Foreign Policy Capacity-Building in New Year

(Supreme Leader Ayatollah Khamenei in his annual New Year speech in Mashad. Photo: khamenei.ir)

By: Kaveh L. Afrasiabi

  The prognostication of Iran's foreign challenges and opportunities in the new Iranian calendar year must inevitably address the different scenarios stemming from contrasting possibilities in Iran's external environment. Also, this endeavor should proceed from a keen understanding of the current issues and priorities in Iran's foreign policy and the related pattern of foreign conduct and behavior that can be traced to a confluence of internal and external sources. Without a sound understanding of the complex interplay of these factors and their overall trajectories it is doubtless even more difficult if not impossible to decipher the range of possibilities and or scenarios that might shape the Iranian foreign policy in the coming year.

  Given the wealth of its neighbors and near neighbors, the matrix of regional relations and the role and impact of extra-regional players in Iran's foreign policy environment, it is hardly surprising that Iran has a multi-layered and multi-dimensional foreign policy that is geared to advance the country's national interests, including its national security interests and economic interests. In the new milieu of post-nuclear agreement known as the Joint Comprehensive Plan of Action (JCPOA), the natural expectation is continuity in the present governmental efforts to expand trade, attract foreign investment, diversify Iran's trade partners, and at the same time promote regional cooperation on various economic and non-economic, e.g., security, matters. Economic diplomacy plays a vital role here, all the more reason for the government to bolster its diplomatic missions abroad with additional resources to pursue this objective, as a part and parcel of what we may call "foreign policy capacity-building." A closer working relationship between the foreign ministry and the economic and other ministries and institutions connected to foreign trade and investment is necessary in order to achieve optimal success in foreign capacity-building.

  Thus, for example, Iran can emulate Tunisia's successful example of public-private initiative (known as FAMEX), which is partly financed by the World Bank and focuses on expanding the range of commodity exporters. As the role of oil in the national economy declines and the non-oil exports gain new importance, a long-term strategy to promote Iran's non-oil exports is needed, one in which the foreign ministry and its missions abroad have a key role to play, complementing the role of other ministries.

  Henceforth, a more successful economic diplomacy in the post-JCPOA era is likely that can capitalize on the advantages of Iran's unblocked assets, new access to foreign markets, and an unprecedented opportunity to pursue joint investment opportunities by streamlining the economic laws. It is precisely here that the new Parliament (Majlis) can act in a timely fashion to help the government's economic diplomacy, by reducing foreign uncertainty and red tape, which hamper the quest for finding foreign partners for various economic and trade objectives. Concerning uncertainty, the reluctance of some western firms to engage with Iran can be lessened as a result of a successful implementation of JCPOA and the related confidence-building that impacts the country's multi-dimensional foreign objectives.

  Needless to say, domestic tranquility and regional stability are important prerequisites for a successful economic diplomacy, which must operate at both regional and global levels. Fortunately, the recent elections in Iran have reinforced the image of Iran as a stable and participatory country, thus acting as a catalyst for foreign capacity-building. The elections' windfall in the foreign arena will likely show themselves in the near future, particularly if the tenth Majlis cooperates and proves to be an asset, rather than hindrance, for the government's foreign policy priorities. With an estimated growth rate of 4 percent in the New Year, Iran is poised to attract foreign investment if it succeeds in creating a more hospitable business climate that would, in turn, upgrade the country's rather dismal credit rating.  Through a combination of more liberalized trade and macroeconomic policies aimed at job creation, controlling inflation, and facilitating the movement of capital into and out of the country, the government can take a giant leap in economic diplomacy, which to some extent reflects and is triggered by the dynamic of internal economy. In other words, Iran's economic diplomacy does not transpire in a vacuum, but rather in a set environment that features a myriad new opportunities for globalizing Iran's trade and economy irrespective of the latter's side-effects. In turn, this would dictate a substantial revision and re-thinking the idea of "resistant economy" which revolves around the notions of economic autonomy, self-reliance, and domestic production. Following the prescriptions of a neo-liberal economy that prioritizes the role and input of the private sector, the new "resistant economy" would have to take into consideration the adverse effects of a stale or closed economy if the necessary adjustments in turning this term into a more complex, dynamic, and multi-faceted phenomenon are missing.

  Turning to Iran's foreign trade partners, there is no doubt about a minor 'turn to the west' triggered by the JCPOA, which in turn raises the issue of how to expand economic ties with Europe. Already, President Rouhani's recent trip to Italy and France has clarified some of the answer to this question. Suffice to say that the resumption of "high-level talks" between Iran and the European Union is a welcome development that may prove decisive in facilitating bilateral relations, particularly with the main European countries such as England, Germany, France, and Italy. In the New Year, Iran is expected to actively pursue both the multilateral and bilateral tracks with Europe, hoping that the continent would also resolve its non-nuclear, e.g., human rights, concerns with Iran as a result of dialogue and discussions with Tehran. Europe today is in turmoil due to the problems of refugees, terrorism, and so on, and the new chapter of healthy relations with Iran is in the mutual interests of both sides.

  Needless to say, with respect to countries such as Turkey and the United States, much depends on the sustainability of the current fragile cease-fire in Syria and one can only hope that it is turned into a permanent cease-fire, requiring Iran's playing the peace card as it has been under the Rouhani administration. The Syrian issue is tied to the question of alliances and counter-alliances as seen by Iran, dictating a great deal of continuity in Iran's foreign behavior. The stakes in Syria (and to some extent by implication in Lebanon) are exceedingly high as far as Iran is concerned, all the more reason to avoid any initiative that would negatively impact the durability of Iran's system of alliances and solidarities in today's Middle East. But, of course, in facing the serious challenges of terrorism and regional rivalries, Iran must be careful not to trigger anti-Iran initiatives contemplated by certain powers in the region and beyond. Thus, exploring the possibility of a post-containment US policy toward Iran is more than an academic preoccupation and can potentially mark the beginning of a true rapprochement in US-Iran relations. For now, however, a less grandiose objective is pursued through incrementalism, such as select cooperation on regional crises, which is rather optimal under the present circumstances. No major shock in US-Iran relations is likely in the coming year, irrespective of who wins the US presidency in November, 2016. With a new US president, who will take time to saddle itself on foreign affairs, any big changes in US's approach toward Iran in this year are highly unlikely and, therefore, Iran must realistically assess both the pluses and minuses of the limited and or incremental improvements in US-Iran relations.

 Finally, with respect to Russia and China, the New Year may mark the beginning of Iran's serious effort to join the Shanghai Cooperation Organization (SCO) primarily for trade and economic purposes. Iran in the post-sanctions era is eligible for induction into SCO, and this requires a thorough scrutiny by Majlis as well. On the whole, a closer government-Majlis relationship can be predicted that serves the country's interests. Similarly, with India, which eyes to expand ties with Iran in the new milieu, Iran's main goal should be to use the barometers of diversification and capacity-building through regional and extra-regional networking. In conclusion, barring unforeseen developments, the New Year ought to be a bumpy year for foreign policy yet with a good economic harvest.