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Iran Is Wisely Marketing Itself As A Conduit For Russian-Pakistani Trade

Iran Is Wisely Marketing Itself As A Conduit For Russian-Pakistani Trade

23 JULY 2021

The Iranian Consul General to Pakistan’s proposal on 16 July that his country could serve as a conduit for Russian-Pakistani trade was extremely strategic since it shows a keen awareness of the Islamic Republic’s role in Eurasia’s rapidly evolving geo-economic environment.

Eurasia’s geo-economic environment is rapidly evolving in light of several interconnected developments over the past year. February’s agreement to construct a trilateral railway between Pakistan, Afghanistan, and Uzbekistan (PAKAFUZ) challenged the strategic viability of the North-South Transport Corridor’s eastern branch (E-NSTC) from the Indian-controlled Iranian port of Chabahar to Afghanistan and the Central Asian Republics (CARs). Kabul hammered another nail in that project’s coffin last month during the virtual trilateral Foreign Ministers meeting alongside the top diplomats from Beijing and Islamabad when it committed to rely on the Belt & Road Initiative’s (BRI) flagship project of the China-Pakistan Economic Corridor (CPEC). Although Russia still officially remains interested in the NSTC, Foreign Minister Sergey Lavrov enthusiastically endorsed Central Asian-South Asian connectivity during a topical conference in the Uzbek capital of Tashkent in mid-July, which can be interpreted as Moscow’s approval of PAKAFUZ and willingness to use this project to reach South Asia.

As it presently stands, Iran can’t bank on the NSTC as much as it initially expected. This initiative will still likely facilitate some Russian-Indian trade as intended, but nowhere near what the most optimistic observers had hoped for. The Islamic Republic’s strategic consolation is that Azerbaijan’s proposed six-nation integration platform will probably become its new priority and thus connect Iran more closely with Russia and the other four members of this platform. Even so, Tehran would still prefer to become a transregional economic player in Eurasia, the vision of which it aims to advance through March’s 25-year strategic partnership deal with China. I wrote at the time that this game-changing development could be leveraged to facilitate Russian-Pakistani trade through the western expansion of CPEC into the Islamic Republic (W-CPEC+) where it would then mostly proceed parallel with the NSTC’s original route. Some critics were skeptical of this ambitious vision, but my views have just been vindicated by the Iranian Consul General to Pakistan.

The Express Tribune reported that Mr. Mohammad Reza Nazeri said on 16 July while speaking at the first session of the Pakistan-Iran Business Facilitation meeting that Iran is a beneficiary of CPEC and can facilitate Pakistan’s trade with Central Asia and Russia. This statement very strongly suggests that he has a keen awareness of the Islamic Republic’s role in Eurasia’s rapidly evolving geo-economic environment. With E-NSTC having been made largely redundant by PAKAFUZ, which in turn also reduced the strategic viability of its core function of facilitating Russian-Indian trade, it makes sense for Iran to position itself as a conduit for Russian-Pakistani trade in order to redeem this project’s transregional importance for connecting Eastern Europe with South Asia. It can also serve as a temporary workaround to trans-Afghan trade between the two for as long as the situation in that landlocked country remains violently unstable. Put another way, Iran finally realizes how important Russian-Pakistani connectivity is nowadays and thus wants to play an important role in facilitating it.

Guided by this flexible approach to Eurasia’s rapidly evolving geo-economic environment, Iran can realistically retain its transregional geo-economic importance despite the NSTC’s initial Russian-Indian connectivity function having been reduced due to recent developments related to PAKAFUZ and New Delhi’s general realignment towards the West (including through its abidance to the US’ unilateral anti-Iranian sanctions regime). The expected influx of Chinese capital and the connectivity projects that it could be responsible for as a result of their 25-year strategic partnership deal could greatly enhance Iran’s transregional connectivity attractiveness, especially with respect to facilitating Russian-Pakistani trade. The expansion of W-CPEC+ to Russia via Iran and Azerbaijan would also improve the viability of the Golden Ring concept for assembling a new multipolar network in the Eurasian Heartland, which would serve the strategic interests of all the involved countries.

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By Andrew Korybko

American political analyst

Tags: Russia, Pakistan, Iran, PAKAFUZ, W-CPEC+, NSTC, Geo-Economics.


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Debunking Bloomberg: Biden’s Afghan Withdrawal Isn’t A Blow To China

20 APRIL 2021

Debunking Bloomberg: Biden

It was hyperbole for Ghosh to claim that ‘Biden’s Afghanistan Withdrawal Is A Blow To China’. It might only be so in the worst-case scenario, which is far from certain.

Bloomberg published an op-ed last week provocatively claiming that “Biden’s Afghanistan Withdrawal Is A Blow To China”. Opinion columnist Bobby Ghosh argues that the country might soon slip back into an all-out civil war that would not only disrupt China’s connectivity interests in the country, but also spill over to threaten the Belt & Road Initiative’s (BRI) flagship project of the China-Pakistan Economic Corridor (CPEC). In addition, he predicts that Afghanistan will become “a sanctuary for jihadists of every stripe — some of whom will undoubtedly direct their attention to that very short, mountainous and porous border with China.”

This line of thinking is typical of what many in the Western mainstream media are saying. They were against former US President Donald Trump’s deal with the Taliban last year and subsequent promise to complete his country’s military withdrawal by the beginning of next month. His successor, US President Joe Biden, will instead initiate the full withdrawal by that date and complete it before the twentieth anniversary of the 9/11 terrorist attacks. Some establishment voices fear that this will create strategic opportunities for China and the US’ other so-called peer competitors like Russia to exploit for zero-sum ends against American interests.

In reality, however, it’s in everyone’s interests that the US completes its promised withdrawal from Afghanistan as soon as possible. America has spent trillions of dollars there without much of anything to show for it. It’s true that Afghanistan now has a governing system comparatively closer (key word) to Western democracy than before and that woman now enjoy greater rights, but the Taliban still controls large swathes of the country and ISIS’ entry to the battlefield in 2014 immensely complicated the anti-terrorist situation there. Indefinitely continuing the US’ occupation of Afghanistan would only make matters much worse without solving anything.

By boldly agreeing to withdraw from the country and clearly articulating the strategic reasons behind this decision in his national speech on Wednesday, President Biden concluded that it’s better to cut America’s losses and simply move on even though the victimized Afghan people won’t be able to move past this twenty-year dark chapter of their national history so easily. In any case, their future is arguably brighter than before, not dimmer. The completion of the US’ withdrawal will unlock promising socio-economic opportunities for Afghanistan provided that their leadership and local stakeholders have the political will to support them.

To explain, it’s precisely because of China that this is possible. Afghanistan’s geostrategic location in the center of the tri-regional Central-South-West Asian space affords it enormous potential for connecting these three massive markets through BRI. In particular, CPEC’s de facto expansion into Afghanistan via the recently agreed Pakistan-Afghanistan-Uzbekistan (PAKAFUZ) railway will complement existing rail connectivity with China via the Central Asian nations of Uzbekistan and Kazakhstan. The Chinese-Iranian Strategic Partnership deal also creates the chance of further expanding this connectivity network to West Asia with time via W-CPEC+.

Domestically, the Afghan economy would require extensive reconstruction, but its reported $3 trillion worth of minerals – including some rare earth ones – could ideally be extracted in the most responsible way possible to ensure the equitable distribution of this wealth to every citizen. Coupled with grants and low-interest no-strings-attached loans from partner states like China and others, the Afghan people actually stand a very credible chance of succeeding in the future so long as their country can avert the all-out civil war that Ghosh fears might soon erupt.

That worst-case scenario is plausible, but nevertheless not inevitable. The Taliban, despite being designated as terrorists, have recently proven themselves to be shrewd diplomats on the international stage during multiple rounds of peace talks over the past few years. They seem to have understand the pragmatism of facilitating such connectivity and extractive projects for the purpose of improving their citizens’ living standards. Should they enter into the planned inclusive transitional government that’s been proposed, then they’ll probably not do anything to threaten those projects since they’ll too have a stake in their success.

Considering all of this, it was hyperbole for Ghosh to claim that “Biden’s Afghanistan Withdrawal Is A Blow To China”. It might only be so in the worst-case scenario, which is far from certain. What’s much more likely is that the existing low-intensity conflict continues but doesn’t reach catastrophic proportions. Instead, with the Taliban possibly becoming part of the Afghan government, the international community might remove their terrorist designation and accept them as equal stakeholders in Afghanistan’s future socio-economic success, a large part of which will be due to mutually beneficial cooperation with China.


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