Iran leaning neither towards the West nor the East: professor

February 16, 2016

TEHRAN - Iranian President Hassan Rouhani is pursuing an independent policy and he is neither leaning toward the East nor the West, a former senior research fellow at Harvard University says.

“His policies do not show any leaning either towards the East or towards the West,” Farhang Jahanpour tells the Tehran Times.

“President Rouhani travelled to the West (Italy and France) only after having signed massive deals with Russia and China,” Jahanpour notes.

Following is the text of the interview:

Q: What is the significance of President Hassan Rouhani’s trip to Italy and France?
A: The Iranian president did not waste any time in making the best use of the lifting of the sanctions and the Implementation Day of the Iranian nuclear agreement with world powers on 16 July 2016. In fact, even before the official lifting of the sanctions, President Vladimir Putin travelled to Iran in November 2015, his first visit for ten years. During his visit to Tehran, the two sides agreed to expand their bilateral economic cooperation in many fields.
The Russian engineering company Tekhnopromexport will build a 1.4 GW thermal power plant in Iran and a desalination plant with a capacity of 200,000 cubic meters of water per day near the city of Bandar Abbas. Moscow will extend Tehran a government loan worth $5 billion to cover the implementation of 35 priority projects in the fields of energy, construction, seaports, railway electrification, and others. A further $2 billion in the form of export credits is due to be provided by Russia’s State Corporation Bank for Development and Foreign Economic Affairs. Victor Melnikov, head of the Iran-Russia Trade Council, said that the two countries could boost bilateral trade exchanges to $10 billion in coming years.
Only a few days after the lifting of the sanctions, Chinese President Xi Jinping was the first foreign leader to visit Tehran. During his two-day visit on 22-23 January, the two sides decided to raise the level of their bilateral trade more than tenfold, from 51.8 billion dollars in 2014 to $600 billion in the next 10 years. President Rouhani and Xi oversaw the signing of 17 politico-economic agreements between the two countries worth tens of billions of dollars. Perhaps even more important than the economic deals was Iran-China’s strategic partnership. The Chinese president confirmed his support for Iran to join the Shanghai Cooperation Organization (SCO).
Shortly after those significant visits by the leaders of the two Eastern superpowers to Tehran, President Rouhani visited Italy and France (25-29 January), and signed some $55bn in deals focused on the hydrocarbons, metals, transport, and automotive sectors. Unquestionably the biggest deal was Iran's purchase of 118 Airbus planes, at a total cost of $25bn. Iran's transport minister, Abbas Akhoundi, has remarked that Iran is in the market for some 400 medium and long-range planes, as well as 100 shorter-haul aircraft. He also said that Iran was open to deals with American aviation companies. On 2nd February, Iran's national carrier signed another agreement to buy 20 new passenger airplanes with an option for 20 more from French-Italian aircraft manufacturer ATR, worth $1.089 billion.
Therefore, the Iranian government has pursued a very active policy of reviving the economy, modernizing Iranian aviation, and boosting industrial output only a short time after the lifting of the sanctions.
Q: Some people argue that these trips show that the Rouhani government is leaning to the West instead of the East. Do you agree?
A: As was mentioned earlier, President Rouhani travelled to the West only after having signed massive deals with Russia and China. Therefore, his policies do not show any leaning either towards the East or towards the West.
Iran enjoys a unique geopolitical position, as a link between the Persian Gulf and the Caspian Sea, between Central Asia and the Caucasus, also linking China and India to Europe, thus acting as a hub for Eurasian integration. Consequently, there is no need for Iran to want to limit itself either to the East or to the West. As a historic link between the East and the West, Iran should be open to trade with all the countries of the world and all those who wish to engage in political and economic interaction with her with no strings attached. The idea of either leaning towards the East or the West is a remnant of Cold War thinking and has to be discarded. At the moment, we are living in a globalized world, with the East and the West being interconnected.
Q: What are the Saudis’ main reasons for intensifying tensions with Iran? Is it because Riyadh thinks the balance of power has changed in the Middle East in favor of Iran?
A: During the time that Iran had been under Security Council and Western sanctions, some regional countries, including Saudi Arabia, benefited from Iran’s isolation. However, now that Iran has returned to the international community, those countries feel threatened. Iran, with a population of 80 million young and educated people, with an advanced scientific base, and with relatively little reliance on oil revenue, poses a major challenge to other regional countries that have moved ahead during the period of Iran’s absence from international trade.
However, with the revival of relations with the international community, in a short period of time Iran will become perhaps the biggest economy in the Middle East, a position that she had held in the past. Just to give an example of Iran’s more varied economy, in Iran’s budget for the next financial year, oil revenue accounts for only 25% of the budget, while in Saudi Arabia oil accounts for 76% of the budget.
Furthermore, a number of Saudi Arabia’s regional adventures have proved very costly, as well as being unsuccessful. Saudi Arabia’s war on Yemen costs a minimum of one billion dollars a week, and she has also been forced to prop up a number of regional countries that she has been forced to bring into coalition with her. As a result, Saudi Arabia’s reserves dropped to $611.9 billion at the end of 2015, the lowest level since 2011, down from $732 billion a year before. They are expected to fall further to around $500 billion by the end of 2016. Saudi Arabia also posted a record budget deficit of $98 billion last year, and in the current year the shortfall is expected to be more than $107 billion. No country can sustain budget deficits of that magnitude over the long term.
The International Monetary Fund last month revised downward Saudi gross domestic product growth to just 1.2 percent this year, the lowest since 2009. All that is despite pumping 10.2 million barrels of crude per day. Therefore, it is not surprising that Saudi Arabia is worried about the future.
Q: Turkey wants to establish a naval base in Qatar. Is that decision related to the U.S. strategy to concentrate on Asia? Some experts believe that the United States wants its allies to play a more active role in the Persian Gulf. If this is true, how will it affect Iran’s role in the region?
A: As a country with 1,770 kilometers of shoreline on the Persian Gulf and the Sea of Oman, Iran dominates the Persian Gulf. The existence of some small foreign bases in some Persian Gulf states would not affect Iran’s dominant geostrategic position in the region. Iran and Turkey are friends and share many common interests. Despite some differences over Syria, the two countries must further expand their relations and must act as anchors of stability in the region. Iran’s independent foreign policy means that she does not wish to act as a proxy for any foreign power. The best policy to be adopted by Iran is the one that Turkey tried to pursue in the past, namely having no tension with any of her neighbors.
There is too much conflict and rivalry in the region. Iran should try to bring the countries of the region closer together, and should try to establish a system of common security that would benefit all. That policy would certainly be better than any military confrontation or involvement in regional conflicts. As the scourge of terrorism shows, all regional countries will be the losers as the result of greater tension, and all of them would benefit by a system of collective security and cooperation, hopefully ultimately leading to a big common market involving all the regional countries. If European countries, despite centuries of wars and intense hostility, managed to form a European Union, there is no reason why the countries in the Middle East that share many historical, cultural and religious values cannot be united and pool their resources, instead of using them for destructive purposes.

[highlights]


Saudi Arabia’s regional adventures have proved very costly and unsuccessful.

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Iran, with a population of 80 million young and educated people, with an advanced scientific base, and with relatively little reliance on oil revenue, poses a major challenge to other regional countries that have moved ahead during the period of Iran’s absence from international trade