….As Venezuela is ‘paralysed’ by launch of sovereign bolivar currency
Iran said on Tuesday it would boost its military might and also showcased a new fighter jet amid increased tensions with the United States and with regional rivals over conflicts in the Middle East.
Iranian President Hassan Rouhani said the Islamic Republic’s military prowess was what deterred Washington from attacking it, adding that under President Donald Trump the United States was becoming isolated even from its own allies.
“We should make ourselves ready to fight against the military powers who want to take over our territory and our resources,” Rouhani said in a speech broadcast live on state television ahead of Wednesday’s National Defence Industry Day.
“Why does the United States not attack us? Because of our power, because it knows the consequences,” Rouhani added.
Last week, Iran’s Supreme Leader Ayatollah Ali Khamenei also said the United States would avoid any military confrontation with Tehran because of Iranian military might.
Khamenei has rejected Trump’s offer of unconditional talks on a new nuclear deal, prompting Trump to tell Reuters in an interview on Monday: “If they want to meet, that’s fine, and if they don’t want to meet, I couldn’t care less.”
Relations between Washington and Tehran worsened further after Trump in May took the United States out of an international deal that curbed Tehran’s nuclear programme in return for an easing of economic sanctions.
Trump branded that 2015 deal as flawed because it did not address Iran’s missile programme or involvement in conflicts in Syria and Yemen, and he has reimposed U.S. economic sanctions.
LOSS OF TRUST IN US
Rouhani compared the sanctions on Iran with the U.S. trade war with China and its new tariffs on some imports from Turkey and European countries.
“It’s not only us who do not trust America. Today even Europe and China do not trust them; even American allies like Canada have lost their trust,” he said.
Earlier on Tuesday Rouhani attended a ceremony, broadcast by state TV, that included the fly-past of a new fighter jet called Kowsar, which Iran says is “100-percent indigenously made” and able to carry various weapons and to be used for short aerial support missions.
However, some military experts believe the fighter jet is a carbon copy of an F-5 first produced in the United States in the 1960s.
“The airframe appears to be an externally unaltered, two-seat F-5 tiger. Whilst it may be domestically manufactured, it’s an entirely foreign airframe,” said Justin Bronk, a research fellow specialising in combat airpower and technology in the Military Sciences team at the Royal United Services Institute.
“It’s a very small lightweight fighter with very small engines which limits the thrust output, a very low internal fuel capacity which limits range, and a very small nose which limits the size and power of radar that you can fit,” he told Reuters.
“All of those constraints are not going to be changed by updating the internal components. While you might put a modern radar, or modern avionics – by Iranian standards – in there, it is still going to be subject to all limitations of the F-5 airframe.”
Iran’s air force has been limited to perhaps a few dozen strike aircraft using either Russian or ageing U.S. models acquired before the 1979 Iranian revolution.
Iran has sent weapons and thousands of soldiers to Syria to help prop up President Bashar al-Assad’s forces, but had to rely on Russia for aerial support due to its own lack of a powerful air force.
The Islamic Republic launched in 2013 what it said was a new, domestically built fighter jet, called Qaher 313, but some experts expressed doubts about the viability of the aircraft at the time.
In the meantime, Venezuela came to a standstill on Tuesday as the country tried to deal with its newly introduced currency.
Thousands of businesses closed in order to adapt to the “sovereign bolivar”, and many workers stayed at home.
President Nicolás Maduro launched the new banknotes on Monday, revaluing and renaming the old bolivar currency.
The government says this will tackle runaway inflation, but critics say it could make the crisis worse. The notes went into circulation on Tuesday.
President Maduro had declared Monday to be a bank holiday.
Confusion over Venezuela’s economic plan
Venezuela crisis: How did we get here?
Much of Caracas is eerily empty for a working day. Some in the opposition called for a strike but many people are simply staying at home out of uncertainty, too concerned about what the new currency will mean for the embattled nation to venture out.
The result is that Venezuela is, in essence, a paralysed country. Confusion reigns in the oil-rich nation and, historically, such moments in Venezuela can be extremely volatile.
As yet, there are no reports of significant protests or violence, but there is an increased deployment of the security forces across the country for the roll out of the new bolivar.
President Nicolás Maduro has said the measure will be the saviour of the economy and tackle the spiralling hyper-inflation. Ordinary people however, simply don’t believe him and are concerned for the future, putting even greater pressure on neighbouring countries struggling to deal with the exodus of millions of Venezuelans.
The new currency lops five zeroes off the old “strong bolivar” – meaning a cup of coffee worth 2.5m strong bolivars in the capital Caracas last month now costs 25 sovereign bolivars.
However, people in Caracas told the BBC they were restricted to withdrawing only 10 sovereign bolivars on Tuesday from cash machines.
Separately on Tuesday, Venezuela was shaken by a powerful earthquake along its northern coastal region that was felt in Caracas, where many of the city’s buildings were evacuated.
US seismologists reported a magnitude 7 quake with an epicentre in the east of Venezuela, while the Venezuelan authorities recorded a magnitude 6.3 quake.
Eyewitnesses in the coastal town of Cumana described residents rushing into the streets, according to Reuters news agency. No casualties were reported.
Earlier, cities across Venezuela were virtually deserted as people struggled to get hold of the country’s new banknotes.
Venezuela’s black market in dollars was even frozen by the currency shift amid confusion and economic uncertainty.
The government announced several other key economic changes to accompany the new notes, including raising the minimum wage by 34 times its previous level from 1 September, raising VAT and cutting generous fuel subsidies.
President Maduro also said the sovereign bolivar would be tied to the petro, a virtual currency the government says is linked to Venezuela’s oil reserves.
But the US has banned its citizens from trading in it, and one cryptocurrency site, ICOindex.com, has even labelled the petro “a scam”.
“Anchoring the bolivar to the petro is anchoring it to nothing,” economist Luis Vicente León told AFP news agency.
Zee with additional report from BBC