IRAN’S QUEST FOR PROXIMITY TO SOUTH AND SE ASIA
Iran in search of news alliances to replace that old western dominance of power matrix in Asia and elsewhere. Often, it creates more problems than finding solutions.
In the realm of geostrategic shift, Iran is certainly to build a new power equation.
Primarily, the South Asian and East Asian regions include two major powers –China and India in term of economic strength.
Thus, some politicians believe that the structure of international relation will be categorized into two distinct systems, the Eastern and Western. If such a thing occurs, they believe, Iran would successfully be able to go ahead with its nuclear programme .This is because the inner circle of the Iranian think that Iran’s policy towards East Asian countries will be shaped by the latter’s energy requirements and in that situation, Tehran will take advantage of differences between Russia and China and the US. But cognizance should be taken this view can not been seen in the prism of a long –term strategy.
In this scenario, the question arises whether Iran can find it opportune for a mutually –beneficial alliance with the East Asian countries specially China and India? Could Iran become a strategic partner with them? For a clear understanding of this issue, a critical analysis of the major factor of energy is required.
Iran’s energy policy
Iran is a major player in the world energy (hydrocarbon) market .It controls around 10 percent (135.5 billion barrels) of the world’s total proven oil reserves and 971 trillion cubic feet of gas.
However, Iran’s share of total oil trade peaked at 17.2 percent in 1972 and then declined to 2.6 percent in 1980 after Islamic revolution. Political developments i.e. regime change had visible impact on Iran’s energy power. After the Islamic revolution and the establishment of new regime, Iran redefined its economic as well as foreign policy. This lead to total transformation in terms of bilateral and multilateral relations. The economic policies became more nationalistic particularly in the energy sector. Since its foreign policy became more oriented towards Ideology and Idealism it acquired a profile which was against the Western countries, particularly to United States. Consequently Iran’s energy policy was influenced by Iran’s foreign policy. This lead to:
1. Cancellation of all oil agreements with Western States and Companies.
2. Reduction of oil production.
3. Attempt to reduce Iran’s economic dependence on oil revenue.
4. Changes in rules about foreign investment and agreement with foreign countries and companies.
The result was oil production reduced from 6 million barrels per day to 1.662 million barrels per day from 1978 to 1981 (Iran Central Bank Statistics). This decline was aggravated by U.S. sanction and Iran- Iraq war. Estimates are that 50 percent of the capacity of oil production paralyzed during Iran-Iraq war. Declining oil prices in 1986-87 forced the Iranian state to revamp its oil sector but it could not be accomplished due to insufficient foreign exchange.
During the second decade after the revolution, Iranian government initiated change in approach from idealistic to realistic and reforms started taking place. In fact, some in the reformist section accepted that need for global engagement. Iran initiated some important moves in the oil and energy sectors. These included:
1. Signing of agreements with oil consumption countries and private Companies.
2. Increased cooperation with OPEC and oil producing countries.
3. Creating new terms and rules for foreign investment.
Despite Iranian government’s effort to cooperate with oil customers and increased oil production, Iranian oil export continued to decline because of its stand off with United States. In fact, the United States energy sanction against Iran adversely affected Iran-Europe trade relations. Engineering and plant manufacturers under pressure from the United States to stopped trading with Iran. This made some of the policymakers to advocate that Iran explores new relations with Asian countries. Iran’s Asia policy though driven by its search for market and investment in energy sector, it also carries with it the intent to restore its regional role and place in global politics.
Iran’s Energy Relations with China and India
The Asian region is the largest consumer of energy in the 21st century. China, India (and Japan) are the biggest energy guzzlers of the East Asian region. Although these countries meet most of their energy demand from Central Asia, Bay of Bengal and Africa, they look towards the Middle East in general and the Persian Gulf in particulars as a source of energy .
Thus, China beingthe second oil customers of Iran’s oil has an important role in Iran’s energy policy. The growing transaction has made China second largest customer of Iranian oil and Iran is the second largest oil exporter to China dynamics spills over to the strategic domain .The two are keen to reap full advantage from this emerging energy relationship. China is perceived as the emerging global power. However, its foreign policy towards West and United States shows that China is not going to compromise its relation with United States to strengthen its ties with Iran. Similarly it is Iran’s stand off with United States that is influencing Iranian-Chinese strategic relations. It can be hypothesized that evolution of Sino-Iran energy relations is predicated on Sino-US and Iran-US relations.
On the other hand, Iran’s energy relationship with India has different dynamic. India needs oil and gas but in comparison to Chinese scale, India is not in a position to participate in Iran’s oil sector. At the same time, India does not enjoy the global strategic salience for instance not being member of Security Council to veto, to protect and promote Iran’s global rehabilitation. However in the Asian theater Iran and India does find congruence, which is beyond the energy transaction. Iran needs the huge Indian market and India wants to get highest benefit possible from Iranian energy. Neither Iran nor India would subscribe the domination of Asia by one power; both would like a multi-polar Asia where both as regional powers have their mutually recognized space of influence. Iran can contribute in this respect in South Asia and India in the Persian Gulf region. But the later would not like to risk its growing relations with US to forge robust energy-strategic tie with Iran. For India relationship with United States is more vital in its efforts of global climbing, with Iran-India relationship are central on trading of oil.
However the fact remains that Iran is one of the major oil exporting countries in the region and energy relation between Iran and the East Asian countries be based on the energy supply in the future .
Hence , one must remember that Iran does not have any strategic partner in East Asia thought it as good relations like economic, trade, political relations with some countries in the region. It would be pertinent to mention here that Iran does not have any strategic interest in the region. Despite this, Tehran has to maintain close relationship with its strategic partners.