Iran port plan seeks to reopen fabled trade routes to Asia

Friday 25/03/2016
An Iranian security guard looks on at oil docks at the port of Kalantari in the city of Chabahar, 300km east of the Strait of Hormuz.

London - India and Iran are to sign an agreement in April to proceed with the first phase of a deep-water port at Chabahar on Iran’s Arabian Sea coast. The project, in Iran’s eastern province of Sistan-Baluchestan, has been delayed by sanctions since an ini­tial agreement was signed in 2002.

The port would provide ready benefits for both sides. While Chabahar has been a port since the days of Alexander the Great, Tehran has long sought a deep-sea facility and its location in the Gulf of Oman offers ready access to the East and would relieve pressure on Bandar Abbas in the Arabian Gulf.

For India, Chabahar offers a route to the Iranian market — both for ex­porting commodities such as rice and importing urea after building a gas-based manufacturing plant — and to Afghanistan and central Asia without having to cross Pakistan.

While Chabahar is often seen as a rival to the deep-water port devel­oped by China in Gwadar, in Paki­stan’s Balochestan province, Paki­stani Commerce Minister Khurram Dastgir Khan on March 18th said the two ports would “cooperate” in the expansion of bilateral trade.

The Chabahar agreement would see Iranian firm Arya Bandar (op­erating under agreement with the Port and Maritime Authority) award a 10-year BOT (build-oper­ate-transfer) to Global India Ports for two berths, one for containers and one for other cargo.

Discussions are under way re­garding a second phase, including a 500km rail link to Zahedan, the provincial capital, and facilities for exporting Iranian gas. These may be advanced later in the year with the scheduled visit to Tehran of Indian Prime Minister Narendra Modi.

This is where possibilities really begin to open. The easing of sanc­tions as part of Iran’s nuclear agree­ment with world powers is set to strengthen Iran as an important hub in a network stretching in all four points of the compass.

In a sense this is new but in an­other it is not. In his classical study of trade under the Safavid dynasty (1501-1736), published 17 years ago, Rudolph Matthee, professor of his­tory at the University of Delaware, included a series of maps highlight­ing the silk trade of the 17th cen­tury. One shows sea routes east to Surat and Jakarta (then known as Batavia), west around Africa to Eu­rope and north by land to the Medi­terranean. Another map shows the more than 2,000km Volga route, north overland, across the Caspian to Astrakhan and then on to the Volga River and Moscow.

“Long-distance trade has forever been a quintessential part of life on the Iranian plateau,” Matthee wrote in The Politics of Trade in Sa­favid Iran. “A crossroads between the Indian subcontinent, Central Asia, Russia and the Mediterranean basin, Iran was the scene of east-west commerce even before the days of the fabled Silk Road, an im­portant branch of which traversed the country… the world between the Mediterranean and Central Asia that was knitted together by com­mon cultural patterns and a com­prehensive trading network.”

A more recent work, published in 2014, by Arash Khazeni, assis­tant professor of history at Pomona College, California, looks at a com­modity that was important up to the 19th century but of little inter­est to the West. Sky Blue Stone: The Turquoise Trade in World History focuses on a “global object that did not matter to Europe but was greatly esteemed and took on pro­found meaning across the tributary Islamic empires of early modern Asia”.

Among many contemporary pic­tures featured in the book, includ­ing the turquoise-studded main square and royal mosque at Isfa­han, is a painting of Moghul em­peror Jahangir on top of the globe with a turquoise ring on his right hand embracing the Safavid Shah Abbas I.

However far patterns and means of trade have changed since Safa­vid times, geography is constant. With sanctions easing, Iran’s more far-sighted leaders see the country once again as a crossroads of north and south, east and west. They look to Europe for technology and investment and as a potential mar­ket for Iran’s largely untapped, vast gas reserves, the world’s second largest.

They also look north. Iranian Energy Minister Hamid Chitchian on March 14th said he expected an agreement with Russia to develop a 1,400-megawatt thermal power plant. According to IRNA news agency, Chitchian claimed visiting Russian officials, including Energy Minister Alexander Novak, had agreed to projects worth $30 bil­lion.

It is not only India that sees po­tential for trade through Chabahar into Iran and central Asia. Oman’s leading port, Salalah, has signed agreements with Bandar Abbas and Chabahar that, according to Ira­nian media reports, could see the sultanate replace the United Arab Emirates as Iran’s biggest regional trade partner.

David Gledhill, chief executive of­ficer of Salalah, has spoken of the hinterlands of all three ports find­ing “gateways for wider markets by leveraging on the location of the partner ports” while “landlocked countries adjacent to Iran… [find] transport corridors to access new markets”.