International
Iran Moving into the Big League
By Kaveh L Afrasiabi, Asia Times 4/5/08
May 5, 2008 - 7:51:09 AM

From the Persian Gulf to the Caspian region, the Caucasus, Central Asia, South Asia and beyond, thanks to its unique geographical location, Iran is in many ways an ideal connecting bridge that has not until now fully exploited its advantageous "equidistance" from India and Europe.

Straddled between the two energy hubs of the Persian Gulf and Caspian Sea, Iran is a suitable conduit for trade, energy and non-energy, between the Arab states of the Persian Gulf, which are members of the Gulf Cooperation Council (GCC), and the landlocked Central Asian states. The GCC comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

Also, with ambitious transportation links projected under the veneer of a "north-south corridor", Iran, Russia and India have conceived new areas of cooperation that connect northern Europe to the Indian Ocean via Iran and the Russian Federation [1] . Already, Iran is an energy exporter to Europe through Turkey, funneling through Turkmenistan's gas and swapping oil with Kazakhstan and Azerbaijan.

Also, Iran has plans not to lag behind the so-called new "Silk Road" project that involves China, India and the GCC states first and foremost and yet for every conceivable reason must be considered Iran-inclusive because of the country's proximity, its expanding trade and economic cooperation with the GCC, and its own trade liberalization policies, reflected in the expansion of free-trade zones.

This is one reason why Iran is modernizing its Persian Gulf islands of Kish and Qeshm, hoping to turn them into tourist hotspots as well as hubs for trade and even finance in the near future [2].

The $7.6 billion Iran-Pakistan-India pipeline (IPI), meanwhile, has the potential more than any other existing Iranian project to extend the purview of Iran's "pan-regional" approach, by organically connecting Iran to the sub-continent on a long-term basis and by providing a new Iran-Pakistan-India nexus that could in turn be used for addressing what is lacking so far, that is, more than paltry inter-regional trade.

The 2,600-kilometer IPI pipeline, which was conceived in 1994, envisages transporting Iranian gas to Pakistan and then on to India. Following Ahmadinejad's visit to India this week, Iran reported the three countries were close to signing a "final agreement".

The poor state of Iran's trade with South Asia is reflected in the sub-optimal trade between Iran and Pakistan, as is the case between Iran and other members of the region's 10-nation Economic Cooperation Organization (ECO) [3].

Attempts to make the ECO a fulcrum of regional cooperation have by and large failed and the ECO's struggle to achieve a major breakthrough in terms of regional cooperation has not brought significant tangible fruits.

Yet that may change, particularly if Iran (a) is inducted in the Shanghai Cooperation Organization, at which it is presently an observer [4], and (b) the IPI project finally gets underway, in which case Iran's greater integration into larger entities will bolster its attempt within the ECO to make this regional organization, which is headquartered in Tehran, more effective.

With respect to the Persian Gulf, the GCC, which continues to shun Iran's olive branch of cooperation, is under new pressures to rethink that attitude as a result of the Shi'ite-led government in Iraq, a potential Iran allay in the politics of the Persian Gulf. It is not far-fetched to think that Iran and Iraq will one day join the GCC states in a new regional cooperative framework.

Certainly, that is how Iran wants it today, as seen in the recent unveiling of Iranian plans for cooperative security and the like put forward at their hitherto recalcitrant GCC neighbors [5], perhaps better pitched as part of an Islamic common market.

Certainly, significant hurdles confront Iran's "pan-regional" approach that seeks to make the country an integrative, nodal point of cooperation between and among various regions, ranging from United Nations and US sanctions out of fear of Iran and its purported "nuclear ambition", as well as a host of purely economic and technical difficulties, such as poor transportation links and cumbersome custom regulations.

Regarding the latter, one of the ECO's key contributions has been in the area of prioritizing a customs agreement, as well as tariff reduction schemes, between the member states that would facilitate trade in the ECO region. Still, the low level of trade between the ECO states is a harsh reminder of the long road ahead before Iran's lofty objective of "pan-regionalism" can be fully realized.

Irrespective, the tangible gains mentioned above illustrate the viability of Iran's "pan-regional" approach that could conceivably elevate its status beyond a mere regional power and add to the cluster of values in its arsenal as a global power.

In fact, as reflected in a recent statement by Iranian National Security Advisor Saeed Jalili regarding Iran as a "global power", Iran's self-image and self-understanding is global-looking and fuels an activist foreign policy that is fully within the camp of the Non-Aligned Movement (NAM) and which constantly prioritizes "global justice".

Economically, however, for Iran and other NAM states seeking a redistribution of global wealth, concentrated in Western hands today, there is no alternative but to push for greater cooperation between themselves and achieve better coordination at international institutions such as the World Trade Organization (WTO), in light of the WTO's ongoing trade wranglings known as the Doha rounds.

Although Iran is not yet a WTO member, it will be directly impacted by the final agreements of the Doha rounds, due later this year, which is why it is incumbent on Iranian policymakers to focus on the Doha rounds and to scrutinize the agricultural and non-agricultural new policies of the WTO that distinguish between developed and developing nations. Yet these fall short of addressing the adverse impacts of globalization and WTO-induced trade liberalization for a whole host of Third World nations.

One thing is clear, the greater the impetus for Iran's "pan-regional" goals and objectives, the more Tehran will find itself entangled in complex regional, extra-regional and global issues and controversies that impact the country's foreign policies, trade, and security both directly and indirectly.

One of the understudied aspects of Iran's "pan-regionalism" is, indeed, how it connects to the issue of globalization that, so far, has been a mixed blessing for the developing world. After all, regionalism and globalization have unhappy kindred relations, with the former simultaneously strengthening and weakening it.

Notes
1. For more information on the International North-South Transport Corridor, click here .
2. For more on the free-trade zones, click here .
3. For more on the Economic Cooperation Organization, click here
4. For more on the Shanghai Cooperation Organization, click here 5. See Iran unveils a Persian Gulf security plan by Kaveh L Afrasiabi, Asia Times Online, April 14, 2007.