TEHRAN- At a time when Iran is seeking to diversify its trade routes due to trade and economic restrictions, regional realities indicate that Iran is not the only country trying to become the region's transit hub; Turkey, the UAE, Saudi Arabia, the Republic of Azerbaijan, and even some Central Asian countries also have extensive plans to attract trade routes and related investments.

Geopolitical developments in recent years, from the Russia-Ukraine war to shifts in global trade routes and the competition among economic powers for control of supply chains, have raised the importance of transit corridors to an unprecedented level. In such circumstances, Iran is more in the spotlight than ever before; a country located at the crossroads of East and West, North and South, which can become the connecting link between the multi-billion-person markets of Asia, Europe, and the region.

Although most discussions about corridors have so far focused on transit revenues, experts believe the real value of these routes lies in attracting investment, developing infrastructure, creating employment, and turning Iran into a regional economic hub; a capacity that, if properly utilized, could be one of the most important drivers of Iran's economic growth over the next decade.

In today's global economy, geography has once again become a determining factor. If in past decades it was thought that technology and digitalization would reduce the importance of countries' geographical positions, recent developments have proven otherwise. The Russia-Ukraine war, Red Sea crises, disruptions in some international shipping routes, and the increasing competition among economic powers for access to markets have once again demonstrated that transport routes and trade corridors play a vital role in the global economy.

In such an environment, Iran is positioned where many countries wish to be. Simultaneous access to the southern high seas, the Caspian Sea in the north, bordering 15 countries, and lying on the route connecting China, India, Russia, Central Asia, the Caucasus, West Asia, and Europe, gives Iran's economy a rare capacity.

Hasan Hassankhani, an economic expert, believes Iran possesses one of the most privileged geopolitical positions in the world. According to him, Iran is connected to vast regional markets through direct and indirect borders, and this very fact could turn Iran into one of the region's most important commercial centers.

* Corridors; beyond transit income

One common mistake in analyzing corridors is limiting their benefits to revenue from goods transit. While the experience of successful countries shows that direct transit income is only a small part of the economic benefits of corridors. When an international trade route passes through a country, it is not just trucks, trains, and ships that traverse that route; rather, capital, technology, international companies, logistics centers, related industries, and employment opportunities also enter the economy along with it.

Successful examples of this can be seen in Singapore, the United Arab Emirates, Turkey, and even the Netherlands. These countries have obtained a significant part of their economic growth not from the sale of natural resources, but by becoming global transit and logistics hubs.

In fact, corridors show their true value when they lead to the creation of a chain of economic activities; from the development of ports and railway lines to the establishment of industrial parks, goods distribution centers, modern warehouses, insurance companies, banks, and international transport companies.

* Investment follows trade routes

Some economic experts believe there is a direct relationship between the development of corridors and attracting investment. An investor always looks for regions that provide faster and cheaper access to large markets. For this reason, the more Iran's position in international corridors is strengthened, the more attractive it will become to foreign investors. Suppose a Chinese, Indian, or Russian company wants to export its goods to regional markets.

If Iran can offer that company the fastest and cheapest transport route, the likelihood of that company investing in Iranian ports, free zones, logistics industries, and even domestic production units increases.

In this regard, Hassankhani emphasizes that Iran can use the investment capacity of countries like China. According to him, China invests hundreds of billions of dollars annually in various countries, and if even a portion of these investments is directed toward Iran's infrastructure projects, many of the country's logistical deficiencies will be resolved.

Among transit projects, the International North-South Corridor holds a special place. This route connects India to Russia and Europe via Iran and can reduce the time and cost of transporting goods compared to some traditional routes. The importance of this corridor is not limited to the transit of goods.

As trade volume increases between India, Russia, and the Eurasian countries, the need for investment in ports, railways, loading centers, export terminals, and logistics services will also grow. In other words, the development of this corridor could become a driving force for investment in the country's transport and infrastructure sectors.

* Regional competition for future trade

The reality is that Iran is not the only country seeking to become the region's transit hub. Turkey, the UAE, Saudi Arabia, the Republic of Azerbaijan, and even some Central Asian countries also have extensive plans to attract trade routes and related investments. This very issue shows that the opportunity before Iran is not permanent. The more decision-making and implementation of infrastructure projects are delayed, the greater the likelihood that part of the country's transit advantages will be transferred to rival routes.

Mohammadreza Sabzali-Pour, head of Iran's World Trade Center, believes that the development of corridors should not be merely a reaction to specific circumstances, but should be pursued as a long-term economic strategy. According to him, these routes, in addition to facilitating trade, can become one of the country's sustainable sources of income.

* Role of private sector in Iran's logistics leap

One of the most important prerequisites for the success of corridors is the participation of the private sector. The government alone cannot provide the financial resources needed to develop all transport infrastructure. New ports, railway lines, transport fleets, logistics centers, and export terminals require large investments; investments that can be secured through the participation of domestic and foreign private sectors.

Sabzali-Pour emphasizes that many companies are ready to participate in transport and logistics projects, and if suitable conditions are provided, this capacity can be used to modernize the fleet and develop the country's infrastructure.

* Economic diplomacy; completing link of corridors

No corridor can succeed without active economic diplomacy. Developing cooperation with China, India, Russia, Central Asian countries, the Caucasus, and regional neighbors is necessary for Iran to become the crossroads of regional trade.

Experts believe that embassies and economic attachés must serve the development of trade and attraction of investment more than ever before. In today's world, the competition among countries to attract capital and trade takes place not only at borders and ports but also in embassies, chambers of commerce, and economic negotiations.

Iran's economy has been dependent on oil revenues for years, but global developments show that countries are more successful when they can use their geographical position to create added value. Trade corridors have the capacity to transform Iran from a mere route for goods transit into a regional center for production, distribution, trade, and investment. In such circumstances, transit revenues will be just the beginning; because investment, employment, industrial development, increased exports, and sustainable economic growth will follow.

Now, a rare opportunity lies before Iran's economy. If the infrastructure is completed, investors are attracted, economic diplomacy becomes more active, and the private sector is placed at the center of decision-making, trade corridors could play the same role for Iran over the next decade that oil played in past decades; with the difference that this time the engine of the country's economic growth will not be a finite resource, but a permanent advantage called geography.

MA

(Source: IRNA)