Iran-Afghanistan economic diplomacy:
Overcoming sanctions, developing bilateral relations
By Ashkan Pirzadeh
Strategic affairs expert
The Islamic Republic of Iran and Afghanistan are two neighboring countries with a long history and numerous religious, economic, and cultural commonalities. Given the unique geopolitical and economic positions of both nations, the advancement of economic relations and developmental diplomacy could play a crucial role in improving their economic and social conditions.
As a landlocked nation, Afghanistan requires reliable and permanent routes to access international waters. Thus, economic and trade cooperation with neighboring countries holds strategic importance for it. The cultural and linguistic affinities have kept Iran at the heart of Afghanistan’s attention. Simultaneously, Iran’s geographical advantages, particularly its access to open waters, can serve as a commercial gateway for Afghanistan, significantly contributing to meeting its essential goods needs.
Opportunities, challenges ahead
The development of economic relations between Iran and Afghanistan presents unique challenges and opportunities. Among the challenges, the economic sanctions imposed by the West on both countries have targeted their growth, creating restrictions on trade interactions. To overcome these obstacles, a serious willpower from both nations and the formulation of practical strategies to counteract and offset these sanctions is essential.
Moreover, insecurity and political instability in Afghanistan significantly impact economic relations, hindering investments and severely affecting cooperation with other nations. Infrastructure issues in transportation and communications further complicate development in Afghanistan. Tehran’s recent efforts to connect its railway to Afghanistan and establish roads in the country are seen as steps to tackle these challenges.
Despite these hurdles, there are exceptional opportunities for enhancing economic ties between the two countries, which outweigh the challenges. For instance, Iran’s strategic position enables it to supply Afghanistan with necessary goods, potentially positioning it as a key player in the latter’s economic growth. Afghanistan’s access to international waters through the Chabahar Port presents a remarkable opportunity for Kabul to procure goods from the global market. Moreover, as one of the world’s largest holders of oil and gas, Iran can make significant contributions to Afghanistan’s industrial growth and energy needs through fuel and petrochemical exports.
Furthermore, the establishment of joint companies and investments in sectors such as industry, agriculture, infrastructure, and energy will foster economic interdependence, creating jobs and increasing GDP in both nations, thereby complicating matters for any potential sanctions imposed on them. Given Iran’s foreign policy aims to support stability and development in Afghanistan, another outstanding opportunity lies in scientific and technological collaborations. These partnerships, covering a broad range of topics, will significantly enhance the economic and cultural relations between the two countries, with Iran consistently being a favored destination for young Afghan students pursuing higher education. Such academic and cultural exchanges further tighten the bonds between the two nations.
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