By Mohammad Ali Haqshenas and Payman Yazadani

SCO long term investment for Iran, not solution to urgent issues: Bininachvili

June 25, 2018 - 10:19

TEHRAN - Dr. Albert Bininachvili, professor of political science at the Columbia University believes Iran's SCO membership is a long term investment for Tehran and doesn’t necessarily provides Iran with solutions to its most urgent issues.

Attending a meeting in Merh News Agency and Tehran Times newspaper headquarters on 20th of June, a series of issues were discussed with Dr. Albert Bininachvili, a professor of political science at the Columbia University, by political analysts from the outlets. Bininachvili is an expert in security and energy focusing on the Persian Gulf and the Caspian. He has published numerous articles on Iran, Central Asia and the Caucasus.

A wide range of topics were discussed during the meeting ranging from speculations on OPEC’s probable decision regarding its output to the Joint Comprehensive Plan of Action (JCPOA), the role of the EU for saving the pact, effects of new US sanctions on Iran's energy sector, reasons behind lack of adequate post-JCPOA foreign investment in Iran, options that the EU has to maintain JCPOA and Iran’s presence in Shanghai Cooperation Organization (SCO).

Asked about possible result of the OPEC meeting on 22th of June, Bininachvili highlighted that the result is both “complicated and simple.”

He highlighted the great influence of Saudi Arabia and Russia regarding oil output, saying that Russia surely follows its own national interests, implying that it shouldn’t be expected from Russia to address other states' interests in this regard.

Touching upon the low cost of JCPOA withdrawal for USA, Payman Yazadani framed “how could Iran increase the cost for USA exit?”

“By having attracted investments in the past,” Bininachvili answered, adding that Iran cannot increase the price now because of not being in a “favorable position.”

Referring to the high interest of American companies in Iran, he said “every multinational [company] will be obviously interested in the untapped market [of Iran] … with 80 million people.”

Giving Boeing as an example, he highlighted that this American company is surely interested in dealing with Iran. He further referred to Iran’s need to reconstruct and modernize its oil and gas fields; which provide extensive opportunities for multinational companies. Iran’s oil and gas sector can “easily” absorb some $100 b investment, he added.

Asked about the reasons behind lack of foreign investment in Iran, Bininachvili said his “personal feeling” is that some Iranian officials were under the delusion that JCPOA was a kind of infinite document and so there was no need to hurry up.

Describing post-JCPOA as the “period of lost opportunities for Iran,” he noted that the country has just attracted one major investment and that is $1 b from French energy giant Total.

Bininachvili compared the status of Iran and Iraq in attracting investment, saying that Iraq has managed to attract more companies despite all their problems including instability, war, and separatism. It is much easier to work in Iran because of its centralized authority, he added.

Asked about the effects of new sanctions on Iran’s energy sector and solutions for lessening the effects, he answered “I expect the immediate effect in terms of the amount may be around 0.5 million [bpd], if things go really bad.”

The most negative effect would be Iran’s oil export to Europe, he said, adding that oil export to China and India have the potential to experience a slight increase while exports to Turkey will probably stay at the current rate.

Reiterating that EU, Japan and South Korea will be the main challenge of Iran for oil export, Bininachvili said that there is chance for obtaining exceptions for trading with Iran, in which companies will be carved out and sanctions won't limit their activities.

“It is much easier to negotiate with Trump about the carvings and exceptions than it used to be with Obama,” he highlighted.

He went on to say that Japan was in desperate need of energy after Fukushima crisis but Obama insisted on sanctions and prevented Iran’s oil export to Japan.

ouching on the good relations between Trump and Japanese Prime Minister Shinzo Abe, he noted that there is a fair chance for obtaining exceptions.

Questioned on the extent of guarantees that EU can provide to keep JCPOA and whether European countries are ready to sacrifice their own interest for Iran or not, the political analyst said, “no one is doing anything for another and this is all about politics and protection of national interest and there is no room for emotions … There are no free lunches in this world”
Analyzing the European positions, he listed three options regarding the EU approach toward the JCPOA. One option is deterioration of EU-U.S. relations given the trade wars and other issues, he said, adding, Europe, in this scenario, will try to expand ties with Iran to retaliate pressures from U.S.  

He believed that the first option will not happen mostly because of Russia’s behavior in Europe. If Russia was behaving much better, Europeans might have allowed themselves to mitigate with America, he said, adding, “… otherwise they [Europeans] will be forced to give concessions to Russia.”

The second option of EU is “wait and see,” the scholar said, highlighting that this is the most probable one. In this scenario, Europe will offer Iranians to stay in the pact but simultaneously expresses solidarity with U.S. regarding issues like missiles and Iran’s presence in the region, he said, adding that Europe may say that it will provide more support if Tehran makes some concessions on concerned areas.

Also, EU may use Iranian cards for bargaining with Washington on other sectors such as free trade, he added.

The next option is when EU says that it is maintaining independence from U.S. but at the same time will do nothing to convince their own companies to work with Iran, Bininachvili highlighted.

Then, they will tell Iran “you see, we are not with America, but our companies are independent. We love Iran and Iranians but we can do nothing with regard to the companies and business activities,” he noted.

Answering a question regarding the importance of Iran’s presence in SCO and whether this international body can help Iran to tackle its economic, security concerns or not, the analyst said that Iran’s membership in SCO doesn’t necessarily provides Iran with solutions to its most urgent issues but it is a long-term investment.

The upgrade on SCO is an obvious continuation of Iran’s long-term policies and another facet for implementation of Iran’s Eastern strategy, the Colombia University professor noted.

Membership in SCO provides another outlet for strengthening ties with Russia and China, he said, adding, Iran relies on the diplomatic support of these permanent members of UN Security Council which are also members of SCO.

Considering the amount of economic cooperation with China and their potential of investment in Iran, joining SCO provides the ground for further cementing ties between the two countries, he added.

Describing China as a “very important actor,” the political analyst said that cooperation with china can be boosted not only on the unilateral level but also on multilateral level.

Referring to Russia, he said that Iran has developed some sort of dependency on Russia’s support in confrontation with U.S. and there are many facets of cooperation between the two countries, the most impressive being the military aspect.

Iran’s presence in SCO is “all in all positive” and “absolutely a right step,” Bininachvili highlighted, adding that this provides opportunities to boost ties with India, Pakistan, Afghanistan and Central Asian countries.