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Iran+5? Benefits and challenges of the Central Asian five (part 2)
Material posted: Pankratenko Igor N.Publication date: 01-06-2018
Iran's new old problem on the horizon – possible sanctions in connection with the new policy of the White House. In light of increasing anti-Iran rhetoric of the US and a new player in the region – Saudi Arabia, how will the relations of Central Asian countries with Iran? My opinion on this matter expressed by Igor Pankratenko, Deputy General Director of the Center for strategic estimates and forecasts (Russia) and member of the Scientific Council of the Institute of Central Asia and Afghanistan (Iran, Mashhad), and Basil Papava, Director of the Institute for the study of the Middle East and Caucasus (Georgia).

Is there any interest among Central Asian countries to develop Iran's direction?

Igor Pankratenko: unfortunately, no. Maybe somebody with this statement I do not agree, the counter-argument will cite some statements of politicians – but let us proceed not from declarations, but from reality. The trade turnover between Tehran with its largest economic partner in Central Asia, Kazakhstan, in 2017, was, according to the state revenue Committee of MF RK, 552,6 million dollars. The worst performance over the past six years. Tajikistan – about 80 million (compared to 292 in 2013), with Kyrgyzstan about $15 million. Seems like a good indicator with Turkmenistan about $ 1 billion. But the caveat is that if you exclude the gas component, then the total amount will be about $120 million.

Once again, the trade turnover between Tehran with all the countries of Central Asia over the last couple of years has decreased. And all this happened in conditions when sanctions against the Islamic Republic of Iran has been, if not completely removed, significantly weakened. But the other side of the coin – a turnover of 28 States of the European Union with Tehran for two (!) the first months of this year amounted to 3 billion 740 million euros. That is, for the entire 2017 year, Central Asia is not traded with Iran as much as the European Union – two months.

And this situation, in my opinion, the best answer to your question. When Hassan Rouhani for a number of reasons the Central Asian direction is always the former for Tehran due to a complex of reasons rather problem, found itself on the periphery of attention of the Iranian diplomacy. Now is the time response.

And of course, a major role is played by the fact that as an economic partner of Iran to the countries of the region poses no serious interest. Yes, Iran has plenty to offer to local markets. But neither the political will nor serious resource in order to promote their products here. Not to mention the rest.

Basil Papava: Historically, the countries of Central Asia and Iran had close ties with each other, because in this region, located state human close ethnically to Iranians peoples, for example, Tajikistan. Moreover, Uzbekistan is also home to Iranian-speaking groups. Despite the fact that in Central Asia live mostly Sunnis, Iran was conducting "soft" foreign policy and tries not to alienate himself from the people of this region.

With regard to the interest of Central Asian countries to Iran, as you know, countries in the region do not have access to the open sea and ports of Iran have direct access to the Arabian sea, which are able to accommodate large ships. For example, the port Chahbar represent a very important because it is the only major commercial sea port, which is located outside of the Persian Gulf and has direct access to the Arabian sea.

There are some shared interests, Iran and Central Asian countries in the field of transport. For example, Tehran has built a transit way Tejen–Sarahs–Mashhad, which provided TSA access to the ports of the Persian Gulf to the markets of the Middle East, South and South-East Asia. The second important project of the railway Kazakhstan – Turkmenistan – Iran, which opened the way for the Central Asian countries to the ports of the Persian Gulf.

Iran is interesting for TSA in matters of construction of hydropower plants, pipelines, and the laying of power lines. With Tajikistan on these issues is cooperation. Here, for example, of particular importance for Turkmenistan have cooperation with Iran in the gas sector. In 1997 was to build a pipeline "Korpeje–jacket and", and in 2010 was put into operation a gas pipeline "the Dovletabad–Sarahs–Hangeran".

Has not received development and Iran's relations with Kyrgyzstan, where he is actively and successfully operate the other players, especially Russia and China. As for Iran-Kazakh relations, in the years of independence the largest trading partner of Iran in the region is Kazakhstan, which supplied crude oil on a swap basis. Had no effect of Iran's relations with Kyrgyzstan, where he is actively and successfully operating other players – Russia and China.

Central Asian States seek to interact with neighbors and foreign powers in the region and in the world. But to attract large investments necessary to adopt comprehensive measures such as the amendment of the law, liberalizing the business climate, developing long-term plans for the promotion of foreign investment, etc.

Today, the main obstacle to rapprochement in the region is the presence of internal barriers in the countries of Central Asia. Occupying an important geopolitical position in the region, Iran has great potential (energy resources, transport communications, etc.) for the delivery of natural resources to the world market, but also in developing closer ties with Central Asian States based on common cultural and linguistic ties. Iran's desire to achieve higher economic and cultural ties with the region traditionally is blocked by two factors. First, each Central Asian state shapes its foreign and regional policy. This often is contrary to the national interests of other States, which creates obstacles to regional integration. Secondly, the US strategy to contain Iran (austerity). Despite the potential of Iran and Central Asian countries – available data indicate low rates of turnover among them.

What new projects are developed in Iran with the countries of Central Asia after the lifting of the sanctions on Iran?

Iran is interesting for TSA in matters of construction of hydropower plants, pipelines, and laying power lines.

Basil Papava: Iran believed that with the end of the sanctions regime could become a transit country for transportation of energy resources through its territory. However, it is unlikely that Iran will be able to take advantage of this opportunity to the fullest. Iran's relations with the West and especially the USA are pretty cool, and at times very tense. The administration of President D. trump got out of the nuclear deal and is going to reintroduce the sanctions regime, making long-term contracts on gas transit from Iran is risky.

But despite this, there are of course some success in Iran's relations with the Central Asian countries. For example, referring to the Iran-Kazakhstan relations Astana invested in gold production in Iran, and Iran is investing in the mining industry of Kazakhstan. Countries are successfully implementing projects in the fields of agriculture, tourism, health care. By the way, in the Iranian city of Bandar Abbas expected to open a Consulate of Kazakhstan, which further cement trade ties between the two countries. At the end of 2017, the parties signed important documents in the field of transport. Transit started in Iran over the railway "Kazakhstan-Turkmenistan-Iran" and Aktau port in the Caspian sea.

For example, Iranian-Turkmen relations can say that large projects between the countries after the lifting of the sanctions against Iran were not implemented. Recently commissioned new Turkmenbashi international port will allow in the future to increase communication with the Iranian ports of Anzali and neka via the port of Bandar Abbas in the Persian Gulf.

After coming to power Shavkat Mirziyoyev, some progress was observed in relations between Iran and Uzbekistan. For example, in the framework held in October 2017 visit of the delegation of Uzbekistan in Iran and the results of the business forum, businessmen have signed agreements for the supply of agricultural and textile products worth $ 25.5 million. Moreover, Iran is pursuing the construction of the first railway to Herat (Afghanistan). In these circumstances, considered in Uzbekistan the project of linking its transport network with the Iranian network via the territory of Afghanistan. The most convenient is the following route: Termez (Uzbekistan)- Mazar-I-Sharif – Herat (Afghanistan).

By the way, not everything is going smoothly in the direction of the construction of the railway "China-Kyrgyzstan-Tajikistan-Afghanistan-Iran". The Tajik side stated that Tehran has promised to allocate $ 1 million for the project, but have not done so. Moreover, this idea came from Iran itself.

After the removal of sanctions against Iran Tehran with the Central Asian countries have not been implemented a serious and major projects – the fact is that Iran pays great attention to maintain its geopolitical influence in the Middle East, home to mostly Shiites.

Igor Pankratenko: When in August of last year we were talking on this subject, it said among other things that any strategic programmes for the region, a kind of "Central Asian project" – Iran did not exist.

I will say more. In the last two years, the Rouhani administration and its so-called "expert support" with a persistence worthy of a better cause, refused to consider the interface between its economic presence in Central Asia with the Chinese projects under the same initiative, the "Belt and Road". With the Central Asian initiatives of Ankara, although there was a window of opportunity.

In the end, new projects do not appear, moreover – and lost former positions. And it is not about relations with Tajikistan and Turkmenistan, there is a specificity, heavily involved in politics, but about economic relations with Astana and Tashkent.

Yes, in 2016 – 2017 Iran was just absent a lot of resources that could have been "throw" in the Central Asian direction in order to carry out independent policy and to launch meaningful economic projects. But the modern world has long used the instrument of equity participation. You may not be home, but its place and, therefore, the right to vote in a particular initiative you have. But, unfortunately, the Rouhani administration here has once again chosen his "special" way.

What are the projections for the future of Iran's relations with the countries of Central Asia?

For the entire 2017 year, Central Asia is not traded with Iran as much as the European Union – two months.

Igor Pankratenko: excuse me, what are the projections after trump withdrew from the Agreement on its nuclear program and Washington, in fact, announced the beginning of the economic war against Iran? I think that in a year and a half we and those modest trade figures of Iran with the countries of Central Asia, cited above, will be remembered with warmth and admiration – those were the days...

Here's presenting 12 pips ultimatum to Iran, Mike Pompeo said a very significant thing: "After our sanctions will come into effect, Tehran will have to fight for the preservation of its economy. Iran will be forced to make a choice: either to preserve its economy, or to waste their resources on wars abroad. He will not be able to do both at the same time". About "the war" is, of course, a figure of speech. But the point is clear – to deprive Tehran of the ability to conduct any active foreign policy. Everywhere. And in Central Asia too.

Accordingly, the economic ties of Iran in the region, Washington would be cut with no less zeal than any other in the middle East, Europe or somewhere else. And if some EU member States can at least afford the luxury of a verbal altercation with the US over economic damage from the cessation of trade with Iran – although European companies have already begun to wind down their presence in Central Asia will cost without further discussions. Especially not those figures here of damage to them seriously argue.

Iran signed with the Eurasian economic Union the agreement on free trade zone. What are your expectations for Iran's relations with Central Asian republics in the framework of the Eurasian economic Union?

Basil Papava: currently, the membership consists of 5 States – Russia, Belarus, Armenia, Kazakhstan and Kyrgyzstan. According to the Minister of energy of Russia A. Novak – Iran could become the sixth full member in the future. Today the free trade agreement between Iran and the EEU will operate as a trial for 3 years to determine the long-term viability of membership of Iran in the trading block.

For Iran's membership in the EEU is a new opportunity to expand its economic horizons beyond its current middle Eastern partners. In addition, the integration of Pakistan in the economic corridor "North–South" can be formed two unique and complementary road corridor – Iran–Pakistan. Transport corridor "North–South" is a joint initiative of the countries that have built and continue to expand the navigation and roads between South Asia, North Eurasia and Europe. In particular, India seeks to provide a Transport corridor "North–South" as the China-Pakistan economic corridor, linking China with the Indian ocean via great road and rail network, the Western Terminus of which is the Pakistani port of Gwadar. The Ambassador of Pakistan in Azerbaijan recently announced that his country is interested in establishing links between existing routes with the transport corridor "North–South". This will give Pakistan the ability to link the Sino-Pakistani economic corridor transport corridor "North–South", which will serve as a long-term strategic interests of the broader region, in terms of linking the Pakistani port of Gwadar with the port of Chabahar in the Gulf of Oman.

Ultimately, a strong and promising EAEC, oriented to the South, will help strengthen Iran-Pakistan relations through strengthened South Asian and North Eurasian trading network, and help to facilitate uninterrupted transportation of goods by road "One belt and One road" from the Pacific to the middle East, Western Eurasia and further South into Africa along the Maritime zone in the Indian ocean.

Economic ties of Iran in the region, Washington would be cut with no less zeal than any other in the middle East, Europe or somewhere else.

Igor Pankratenko: Frankly, the signing of the agreement on establishment of the temporary free trade zone between the EEU with Iran was for me one of the funniest news may. Let me explain: it's the signing took place exactly when it was obvious that trump fully intends to renegotiate the agreement on Iran's nuclear program. Moreover already informed about the upcoming against Teheran new sanctions from its Western partners – London, Paris and Berlin. And Beijing, he made it clear that is configured to the most decisive steps in the Iranian matter.

Absolutely it was easy to put two and two together – even if trump would save JCPOA, he still would have started to put pressure on Iran, seeking revision of its guidelines. And the way the pressure was only one – the economic sanctions. And – not in General, but the "point" against companies and even specific individuals doing business with Tehran. That is why this political arithmetic was daunting for those who the Union decided to sign an agreement with Iran on the establishment of a temporary FTA no sooner and no later, and at that point in time – a great mystery.

In the end, the agreement was signed – but to work it will not. And not because someone so strive to support the US, but because of all of the same arithmetic

In the end, the agreement was signed – but to work it will not. And not because someone so strive to support the US, but because of all of the same arithmetic. 18 trillion more than 400 billion. Where 18 trillion – it's the economy and the U.S. markets, which will get those who will trade with Tehran. But 400 billion is the economy of Iran.

A specific example – the trade turnover between Astana and Tehran in the past year, as mentioned above, was 552,6 million dollars. Between Astana and Washington for 10 months of 2017 billion three hundred million of American money. Plus – a new agreement between the companies "Boeing", "GETransportation", "GEDigital", "Chevron", "air Astana", "Kazakhstan Temir Zholy", "scat" and "Samruk-Kazyna". And more – plus nearly $ 30 billion of U.S. investment since 2005, the year in energy, transport, communication and mining sectors of Kazakhstan's economy. The question about who is faced with a choice "either-or" – will seek to maintain relationships in Astana us-Iran economic war, I think, quite rhetorical.

So, the US withdrew from the nuclear deal with Iran and intend to impose new sanctions, as you put it – to start an economic war with Tehran. So what is in store for Central Asian States?

Igor Pankratenko: frankly, though, humanly say that to me is hard enough, no serious negative consequences for States of the region in the short term, a new round of U.S.-Iranian confrontation will bring.

A rating system of Tehran as external player in Central Asia for the last three years has gone down. And came to the state when the "Iranian factor" in the regional hands – in no small part because of the policies of the administration of President Rouhani – plays too prominent a role.

During these three years of stay in the periphery of Iranian foreign policy, Central Asian States is quite a accustomed to the situation, when Iran seems like it is, but at the same time – his presence seriously has no effect. Continues to increase its presence in China, comes to Turkey, an interesting movement towards the region refers to new Delhi. Updates to the level of "3.0" is your level of interest in Astana and Tashkent USA. You can list another Paladino processes, which, along with the above, form the actual external and internal political agenda for Central Asia. But here's the item associated with Iran, it is, unfortunately, no.


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