“Chabahar Port is not just a transit port, it is an investment opportunity,” Iranian Ambassador to India said in a recent interview with ThePrint, a Delhi-based online newspaper.
Ali Chegani pointed out that Indian Foreign Minister Subrahmanyam Jaishankar had visited Iran twice after Seyed Ebrahim Raisi’s presidency and added that a visit by his Iranian counterpart Hussain Amir Abdollahian to New Delhi is in preparation.
The Iranian envoy stressed that the port of Chabahar is not subject to unilateral US sanctions. Experts believe an exemption was granted due to the US focus on harnessing emerging Chinese influence in the region. The Pakistani port of Gwadar, located 140 kilometers east of Chabahar, is being developed by China as part of the China-Pakistan economic corridor.
In May 2015, Iran and India signed a cooperation agreement for the development of the port of Chabahar. The Indian private sector was to invest in Chabahar in two phases.
The first phase is a $ 31 billion project that includes the construction of two berths in the port, a 640-meter container and a 600-meter multipurpose cargo terminal.
In the second phase, India’s Jindal Infrastructure, Essar, SAIL and IRCON will develop the area around the port, which involves the development of a free trade area and a railway line connecting Afghanistan landlocked in the Central Asian region.
For India, one of the fastest growing economies in the world, the port of Chabahar will provide an alternative route for doing business with Afghanistan and Central Asia bypassing Pakistan.
Iran has built an alliance with the east, including China, Russia and countries in the region
In January 2017, seven agreements valued at over $ 3 billion were signed by Iranian, Indian, Omani, Chinese and South Korean investors to promote investment opportunities and sustainable development on the Mokran coast in the area. Chabahar Free Trade Agreement (CFTZ).
However, all foreign investors withdrew from the Chabahar project due to the US withdrawal from the JCPOA and the imposition of “maximum pressure” sanctions in 2018. A total of 1,500 sanctions were adopted under the administration. of former US President Donald Trump. These restrictions make financial transactions almost impossible. It should also be mentioned that foreign investors could be subject to “secondary sanctions”.
With the seventh round of the JCPOA talks underway which resumed on November 29, Western powers must keep in mind the type of economic slump Iranian middle and lower classes are going through due to sanctions and the COVID-pandemic. 19. The Raisi administration stressed that the lifting of sanctions is a prerequisite for relaunching the nuclear deal.
Humanitarian imports were allowed under Trump’s “maximum pressure” sanctions. Due to the lack of a stable banking channel for humanitarian work, Iran is unable to import drugs, medical equipment, etc. in this era of pandemic.
When the United States left the JCPOA in 2018, the so-called E3 (Germany, France and United Kingdom) registered the Trade Support Instrument (INSTEX). However, this Special Purpose Vehicle (SPV) does not have an engine or driver. The INSTEX mechanism was supposed to maintain trade flows between Europe and Iran and initially it was announced that this SPV would be used for the most essential sectors, such as pharmaceuticals, medical devices and agri-food products. However, this SPV remains unmanned and motorless.
The Norwegian Refugee Council recently warned that future aid work in Iran was under threat due to US sanctions. Delivery of aid to Afghan refugees residing in Iran and victims of the severe 2019 floods in Iran was under threat as banks refuse to transfer money to aid agencies for fear of sanctions, the Norwegian group said.
In April 2019, severe and widespread flash floods forced 366,000 people from their homes and killed 76 people in 25 of Iran’s 31 provinces. With infrastructure and livelihoods severely affected, immediate and long-term assistance and support to more than two million people have been hampered by the sanctions.
In a speech at the UN on November 9, Iranian Ambassador to the United Nations Majid Takht Ravanchi denounced unilateral sanctions to prevent affected countries from accessing the financial resources necessary to achieve the Sustainable Development Goals . Ravanchi stressed that “problems such as exclusion and inequalities can act as potential drivers, exacerbate conflicts and weaken the opportunities to achieve lasting peace”.
When Raisi took office, he vowed to take steps to lift the tough sanctions and bridge the gap with the disgruntled Iranian general public, but stressed that he would not tie the country’s future to the West. Raisi said that instead, his administration would prioritize regional relations, especially with neighboring countries.
Iran has built an alliance with the east, including China, Russia and countries in the region. Raisi’s promise to focus on relations with countries in the region has borne fruit. Iran’s membership in the SCO has been one of the spotlight, but the membership process started years ago and it will take another two years for Iran to become a full member.
Another example is Raisi’s visit to Ashgabat, Turkmenistan on November 28. During the trip, an agreement was signed for gas exchanges between Iran, Azerbaijan and Turkmenistan. Oil Minister Javad Owji said shipments were due to start on December 22. This happened against the backdrop of the recent difficult diplomatic route between Iran and Azerbaijan.
Meanwhile, there have been several rounds of talks between Iranian and Saudi officials. Both sides expressed optimism about the talks and future rounds are being prepared, which could bring the two main players in the region closer together.
The Iran-China strategic agreement was signed on March 27, 2021, on the 50th anniversary of the establishment of diplomatic relations between Iran and China. Although the details and terms of the deal originally proposed in 2016 have not been made public, it has been announced that China will invest $ 400 billion to $ 600 billion in the Iranian economy, a report from Iran reads. China Briefing. In return for Chinese aid, Iran will provide cheap oil. The two countries also signed defense agreements and conducted naval exercises during the Rouhani years.
It is the first time that the Islamic Republic has entered into such an extensive agreement with a major world power. The last was a 10-year deal with Russia, which was later extended to 20 years.
What impact the Iran-China strategic deal will have on Chabahar’s development remains to be seen.
With the continuation of the sanctions regime, Iran’s so-called eastward shift is inevitable. The role of China and Russia in the development of the Chabahar Free Trade Area is inevitable.
China’s new digital e-RMB currency as well as barter trade could play an important role in facilitating Sino-Iranian trade, thereby reducing regional dependence on greenback transactions.
However, looping back to today’s economic realities, the US dollar remains the most important and influential currency in today’s financial market. In 2019, the US dollar accounted for almost 90% of all international transactions and 60% of all foreign exchange reserves. The supremacy of the US dollar gives US economic sanctions their strength, making it nearly impossible for sanctioned countries like Iran and North Korea to conduct international affairs.
In a recent telephone conversation, Raisi told his Russian counterpart Vladimir Putin that “the Islamic Republic is absolutely serious about the negotiations and we are just as serious about the rights of our people to the lifting of the sanctions”, according to a press release published on the presidency’s website.
By the time the sanctions regime ends, Iran will become one of the most lucrative places in the world to invest. Besides natural resources, Iran is also a major global producer of steel, cement, cars and well positioned in nanotechnology and stem cell research.
Every effort must be made during the seven rounds of the Vienna talks to facilitate the legal rights of the Iranian nation to benefit from peaceful nuclear knowledge.
Describing Iran’s potential, Sajid Rizvi, editor-in-chief of London-based EAPGROUP International Media said: “It’s very hard to beat its strengths: a consumer market of over 80 million people, in largely well educated; an even more attractive human capital mix than Turkey; and on the very important energy front, a combination of as much oil as Saudi Arabia, as much gas as Russia and arguably more mineral resources than Australia.