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INSTC: The power of Iran to revive its geopolitical significance

Vahid Pourtajrishi

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Authors: Vahid Pourtajrishi & Mahdi Torabi

The strategic position of some countries in the field of transit is assumed as an economic chance for them. International transit helps to consolidate the eco-political relations between the states beside of their significant influence on the economic conditions of the origin and destination countries.

Iran’s access to the Caspian Sean in north, Persian Gulf in south and the Sea of Oman as a water corridor ending to the Indian Ocean helps to keep this country always present in international transit sphere as a connecting bridge between East and West of the world. Existence of the ancient passing ways through Iran like the Silk Road demonstrates this claim for sure.

Construction and completion of Qazvin – Rasht railway in March 2019 was a great forward step into expansion of the rail infrastructures of Iran. This project also completed a significant part of the International North – South Corridor (INSTC) as one of the ten defined rail-mixed corridors in Helsinki Summit 1992 and approved as the key actor way between the three countries of Iran, Russia and India. The initial agreement on establishment of this corridor signed in Saint Petersburg between the three mentioned states in 2000. According to the existing official documents, this corridor links the South – Asian countries to the North of Europe. In fact, after completion of INSTC, the Northern countries like Finland, as the defined destinations will get linked to India beside of linkage between the Persian Gulf and Indian Ocean countries to Europe  and this could be counted as an revolution in world of international transit.

But the most significant advantage of this corridor is shortening of the way and saving time and cost for the participant countries.

The important elements in establishment of INSTC

Like any other international corridor, the INSTC also includes some eminent factors which make this corridor distinct. In continue, we try to take a look at some of these points:

Distinct role of Iran

As it is shown in the map, Iran is located in the heart of INSTC as the main passing way and bridge between North and South. According to the published info by the Iranian railways, only during 2018, more than 253000 tons of freight passed the Astara rail border of Iran into/from Azerbaijan on this corridor that this amount of freight was carried by 4094 wagons. This is a great triumph for Iran in spite of US economic sanctions against this country. We have to pay attention to this fact that, by completion of INSTC could how much help Iran to increase its GDP by transit as a sustainable way for income without rely on oil export as its main source of income.

Activation of South – West Corridor at the same time

The agreement on establish the International South – West Corridor (ISWC) was signed by the presidents of Poland, Iran, Ukraine, Georgia and Azerbaijan railways in March 2017. In fact, this project was started according to a joint trilateral idea by Iran, Azerbaijan and Georgia.

ISWC supposed to be established as a branch of INSTC but the parties agreed to create a new corridor with separate name. According to the given map below, the path of both corridors is same from India to Azerbaijan. So, it is clear that real establishment of ISWC also depends on the completion of the missing rail link in Iran. That’s why, completion of Qazvin – Rasht railway not only helps to decrease the volume of the mentioned missing link, but also it caused to achieve a great success in implementation of South – West Corridor.

According to the estimated calculations of experts, the ISWC will contain at least 2 million tons of freight at the first year of its establishment. So, if we plus this amount to 253000 tons of freight in INSTC, it could bring something more than 2.5 million tons of freight in Iran’s path.

Increase of potential competitive power of Iran versus the alternative roots

Non-completion of the North – South Corridor caused to create of new alternatives for this root. For example we can refer BTK (Baku – Tbilisi – Kars), CPEC (China – Pakistan Economic Corridor), Silk Wind that’s is passing Caspian Sea in order to connect China to Europe of the Ice Silk Road which is assumed as Russia – China joint initiation for connecting Asia and Europe from the North Sea. Of course, all of the mentioned alternatives are very costly in comparison with INSTC. Even for operating some of these roots like the Ice Silk Road, the participants need to manufacture huge and high expensive nuclear ice breakers to pass north.

Completion of Qazvin – Rasht root could make Iran closed to its long dreams as the heartland and revival of the classic Silk Road role for this country in new face.

INSTC, the new breath revive

As discussed above, gradual completion of INSTC could put Iran in the heart of the international transit roots between East and West of the world to revive the classic role of this country in the mentioned issue.

Despite of the US unlawful sanctions against Iran, we are witnessed for increase of demands in use of Iran’s transit roots, the factor which could make this country far from oil dependency. In fact the sanctions moved Iran into the non-oil economy including use of its potential in international transit as a modern successful method to make its economy sustainable.

Vahid Pourtajrishi is an expert at planning unit of the department of the international affairs of the Railways of the Islamic Republic of Iran. He has worked as journalist at correspondent of Mehr News Agency.

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Chinese purchases of Iranian oil raise tantalizing questions

Dr. James M. Dorsey

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A fully loaded Chinese oil tanker ploughing its way eastwards from two Iranian oil terminals raises questions of how far Beijing is willing to go in defying US sanctions amid a mounting US military build-up in the Gulf and a US-China trade war.

The sailing from Iran of the Pacific Bravo takes on added significance with US strategy likely to remain focused on economic rather than military strangulation of the Iranian leadership, despite the deployment to the Gulf of an aircraft carrier strike group as well as B-52 bombers and a Patriot surface-to-air missile system.

As President Donald J. Trump, backed by Secretary of State Mike Pompeo, appears to be signalling that he is not seeking military confrontation, his administration is reportedly considering a third round of sanctions that would focus on Iran’s petrochemical industry. The administration earlier this month sanctioned the country’s metals and minerals trade.

The sailing raises the question whether China is reversing its policy that led in the last quarter of 2018 to it dramatically reducing its trade with Iran, possibly in response to a recent breakdown in US-Chinese trade talks.

“The question is whether non-oil trade remains depressed even if some oil sales resume, which I think it will. That’s the better indicator of where Chinese risk appetite has changed. Unfortunately Iran‘s reprieve will be limited—but better than zero perhaps,” tweeted Esfandyar Batmanghelidj, head of Bourse & Bazaar, a self-described media and business diplomacy company and the founder of the Europe-Iran Forum.

A Chinese analyst interviewed by Al Jazeera argued that “China is not in a position to have Iran’s back… For China, its best to stay out” of the fray.

The stakes for China go beyond the troubled trade talks. In Canada, a senior executive of controversial Chinese telecommunications giant Huawei is fighting extradition to the United States on charges of violating US sanctions against Iran.

Reports that Western companies, including Kraft Heinz, Adidas and Gap, wittingly or unwittingly, were employing Turkic Muslims detained in re-education camps in China’s north-western province of Xinjiang, as part of opaque supply chains, could increase attention on a brutal crackdown that China is struggling to keep out of the limelight.

The Trump administration has repeatedly criticized the crackdown but has stopped short of sanctioning officials involved in the repressive measures.

Bourse & Bazaar’s disclosure of the sailing of the Pacific Bravo coincided with analysis showing that Iran was not among China’s top three investment targets in the Middle East even if Chinese investment in the region was on the rise.

The Pacific Bravo was steaming with its cargo officially toward Indonesia as Iranian foreign minister Mohammad Javad Zarif was touring his country’s major oil clients, including China, in a bid to persuade them to ignore US sanctions.

A second tanker, the Marshal Z, was reported to have unloaded 130,000 tonnes of Iranian fuel oil into storage tanks near the Chinese city of Zhoushan.

The Marshall Z was one of four ships that, according to Reuters, allegedly helped Iran circumvent sanctions by using ship-to-ship transfers in January and forged documents that masked the cargoes as originating from Iraq.

The unloading put an end to a four-month odyssey at sea sparked by buyers’ reticence to touch a cargo that would put them in the US crosshairs.

“Somebody in China decided that the steep discount this cargo most likely availed … was a bargain too good to miss,” Matt Stanley, an oil broker at StarFuels in Dubai, told Reuters.

The Pacific Bravo, the first vessel to load Iranian oil since the Trump administration recently refused to extend sanction exemptions to eight countries, including China, was recently acquired by China’s Bank of Kunlun.

The acquisition and sailing suggested that Bank of Kunlun was reversing its decision last December to restrict its business with Iran to humanitarian trade, effectively excluding all other transactions.

The bank was the vehicle China used in the past for business with Iran because it had no exposure to the United States and as a result was not vulnerable to US sanctions that were in place prior to the 2015 international agreement that curbed Iran’s nuclear program.

China’s willingness to ignore, at least to some extent, US sanctions could also constitute an effort to persuade Iran to remain fully committed to the nuclear accord which it has so far upheld despite last year’s US withdrawal.

Iran recently warned Europe that it would reduce its compliance if Europe, which has struggled to create a credible vehicle that would allow non-US companies to circumvent the sanctions, failed to throw the Islamic republic an economic lifeline.

In a letter that was also sent to Russia and China, Iran said it was no longer committed to restrictions on the storage of enriched uranium and heavy water stocks, and could stop observing limits on uranium enrichment at a later stage.

Russian president Vladimir Putin warned in response to the Iranian threat that “as soon as Iran takes its first reciprocal steps and says that it is leaving, everyone will forget by tomorrow that the US was the initiator of this collapse. Iran will be held responsible, and the global public opinion will be intentionally changed in this direction.”

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The Iran Question

Dr. Arshad M. Khan

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Will there be war with Iran?  Will there not be war with Iran?  The questions are being asked repeatedly in the media even though a single carrier task force is steaming up there.  The expression is old for the latest carriers are nuclear powered.  Imagine the mess if it was blown up.

There are two kinds of weapons in the world … offensive and defensive.  The latter are cheaper, a fighter plane compared to a bomber.  If a country does not (or cannot afford to) have offensive intent, it makes sense to focus on defense.  It is what Iran has done.  Moreover, its missile centered defense has a modern deadly twist — the missiles are precision-guided. 

As an Iranian general remarked when questioned about the carrier task force:  some years ago it would’ve been a threat he opined; now it’s a target.  Iran also has a large standing army of 350,000 plus a 120,000 strong Revolutionary Guard and Soviet style air defenses.  In 2016 Russia started installation of the S-300 system.  It has all kinds of variants, the most advanced, the S-300 PMU-3 has a range similar to the S-400 if equipped with 40N6E missiles, which are used also in the S-400.  Their range is 400 km, so the Iranian batteries are virtually S-400s.  The wily Putin has kept trump satisfied with the S-300 moniker without short-changing his and China’s strategic ally.  The latter continuing to buy Iranian oil.

Iran has friends in Europe also.  Angela Merkel in particular has pointed out that Iran has complied fully with the nuclear provisions of the UN Security Council backed Joint Comprehensive Plan of Action i.e. the Iran nuclear deal.  She is mustering the major European powers.  Already alienated with Trump treating them as adversaries rather than friends, they find Trump’s bullying tiresome.  President Macron, his poll ratings hitting the lowest, is hardly likely to engage in Trump’s venture.  In Britain, Theresa May is barely able to hold on to her job.  In the latest thrust by senior members of her party, she has been asked to name the day she steps down.

So there we have it.  Nobody wants war with Iran.  Even Israel, so far without a post-election government does not want to be rained upon by missiles leaky as its Iron Dome was against homemade Palestinian rockets.

Topping all of this neither Trump nor Secretary of State Pompeo want war.  Trump is as usual trying to bully — now called maximum pressure — Iran into submission.  It won’t.  The wild card is National Security Adviser John Bolton.  He wants war.  A Gulf of Tonkin type false flag incident, or an Iranian misstep, or some accident can still set it off. 

In Iran itself, moderates like current President Hassan Rouhani are being weakened by Trump’s shenanigans.  The hard liners might well want to bleed America as happened in Iraq and Afghanistan.

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Iran’s game just started

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By announcing that Iran will begin keeping its excess uranium and heavy water, the Islamic Republic now sends a firm and clear message to the west, exactly one year after U.S. president, Donald Trump unilaterally withdrew from its nuclear deal with Iran. 

At this point, it seems that Iran has made a wise decision. Over the last year, the European troika has not only done anything to revive the nuclear deal or bring any kind of benefit to the Iranian nation, but they have actually backed up U.S. by developing new plans to undermine Iran’s “missile work”, and diminish its “power in the region” as well as its “nuclear technology”.  

As stated in clauses 26 and 36 of Joint Comprehensive Plan of Action (JCPOA), if the other side fails to meet its obligations, Iran is entitled to partially or completely end its commitments as well. So, Iran’s recent decision could be analyzed both on legal and strategic terms. 
However, it seems that the strategic aspects of Iran’s decision are even more important than its legal aspects. This decision is strategically important because it stops Washington and European troika to carry out their anti-Iran scheme, a dangerous scheme that they actually started devising when Trump took the office in 2017.  

At the time, Theresa May, the British Prime Minister, and Emmanuel Macron, the French president played a major part in carrying out the west scheme. A scheme based on enforcing Iran to keep its “nuclear promises” and stay committed to a “distorted nuclear deal” while “U.S. had abandoned the deal”, and at the same time, trying to “diminish Iran’s power in the region” and “reduce its missile activities”. 

All other actions of Europeans toward Iran were also simply targeted at carrying out this major plan, including how they constantly changed their strategies toward Tehran, and how Germany, U.K. and France intentionally delayed in launching the alternative trade mechanism (Instex) with Iran.  

Now, Iran’s decision to keep its Uranium and heavy water is definitely in compliance with JCPOA, and more importantly, it will seriously undermine the “American-European” joint plan against Iran. This also explains why French government was so distressed by Iran’s new nuclear strategy and had such a quick reaction, considering that Emmanuel Macron, the French president and Jean-Yves Le Drian, the French Foreign Minister both have had important roles in carrying out the American-European anti-Iran scheme. 

At any rate, what is clear now is that the game has just started! And the Iranian political system and specially the foreign ministry have a great mission to run this game wisely.  

In following days, the European troika might want to force Iran into changing its decision by threats such as reviving the European Union sanctions against Iran or even taking Iran’s case to the United Nations Security Council (so that Trump administration can meddle in Iran’s affairs). But, it is time for Iran political system to be adamant in its decision.  

The Iranian Foreign Ministry should clearly ask the Europeans to choose one of these options, either Iran will “further reduce its commitments to the nuclear deal” or the Europeans should do something practical to “protect the rights of Iranian nation”. 

It is also necessary that the Iranian political system reveals the American-European joint anti-Iran scheme to the people so that the true nature of Europeans is showed to Iranians. In that case, Europe and specially the European troika will completely lose their reputation.    

First published in our partner Tehran Times

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