Precious legacies of Raisi’s economic diplomacy
Iran is mourning its revolutionary president Seyyed Ebrahim Raisi who on Sunday was martyred in a helicopter crash northwest of the country. He dedicated his life to the people’s welfare and economic prosperity. During three years of his tireless presidency, president Raisi was a source of many services to the progress of the Islamic Republic of Iran on the world stage. One of the brilliant areas of his activities was the foreign policy.
In addition to the tangible outcomes of the policies of president Raisi’s government in boosting foreign relations in the path of realizing national interests, increasing national power, enhancing foreign trade, and neutralizing Western sanctions have certainly been the cornerstones of many actions that can be built upon by future governments.
Here we focus on a small but important part of president Raisi’s foreign policy achievements.
Membership in regional,
international blocs
Strengthening international alliances in foreign relations, especially membership in regional common market organizations and free trade agreements, has always been one of the important objectives in the foreign policy of the Islamic Republic. Remarkable gains have been made to this end under president Raisi who, compared to his predecessors, further used Iran’s unique geopolitical position and economic capabilities to secure Iran’s share of regional and international trade.
One of these achievements was the finalization of Iran’s membership in the two key economic blocs of BRICS and Shanghai Cooperation Organization (SCO) along with several emerging non-Western powers. Though Iran for years was an observer member of these blocs, if it was not for the major change in Iran’s foreign policy under president Raisi who adopted the “Look to the East” policy, Iran’s membership could not have been realized this quickly.
Russia and China, two great strategic allies in the transitioning global order, consider the Islamic Republic as the third member of their Eastern alliance due to the country’s completely independent policy, strategic geopolitical position, military power, and extensive regional influence. The government of Raisi played a key role in this achievement.
Indeed, membership in SCO will provide unmatched opportunities for Iran’s economic development and foreign trade. The bloc covers about 30 percent of the global GDP and about 40 percent of the world’s population, which translates into the total defeat of the West’s sanctions that aimed to isolate Iran from global trade.
Joining the club of the emerging powers of BRICS, which many experts say will prospectively replace the G7, facilitates foreign trade, cuts trade costs and customs, transfers technology and knowledge, provides raw material, expands Iran’s interactions with global markets, and eliminates various international payment problems by doing business with national currencies.
During president Raisi’s tenure and thanks to the efforts of the late foreign minister Hossein Amir-Abdollahian, Iran managed to take a huge step toward membership in the Eurasian Economic Union. The organization, which accounts for about 2.4 percent of the global trade, also signed a free trade deal with Tehran.
Marketing, opening
new trade gates
The economy was a priority to the foreign policy of the government of president Raisi, to the extent that during his 33-month presidency, he visited 28 foreign countries. In the meantime, although the government focused on expanding all-round economic relations with neighbors and countries in the region, president Raisi did not ignore other markets receptive to Iranian companies and goods, especially in developing countries.
To this end, after years of stagnation, Raisi’s government revived Iran’s trade and political standing with Latin America. In addition to meetings with Latin American leaders on the sidelines of the UN annual sessions, in June 2023, he started a five-day tour that saw him visiting Venezuela, Nicaragua, and Cuba. By signing 35 cooperation documents in various areas, he took a long leap to restore Iran’s considerable trade share in this region.
During his presidency, relations with Africa also saw a surge. His efforts manifested, for example, in the Iran-Africa Summit initiative held earlier in April in Tehran at the level of senior officials, including finance ministers of over 30 African countries. Furthermore, president Raisi toured the three countries of Kenya, Uganda, and Zimbabwe in July 2023, marking the first visit of an Iranian president to Africa in 11 years. The tour secured significant achievements for Tehran.
The jump in the country’s oil and gas revenues in the middle of tough sanctions and energy agreements with neighbors were among the other accomplishments of the economic diplomacy of president Raisi’s government. According to officials, Iran managed to increase oil and gas production and export revenues to levels higher than before the US withdrawal from the 2015 nuclear deal, officially called the Joint Comprehensive Plan of Action.
Revamping the country’s energy diplomacy and boosting cooperation with neighboring countries have been on the agenda of the oil ministry since the beginning of the late president’s government. Ending the five-year hiatus in gas trade with Turkmenistan, the signing of a three-party gas swap deal between Iran, Turkmenistan, and Azerbaijan paved the way for Tehran to access the European gas market in the future.
Another key step in increasing energy exports was taken by Raisi in his recent trip to Pakistan. The two neighbors agreed to conclude the construction of the Iran gas pipeline to Pakistan. By taking the final steps of this agreement, Iran’s share of the region’s energy market will surely witness a fundamental transformation. Since the 11th phase of the South Pars Gas Field in a shared field with Qatar was rolled out during his term, Iran’s production surpassed that of the Qataris even in the midst of sanctions.
Unlocking Iran’s
corridor capacities
Iran is a country with a unique geopolitical position on a highway connecting the east, west, north, and south of the world. This has created an opportunity for Iran to play a key role in major transit projects and the international trade network. Both of these can contribute to its economic development and secure income sources for it.
During Raisi’s tenure, a change in Iran’s approach to the “resistance economy” caused the government to prioritize putting more into the development of the International North-South Corridor, consequently allowing the rail and road projects to experience a remarkable expansion in a short period. In this regard, cooperation with India to further develop Chabahar port took place. Moreover, Iran’s rail connection to Afghanistan was concluded with the inauguration of the Khaf-Herat railway in July last year.
The East-West Corridor is also a mid-term strategic priority that invites intense competition given its huge transportation potential. Some rival routes are already active and entrenched within the framework of this corridor. Three years ago, when the Belt and Road Initiative (BRI) was inaugurated and the first Turkish freight train made its way to China without passing through Iran, there emerged a feeling that Iran was abandoned in this megaproject. Actions of the past governments made Iran the big absentee in this significant project despite being aware of the geopolitical importance of the BRI.
This approach was changed under president Raisi’s government as the latter focused on taking advantage of the country’s regional capacities. Under his government, a new approach was put high on agenda that exploited the country’s transit capacity in bilateral or multilateral trade exchanges with the allies. Inaugurating the Kazakhstan-Turkmenistan-Iran-Turkey corridor in May 2022 to boost the East-West Corridor was among the fruits of this policy that managed to restore Iran to the BRI.
The article first appeared on ABNA24.