Who Benefits from Iranian Business?

Exclusive: European and U.S. businesses are hoping for a bonanza once Iran is freed from economic sanctions, but the West must overcome decades of distrust from the Iranians, meaning that Russia and China may have an early edge in building commercial bridges to Iran, writes Andrés Cala.

By Andrés Cala

The nuclear deal between six world powers and Iran will reset key economic and geopolitical relationships but perhaps not in the way many Western pundits expect. Iran, unshackled from international sanctions, is sure to reach out to U.S. and European companies for goods and technology but may favor Russia most of all because of a budding relationship built on mutual trust and mutual interests.

Iran’s difficult history with the United States dating back to the CIA coup overthrowing Iran’s elected leader in 1953 through the tensions with Iran’s Islamic Republic and U.S.-instigated economic sanctions makes Iranian leaders leery of again becoming dependent on Western banks and being vulnerable to U.S. geopolitical designs.

Iranian President Hassan Rouhani (left) shakes hands with Russian President Vladimir Putin at the Shanghai Cooperation Organization summit in the Kyrgyz capital of Bishkek on Sept. 13, 2013. (Photo credit: Press TV)

Iranian President Hassan Rouhani (left) shakes hands with Russian President Vladimir Putin at the Shanghai Cooperation Organization summit in the Kyrgyz capital of Bishkek on Sept. 13, 2013. (Photo credit: Press TV)

Iran has had troubled relations with Russia historically, too, but has come to see Russia under President Vladimir Putin as something of a regional partner, even if not exactly an ally. Russia pressed for a positive outcome in the nuclear negotiations and supports Iran’s regional resistance to Sunni terror groups, such as Al Qaeda and the Islamic State, especially in Syria. Russia also sees Sunni extremism as a serious threat to its own security.

That collaboration when combined with worries about the possible renewal of Western sanctions sometime in the future suggests that Iran will seek to consolidate its marriage of interests nurtured recently with Russia. Both countries have experienced the economic pain that comes from charting independent policies that conflict with U.S. and European demands.

So, with the United Nations Security Council soon expected to lift many international sanctions on Iran, Russian companies will work to not only maintain but to deepen their ties with Iran’s economy. Iran also might look to other BRICS countries, such as China, Brazil and South Africa, as natural allies in standing up against future U.S. pressure and displeasure.

Iran’s suspicions toward the United States and Europe will surely be slow to recede even as Western corporations make an aggressive bid to access Iran’s lucrative markets, from the energy industry to manufacturing to finances. Some $100 billion in investment is needed for Iran’s energy sector alone with other promising opportunities in consumer goods, banks, telecommunication, vehicle manufacturers and more.

The West possesses technology that Iran will need to rebuild its shattered economy, but there is a trust deficit. Iran is sure to remember the past when the West has frozen Iran’s assets, blocked access to spare parts, and confiscated Iranian property through one-sided legal proceedings, some of which even European courts have overturned.

Though Europe might be on somewhat friendlier terms with Iran than the United States, Europe’s close adherence to U.S. foreign policy means Europe can’t offer a long-term strategic relationship to Iran. So, the Islamic Republic likely will buy what it needs in business-to-business transactions with the West but will not forget the years of hostility.

It was Russia and China that worked to blunt Western hawkish demands, which included open threats to bomb Iran and force “regime change.” Russia and China also found ways to ease the sanctions, especially in regards to the arms embargo, while helping Iran fashion an agreement not to develop nuclear weapons.

Days before the final deal was signed, Iranian President Hassan Rouhani met Putin in the sidelines of a BRICS meeting and praised Russia for its role in the negotiations. “I consider it my duty to thank Russia for the efforts it has made in resolving and negotiating the Iranian nuclear program, and for the personal efforts made by Mr. [Foreign Minister Sergey] Lavrov.”

Downsides to a Relationship

But there are economic downsides to this Russian-Iranian diplomatic collaboration. Some Russians note that the reintroduction of Iranian oil onto world markets will depress oil prices and thus hurt a key sector of Russia’s economy, which is already suffering amid a glut of Saudi oil. But that factor was already a given. Putin brushed it aside in seeking the nuclear deal and in recognizing how a resurgent Iran could fit within Russia’s broader strategic calculations.

Putin began turning to Asia after Moscow’s overtures to the West, in his view, were betrayed in Libya, Syria and especially Ukraine. Putin had sought to build a positive relationship with President Barack Obama by working closely on mutual concerns such as Islamic terrorism and Mideast unrest. However, that collaboration was shattered in February 2014 when the United States backed a “regime change” in Russia’s neighbor Ukraine and applied the lash of Western sanctions to Russia when it would not accept the new anti-Russian regime.

Faced with this U.S. and Western hostility, Putin rebalanced Russia’s strategic relationships toward the BRICS Brazil, Russia, India, China and South Africa. Iran fits neatly into that equation as Putin’s best option to leverage Russia’s interest in the vital Middle East, where it has been losing influence since the end of the Cold War.

In line with Putin’s strategy, Iran and Russia have worked hard to overcome lingering suspicions based on centuries of border tensions, recognizing that they now have more interests pushing them together than pulling them apart.

While Russia generally can’t compete with Western technology, it has advantages in some other commercial and industrial sectors, including nuclear energy, foodstuffs and arms. Last year, the two countries agreed to a package worth billions of dollars in hard cash for Russia involving building up to eight nuclear reactors within five years for power generation purposes. The nuclear deal signed this month only paves the way for those deals to be developed further.

On the agricultural side, Iran is the third biggest buyer of Russian wheat and has sold Russia fruits and vegetables which helped Russia replace European imports that the Kremlin blocked in retaliation for Europe’s economic sanctions over the Ukraine conflict.

Because of the international sanctions against Iran, bilateral trade between Russia and Iran remains modest, only $1.5 billion, a fraction of Russian trade with Israel for example. But Russia and Iran seek a ten-fold increase in bilateral trade this decade and have talked of up to $70 billion in potential investments. Even half of that would be transforming for both countries.

There is also the all-important arms business. Iran needs to update its military, and Russia and China are set to sell more than any other countries. In April, Putin agreed to restart talks to deliver the S-300 anti-aircraft defense system as a prelude no doubt to everything else Iran needs, especially to update its air force which hasn’t been modernized since the revolution in 1979. Some estimates suggest a $15 billion market up for grabs.

And there is another Iranian top priority: security. Iran and Russia signed an intelligence-sharing agreement and their cooperation has intensified, especially in regards to Syria where the two can each fill a need, with Russia providing the military hardware and Iran having military advisers and other assets on the ground.

The nuclear deal also could pave the way for the West to join them in arranging serious negotiations between Syrian leader Bashar al-Assad and his more moderate opponents and possibly end or curtail Syria’s bloody civil war. It wouldn’t be surprising to see Russia and Iran together seeking more informal collaboration with the U.S. and Europe in Syria and Iraq against the Sunni radicals of the Islamic State and Al-Qaeda.

Iran’s influence among fellow Shiites and Shiite offshoots in Iraq, Syria, Lebanon and Yemen could offer Russia more leverage in the Middle East, even if Moscow does not want to pick a fight with Arab countries outside Syria.

Putin also is gingerly approaching stresses in the bilateral relationship with Israel, with which Russia has important business, financial and cultural ties. Many Russian Jews have relocated to Israel, which views Iran as its greatest regional enemy.

Another ‘I’ in BRICS

But the prospect of Iran, in effect, becoming a second “I” in the BRICS acronym is not what many Western economic observers expected. They were looking at the potential boon for European and U.S. businesses and the prospect that Europe, in particular, could weaken Russian-Iranian ties by trading with Iran and by playing off Iran and Russia over energy.

And surely there will be some of both. European companies expect to be in the forefront of a business gold rush to Tehran and Europe will buy Iran’s oil that, pre-sanctions, filled Europe’s energy needs by some 600,000 barrels a day, mostly to Italy, Greece and Spain.

Iran currently produces less than 3 million barrels of oil per day but could increase that to at least 4 million bpd. And Iran’s gas reserves, the second biggest in the world, could eventually make their way to Europe, reducing the Continent’s dependence on Russian natural gas. While there are many obstacles to an Iran-to-Europe pipeline, there are cheaper alternatives, like shipping liquefied natural gas.

But even if that were to happen, Russia is already looking toward Asia, not Europe, to increase energy exports. So, a gradual reorganization of the market with Iran’s energy supplies coming back online will likely have little long-term impact on Russia’s economy.

Whatever the case, Iran’s post-sanctions reality will develop gradually, not just because of the phasing-in of the nuclear deal itself, but because Iran needs to manage popular expectations to avoid potential social disruptions. However, regarding which countries can most gain from the opening of Iran, Russia has the early advantage, especially diplomatically, followed by China.

Europe and the U.S. have quality products to sell but also fences to mend and suspicions to dispel. And while it’s true there is mistrust to overcome between Moscow and Tehran, their current objectives are more in sync. They will not become allies overnight, but the relation will mature as long as both keep their ends of the deals, which in the past has proved difficult.

But there is a strong incentive for Iran and Russia to make their new relationship work. For Russia, it’s about strategic access to the Mediterranean (via Syria) and the ability to retain and even expand its influence in the vital Middle East (by expanding ties to Iran and its regional allies). For Iran, it’s about strengthening its regional position vis a vis its regional rivals Saudi Arabia and Israel.

The West, too, will no doubt benefit from Iran’s economic renaissance. Western business interests, including Americans, lobbied hard in favor of lifting the sanctions. Corporate delegations from the U.S., Canada, France, Germany and other Western nations have already flocked to Iran to prepare for reentering Iran’s markets as soon as sanctions are lifted.

There will be room for all to benefit, even Arab countries like the United Arab Emirates, Qatar and Oman. But Russia is the best positioned to gain from Iran’s comeback.

Andrés Cala is an award-winning Colombian journalist, columnist and analyst specializing in geopolitics and energy. He is the lead author of America’s Blind Spot: Chávez, Energy, and US Security.

image_pdfimage_print

12 comments for “Who Benefits from Iranian Business?

  1. Abe
    July 24, 2015 at 4:12 pm

    Sanctions relief is promised in return for Iran’s commitments […] However, the deal attaches a number of potentially problematic principles to the relief program.

    To begin with, while Iran has accepted to put into effect all its commitments in the first six months of the deal, sanctions relief would be phased in over a period of 10 years. Second, the relief will not begin until Iran has verifiably put all its commitments into effect. In other words, the so-called “implementation phase” of the agreement has diametrically opposed meanings for the two sides of the deal: while for Iran it means the end of the implementation of its commitments, for the U.S. side it means the beginning of the implementation of their promises. Third, a “snap-back” clause, enabling rapid re-imposition of sanctions if Iran is deemed in non-compliance, effectively gives the U.S. and its allies the whip-hand over the deal’s implementation.

    It is obvious from these stipulations that while the “snap-back” clause and other binding conditions of the deal guarantee Iran’s compliance with the agreement, it leaves the U.S. side free from similar guarantees or obligations of carrying out their end of the bargain.

    Making Sense of the Iran Nuclear Deal: Geopolitical Implications
    By Ismael Hossein-Zadeh
    http://www.counterpunch.org/2015/07/24/making-sense-of-the-iran-nuclear-deal-geopolitical-implications/

  2. Abe
    July 24, 2015 at 3:56 pm

    President Obama certainly concluded that the 36-year-long Wall of Mistrust against Iran was bound to fail. The real Masters of the Universe in Washington – those who control the deep state – always knew that the “nuclear weapons” hysteria was bogus. That was part of a strategic decision to keep the Islamic Republic isolated from the West as long as possible, and ultimately force regime change.

    The “policy” failed – miserably. So Obama’s Plan B was a nuclear deal.

    And after striking a deal, why not seduce Tehran into some sort of collaborative effort in policing the Middle East – as in reigning in or, better yet, soundly defeating ISIS/ISIL/Daesh?

    That would provide a neat historical echo to the Shah years – the former “gendarme of the Gulf” who, when driven out of power by the Islamic revolution, plunged Exceptionalistan into fits of decades-long despair.

    Moreover, the Obama administration and some Beltway factions seemed to believe that factional leadership silos in Tehran – and Qom — might be manipulated to serve US strategic interests.

    The imperial designs on Iran
    By Pepe Escobar
    http://www.sott.net/article/299348-The-imperial-designs-on-Iran

  3. Mortimer
    July 24, 2015 at 12:18 pm

    I have to disagree with Señor Andres Cala’s interpretation of the nuke agreement as strictly favorable to Russia. Mr Cala, “upon further review,” is aligned with US anti-Venezuela oil barons/neocons and Obama’s administration bent on reinstalling Capitalists into control over “socialist” Venezuela.
    So, now that Russia is another of our Manufactured Enemies, the Iran deal” favorable to Putin” becomes verboten. ——- Don’t believe the hype !!!

    Edited EXCERPT from http://www.times.com

    The Iran deal: It’s the economy, stupid

    BY SALMAN RAFI
    JULY 24, 2015

    “I had to fill my shoulder bag with Iranian Rial every day to meet routine expenses. The taxi driver would simply demand thousands of Rials to take me to a place hardly 5 to 10 KM away.” This is what my friend had to tell me about Iran’s economic situation after his short visit in 2013-14. As a matter of fact, Iranian Rial hit its all-time low in 2012 due to the crumbling economic situation that arose out of the sanctions imposed on the country. As it stood then, 34,500 rials bought $1 on the open market. Today, almost 30,000 Iranian rials equals just one US dollar.

    The underlying principle of these deliberations was simple: Economic survival. Geopolitics notwithstanding, Iran would never have been able to compete with rival states without getting rid of the western imposed sanctions. The nuclear deal relieves Iran of such pressures.

    In simple words, the deal is more than a new chapter in Iran’s relations with the West and the world at large; it is the agreement by which Iran can transform itself from a potentially powerful, though politically and economically isolated country, into an emerging power. This potential transformation isn’t limited to a new strategic outlook towards both the western and non-western worlds, it can also be used as a linchpin in creating a new balance of power vis-à-vis its rival regional states, especially Kingdom of Saudi Arabia.

    Iran’s Minister of Industry, Mines and Trade Mohammad Reza Nematzadeh said the Islamic Republic would focus on its oil and gas, metals and car industries with an eye to exporting to Europe after sanctions are lifted, rather than simply importing western technology. “We are looking for a two-way trade as well as cooperation in development, design and engineering,” Nematzadeh told a press conference in Vienna. “We are no longer interested in a unidirectional importation of goods and machinery from Europe,” he said.

    The rapidity with which Iran is responding to the historic opening created in Vienna reflects its overriding desire to re-integrate with the global economy in order to facilitate its growth as an economic and political power.

    On the flip side, two-way trade and investment with Iran is an invitation to western corporate interests to invest in Iran. For the US and its allies, this agreement provides a new opportunity to tap untold billions of dollars in profits by entering a virtually untapped market that runs the gamut from consumer goods to energy investments and financial services.

    Iran’s deputy Economy Minister Mohammad Khazaei said Iran has already completed negotiations with some European companies that want to invest in the country. “We are recently witnessing the return of European investors to the country. Some of these negotiations have concluded, and we have approved and granted them the foreign investment licences and protections,” Khazaei said at the press conference. He was further reported to have said, “Even in the past couple of weeks we have approved more than $2 billion of projects in Iran by European companies

  4. Abe
    July 24, 2015 at 11:47 am

    neither Iran, Hezbollah or Hamas pose a threat to Israel, they pose a threat to the Israeli occupation and oppression of Palestinians.

    […]

    Most news broadcasts of the Iran deal also include a statement that, “US allies in the region are worried.” One ally is Saudi Arabia, a ruthless dictatorship run by a corrupt, male dominated family of so-called “kings” and “princes” as though we were still living in the dark ages. Another ally is Egypt’s dictator Abdel Fatah Sissi who gained power through a coup, overthrowing and arresting Egypt’s first democratically elected President, and the third is Israel, which maintains a violent, racist apartheid regime in Palestine. With allies like these, who needs enemies?

    Now, why does anyone care what Netanyahu says? The answer has little to do with strategic issues or nuclear proliferation. It has everything to do with the fact that American politicians are afraid of the Israeli lobby. The spineless politicians who stood and clapped as Netanyahu marched on Capitol Hill, his hands stained with Palestinian blood, are afraid that AIPAC will punish them.

    AIPAC and the web of pro-Israel organizations it controls are in the business of selling and protecting Israeli interests. They tell a story that paints Israel as a symbol of democracy, freedom and tolerance, and the Palestinians as symbols of hatred, religious fanaticism and terror. American politicians who try to question this pretty picture, will find themselves out of a job.

    Iran Is Not The Threat
    By Miko Peled
    http://mikopeled.com/2015/07/21/iran-is-not-the-threat-by-miko-peled/

  5. Joe L.
    July 21, 2015 at 12:42 pm

    My thoughts are that maybe in the future that sanctions will have little bite but rather push countries toward BRICS institutions such as its’ Development Bank and an alternative to the SWIFT system. I think for too long our western economies have used sanctions as a weapon to try to “persuade” countries to allow our corporations, and governments, to pursue their interests within the sanctioned country at the behest of the people of that country. It is also further sickening and maddening to hear people like Madeline Albright speak to the fact that a half million children died in Iraq due to sanctions and say that the “price was worth it”. I think that the west has used “debt” and its’ control of the worlds economic system as a weapon for imperialism for far too long. So I am hopeful for the BRICS and I hope that they take a different direction then the IMF and World Bank, but we will have to see…

  6. Abe
    July 21, 2015 at 12:37 pm

    it would be foolish for Iran to accept unlimited inspections at any location on its territory because the United States has in the past used inspections as a cover for espionage that facilitated military attacks

    It’s Simple, Face the Nation: Iran Doesn’t Trust US Inspectors–and Shouldn’t
    By Jim Naureckas
    http://fair.org/home/its-simple-face-the-nation-iran-doesnt-trust-us-inspectors-and-shouldnt/

  7. Abe
    July 21, 2015 at 1:41 am

    Iran’s lack of economic engagement with the West allowed it to grow into the counter-terrorism force that it has become in the region. Military experts understand that, despite the bellicose language employed by Obama and US political elites and their media mouthpieces, Iran is the single most effective force fighting against the Islamic State and Wahhabi extremism generally throughout the Middle East. Take away Iran’s motivation to be assertive, and complicate the puzzle with competing interests in Iran’s domestic politics, and suddenly you find that that force becomes far less potent, and the region becomes far more dangerous.

    Perhaps the single most important objective for US strategic planners though is to prevent Iran’s integration into the emerging non-western, Eurasian political, economic, and military architecture. Washington has watched over the last few years as institutions such as BRICS, the SCO, the New Silk Roads, and the EEU grew from drawing board ideas into tangible realities which now threaten to coalesce into all-encompassing geopolitical alliances.

    With Russia and China becoming closer by the day, and the former Soviet Republics of Central Asia following suit, regional integration has been proceeding at breakneck speed. Add to that the emergence of a still chaotic, but increasingly less NATO-dependent Afghanistan, along with the newly added SCO members India and Pakistan, and it is clear that the United States is faced with a daunting geopolitical imperative.

    Therefore, the US must create a mechanism to slow down, if not stop and reverse, this burgeoning integration. It is here that Iran serves its most useful purpose in the eyes of imperialists in the US whose primary goal is the maintenance and expansion of US hegemony for another hundred years.

    While Iran already has “observer” status in the SCO, its formal relationship with the bloc is uncertain at best. There are some who believe that the lifting of sanctions and normalization of relations would lead to Iran’s quick accession to the SCO. However this is perhaps a bit of wishful thinking.

    With Iran free to make such decisions, it might decide that it has vested economic interests in the West that would make jeopardizing them with Russian and Chinese friendship a risky move. Iran could be made to feel that the advantages it will easily gain from cooperation with the West outweigh the potential of junior status within the SCO-EEU-New Silk Road framework, especially with Iran being a competitor with Russia for energy exports both to Europe and China. Indeed, this is part of the calculus as far as Washington sees it, that is to say, those in Washington with even a little vision. They want to force Iran into a competitive, rather than cooperative, relationship with Russia. Additionally, they’d like to see Iran playing the role of SCO home-wrecker, as it plays China against India in major investments such as Chabahar, the all-important Iranian port seen as a major prize by both Beijing and Delhi.

    In this way, the US wants to remake Iran from a bulwark against US-NATO-GCC-Israeli hegemony, into a weapon to be used as a wedge against BRICS-SCO-EEU-New Silk Road cooperation. If this sounds far-fetched, it shouldn’t; this is precisely the same sort of tactics the US employed throughout the Cold War with many different countries that it sought to “weaponize” against the Soviet Union and the non-aligned states.

    The Geopolitics and Economics of the Iran Nuclear Deal
    By Eric Draitser
    http://journal-neo.org/2015/07/21/the-geopolitics-and-economics-of-the-iran-nuclear-deal/

  8. Anonymous
    July 20, 2015 at 11:15 am

    What we have in the below sentences is the warmongers’ prescription for Aiding and Abetting in the “Birth Pangs of a New Middle East”, as announced by Ms. Condelezza Rice:

    The conventional arms embargo on Iran essentially stays, for five years. That’s absurd, compared to Israel and the House of Saud arming themselves to their teeth.

    Last May the US Congress approved a $1.9 billion arms sale to Israel. That includes 50 BLU-113 bunker-buster bombs — to do what? Bomb Natanz? — and 3,000 Hellfire missiles. As for Saudi Arabia, according to SIPRI, the House of Saud spent a whopping $80 billion on weapons last year; more than nuclear powers France or Britain. The House of Saud is waging an — illegal — war on Yemen.

    Qatar is not far behind. It clinched an $11 billion deal to buy Apache helicopters and Javelin and Patriot air defense systems, and is bound to buy loads of F-15 fighters.

    Trita Parsi, president of the National American-Iranian Council, went straight to the point; “Saudi Arabia spends 13 times more money on its defense than Iran does. But somehow Iran, and not Saudi Arabia, is seen by the US as the potential aggressor.”

    Pepe Escobar ~-~-~-~
    http://www.atimes.com

  9. Abe
    July 19, 2015 at 7:01 pm

    Washington’s web of contradictory alliances, overt and covert interventions, and attempts to consolidate a pro-American regional order throughout the Middle East have resulted in that region becoming more sectarian and violently unstable than at any point in modern history, while the strategic position of the United States more generally is in decline.

    It is in this context that strategic rapprochement between Washington and Tehran has become more advantageous to American interests than a policy of non-engagement and open support for regime change.

    […]

    Israel, like Saudi Arabia, is principally opposed to Iran normalizing diplomatic and business relations with the Western world – not over any fantastic existential threat posed by Iran against the Jewish people – because doing so would shift the regional balance of power and constrain Israeli impunity. Tel Aviv is well aware that a nuclear deal that verifies Tehran’s peaceful compliance serves to erode any justification it could have to launch a military operation against Iran’s nuclear facilities.

    The Obama administration is clearly aware that Iran poses no substantial threat to Israel, which maintains an undeclared nuclear arsenal that is entirely unmonitored by the international community. Therefore, the strategic basis of the nuclear deal has more to do with constraining the actions of Benjamin Netanyahu’s government in Tel Aviv, which has notoriously strained relations with the White House, thus allowing Washington to reap the aforementioned benefits of a strategic rapprochement with Iran.

    Furthermore, the US administration was inclined to reverse its policy on Iran to avoid Russia and China displacing American business interests as they increasingly deepen both economic and security relations with Tehran, symbolized by Moscow’s recent decision to lift a ban on the sales of S-300 air defense systems to the country. In truth, the idea that American investments and the kind of restrained pragmatism on offer from Washington would deter Iran from integrating into a parallel Russian and Chinese-led trade and security architecture is an ambitious sort of wishful thinking.

    Washington primarily sees the utility of an Iranian re-entry into energy markets as a factor that will place further downward pressure on global energy prices, driving down Russian energy exports. Moreover, the US sees the pragmatism of the Rouhani government and its desire to open to the global economy as the most expedient way of keeping Russia down while ensuring the unimpeded flow of oil through the Strait of Hormuz, at a time when the US is reducing its military presence in the region.

    As long as the strategic utility of cooperation with Iran remains greater than the strategic utility of hostility, the United States can be expected to cautiously continue on its current trajectory vis-à-vis Tehran.

    US Strategic Impotence Driving Iran Détente
    By Nile Bowie
    http://journal-neo.org/2015/04/28/us-strategic-impotence-driving-iran-detente/

    • Anonymous
      July 19, 2015 at 9:14 pm

      You’ve stated what the US want cry clearly in your summary
      I doubt very much if it will happen as stated.
      Iran have there own reasons for doing this deal. To end sanctions
      It has no desire to get sucked back into western alliances that could get turn off again when, not if iran chooses to follow its own path
      That idiot david Cameron was on nbc speaking in his pompous fashion about iran having to change their behaviour!!!
      And they expect markets to open up to jerks like this who are US/israel puppets.

  10. July 19, 2015 at 3:32 pm

    I would see a different country benefiting most – and being most changed by the P5+1-Iran deal: Pakistan.

    The P5+1-Iran deal neatly fits into Pakistan’s recent admission into SCO, together with India’s. Iran will likely be soon admitted to SCO, too. The immediate effect of the P5+1-Iran deal for Pakistan will be that it can buy now all energy it wants from Iran, starting with the long sought IP-Pipeline, without running into trouble with the US. Also, India will likely develop closer economic links with Iran, likely beginning with energy and Aluminium. While the SCO has the problem that the big countries Russia and China have good relations to only of of Pakistan and India, Iran has good relations to both and a genuine preference only in so far that Pakistan and India will get good relations. Iran can therefore be like glue putting Pakistan and India inside the SCO together.

    For Pakistan that will mean an enourmous geopolitical transition: it will leave the orbit of the US and the Sauds, which brought so many conflicts for Pakistan, and instead come into the orbit of China, Iran, Russia and India.

  11. July 19, 2015 at 3:31 pm

    Thanks for the informative article.

    However, I would see a different country benefiting most – and being most changed by the P5+1-Iran deal: Pakistan.

    The P5+1-Iran deal neatly fits into Pakistan’s recent admission into SCO, together with India’s. Iran will likely be soon admitted to SCO, too. The immediate effect of the P5+1-Iran deal for Pakistan will be that it can buy now all energy it wants from Iran, starting with the long sought IP-Pipeline, without running into trouble with the US. Also, India will likely develop closer economic links with Iran, likely beginning with energy and Aluminium. While the SCO has the problem that the big countries Russia and China have good relations to only of of Pakistan and India, Iran has good relations to both and a genuine preference only in so far that Pakistan and India will get good relations. Iran can therefore be like glue putting Pakistan and India inside the SCO together.

    For Pakistan that will mean an enourmous geopolitical transition: it will leave the orbit of the US and the Sauds, which brought so many conflicts for Pakistan, and instead come into the orbit of China, Iran, Russia and India.

Comments are closed.