank governor last month.

While dealing with foreign pressure, Pezeshkian’s government has also been hounded by hardliners at home who have demanded immediate changes to his relatively moderate cabinet.

The infighting became so serious that the supreme leader publicly intervened, telling lawmakers in parliament and other officials during a speech last week that they are “forbidden” from “insulting” the president at a time when the country must focus on providing essential goods to the people.

Subsidy scheme

For his part, Pezeshkian has kept his rhetoric focused solely on “combating corruption” through an initiative that has eliminated a subsidised currency rate used for imports of certain goods, including food.

Pezeshkian’s government argued the subsidised allocated currency was being misused by state-linked organisations. The scheme was supposed to deliver cheaper imported food, but that has not been the case.

The money freed up by the initiative has been distributed as electronic coupons among Iranians to buy food from select stores at prices set by the government.

But each citizen will get only 10 million rials per month for four months. That figure amounted to just over $7 when it was announced during the protests early this month, but it is now worth closer to $6 as the fall of the national currency further erodes purchasing power.

To add insult to injury, the announcement of the subsidy scheme contributed to an abrupt tripling or quadrupling of prices for some essential goods, including cooking oil and eggs. Iran’s annual inflation rate remains untamed at nearly 50 percent and has been on a rising trajectory in recent months.

The top two state-run carmakers, which hold a large monopoly in Iran’s auto industry, have also been positioning themselves for yet another price hike as the end of the Iranian calendar year approaches in March.

One of the firms, Iran Khodro, said on Tuesday that it would increase prices by up to 60 percent while local media reported that the other, Saipa, was expected to follow suit. The government has reportedly intervened to delay or slow the price hikes.

TEDPIX, the main index of the Tehran Stock Exchange, continued its recent decline on Wednesday, losing 30,000 points to stand at 3,980,000. The index was at an all-time high of 4,500,000 last week, having made gains in early January.

Most European countries have either turned down their invitations to join United States President Donald Trump’s “Board of Peace” for overseeing the reconstruction of Gaza – or politely suggested they are “considering” it, citing concerns.

From within the European Union, only Hungary and Bulgaria have accepted. That is a better track record of unity than the one displayed in 2003, when then-US President George W Bush called on member states to join his invasion of Iraq.

Spain, Britain, Poland, Hungary, Czechia and Slovakia said “yes”.

France turned the invitation down on the grounds that Trump’s board “goes beyond the framework of Gaza and raises serious questions, in particular with respect to the principles and structure of the United Nations, which cannot be called into question”.

Trump pointedly did not invite Denmark, a close US ally, following a diplomatic fracas in which he had threatened to seize Greenland, a Danish territory, by force.

The US leader signed the charter for his Board of Peace on January 22 at the World Economic Forum in Davos, Switzerland, calling it “one of the most consequential bodies ever created”.

It has come across to many of the countries invited to join it as perhaps too consequential – an attempt to supplant the United Nations, whose mandate the board is meant to be fulfilling.

Although Trump said he believed the UN should continue to exist, his recent threats suggest that he would not respect the UN Charter, which forbids the violation of borders.

That impression was strengthened by the fact that he invited Russia to the board, amid its full-scale invasion of Ukraine.

‘Trump needs a big win ahead of midterms’

“Trump is thinking about the interior of the US. Things aren’t going well. He needs a big win ahead of the November midterms,” said Angelos Syrigos, a professor of international law at Panteion University in Athens.

The US president has spent his first year in office looking for foreign policy triumphs he can sell at home, said Syrigos, citing the abduction of Venezuelan President Nicolas Maduro, the bombing of Iran and his efforts to end the Ukraine war.

Trump has invited board members to contribute $1bn each for a lifetime membership, but has not spelled out how the money will be spent.

His son-in-law, Jared Kushner, is a member of the executive board.

“How will this thing function? Will Trump and his son-in-law administer it?” asked Syrigos.

Catherine Fieschi, a political scientist and fellow at the European University Institute, believed there was a more ambitious geopolitical goal as well.

“It’s as though Trump were gathering very deliberately middle powers … to defang the potential that these powers have of working independently and making deals,” she said.

Much like Bush’s 2003 “coalition of the willing” against Iraq, Trump’s initiative has cobbled together an ensemble of countries whose common traits are difficult to discern, ranging from Vietnam and Mongolia to Turkiye and Belarus.

Fieschi believed Trump was trying to corral middle powers in order to forestall other forms of multilateralism, a pathway to power that Canadian Prime Minister Mark Carney outlined in his speech at Davos, which so offended Trump.

“In a world of great power rivalry, the countries in between have a choice: [to] compete with each other for favour, or to combine to create a third path with impact,” Carney had said, encouraging countries to build “different coalitions for different issues” and to draw on “the power of legitimacy, integrity and rules”.

He decried the “rupture in the world order … and the beginning of a brutal reality where geopolitics among the great powers is not subject to any constraints”.

After the speech, Trump soon rescinded Canada’s invitation.

Countering agglomerations of power and legitimacy was Trump’s goal, Fieschi believed.

“Here you bind them into an organisation that in some ways offers a framework with Trump in it and the US in it, and implies constraints,” said Fieschi. “It’s not so much benign multilateralism as stopping the middle powers getting on with their hedging and with their capacity to have any kind of autonomy, strategic and otherwise.”

At the same time, she said, Trump was suggesting that the Board of Peace “might give them more power than they have right now in the UN”.

“Trump thinks this is like a golf club and therefore he’s going to charge a membership fee,” Fieschi said.

“If it was a reconstruction fee [for Gaza], I don’t think people would necessarily baulk at that,” she noted, adding that the fee smacked of “crass oligarchic motivation”.

The Board of Peace is called into existence by last November’s UN Security Council Resolution 2803 to oversee the reconstruction of Gaza.

It is defined as “a transitional administration” meant to exist only “until such time as the Palestinian Authority (PA) has satisfactorily completed its reform program … and [can] effectively take back control of Gaza.”

Trump’s charter for the board makes no mention of Gaza, nor of the board’s limited lifespan. Instead, it broadens the board’s mandate to “areas affected or threatened by conflict”, and says it “shall dissolve at such time as the Chairman considers necessary or appropriate”.

China, which has presented itself as a harbinger of multipolarity and a challenger of the US-led world order, rejected the invitation.

“No matter how the international landscape may evolve, China will stay firmly committed to safeguarding the international system with the UN at its core,” said Chinese Foreign Ministry spokesman Guo Jiakun last week.

The UN itself appears to be offended by Trump’s scheme.

“The UN Security Council stands alone in its Charter-mandated authority to act on behalf of all Member States on matters of peace and security,” wrote UN Secretary-General Antonio Guterres on social media on Monday, January 26.

“No other body or ad-hoc coalition can legally require all Member States to comply with decisions on peace and security,” he wrote.

Guterres was calling for a reform that would strengthen the legitimacy of the UN Security Council by better reflecting the balance of power in the world as it is, 81 years after the body was formed. But his statement can also be read as a veiled criticism of Trump’s version of the Board of Peace.

Transparency and governance are problematic, too.

Trump is appointing himself chairman of the board, with power to overrule all members. He gets to appoint the board’s executive, and makes financial transparency optional, saying the board “may authorise the establishment of accounts as necessary.”