China urges 'Brethren in Central Asia' to unite

Chinese President Xi Jinping has urged the “Brethren in Central Asia” to unite against attempts to divide them in the face of unprecedented turmoil and build themselves as the bridge connecting Asia and Europe.

“The world needs a harmonious Central Asia. Brotherhood is better than all wealth,” Xi said in a keynote speech delivered on the second day of the inaugural China-Central Asia Summit in Xian, attended by the leaders of five countries in the region.

“Ethnic conflicts, religious strife and cultural divisions are not the main theme of Central Asia. Unity, tolerance and harmony are what the people of Central Asia seek,” he said, adding, “No one has the right to create discord and confrontation in Central Asia, let alone seek political self-interest from it”.

“The sovereignty, security, independence and territorial integrity of Central Asian countries must be safeguarded, the development path chosen independently by the Central Asian people must be respected, and the efforts of the Central Asian region to work for peace, harmony and tranquility must be supported,” Xi said.

With its “unique geographical advantage”, Central Asia could “become an important interconnection hub in Asia and Europe”.

Xi pledged to expand trade and economic cooperation with Central Asia and said Beijing would deepen connectivity in the region and expand energy cooperation, among other things, according to state news agency Xinhua.

He said China hoped to speed up construction of the Line D natural gas pipeline and expand the scale of oil and gas trade with the region.

Xi also announced that China would provide US$3.7 billion in financial support for the development of Central Asian nations.

Xi said the summit – the first in-person meeting of its kind since Beijing established diplomatic relations with the five newly independent countries in 1992 – opened up new prospects for cooperation with Central Asia.

“The relations between China and Central Asian countries have profound historical origins, extensive practical needs, and a solid foundation of public opinion, and they are full of vigor and vitality in the new era,” he said.

Xi said China was willing to help Central Asian countries bolster their law enforcement security and defence capabilities to independently maintain regional security, adding that China would promote the peaceful reconstruction of Afghanistan.

Xi also called for joint efforts to boost strategic trust and strengthen security ties between China and Central Asia.

“We will resolutely oppose external forces interfering in the internal affairs of regional countries and staging ‘colour revolutions’, maintain zero tolerance for the three forces, and work to resolve the regional security dilemma,” he said, referring to terrorism, separatism and religious extremism.

The summit, in the northwestern province of Shaanxi, coincided with the Group of Seven meeting in Japan, where leaders from the advanced economies – including the US, Canada, Germany and France – are expected to discuss ways to counter China’s economic coercion.

The leaders agreed on Friday to set up a formal mechanism to hold a China-Central Asia meeting every two years, with Kazakhstan to host the next one in 2025.

Beijing views Central Asia as a critical frontier for expanding trade and energy security. The region is also regarded as crucial to maintaining stability in Xinjiang, where the treatment of Uygur Muslims has been among the most contentious issues between China and the West.

In recent months, efforts to strengthen ties with the region included Xi’s first trip abroad since the early days of the Covid-19 pandemic, with visits to Kazakhstan and Uzbekistan in September.

On Thursday, Xi held a series of one-on-one meetings with the leaders of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. All expressed support for greater Chinese engagement in the region, including under the flagship Belt and Road Initiative.

Yu Jun, deputy director general of the Chinese foreign ministry’s department of European-Central Asian affairs, flagged on Tuesday that the leaders of the six nations were expected to sign a slew of important political documents on areas including economy, trade and connectivity.

Trade between China and the five Central Asian countries has increased significantly since Beijing launched its belt and road plan in 2013. The combined volume reached US$70.2 billion last year, up 40%YoY, according to Chinese customs data.

 

Iran Emerging Regional Transit Hub

For thousands of years, Iran has been an important route for the transit of foreign goods due to its geopolitical position. The country played a significant role in transporting commodities from west to east as one of the main stations along the ancient Silk Road.

In the modern day, this huge capacity became dormant due to war, political conflicts, and sanctions and consequently lack of infrastructure. Now the global conditions are changing in Iran’s favor and new opportunities have appeared on the horizon.

The Ukraine war, despite its grave consequences for many countries, has presented Iran with a golden opportunity to realize the long-awaited goal of becoming the global transit hub it once was.

The row between Europe and Russia over the Ukraine war, which resulted in harsh sanctions being imposed on the country, cornered the Russian government economically and many European countries closed their borders on Russian goods making it very hard for its traders to be able to access their destination markets. As a result, the country started looking for new ways for distributing its goods across the world, especially in Asia and the International North-South Transit Corridor (INSTC) once again came under the spotlight.

The agreement for launching INSTC was signed by Iran, India, and Russia in 2000. Despite all the interest and hype, the attention to the route faded due to geopolitical hurdles including the global economic stagnation, the US sanctions on Iran, the conflict in Karabakh, and the pandemic.

Now the multi-modal network of ships, rail, and roads is once again gaining its importance, as the most important trade link between Asia and Europe.

According to official data, one of the major advantages of this transportation route is that the cost of transporting goods through this corridor is 30% cheaper. It also halves the time it takes to transport Indian goods to Russia via the Suez Canal.

Iran can use this transit route to distribute European commodities in the shortest possible time and at a lower cost than other routes to the Indian Ocean and the Persian Gulf.

It is predicted that after the full operation of INSTC, Iran will be able to earn US$20 billion in transit profits annually, something helping it reduce its dependence on oil revenues amid the American ban on the sector.

Iran has been taking serious measures for the development of its railway network as well as its ports and shipping infrastructure in order to encourage more countries to join the project.

Using the capacities of INSTC, Iran will be able not only to expand the volume of trade with Russia and the countries of the region; it can also gain a huge share of the mentioned countries’ annual transit.

Currently, Russia has proposed to take part in some railway projects in Iran in order to accelerate the development of the Islamic Republic’s railway network along the mentioned route.

Last week, Igor Yevgenyevich Levitin, aide to the president of the Russian Federation, visited Iran on top of a high-ranking delegation to meet with Iranian Transport and Urban Development Minister Rostam Qasemi and discuss the expansion of transport ties.

According to the Iranian Transport Ministry, Levitin was tasked by Russian President Vladimir Putin to take the necessary measures for the implementation of Iran’s Rasht-Astara railway and the signaling of the country’s Incheh Borun-Garmsar railway line (both of which are along the INSTC route).

Besides linking India to Europe via this corridor, Iran can connect Central Asia to the Indian Ocean and the Persian Gulf. Landlocked countries in Central Asia can use the corridor's railway to access the high seas. Over time, Iran's place in the corridor would become known to all.

Kazakhstan, Turkmenistan, Turkey, Iraq, and Afghanistan have also shown interest in joining the huge project by linking their railways to that of Iran.

Earlier this month, Kazakhstan reached an agreement with the Islamic Republic of Iran for using the country’s rail network and the southern Shahid Rajaee Port for transiting goods to the Central Asian and Commonwealth of Independent States (CIS) regions.

Iran has also been seeking to join its railway with Iraq in order to use the Arab country to facilitate access to the Syrian market, this way Syria can also be somehow linked to the INSTC.

The rail and sea route can also join the Chinese Road and Belt project, which seeks to revive the ancient Silk Road. As one of Iran’s major trade partners China has also shifted to Central Asia and the Caspian Sea to transit its goods to Europe after the eruption of the Ukraine crisis and Iran could play a significant role in delivering Chinese goods to their destinations.

The current international conditions have presented Iran with a proper opportunity to play a bold role in the broader implementation of the INSTC and to transform into a regional trade hub by developing its rail and transit infrastructure.

Given the lower costs and shorter time of trade via this route, Iran can become the main trade link between Asia and Europe and effectively neutralize the US measures aimed to isolate Iran from the global economy.

 

 

Iranian non-oil trade with neighbors up 18% during March-June 2022 quarter

The value of Iran’s non-oil trade with its neighboring countries increased 18% during the first three months of the current Iranian calendar year (March-June), as compared to the same period last year, the spokesman of Islamic Republic of Iran Customs Administration (IRICA) announced.

Ruhollah Latifi put Iran’s non-oil trade with its neighbors at 20.973 million tons worth US$12.363 billion in the three-month period.

He said trade with the neighbors accounted for 49% of the value and 59% of the weight of Iran’s non-oil trade during the period under review.

The country exported 16.05 million tons of non-oil goods worth US$6.736 billion to the neighboring countries in the three-month period of this year, indicating 20% rise in value, while 10% drop in weight, as compared to the same period last year, the official stated.

He named Iraq, Turkey, United Arab Emirates (UAE), Afghanistan, and Oman as the five top export destinations.

Latifi further announced that Iran imported 4.433 million tons of goods worth US$5.627 billion from its neighbors during this period, with 15% growth in value and one percent rise in weight YoY.

He named UAE, Turkey, Russia, Pakistan, and Oman as the five top sources of imports.

As previously announced by the IRICA head, the value of Iran’s non-oil trade with its neighbors during the previous Iranian calendar year 1400 was reported at US$51.875 billion, an increase of 43% YoY.

Alireza Moghadasi put the weight of non-oil trade with the neighboring countries at 100.131 million tons in the said year, stating that trade with the neighbors also increased by 23% in terms of weight.

The official put the annual non-oil exports to the mentioned countries at 75.445 million tons valued at US$26.29 billion, with a 29% rise in value and a 12% growth in weight.

Major export destinations of the Iranian non-oil goods were Iraq with US$8.9 billion, followed by Turkey (US$6.1 billion), United Arab Emirates (US$4.9 billion), Afghanistan US$1.8 billion) and Pakistan with (US$1.3 billion) in imports from the Islamic Republic, others countries included Oman, Russia, Azerbaijan, Turkmenistan, Armenia, Kazakhstan, Kuwait, Qatar, Bahrain, and Saudi Arabia, according to the official.

Moghadasi further stated that Iran imported 24.686 million tons of non-oil commodities worth over US$25.846 billion in the previous year, with a 60% growth in value and a 68%YoY increase in weight.

The United Arab Emirates was the top exporter to Iran during the period exporting US$16.5 billion worth of goods to the country, followed by Turkey, Russia, Iraq, and Oman, he stated.

Pakistan, Kazakhstan, Azerbaijan, Turkmenistan, Afghanistan, Armenia, Kuwait, Qatar, and Bahrain were other top neighboring countries that supplied goods to Iran in 1400, respectively.

Increasing non-oil exports to the neighboring countries is one of the major plans that the Iranian government has been pursuing in recent years.

Iran shares land or water borders with 15 countries namely UAE, Afghanistan, Armenia, Azerbaijan, Bahrain, Iraq, Kuwait, Kazakhstan, Oman, Pakistan, Qatar, Russia, Turkey, Turkmenistan, and Saudi Arabia.

Neighbors are priority for Iran, says Raisi

On Friday, President Ayatollah Seyed Ebrahim Raisi stressed that dealing with all countries of the world is on the agenda of his government, and that neighboring countries take priority in developing the country's foreign diplomacy.

In a press statement issued at the end of his visit to Golestan Province in northeastern Iran, Raisi said a balanced view prevails in Iranian foreign policy and attention to the East or West is not on the agenda.

He pointed out that some former officials put their hopes on the West, which resulted in the suspension of the country's activities, but despite Iran’s current negotiations with the Westerners and its efforts to lift sanctions, Tehran relies on its zealous youth to preserve national independence and power.

Raisi stated that some of his government's actions in expanding neighborly relations or strengthening ties with the regional countries are interpreted as “look to the East,” adding, "Our message is that there should be a balance in foreign relations. In the past, the view of the West in the field of foreign policy was heavy and all the government had hoped was in the hands of the West."

"The country cannot be limited to relations with certain countries," he said, adding, "The country must move forward. For example, in the core negotiations, our hope is first in God and then in the Iranian people. We do not hope for a miracle in Vienna. We seek to lift sanctions, but more importantly, we seek to neutralize sanctions."

The President also said his government plans to use the capacity of the North-South corridor to economically develop the eastern part of the Caspian Sea. Pointing to the status of this region in expanding neighborly relations, he said, "The government has put interaction with all countries around the world, especially neighboring countries, on the agenda."

Ayatollah Raisi added, "Today, relations with neighbors are not commensurate with the existing capacities, and our economic and trade interactions with neighboring countries can be at a much higher level. During my travels to neighboring countries, since the beginning of the government, it became increasingly clear to me that the capacities of the country's neighborhood relations have not been realized as they should be put in practice."

The President said, "During our visit to Turkmenistan, which happens to be a neighbor to Golestan province, we came to the conclusion through negotiations that there is a lot of potential for improving the level of relations, and one of these capacities was the gas swap agreement, which contributes to not having gas outages in the northern regions of the country."

Ayatollah Raisi also pointed to his government’s plans to solve the people’s problems. 

Speaking in a press conference at the end of his trip to Golestan province on Friday evening, Ayatollah Raisi said, "The proposals for resolving the problems were prepared and finalized in a meeting with the first vice-president," according to the official website of the presidency.

Saying that Golestan province is one of the agricultural hubs of the country, the president added, "In Golestan province, unlike most parts of the country, the population of villages has not decreased and therefore in this trip, most of the funds allocated to Golestan were allocated to agriculture to address the concerns of the people in the field of agriculture."

Raisi also talked about the state of industry in Golestan province. "We also have industrial towns in Golestan province, but the industry in the province is not as prosperous as it should be and therefore it was decided to form a working group under the Governor General and with the presence of representatives of related agencies including the Ministry of Industry."

 

Iran begins swapping Turkmenistan gas to Azerbaijan

According to a report, the agreement between Iran, Azerbaijan and Turkmenistan on a natural gas swap deal for up to two billion cubic meters of Turkmen gas has taken effect on January 01, 2022.

As reported, of the total received gas from Turkmenistan about 20 to 30 percent will be the share of Iran as swap fee and the rest will be delivered to Azerbaijan. Azerbaijan will reportedly receive four million cubic meters of new energy supplies per day. However, the figure is currently less than four million and will gradually reach that amount.

The deal, which was backed by the Presidents of the three Caspian countries during the 15th Summit of the Economic Cooperation Organization (ECO) in the Turkmen capital city of Ashgabat on November 28, 2021, was signed by the oil ministers of the two countries on November 30, 2021.

Under the swap deal, Iran will receive gas from Turkmenistan and deliver an equivalent amount minus the swap fee to Azerbaijan at the Astara border. The gas that Iran will receive from Turkmenistan under the swap agreement will cater to the needs of Northern provinces of the country.

Iran has major natural gas fields in the south but has imported gas from Turkmenistan since 1997 for distribution in its Northern provinces, especially during the winter.

Experts believe that the implementation of this deal could encourage other countries in the region to ink similar deals and to use the Islamic Republic’s capacities in this regard.

Having the largest high-pressure gas pipeline network after Russia, Iran can play a key role in transferring gas from east to west of Iran and to the neighboring countries such as Azerbaijan.

This deal is also a big step for Iran as it would ensure stable gas supply to the country’s Northeastern regions which are far away from the sources of natural gas in the country.

Iran’s growing trade with ECO member countries

Iran’s trade with the members of the Economic Cooperation Organization (ECO) exceeded US$10.447 billion in the first eight months of the current Iranian calendar year (March 21-November 22) to register a 44% increase year on year (YoY), the spokesman of the Islamic Republic of Iran Customs Administration (IRICA) said.

According to Ruhollah Latifi, the volume of trade with the mentioned countries also increased by 34 percent in comparison to the previous year’s same eight months, IRNA reported.

As reported, during the mentioned period Iran traded over 21,778,387 tons of commodities worth US$10.447 billion with ECO member countries including Turkey, Afghanistan, the Republic of Azerbaijan, Kyrgyzstan, Kazakhstan, Pakistan, Tajikistan, Turkmenistan, and Uzbekistan.

Iran exported 18.631 million tons of commodities worth over US$6.823 billion to the said nations in the mentioned period.

He said major export destinations of the Iranian goods in the said union were Turkey with about US$3.767 billion of imports, Afghanistan with US$1.27 billion, Pakistan with US$764.389 million, and Azerbaijan with US$335.843 million.

As reported, the Islamic Republic’s export to ECO members increased by 46% and 54% as compared to the figures for the previous year in terms of weight and value, respectively.

Meanwhile, the country imported 3,147,332 tons of goods valued at over US$3.623 billion from the ECO member countries, with Turkey, Pakistan, Uzbekistan, Kazakhstan, Azerbaijan, Turkmenistan, Afghanistan, Tajikistan, and Kyrgyzstan being the top sources of imported goods.

The value of Iranian imports from the ECO union also increased by 28% as compared to the previous year’s same time span, the official said.

According to Latifi, more than 23.723 million tons of goods worth US$11.71 billion were traded between Iran and the ECO member countries during the previous Iranian calendar year (ended on March 20), of which the share of exports was 18.419 million tons of goods worth US$6.890 billion and the share of imports from these countries was 5.312 million tons worth US$4.819 billion.

The value of Iran’s non-oil trade during the first eight months of the current year stood at about US$33 billion, Latifi had previously announced.

The Economic Cooperation Organization or ECO is an Asian political and economic intergovernmental organization that was founded in 1985 in Tehran by the leaders of Iran, Pakistan, and Turkey.

 

Iran keen in developing links with neighbors

Deputy Foreign Minister of Iran for Economic Diplomacy Mehdi Safari has said it is a priority to expand economic and trade cooperation with neighbors, saying the Economic Cooperation Organization (ECO) can help achieve this goal.

Safari made the remarks at a meeting with ECO Secretary-General Khosrow Nazeri on the eve of the ECO summit in Turkmenistan, Mehr reported on Wednesday.

ECO includes Iran, Turkey, Afghanistan, the Republic of Azerbaijan, Kyrgyzstan, Kazakhstan, Pakistan, Tajikistan, Turkmenistan, and Uzbekistan.

At the meeting, the ECO chief presented a report on the process to prepare for the summit in Ashgabat and hailed Iran for its assistance in this regard.

Safari said expansion of economic and trade cooperation with neighbors is a priority of the new Iranian administration and stressed the role of ECO in achieving the goals of member countries.

The top diplomat said a plan by Iran to send a high-level team to the forthcoming summit signifies the prominent position of ECO.

Safari said Iran is ready help ECO members to implement important decisions at the ECO summit in Ashgabat.

Iranian Transport and Urban Development Minister Rostam Qasemi said that positive agreements have been reached with neighboring countries, for expansion of transportation cooperation, especially in the aviation sector, IRNA reported.

Speaking at the ceremony on introducing the new head of Civil Aviation Organization (CAO), Qasemi said, “We recently reached agreements with Turkmenistan and Kyrgyzstan, part of which is related to the development of aviation.”

According to the official, the expansion of transportation cooperation with other countries will lead to the expansion of trade ties and eventually will increase the country’s revenues.

“We have made plans for upgrading our transportation fleet. However, we need effective measures to be taken for the development of the aviation industry,” he stressed.

He further stated that the most important factor in the development of the aviation industry is the use of specialists to promote it, adding: “In order to empower the aviation industry to meet the needs of the country, we need more work to be done, and this capability exists inside the country.”

Elsewhere in his remarks, Qasemi mentioned the needs of other transportation sectors including road, maritime, and rail, and said, “The transport sector needs to modernize its fleet, and we have not yet achieved the goals of the program in the rail, sea, and land sectors.”

Ghasemi pointed to the existing problems in the railway fleet and also the incompleteness of the country’s railway corridors and said, "Conditions in the railway sector are not favorable, the average life of the road transportation fleet is high and in the sea sector, despite high capacities, the capacity of the country’s ports has not been used well."