Central Asian countries waiting for Iranian investments

Central Asia has welcomed the settlement of the nuclear issue between Iran and the P5+1 with excitement. The countries of the region hope that Tehran will send some of its unfrozen funds for the implementation of transport and energy projects in Central Asia. So Almaty will hold a Kazakh-Iranian Business Forum on July 22-24, during which issues in the information technologies, telecommunications, energy, mining industry, agricultural machinery and engineering sectors will be discussed.

Alexander Knyazev, an expert on Central Asia and the Middle East, believes that the unfreezing of Iranian foreign accounts will occur at the beginning of 2016 in the best case. "This is about 130 billion dollars. The amount is not small, but not fantastic. Perhaps there is a place for the Central Asian direction, the Caucasus, the Middle East, and the Afghan directions to use them," Knyazev told Vestnik Kavkaza. He also noted that also there are problems of internal development, which are likely to be a priority for Tehran. The expert believes that it is early to to predict anything specific. "My guess is that the funds will be used primarily for the development of the transport area. If we talk about the Russian direction, the Caspian routes and Trans-Caspian railway through Turkmenistan and Kazakhstan look more promising," Knyazev noted.

For the Central Asian countries today's euphoric expectations "look very naive," Alexander Knyazev thinks. The transit countries towards Iran from China and Russia – Kazakhstan, Uzbekistan, Turkmenistan – will be beneficiaries in the case of liberalization of the foreign economic activity of Iran. This is probably the only sector where you can feel something. Probably Kazakhstan will be able to renew the swap oil deliveries to the ports of the Persian Gulf, but their volumes are not likely to be critical for the export of Kazakhstan. Possible an increase of exports of Kazakh grain, certain types of mineral resources of Kazakhstan and cotton from Uzbekistan are possible, some revival will happen in marine transportation in the Caspian Sea. But Iranian routes are unlikely somehow to dramatically change the already-established transport configuration in the region.

Yuri Solozobov, the director of international programs at the Institute of Russian National Strategy, also believes that Astana has the most chances of cooperation with Tehran. "Kazakhstan is the first country with which Iran started large-scale economic and trade cooperation. This country was not chosen randomly. Kazakhstan has repeatedly provided a platform for talks between Iran and the P5+1," Solozobov told Vestnik Kavkaza. According to him, the lifting of sanctions from Iran wasn't a surprise for Kazakhstan. "Kazakhstan all that time carefully developed cooperation with Iran, prepared infrastructure projects to build up cooperation during the period after the lifting of the sanctions. Last year, the Kazakhstan-Turkmenistan-Iran railway was launched. The second transport hub is Port Aktau on the Caspian Sea. Kazakhstan will find a market for their products in Iran, in particular for metal, grain and other products. Tehran, which is currently preparing for an economic breakthrough, will be interested in receiving Kazakh metallurgical, agricultural and other products," the expert said.

He also noted that swap deliveries of Iranian crude oil went through Port Aktau, making it possible for the smooth operation of the port. "Now it was decided to build a fourth refinery in the Mangistau region. This will provide additional opportunities to expand cooperation in the energy sphere," Solozobov said. He stressed that the cooperation between Iran and Kazakhstan will rise to another level under the new conditions. "The Kazakh-Iranian Business Forum will be a platform for collaborative research and educational institutions, industrial enterprises. The forum will discuss not the primary sectors but the development of Kazakh and Iranian companies in the field of information technologies, telecommunications, energy, mining industry, agricultural machinery and engineering. As the closest neighbor of Kazakhstan, Iran can be a very effective partner in these areas. Therefore, the idea of making Kazakhstan a bridge between the East and the West is not declarative. This is a working formula of the foreign economic policy of Astana," Yuri Solozobov said.

However, each country in the region already has its own history of cooperation with Tehran. For example, not only the common border, where cognate peoples live on both sides, brings Iran and Turkmenistan together, but also cooperation in the fields of energy, agriculture, science. Not so long ago, Iranian President Hassan Rouhani visited Turkmenistan, and spoke about Tehran's plans to strengthen cooperation between the two countries in the energy sector, which was started in the early 1990s. And in 1998, the Korpeje-Kurt-Kui gas pipeline, with a length of 200 km and a capacity of 10 billion cubic meters of gas per year, was built. After a while, a second branch of the pipeline was commissioned with a capacity of 8 billion cubic meters of gas per year. The financing of the construction of the gas pipeline was conducted at Iran's cost. The Iranian corridor allowed Turkmenistan to enter the gas market outside the post-Soviet space, thereby reducing its dependence on Russia.

Iran has been working in Tajikistan since the end of the 1980s. These two countries are linked by a common language and culture. Tehran has acted as a mediator in the negotiations in the inter-Tajik settlement, when the civil war (1992-1997) was raging in the republic. After the war, Iran built Sangtuda-2 in the republic.

A common problem for Iran and Central Asia are tensions in neighboring Afghanistan. The concentration of Islamic State militants near the borders with Tajikistan and Turkmenistan is of concern to Tehran, Dushanbe and Ashgabat. "Firstly, IS is an anti-Iranian and anti-Houthi project, and it remains so. "Iran is the only real indirect opponent of the IS, Bashar al-Assad and the Houthi militias in Iraq could not hold fast without Iranian help, and sometimes even direct military involvement. Iran will maintain these positions, regardless of any US proposals. The Iranians have supported the Americans against the Taliban in Afghanistan, and in return they received new threats from Afghanistan, the threat posed by the United States. Therefore, I hope, Tehran will not listen to the American provocations of this kind for the second time, but will simply follow their own interests in the region," Alexander Knyazev said.