- Associated Press - Thursday, October 25, 2012

DUBAI, United Arab Emirates — In back-to-back Asian summits this month, Iran’s president made sure to carve out special time to look east.

At one gathering in Azerbaijan, Mahmoud Ahmadinejad reminded the president of Kazakhstan about the vision of a railway linking the heart of Central Asia with Iran’s warm ports.

At another meeting in Kuwait, he held talks with Tajikistan’s leader about their growing trade ties.

Even as U.S. and European sanctions tighten around Iran’s economy, officials in Tehran are busy reaching out to Asian markets as a critical lifeline.

For months, Iran’s oil sales to energy-hungry nations such as China and India have been the focus of intense Western efforts to reduce the flow as part of the pressure over Iran’s disputed nuclear program.

Yet lesser — but not insignificant — economic pathways for Iran also run along the ancient Silk Road connecting China and the Middle East.

While Iranian trade and projects in Central Asia are tiny compared with oil sales to the continent’s economic powerhouses, the outreach represents another way for Tehran to seek economic buffers from sanctions in a region where Washington holds relatively limited sway.

It also displays some of Iran’s first steps at trying to diversify its economy away from oil — which still represents 80 percent of foreign currency revenue — and develop backyard markets for its construction and technology industries.

“The Iranian economy is so strong that it could live without oil revenues,” Mr. Ahmadinejad said at a Pan-Asian summit last week in Kuwait. “Our people could get accustomed to that, and I think that things will change in the near future.”

On Tuesday, Iranian Oil Minister Rostam Qasemi told an energy conference in Dubai that Iran has contingency plans to run the country without the critical oil revenue, including investments in solar and other renewable sources.

While Iran is a long way off from functioning without its oil income — and may never reach that stage — the remarks reflect real ambitions to turn Central Asia into a key market for Iranian goods and technological expertise while offering the landlocked former Soviet republics access to the sea.

In August, carmaker Iran Khodro announced plans to boost exports to Kazakhstan and Turkmenistan.

In Tajikistan, Iranian construction firms are major builders, with projects such as hydroelectric power stations and a $39 million tunnel that connects the capital Dushanbe to northern Tajikistan.

But the centerpiece of the Islamic republic’s outreach — an uninterrupted rail link through Central Asia — remains caught up in disputes and competing ventures more than 15 years after the first leg was opened between Iran and neighboring Turkmenistan.

Last month, Turkmen President Gurbanguli Berdymukhamedov abruptly canceled a reported $700 million contract with Iran’s Pars Energy to continue the rail line to Kazakhstan along the Caspian Sea coast.

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