Iran looks east with ‘soft power’ for a new era

Friday 15/05/2015
Looking to Pakistan

Americans, Europeans and Arabs have long thought of Iran as a Mid­dle Eastern power, actu­al or potential. Iranians are more likely to think of their country as the centre of the world — which for much of history it has been — and this makes their mental map rather different.
First and foremost, this means Iran is very much part of Asia. Tehran always has one eye on the east, through Afghanistan to Farsi-speaking Tajikistan and beyond. Its largest trading partner is China. Many Asian languages, beginning with Urdu, are littered with Farsi words.
Almost as soon as the outline nuclear agreement was reached April 2nd, Bijan Namdar Zanganeh, Iran’s oil minister and close ally of Iranian President Hassan Rohani, was on a plane to Beijing for his first official visit to the People’s Re­public of China.
Zanganeh praised China for con­tinued cooperation under sanc­tions and said Iran would expand the relationship “when sanctions are removed”. Beijing has been buying half of Tehran’s oil exports — at least 550,000 barrels a day (bpd) — since tight US and EU eco­nomic sanctions were introduced in 2012 and will reportedly increase that by at least 100,000 bpd this summer.
The Chinese were also the last foreigners prepared for significant investment in Iran’s energy sector after European majors like Royal Dutch Shell, Total and Eni pulled out around 2010.
Iran is prioritising China not only for economic engagement. Military cooperation was increased with joint naval manoeuvres in Septem­ber 2014. Chinese President Xi Jin­ping is expected in Iran this year.
Pakistan has also figured in post-agreement news. Shahid Khaqan Abbasi, the petroleum minister, announced a Chinese loan for 85% of the cost of Pakistan’s leg of a natural gas pipeline from Iran. The scheme was once scheduled to include India, which withdrew under US pressure in 2009, and, with Washington opposed to the project, the Pakistanis have also dragged their feet.
But with the nuclear agreement, Pakistan’s energy needs have moved up its political agenda. The pipeline can be ready in two years to supply gas to produce 4,500MW of electricity, nearly as much as the shortfall that regularly produces nationwide outages.
Pakistan, mainly Sunni with a large Shia minority, wants better relations with Iran after border clashes in restive Baluchistan in October and has resisted pressure from Saudi Arabia to join its coali­tion in Yemen against Zaidi Shia Houthi rebels.
Pakistan is not alone in eyeing Iran’s hydrocarbons, the world’s largest combined oil and gas re­serves in the world. Since the Western sanctions of 2012, almost all Iranian crude exports have gone to Asia — Japan, India, South Korea and China. Sales are expected to edge up in coming months, espe­cially if sanctions are eased with a substantial nuclear agreement by June 30th.
The rise will be slow given the keen terms offered by rival export­ers Russia, Kuwait and the United Arab Emirates. Nonetheless, while demand for oil is falling in the de­veloped world and globally, it is ris­ing in Asia.
Tehran wants the majors back but relations will not be so cordial. “Iran has always wanted balance,” Heydar Pourian, editor of the Teh­ran business monthly Iqtisad Iran, told The Arab Weekly. “Remember the revolutionary slogan: ‘Neither East nor West!’”
But the balance may be import­ing advanced technology — espe­cially gas liquefaction — from the large oil companies while Asia of­fers the demand for exports that lures the majors’ investment in Iran.
The political consequences of the Iranian nuclear agreement in Asia will include Tehran’s gradual admission to “mainstream” or­ganisations. Moscow will support Iran’s membership of the Shanghai Cooperation Organisation, a body stretching across six countries from Russia through central Asia to China.
Russia, an Asian as well as a Eu­ropean power, announced in Janu­ary a military agreement with Iran centred on naval cooperation as Sergei Shoigu made the first visit of a Russian defence minister to Iran for 15 years. Just after the Ira­nian agreement, Russian President Vladimir Putin confirmed Moscow would supply a missile defence system it had previously deemed barred by UN sanctions.
Even on the nuclear issue, the main fallout of the agreement — assuming a substantial deal is reached — could be in Asia. De­veloping a new non-proliferation strategy tailored to Iran may have consequences for Middle Eastern powers Saudi Arabia, Turkey and Israel, but will surely go beyond.
For Iran to accept limits out­side the nuclear Non-Proliferation Treaty (NPT), as well as intrusive inspections by the International Atomic Energy Agency, may in­crease pressure for closer scrutiny of NPT-signatories running civil programmes (Japan and South Korea) as well as weaponised coun­tries outside the NPT (North Korea, India, Pakistan, and even Israel).
This could give Iran scope to style itself a moral leader, some­thing it will relish. Those who see Tehran’s influence in terms of the Quds Force or arms supplies are underestimating both “soft power” and the importance of trade.