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‘Gadkari effect’ on growing Iran-India relations

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If the ‘Newton Effect’ in physics has an equivalent in international diplomacy, we can describe what is happening to India-Iran relations as the ‘Gadkari Effect’.

Like in the case of the 18th century English scientist Isaac Newton’s optical property of physics, the minister in the Indian government Nitin Gadkari – arguably, by far the best performing colleague of Prime Minister Narendra Modi – has created a series of concentric, alternating rings centered at the point of contact between the Indian and Iranian economies.

‘Gadkari’s rings’ around the Chabahar Port in the remote province of Sistan-Baluchistan in southeastern Iran are phenomenally transforming the India-Iran relationship.

The first definitive signs of this appeared in December when the quiet, intense discussions between New Delhi and Tehran under Gadkari’s watch resulted in the agreement over a new payment mechanism that dispenses with the use of American dollar in India-Iran economic transactions.

Prime facie, it was a riposte to the use of sanctions (‘weaponization of dollar’) as a foreign policy tool to interfere in Iran’s oil trade with third countries such as India. (See my blog India sequesters Iran ties from US predatory strike.)

However, the 3-day visit to Delhi by the Iranian Foreign Minister Mohammad Javad Zarif on January 7-9 highlighted that the application of the payment mechanism to the Indian-Iranian cooperation over Chabahar Port holds seamless potential to energize the economic partnership between the two countries across the board. In a historical sense, an opportunity is at hand to make the partnership, which has been ‘oil-centric’, a multi-vector ‘win-win’ relationship.

The meeting between Gadkari and Zarif in Delhi on Tuesday signaled that the two sides have a ‘big picture’ in mind. Thus, the opening of a branch of Bank Pasargad in Mumbai is a timely step. Pasargad is a major Iranian private bank offering retail, commercial and investment banking services, which provides services such as letters of credit, treasury, currency exchange, corporate loans syndication, financial advisory and electronic banking. (It is ranked 257th in the Banker magazine’s “1000 banks in the world”.)

Bank Pasargad is establishing presence in India just when the Chabahar Port has been ‘operationalized’ and a first shipment from Brazil carrying 72458 tons of corn cargo berthed at the port terminal on December 30.

More importantly, the discussions between Gadkari and Zarif have covered proposals for a barter system in India-Iran trade. Iran needs steel, particularly rail steel and locomotive engines “in large quantities, and they are ready to supply urea,” Gadkari told the media.

Then, there is a proposal for a railway line connecting Chabahar with Iran’s grid leading northward to the border with Afghanistan. Zarif summed up the broad sweep of discussions this way:

“We had very good discussions on both Chabahar as well as other areas of cooperation between Iran and India. The two countries complement each other and we can cooperate in whole range of areas… We hope that in spite of the illegal US sanctions, Iran and India can cooperate further for the benefit of the people of the two countries and for the region.”

Paradoxically, the collaboration over Chabahar Port, which has been a “byproduct” of India-Pakistan tensions, is rapidly outgrowing the zero-sum and gaining habitation and a name in regional security. There are many ways of looking at why this is happening so.

Clearly, both India and Iran have turned the Chabahar project around to provide an anchor sheet for spurring trade and investment between the two countries. This approach holds big promises. There is great complementarity between the two economies.

Iran is the only country in the Middle East with a diversified economy and a huge market with a fairly developed industrial and technological base and agriculture and richly endowed in mineral resources. It is an oil rich country and the needs of Indian economy for energy, of course, are galloping.

Second, Chabahar Port can provide a gateway for India not only to Afghanistan and Central Asia but also to Russia and the European market. Logically, Chabahar should be linked to the proposed North-South Transportation Corridor that would significantly cut down shipping time and costs for the trade between India and Russia and Europe.

Thus, it falls in place that the Trump administration, which keeps an eagle’s eye on Iran’s external relations, has given a pass to the Indian investment in Chabahar. Prima facie, Chabahar Port can provide access for Afghanistan to the world market and that country’s stabilization is an American objective. But then, Chabahar can also provide a potential transportation route in future for American companies trading and investing in Afghanistan and Central Asia.

According to a Pentagon task force set up to study Afghanistan’s mineral wealth, that country is sitting on untapped rare minerals, including some highly strategic ones worth at least 1 trillion dollars. Indeed, President Trump has pointedly spoken about it to rationalize the US’ abiding business interests in Afghanistan. Now, from indications of late, conditions have dramatically improved for an Afghan settlement that provides for enduring US presence in that country.

We must carefully take note that Iran is in effect supplementing the efforts of Pakistan and the US to kickstart an intra-Afghan dialogue involving the representatives from Kabul and the Taliban.

Importantly, China has also adopted a similar supportive role. A high degree of regional consensus is forging that security and stability of Afghanistan should not be the stuff of geopolitical rivalries.

The bottom line is that Iran’s own integration into the international community, which the Trump administration is hindering, is inevitable at some point sooner than we believe.

The disclosure that behind the cloud cover of shrill rhetoric against Iran, Washington secretly made two overtures to Tehran recently to open talks shows that Trump himself is looking for a deal to get out of the cul-de-sac in which his Iran policies have landed him.

Washington cannot but take note of the constructive role that Tehran is playing on the Afghan situation. (Interestingly, Zarif and Zalmay Khalilzad, US special representative on Afghanistan who go back a long way, have paid overlapping visits to Delhi.)

There is an influential constituency of strategic analysts and opinion makers within the US already who recognize the geopolitical reality that American regional policy in the Middle East will forever remain on roller coaster unless and until Washington normalizes with Tehran. They acknowledge that at the end of the day, Iran is an authentic regional power whose rise cannot be stopped.

From such a perspective, what Zarif’s discussions in Delhi underscore is that while Iran is keeping its end of the bargain in the 2015 nuclear deal, it is incrementally defeating the US’ “containment strategy” by its variant of “ostpolitik”, focused principally on three friendly countries – Russia, China and India.

This is where much depends on the Indian ingenuity to create new webs of regional partnerships. There are tantalizing possibilities. Remember the 3-way Moscow-Baghdad-Delhi trilateral cooperation in the bygone Soviet era?

That is only one model of how the three big countries – Russia, India and Iran – can have common interest to create sinews of cooperation attuned to Eurasian integration. It is a rare convergence since there are no contradictions in the mutual interests of the three regional powers.

The Indian diplomacy must come out of its geopolitical reveries and begin working on the tangible and deliverable. That will make our foreign policy relevant to our country’s overall development. Gadkari has shown how geo-economics makes brilliant, purposive foreign policy. Equally, he followed up diligently what needed to be done to get Chabhar project going so that an entire architecture of cooperation can be built on it. Zarif’s extraordinary remarks testify to it. Even a hundred theatrical performances on the Madison Square Garden wouldn’t have achieved such spectacular results in a short period of time.

*Nitin Jairam Gadkari is an Indian politician and the current Minister for Road Transport & Highways, Shipping and Water Resources, River Development & Ganga Rejuvenation in the Government of India.

First published in our partner MNA

The writer has served as Indian diplomat in former Soviet Union, Pakistan, Iran and Afghanistan, Turkey etc. He writes mainly on Indian foreign policy and the affairs of the Middle East, Eurasia, Central Asia, South Asia and the Asia-Pacific.

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The Russian bear in Lebanon

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It turned out that the Biden-Putin summit on May 16 has established a wider effect than anyone would expect.

It exceeded by far political analysis, especially in Lebanon. The summit almost coincided with the Russian economic delegation’s visit to Beirut on the 18th of the same month and the announcement of its study results to initiate investments projects in Lebanon.

The results revealed the Russian delegation’s future plans in rebuilding the oil refineries in Zahrani and Tripoli and rehabilitating the latter’s port. Regardless of the projects, the Russian companies intend to deal with, if they are approved and encouraged by good signs changes can be relied upon. It means that Lebanon has taken an important leap in its economic policies by gradually moving towards the East.

Naturally, Lebanon’s orientation towards the East “if it happens” will not be absolute and definitive, but rather principled and partial. This is an important matter by itself. It is marked as a qualitative leap that may minimize the private companies’ monopolization of energy imports, which will be directly reflected, firstly, in electricity production in Lebanon, and secondly in facilitating the provision of petroleum products in Lebanon. Such projects became a necessity, in particular, after the collapse of the Lebanese lira against the American dollar.    

Logically, changing the reality of the production of electricity will reveal immediate results. It will be reflected in the change in the rehabilitation of the economic infrastructure fields in Lebanon. It will also positively reflect in other vital areas, such as determining the prices of food commodities, which became outrageously high. 

Accordingly, one of the most important reasons for the obscene rise in food prices is related to the high costs of transportation in the last month alone. It is almost above the purchasing power of the Lebanese. For example, the prices of vegetables and fruits, a non-imported commodity, which is not supervised by government support, remained within reasonable prices; however, once the diesel prices started rising, it directly affected the prices of the seasonal vegetables and fruits.

In addition, there are unseen accomplishments that will go with the entry of Russian companies, which is creating new job opportunities in Lebanon. Lately, it was reported that unemployment in Lebanon will reach 41.4% this year. It is a huge rate, which the Lebanese media, in general, use to provoke people against the current resigned government. However, it neglects to shed the light on the importance of the Russian investment in creating new job opportunities, which will affect all social groups, whether they were transporters, building workers, porters, cleaners, or university graduates.

The companies coming to Lebanon are directly supported by the Russian state. However, they are private companies, a fact that has its advantages. They are familiarized with dealing with other Western international companies. Russian companies have previously coordinated with French and Italian companies in Lebanon, through contracts concluded for the extraction of gas in Lebanese fields and in other fields outside Lebanon. Russian- European coordination process is also recognized in rebuilding Beirut’s harbor. A German company will rebuild the docks, while the French will rebuild the containers or depots, and the Russian companies will rebuild the wheat silos.

It seems that the process is closely related to the future of Lebanon and the future of the Chinese project, the New Silk Road, [One Road, and One Belt]. However, it is not clear yet whether the Russian companies will be investing in Tripoli’s refinery and in regenerating and expanding its port or it will be invested by the Chinese companies. If this achievement is accomplished, then Tripoli will restore its navigating glorious history. Tripoli was one of the most important ports on the Mediterranean. Additionally, there is a need for the Russian and the Chinese to expand on the warm shores of the Mediterranean Sea.

Secondly, the project will boost Tripoli and its surroundings from the current low economic situation to a prosperous economic one, if the real intentions are there. The results in Tripoli will be read as soon as the projects set foot in the city. Of course, this will establish another Sino-Russian victory in the world of economy and trade, if not in politics as well.

The entry of the Russians and the Chinese into the Lebanese field of commerce has international implications. It will come within international and global agreements or understanding. Nevertheless, it is a sign that the Americans are actually losing their grip on Lebanon. This entry will stop the imposition of a limited number of European-oriented Lebanese monopolizing companies, which have dominated the major Lebanese trade of oil and its products. Dominance is protected with the “illusion” of meaningless international resolution. It is true that the Americans are still maneuvering in several places; however, this is evident to the arbitrariness of decisions making in the U.S. today. It is the confusion resulting from ramifications of the “Sword of Jerusalem” operation in Palestine; it seems that they do not have a clear plan towards policies in the region, other than supporting “Israel”.

If the above is put into action, and the Russian companies start working within a guarantee agreement with the Lebanese state. This means a set of important issues on the international and regional levels. And it also means that the Americans would certainly prefer the Russians to any Chinese or Iranian economic direct cooperation in Lebanon.

Firstly, it is clear that in their meeting Mr. Biden and Mr. Putin reached a kind of consent to activate stability in the region. Two years ago, the Americans had a different plan. According to an established source, the Americans actually intended to strike internal stability in Lebanon and ignite another civil war round, before finalizing stability in Syria. This assertion tunes with David Hale’s, an American envoy to Lebanon, a declaration about the American anger over the $10 billion spent in Lebanon to change the political reality and overthrow Hezbollah from the government. Consequently, the American project is behind us now. Russia and China need to invest in the stability of Lebanon, in order to secure their investments in the process of rebuilding Syria.

Secondly, the Lebanese state guarantee, which the Russians require, is directly related to the lack of confidence in the Lebanese banking policies, which have lost their powers as a guarantor for investments after the role they played since November 17, 2019 till today. It proved the inefficiency of the financial policies of the Lebanese banks, which was based on the principle of usury since the nineties of the last century. In addition, a state guarantee will enable the Russian companies to surpass the American sanctions. 
The state guarantee increases the value and importance of the Lebanese state as an entity in the region, and this can be understood from Macron’s statements after the explosion of Beirut port last August when he said that Lebanon’s role in the region as we know it must change. 

Thirdly, if we consider the history of international unions in the world, including the European Union, the (Persian) Gulf Cooperation Council and others, they started as economic alliances before they end as political alliances. Therefore, at this historical stage and in order to work on the economic recovery of Lebanon, which needs more investments instead of falling under the burden of more debts. Lebanon needs to head East towards economic unity with Syria. In cooperating with two superpowers, Lebanon and Syria can form an economic bloc on the Mediterranean shores, a bloc that can get Lebanon out of the vortex of Western absurdity and expand its alliances and horizons to be a real economic and cultural forum where the East and the West can meet.

From our partner Tehran Times

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A New Era in US-Jordan Relations

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President Joe Biden meets with Jordan's King Abdullah II in the Oval Office of the White House in Washington, Monday, July 19, 2021. (AP Photo/Susan Walsh)

King Abdullah of Jordan is the first Arab leader who met American President Joe Biden at the White House. The visit has reaffirmed the strong and long-standing Jordan-US strategic partnership and reinvigorated the bilateral engagement for working together on security issues, and economic development on the basis of shared values and priorities. The King’s visit to Washington reaffirmed Jordan’s value as a reliable ally who plays a critical role for stability in a highly volatile region.

Jordan’s value is multi-dimensional and ranges from bilateral military cooperation, intelligence sharing and joint global counterterrorism operations including as a member of the Global Coalition to Counter ISIS and the Combined Joint Task Force-Operation Inherent Resolve to deployment of almost three thousand (3,000) American troops to Jordan as part of the ongoing campaign to combat regional terrorism. The US has expanded military footprint to Jordan after Washington’s decision to withdraw forces from Syria and reduce military presence in the Turkish airbase of Incirlik. In addition, the kingdom’s geopolitical position in the heart of the Middle East provides a viable alternative for logistical support to the American military taking into consideration the US decision to withdraw from Afghanistan and close three bases in Qatar. Notably, the remaining supplies from the three Qatari bases along with the Support Mission have been transferred to Jordan and have become part of the Area Support Group-Jordan that operates as the Base Operations Support Integrator to back contingency operations and military-to-military engagements within the US Army Central Command’s area of responsibility.

Jordan’s value also stems from its critical role in addressing the overwhelming humanitarian needs created by the conflicts in Syria and Iraq as well as in hosting almost two million registered Palestinian refugees.

Support of Two-state Solution

The fact that Jordan remains at peace with Israel and is a key interlocutor with the Palestinians adds to the kingdom’s reliability to mediate and advance initiatives that support the two-state solution. This presupposes the resetting of Jordan-Israel relations. Washington is well-placed to offer its good offices and help restore trust between the two neighboring countries. The twenty-seventh year Jordan-Israel peace treaty shows not only the possibilities for coordination and co-existence but also the ceilings to peace with Israel in the absence of a solution to the Israeli-Palestinian conflict. A “cold peace” and quiet, limited cooperation are currently the maximum possibilities vis-a-vis a “warm peace” that will unlock Jordan-Israel cooperation and potential.

It is nevertheless noteworthy that the last five years have been discerned by the previous American administration’s lack of appreciation of the complexity of the Israeli-Palestinian conflict. The Trump peace proposal, known as “the Vision”, not only undermined the long-established aim of a two-state solution but also reinforced discussions over alternatives including a one state outcome to the Israeli-Palestinian conflict; different measures of annexation, such as Israeli annexation of Area C in the West Bank; “exotic options” such as a federation in which Israel and Palestine share certain aspects of sovereignty; potential unilateral Israeli initiatives with most prevailing a Jordanian model, in which Jordan takes control of the West Bank and Palestinians are given Jordanian citizenship; and, reinforcement of the notion that “Jordan is “Palestine””.

Practically, Jordan can serve as honest broker in any future Israeli-Palestinian peace process, but as the late King Hussein stated in an interview with The New York Times in 1991 “Jordan should not be, cannot be, will not be a substitute for the Palestinians themselves as the major aggrieved party on the Arab side in a process that leads to peace”. The cited statement is fully embraced by Jordan’s current leadership.

Acknowledgment of Jordan’s Custodianship

The public acknowledgement by the American President of the kingdom’s special role as custodian of the Muslim holy places in Jerusalem is translated into a vote of confidence and a commendation for Jordan’s efficient safeguarding of religious sites for decades.  As known, Amman pays the salaries of more than one thousand (1,000) employees of the Jerusalem Waqf Department and its custodianship role is carried out on behalf of all Islamic nations. The kingdom holds the exclusive authority of the Jordanian-appointed council, the Waqf, over the Temple Mount/ Haram Al Sharif and has spent over 1 billion dollars since 1924 for the administration and renovation of Al Aqsa mosque.

Jordan has admittedly served at multiple occasions as credible intermediary for Israel and the Palestinians to suspend tensions in the old city of Jerusalem, particularly at the Temple Mount/Haram Al-Sharif and pursues a successful administration of religious funded schools favoring moderate religious education and religious tourism. Jordanian moderation has guaranteed co-existence of the three monotheistic religions in Jerusalem at a time when on the contrary, counties like Turkey funnel millions of dollars in charity projects in Jerusalem promoting the ideology of the Muslim Brotherhood.

Overall, Jordan’s custodianship has proved to be successful in maintaining delicate arrangements for the benefit of all religions and parties involved.

American Loan Guarantees

The King’s discussions with the American President also centered on the economic challenges exacerbated by the effect of the pandemic and the enhancement of bilateral economic cooperation. Admittedly, Jordan showed strong leadership and governance with early actions that reduced the coronavirus pandemic pressure on the kingdom’s health system. The Jordanian government imposed a nationwide lockdown and severe social distancing measures at a much earlier stage of the pandemic than other Middle East countries.

Jordan withstood the pandemic’s impact with minimal loss of life but with a significant cost to its economy. As of June 2020, most restrictions on economic activity were lifted turning Jordan into one of the first Arab countries to reopen. Gross Domestic Product (GDP) has contracted in 2020 by 3.5 percent after growing 2 percent in 2019 due to losses in state revenues because of fewer remittances and a weakened tourism market.

To cope with the direct negative effects of the pandemic on its state budget, the Kingdom received $396 million from the International Monetary Fund (IMF). The amount of finance has specifically helped address the country’s balance of payments needs and allowed for higher spending on healthcare, and assistance to households and companies most affected by the pandemic. Despite that the IMF provided in March 2020 another multi-year $1.3 billion loan package to Jordan, the pandemic has caused a $1.5 billion shortfall in its balance of payments.

This complex economic reality along with Jordan’s moderation in the Arab world justify continued robust annual American economic assistance to the kingdom in the form of budgetary support (cash transfer), USAID programs in Jordan, and loan guarantees. US cash assistance should increase in the coming years taking into consideration that it is directed to refugee support and to segments of the economy that are mostly affected by the pandemic like foreign debt payments and fuel import costs. Overall, a pledge should be made for Jordan in American congress for the authorization of moreUS sovereign loan guarantees that will help the kingdom weather the pandemic’s adverse medium-to-long-term effects on its economy. US sovereign loan guarantees will allow Jordan to issue debt securities that are fully guaranteed by the American government in capital markets, effectively subsidizing the cost for the Jordanian government to access financing.

It is also noticeable that in a genuine effort to help the kingdom contain the pandemic and safeguard public health, the American administration proceeded with the delivery of over 500 thousand covid-19 vaccines to Jordan highlighting American commitment to international vaccination programs including that of the kingdom.

US-Jordan Defense Partnership

The strategic US-Jordan defense relationship was reflected in the discussions that were conducted between the Jordanian King and the American President. American support for the modernization of Jordan’s F-16 fighter jets has been at the forefront of the agenda with the aim of achieving greater interoperability and effectiveness for the Jordanian Armed Forces.  The American President recognized Jordan’s contribution to the successful international campaign to defeat ISIS and honored as an example of heroism the memory of captain Muath al-Kasasbeh who was executed in 2015 by the terrorist organization’s militants.  

Jordan has suffered avowedly from terrorism throughout the years and works collectively at regional and international levels to eliminate all its forms. The kingdom lost two prime ministers, Haza’a Al-Majali and Wasfi Al-Tal, as victims of terrorism and experienced a series of terrorist attacks like the simultaneous suicide bombings against three hotels in Amman in November 2005 that led to the loss of life of American, Israeli, Palestinian, and Jordanian nationals.

In effect, Jordan is the third-largest recipient of annual American foreign aid globally, after Afghanistan and Israel. A Memorandum of Understanding on American foreign assistance to Jordan commits the United States to providing $1.275 billion per year over a five-year period for a total of $6.375 billion (FY2018-FY2022). Renegotiations on the next such agreement for FY2023-FY2027 is estimated that will aim at increasing the American commitment to Jordan, a key ally in the fight against international terrorism whose military should be in position to procure and maintain conventional weapons systems.

On the whole, Jordan is a steadfast security partner of the United States in the Middle East whose moderation and pragmatism helped the kingdom weather regional and world challenges. As 2021 and past years have showed, Jordan’s position as a bridge between the Levant and the Persian Gulf provides it a unique geopolitical standing, in a way that nowadays Amman is granted with a significant security, diplomatic and humanitarian role that signals a new era in US-Jordan relations.

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Chinese FM Wraps Up his Visit to Egypt

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Wang Yi, the Chinese State Councilor and Foreign Minister, visited Egypt on July 18, 2021, in El Alamein City, northwest Egypt. The Chinese Foreign Minister is the first foreign official to visit this strategic city.

Wang Yi met with his Egyptian counterpart, Sameh Shoukry, during his visit to Egypt, and they discussed bilateral relations between the two countries. This year marks the 65th anniversary of the establishment of diplomatic relations between Egypt and China. Egypt is the first Arab country to establish diplomatic relations with China and the first African country to do so. In the Arab world, the Islamic world, Africa, and developing countries, Egypt has long been one of China’s most important strategic partners. At the international level, the two countries mutually support one another. The meeting between Egypt’s Foreign Minister and China’s Foreign Minister focused on three main issues: the Covid-19 vaccine, the One Belt One Road Initiative, and international and regional issues such as Palestine and Syria

Covid-19 Vaccine

Both Egypt and China have a long history of cooperation and friendship. Before the outbreak of the Covid-19, the two countries’ relations were based on economic and trade cooperation, with China being Egypt’s first trading partner for the eighth year in a row since 2013, and the volume of trade exchange between the two countries exceeding $14.5 billion in 2020. However, as the outbreak Covid-19, cooperation between the two countries expanded to include medical cooperation. Egypt and China worked together to combat the virus. Egypt sent medical supplies to China, and China sent medical supplies and Chinese vaccine to Egypt. In addition, in December 2020, the two sides signed a cooperation agreement on COVID-19 Vaccine Production and China dispatched technical teams to Egypt to assist in the vaccine’s local manufacture. As a result, Egypt is considered Africa’s first vaccine manufacturer.

One Belt One Road Initiative  

Egypt is an important strategic partner in building the Belt and Road Initiative. According to CGTN, the Egyptian president, Abdel Fattah al- Sisi, stated that:” Egypt supports the Belt and Road Initiative(BRI).” He added that Egypt is ready to strengthen cooperation with China in the fields of economy, trade, industry, science and technology, and expand human exchanges within the framework of the “Belt and Road Initiative.” One Belt and One Road Initiative is one of the most important initiatives of the twenty-first century, announced by President Xi Jinping during official visits to Indonesia and Kazakhstan in 2013. Egypt was one of the first countries to participate in this initiative. In 2014, Egyptian President al-Sisi expressed in an interview that China’s One Belt and One Road Initiative was an “opportunity” for cooperation between China and Egypt. Egypt was willing to participate in it actively.

International and Regional Issues

Regarding the international and regional issues, the two sides exchanged views and coordinated positions on some issues as Palestine, Syria issues. It’s worth mentioning that Wang Yi paid a visit to Syria the day before his trip to Egypt, marking him the first Chinese official to visit Syria since the country’s civil war began. China supports the Syrian sovereignty and rejects foreign interference in Syria, and also rejects the regime change. The Egyptian Minister Sameh Shoukry also discussed with his Chinese counterpart Wang Yi the GERD issue. According to Sky News, Shoukry explained Egypt and Sudan’s positions as two downstream countries, the importance of preserving the interests of all parties and not jeopardizing the downstream countries’ water security, and the importance of engaging in intensified negotiations under the auspices of the African Union presidency. The two sides signed an agreement on the Egyptian-Sino Intergovernmental Cooperation Committee at the end of their meeting.

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