On the Way to Corridorization
A glance at politico-economic trends of Iran becoming corridor hub
Corridors should be looked at first from a geopolitical and political point of view, and then from an economic point of view, as the construction of a corridor brings geopolitical and strategic consequences more than economic consequences.
For a long time the issue of corridors and transit in Iran has been discussed at different levels, and the significance of Iran’s geography in international transit along with the positive role it can play in this regard have brought the discussion to a social demand in the public opinion. But care must be taken to ensure that public opinion is directed in the right direction; that is, the expectations that have been formed regarding the consequences of the corridor’s construction should be in accordance with the facts.
When it is said to be in accordance with the real function of the corridors, it means that the economic benefits and forex revenues of the corridors should not be magnified too much because, basically, such attitude towards corridors is not comprehensive and correct.
Due to the political developments in the Iranian decade to 2021, and the events that occurred during the years regarding energy production and the distribution market in the world, Iran’s role and position in the global supply chain has become weaker than before.
Undoubtedly, the political statement that “Iran has been removed from the world chain” does not hold true in any sense, as the term “removal” from a chain is not suitable for Iran, nor can it be applied to any other country.
Iran cannot be ignored in global equations because of its unique geography, rich resources, and political power, based on thousands of years of history and culture. However, Iran’s role has faded in the past few years and needs to be restored.
Restoring Iran’s regional and global role is manifested in the best way in the corridor sector, as it can provide the security of roads and goods, and in terms of time of goods transfer, due to the unique geography and existing infrastructure, it can speed up the transfer of goods.
Therefore, corridors can reshape Iran’s role in the global supply chain. The same issue leads to the second result and positive consequence, that is, creating deterrence against sanctions.
For example, the amount of goods transferred between China and Europe by rail stands at 100 million tons per year. If the transit goes through Iran, it will no longer be easy to bring Iran into the economic war and the game of sanctions, as the world powers’ dependence on Iran will not give them too much leverage on the economic war.
In this case, the disruption in Iran’s relations will be, for example, the disruption in China’s relations with Europe, while the relationship between China and Europe is just an example.
As a result, if Iran establishes its position as a cost-effective and safe way, this corridor can no longer be easily blocked.
Politico-economic links of corridors
Due to the prevalence of the economic aspects of corridors, issues such as the relationship of governance with the corridorization of Iran have been neglected. There are a series of principles that form the foundation of governance in the Islamic Republic, as some may raise the doubt that the country won’t be able to set up corridors to turn Iran into a transit hub due to its security and ideological considerations.
On the one hand, some of our borders are closed and the transit of some goods is prohibited; on the other hand, we have political and border tensions with some countries, and these factors collectively make Iran known as an unattractive way.
But the opposite is true. The most important preliminary condition for a country to become a corridor is not the legal restrictions it imposes on its customs regulations. Instead, it primarily hinges on not exploiting the capacity of its roads.
When a country becomes a corridor or a hub, industries and services related to the corridor are established in that country. Services such as warehousing, re-exporting, loading and unloading equipment are among the said industries, and all of these create a power and possibility that makes other countries dependent on the corridor hub, and on an extended level, it will influence regional and global equations. Moreover, it also indicates that Iran does not have a “non-technical” or politically motivated approach toward other nations.
Enjoying corridor status can establish a new relationship between Iran and the world; that is, a state of adhesion and economic connection. However, the economic link does not fetch an eye-catching amount of forex or special economic achievement. The important thing is that the economic adhesion and connection can lead to a kind of deterrence in the US economic war against Iran.
For example, if we increase the transit of goods to 50 million tons per year, its direct revenue may reach $10 billion, which is not a high figure for a country like Iran. But the depth of dependence it creates on Iran can be very important.
Therefore, in governance, it is better to adjust some views and policies by avoiding a one-dimensional economy-oriented view. By the way, along with their economic benefits, corridors are also cost-generating and create traffic or speed up the depreciation of roads and equipment. But the problem is that a strategic look at corridors requires not to focus only on their direct economic benefits. The passage of every truck through the country requires jobs and products that will necessarily be created, including repair shops, spare parts plants, road development, re-exports and dozens of other things that complement each other in a cycle.
Role of the incumbent Iranian gov't
The main change of attitude that occurred in the current government compared to previous governments was the emphasis on the good neighborliness policy. The emphasis has and will have a positive effect on facilitating Iran’s transit connections with neighboring countries.
Along with China and Russia, Iran is a country with many neighbors. But more importantly, in addition to the multiplicity of neighbors, it also has a unique advantage that distinguishes Iran from China and Russia, and that is the multiplicity and diversity of neighborhoods.
In eastern and northeastern Iran, Afghanistan, Pakistan and Central Asia are located, which connect us to the Indian subcontinent and China, from the south to the Arab countries along the Persian Gulf, the Red Sea, and Bab al-Mandeb, and from there to Africa. From the northwest, we are connected to the Caucasus and Eurasia, and from the west we have access to the Mediterranean and the Suez Canal.
All these neighbors and the geopolitical capacity represent diversity, simultaneous with multiplicity, while each of the neighboring countries is a so-called special economic, political and cultural geographical “plate”, which may not be able to get connected with each other, except for Iran.
For example, without Iran, the relationship between the Central Asian countries and the Persian Gulf littoral states cannot be formed in many cases, or due to their geographical positions, they cannot have easy access. But due to its cultural and geographical location, Iran can communicate directly with each of its neighbors.
Or, for example, Turkey and Central Asia can get connected, or this connection is very costly, but Iran is located in the middle and can connect them much more easily. This connection is not only a geographical connection, but also a meaningful connection; that is, our northeastern provinces can be socially and culturally connected with Central Asia, the same connection exists in other regions, including our Khuzestan, with Iraq or Kuwait, and the same regional relationship can facilitate the principle of connection with these countries. Therefore, the most important measure of the incumbent government on Iran’s corridor connection is the “good neighborliness” policy, which is pursued both by the president and the cabinet.
Sea connection to Russia
The stance of Iran on the maritime domain is a strategic view, and under political and security relations, the economic interests of the country can be secured in this way.
Before the start of war in Ukraine, Russia used to export more than 800 million tons of goods from its ports; after the war, the figure has dropped to less than 400 million tons. Even though our northern ports enjoy the capacity to clear nearly 30 million tons of cargo, in the last Iranian year of 1401, less than 20% of the amount, equal to less than six million tons of goods, were imported from Russia.
While Russia’s trade with India, after the Ukraine war, has reached nearly 80 million tons, which has increased by nearly 100%. In other words, before the war, about 40 million tons of goods were sent from Russia to India, while after the war, the figure has reached 80 million tons. This is an economic opportunity that we can use, even with the current infrastructure, we can actually send 30 million tons of Russian cargo through the Caspian Sea. This is excluding the other border capacities such as the borders of the Caucasus and Incheboroun.
Geopolitical challenges, threats
What is indisputable about the corridor known as Zangezur is that the connection of Zangezur to the Republic of Azerbaijan and the blockade of the Lachin route will be detrimental to Iran – both a security and an economic loss.
Regardless of Iran’s redlines and the fact that the geopolitics of these regions should not change, the corridor’s view is basically a competition-oriented view. Iran’s concern is not only about passing a transit corridor through the Republic of Azerbaijan, but about the disruption of the geopolitical stability of the Caucasus and the influence of the Zionist regime in the region.
Iran supports the stability and security of its surrounding countries and has no problem with a competitive environment; high-ranking officials of the country have repeatedly emphasized, in direct and indirect meetings, that they consider the security of their neighbors as their own.
The concept of corridor has been formed so that every actor plays its role actively.
If we have a passive policy on the corridor known as Zangezur, or the Dry Canal of Iraq, or the Lapis Lazuli Corridor in Central Asia, we will suffer in all cases. For example, regarding the Dry Canal of Iraq, some people have claimed that “by connecting to Zangezur, it bypasses Iran”, while the tact of our governing body on the corridor would be to manage its connection with our active policy.
It is Iran that can be the best and most economical route to connect Arab countries to Central Asia, and connect Russia to the high seas. Therefore, if we are passive about the formation of the Zangezur Corridor and stand idly by, it is clear that we will lose the economic and geopolitical competition.
But with an active approach by Tehran, regardless of the security-creating power of Iran, it is clear that the economic preference in the region is undoubtedly Iran.