The recently unveiled mega-project that seeks to establish a connectivity corridor between India, the Middle East, and Europe has stirred apprehensions in Iran over the country’s diminishing role in global economic engagements, which are increasingly perceived as integral components of future security paradigms. As discussions persist regarding Iran’s underutilized geopolitical assets, some of which may have been somewhat overstated, there is hope among observers that Iran will recalibrate its approach to the economic dimension of security. In other words, by alleviating tensions in its foreign relations, Iran has the potential to unlock the manifold advantages presented by economic agreements.
India’s Arab-Med Corridor alone may not completely diminish Iran’s role in the escalating global transit competition. However, as pointed out by Reza Sadeqian, an economic journalist at Jahan-e San’at newspaper, when one considers other factors such as China and India’s hesitance in infrastructure investments in Iran, it becomes evident that Iran’s significance in the global economy is waning. Sadeqian emphasizes that international competition increasingly prioritizes policies aimed at economic development and the expansion of trade relations, while Iran is gradually transitioning into a nation with only a limited capacity to export 2–3 million barrels of oil. However, there are more optimistic experts, such as Mohammad Rastad, a former official in Iran’s Ports and Maritime Organization. He believes the Arab-Med Corridor need not necessarily pose a direct challenge to Iran’s existing transit corridors or significantly impact the operations at the Chabahar Port. Rastad bases his argument on the distinct advantages of each transit corridor and the ultimate decisions by exporters and carriers regarding the cost-effectiveness of their chosen routes. Nevertheless, he acknowledges that Iran must take steps to make its transit corridors more appealing to potential clients. To enhance its competitiveness, Rastad suggests Iran should provide optimal transit conditions to merchants, forge agreements with relevant stakeholders, and offer high-quality services. These measures, he believes, are essential for Iran to bolster its transit advantages compared to other countries. Pro-government sources often highlight the potential economic benefits of the International North-South Transport Corridor (INSTC) for Iran. While Iranian officials emphasize the necessity of completing the remaining railroad sections within Iran, financial limitations have thus far have slowed progress on this front. However, recent analysis by a specialized transportation outlet suggests that estimates regarding the value of this transit route may have failed to account for the complexities of trade relations and the actual volume of transit goods in Iran. Consequently, these estimates may present an unrealistically rosy picture of the corridor’s potential. By examining the relatively low and declining volume of goods passing through Iran, as well as the preference of merchants for road and sea transport over rail, researcher Atusa Aqapur argues that even the completion of the Rasht-Astara railroad may not substantially enhance Iran’s transit advantages. Additionally, she points out that India, being the largest economy among the INSTC members, has limited trade with Russia and Central Asian countries. Furthermore, factors such as Iran’s tensions with the Republic of Azerbaijan have negatively affected the project’s completion. What further complicates the assessment of this transit corridor’s value are Russia’s temporary motivations for its completion, which raise questions about the overall evaluation of its significance.
Besides the growing competition through corridors, countries in the Middle East and beyond are actively pursuing economic agreements that will define their security in the future. The centrist Khabar Online outlet sees the inclusion of countries like Saudi Arabia, the UAE, Argentina, Egypt, and Ethiopia in BRICS as evidence of this evolving trend. The outlet perceives BRICS and the Shanghai Cooperation Organization as security pacts that establish mutual security obligations among these nations by intertwining their economies. This, in turn, paves the way for the normalization of relations even with historical adversaries such as Israel. In fact, the outlet argues that although Iran has not formally adhered to FATF regulations, it has effectively embraced even stricter regulations by joining the SCO. Against this backdrop, it appears that Iran’s neighboring countries are increasingly avoiding economic ties with Tehran to shield themselves from U.S. sanctions. A recent agreement between Pakistan and Russia concerning a gas pipeline, which notably circumvented Iran and left it out of the so-called Peace Pipeline with Pakistan, exemplifies this trend. Another gas pipeline, transporting gas from Turkmenistan, the Republic of Azerbaijan, and Turkey to Europe, is another development bypassing Iran’s swap agreement with Turkmenistan and the Republic of Azerbaijan. Writer Rasul Karimi contends that while Arab nations have continued to advance technologically, U.S. sanctions have effectively hindered Iran’s technological advancements and eroded its security leverage, such as gas and oil resources and its control over the Strait of Hormuz. This contrast was particularly evident last winter when Qatar exported gas to Europe while Iran did not. In what he describes as a new chapter in Iran’s isolation, Karimi argues that U.S. diplomacy has solidified Iran’s isolation, with China successfully diminishing Iran’s regional threat. Nonetheless, Karimi expresses hope that the leadership in Iran will reconsider its approach to the economic dimension of security and work toward reducing tensions in its international relations to achieve economic prosperity.
