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Iranians nurture ties to Asia to blunt sanctions
Question of the Day
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.
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.
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.
The reasons were unclear, but Turkmenistan has been reviewing its deep trade ties with Iran as Western sanctions widen.
Such a railway would bypass Iran and still provide the sea access coveted by the Central Asian states.
“Iran has no choice but to turn to Asia for trade” because of the Western sanctions, said Sasan Fayazmanesh, an economic affairs expert and head of the Middle East Studies Program at California State University, Fresno. “But that, of course, will not solve Iran’s problem of selling its oil since the Central Asian countries, for the most part, do not need Iran’s oil.”
But for Tehran, its overtures to Central Asia mean more than just a price tag.
Iran has been a cultural point of reference for centuries across the ex-Soviet states through books, films and traditions dating back to Persia’s pre-Islamic Zoroastrian faith.
A weak link for Iran, however, is the rifts within Islam.
Much of Central Asia is Sunni Muslim, and governments are cautious about any moves that could stir sectarian tensions with Shiite minorities. These same divides, in turn, help cement the influence of Shiite Iran in Iraq and parts of Afghanistan.
By Andrew P. Napolitano
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