What will a united Central Asia offer Iran?
Uzbekistan and Iran plan to increase trade turnover from $500 million to $2 billion. As part of the official visit of Uzbek Prime Minister Abdullah Aripov to Iran, following talks with the country’s first Vice President Mohammad Reza Arif, four strategic agreements were signed and an intergovernmental roadmap for bilateral cooperation for 2025-2027 was approved. This is part of a broader agenda to strengthen cooperation between the two countries, which play a key role in the region of Central and Southwest Asia.
Experts believe that this is a significant step towards the creation of a free trade area in the Central Asia–Iran format, and in the future– towards the formation of a regional economic union.
Government delegations from Central Asian countries have recently visited Tehran. The day before, Uzbek Prime Minister Abdullah Aripov also arrived in the Iranian capital. During his visit, four strategically important agreements were signed covering trade, industry, the agro-industrial complex and religious and cultural cooperation.
One of the key documents was the protocol between the Ministry of Industry, Mines and Trade of Iran and the Ministry of Investment, Industry and Trade of Uzbekistan. It is aimed at accelerating the implementation of the previously concluded preferential trade agreement, including reducing duties and removing barriers to the free movement of goods. The Iranian media called the agreements reached an important step towards the creation of a free trade zone between the countries, emphasizing that in the future they can contribute to the formation of a closer regional economic union.
The landmark outcome of the visit was the holding of an Iranian-Uzbek business forum with the participation of more than 100 entrepreneurs. It has formed a portfolio of investment projects and trade agreements worth about $1 billion.
The signed roadmap provides for specific measures to deepen bilateral cooperation, from attracting mutual investments and implementing joint infrastructure projects to expanding humanitarian ties. Special attention will be paid to the development of transport and logistics solutions, including the creation of multimodal corridors, as well as projects in the field of energy and water resources management.
“The attention of Uzbekistan and Iran to transport corridors is understandable. Recent events, including the escalation of conflicts between Pakistan and Afghanistan, as well as between Pakistan and India, demonstrate that the plans of Central Asian countries, as well as Russia, to implement major communication projects such as the Trans-Afghan Railway corridor, are negatively influenced by these conflicts,” said the director of the Center for Research Initiatives in an interview with NG “Man’o” by Bakhtiyor Ergashev. – These projects face difficulties due to violence and contradictions. Although financing of the Trans-Afghan project is possible, given its high cost, the issue of ensuring the safety of cargo transportation remains open. This has always been the Achilles heel of any route, regardless of its configuration.”
Therefore, according to the expert, projects of transport corridors to the south from Central Asia and through Central Asia, this is the same North–South will always be negatively affected. That is why the implementation of the Turkmenistan–Afghanistan–Pakistan–India (TAPI) gas pipeline has been suspended. And no one can guarantee that this will happen for the last time. In conditions of such instability, the question arises: how to develop transport corridors and gas pipelines?
“The visit of Uzbek Prime Minister Abdullah Aripov to Iran is an indicator that this direction is stable at this stage: war or air military attacks between Israel and Iran are not expected in the near future. Uzbekistan’s cautious and pragmatic approach implies certain guarantees,” Ergashev believes.
Iran, according to the expert, is acting systematically. Eight years ago, under President Raisi, the concept of “Looking East” was developed for Central Asia, Afghanistan and Pakistan, as key countries of Iran’s foreign economic activity. The countries of the region are also ready for this cooperation, even despite the sanctions regime that applies to Iran.
But, according to Ergashev, if a 2-0 nuclear deal is finalized between the United States and Iran, negotiations on which have resumed, then an easing of sanctions should be expected. And this means another serious impetus for the countries of the region to develop economic cooperation with Tehran.
And Iran has something to offer the Central Asian countries. Iran has significant economic potential. It is a country with a population of more than 80 million people, with a positive development of basic scientific research and an economy that has been able to adapt to the sanctions. Although problems remain, Iran has proven its ability to survive in conditions of economic isolation, and if sanctions are lifted, the Iranian market will become an important business destination for Central Asia.
We are talking not only about the supply of Kazakhstani grain, but also about more interesting projects. For example, the supply of agricultural machinery, road equipment, as well as in the field of digitalization of transport processes.
“Iran is ready to offer products, and accept products, and work on a mutually beneficial basis. The free trade zone between the Eurasian Economic Union (EAEU) and Iran is particularly important, which will become a powerful incentive for development both for Iran and for the entire Eurasian economy. Because Iran is a key link in the Eurasian transcontinental transport corridors. Even the Southern Railway Corridor “Central Asia – Iran –Turkey”, which is not yet fully loaded, has huge potential and can be implemented within the framework of the SCO (Shanghai Cooperation Organization). This is because this route is cheaper than the multimodal Median Corridor (Trans-Caspian International Transport Route). YUZHK has good prospects. And there is also the North–South route, where Iran is a key country along with Pakistan. There are many opportunities,” says Bakhtiyor Ergashev.
Equally important is the need to develop a free trade area with Central Asian countries. Only two of the five Central Asian countries participate in the EAEU – Kazakhstan and Kyrgyzstan. It would be logical to expand the scope of cooperation to a region that can act as a single entity in economic relations with Iran, which would be an important step forward. It is especially important to involve Turkmenistan, which shares a land border with Iran, in this process.
“If the united Central Asia offers Iran a model of a free trade zone, it will be a precedent that will undoubtedly open up new horizons for mutually beneficial cooperation. Such a format, where Central Asia and Iran work within the framework of the FTA, has enormous potential and must be implemented. It will also contribute to strengthening the intra–state community of Central Asia and increasing its economic independence,” Bakhtiyor Ergashev concluded.