Senator Mushahid Hussain, Dr Izadi and Dr Liangxiang
Distinguished Participants,
Ladies and Gentlemen,
I am pleased to welcome you to today’s webinar. In this virtual conference room, I can recognize some familiar names among the participants. I am sure we are also reaching out to new IPI friends as well. A warm welcome to you all!
We are all gathered today to deliberate on a very important development taking place in the region, I mean the progress towards the formalization of a comprehensive and economic and security partnership between Iran and China. The development will have important implications for the region and beyond. Therefore, besides learning more about it from our Iranian and Chinese friends and certainly Senator Mushahid’s insightful talk, one of the objectives of today’s discussion is to see how Pakistan can benefit from it.
Pakistan’s relation with China are deep and enduring. They are time tested. Meanwhile, ties with Iran, though longstanding based on some very strong historical, cultural, linguistic, religious and civilizational linkages, have been greatly influenced by regional and global geo-political environment. This may explain why despite various instances of cooperation, the two countries failed to forge ahead in a big including the failure to increase bilateral trade, open banking channels, start ferry service between the two countries and undertake energy projects.
I had always said that strategic convergence and trust was needed to take Pak-Iran relations forward. I believe that the opportunity is arriving thanks to China, which has heavily invested in Pakistan’s development in the shape of China-Pakistan Economic Corridor – a key component of Beijing’s Belt and Road Initiative.
The foundation for the impending new phase in Iran-China strategic cooperation was laid during President Xi’s visit to Tehran in January 2016, soon after the signing of JCPOA, more commonly known as Iran nuclear deal. During the past four years lot of work has gone into shaping this cooperation, which envisages China investing billions of dollars in Iran over the next 25 years and Tehran providing heavily discounted oil to Beijing.
This cooperation between Tehran and Beijing, which is yet to be approved by Iran’s parliament and has to undergo other formalities, presents a win win situation for both sets of national interests.
Iran has been hit hard by the US sanctions, and Chinese investments could help it lessen the impact of Washington’s “maximum pressure” campaign. Meanwhile China needs uninterrupted supply of cheaper energy for its sustained strong economic growth. China may through this investment especially in ports development gain strategic advantage.
Skepticism has been expressed by some about the materialization of this deal, which is being described as “ambitious” in the presence of US sanctions because of potential implications for Chinese financial institutions. Similarly, some Middle Eastern countries have been warily watching the development. These concerns are per se more due to regional politics than any solid basis. China already has strategic cooperation agreements with a number of Arab countries and has always maintained a balanced approach in its external relations. It would, therefore, not do anything that could undermine its Arab ties.
Nevertheless, it is certain that the deal, when formalized, could potentially alter the regional landscape in which there would be opportunities for all stakeholders in the neighbourhood – though extra-regional actors may lose space to act here.
The big question is about Pakistan taking advantage of this. We can do so by completing the long pending Iran-Pakistan gas pipeline project, developing rail and road links with the neighbourhood and expanding trade. But we need to be mindful of the reaction from US, if we connect with this upcoming development. Resisting US pressure may be difficult, but certainly not new for Pakistan, which has already endured lot of pressure over CPEC.
In parallel with the growing Iran-China partnership, Islamabad needs to closely follow India’s departure from projects in Iran. India has lost the railways project and may be on the way to losing the gas field development project as well. It is a welcome opportunity for Pakistan as it removes one irritant in Iran-Pakistan ties. We need to fully exploit that opportunity as well.
I believe that by participating in this webinar, we are in the right place and at the right time. Together let us accelerate the exchange of ideas. I am confident that from today’s discussion you will learn more about the expected development and find newer ideas about how Pakistan can benefit from it.
Thank You.
