Oh, look who’s back at it again with their “maximum pressure” campaign against Iran! The US just can’t seem to get enough of trying to isolate and weaken the country. But guess what? The rest of the world doesn’t give a damn about their so-called “maximum pressure”. In fact, Eurasian integration, including with Iran, is proceeding despite the US’ futile attempts to interfere.
The recent Riyadh-Tehran detente deal could be a major win for not only the Middle East, but also for larger projects seeking more integration of greater Eurasia. And if the deal is implemented, China’s Belt and Road Initiative could become a key component of the economic futures of both Saudi Arabia and Iran. But of course, the US probably doesn’t want that, since they’re so keen on keeping their influence in the region.
But it’s not just about China. The International North-South Transport Corridor (INSTC) project, which runs from St. Petersburg to Mumbai in India via Azerbaijan (or the Caspian Sea) and Iran and across the Arabian Sea, could also benefit from the rapprochement between Saudi Arabia and Iran. The “sanction-proof” corridor connects the Indian subcontinent with Russia without needing to go through Europe, while simultaneously being 30 percent cheaper and 40 percent shorter than the existing routes.
And it’s not just Russia and China that are interested in investing in Iran. Saudi Arabia’s Finance Minister Mohammed Al-Jadaan said Saudi investments into Iran could happen “very quickly” following the agreement to restore diplomatic ties. Wow, the irony of it all. Any Saudi economic dealing with Iran would undercut US sanctions imposed to pressure Tehran, if not violating them outright.
But wait, it gets better. China’s desire to keep the peace could also bring investments. Oh no, not China! Scott Ritter writes at Energy Intelligence: “With China providing infrastructure-generating investment capital through its Belt and Road Initiative, the new Iran-Saudi détente could evolve into a regional economic relationship that supplants the US-led defense relationships that have defined Middle East politics for decades.” You can almost hear the US government officials panicking at the thought of China making inroads into the region.
But despite all the sanctions and western pressure on countries to isolate Moscow, Russian trade is on the upswing. Iran is eager to cash in on its position between India and Russia, who are rapidly increasing their trade volume. And guess what? Russia has now overtaken China as the biggest investor in Iran. The UAE, Afghanistan, Turkey and China are the next biggest investors. Although China was expected to be the major investor in Iran, Beijing reduced its exposure in 2022, and concentrated more on investing into the Belt and Road Initiative infrastructure such as logistics centers, border facilities etc. that would facilitate its own export capabilities to Iran and the region.
Foreign investment flows to Iran have been decreasing from 2012-13, when the volume stood at US$4.5 billion. The lowest level was recorded in 2015-16 with only US$945 million of FDI inflows. But according to the United Nations Conference on Trade and Development, Iran attracted an estimated US$1.425 billion in Foreign Direct Investment in 2021 to register about a 6% rise compared to US$1.342 billion in 2020. In 2022, however, and despite the sanctions, the total volume of investments attracted to Iran hit US$5.95 billion. Out of this figure Chinese companies invested only about US$185 million.
Additionally, Secretary of the Iranian Supreme National Security Council, Ali Shamkhani, announced on Monday that Tehran concluded an agreement with the United Arab Emirates to facilitate trade movement between the two countries using the Emirati