Trilateral meeting in Tehran

Trilateral meeting in Tehran

Vladimir Putin's visit to Tehran on November 1 was timed to trilateral meeting of the leaders of Russia, Iran and Azerbaijan. Politicians met in such composition for the first time in August of 2016. At that time, this format was recognized as successful, and sides agreed to hold similar meetings on a regular basis. As editor-in-chief of "Iran Today" Nikita Smagin writes in an article "Trilateral meeting in Teheran", despite positive feedback from participants, current negotiations format has a number of natural limitations.

It was created around one specific logistic project - the "North-South" transport corridor. Not surprisingly, this topic was at the center of trilateral negotiations. This time, issues of transport, fight against terrorism, trade and energy, as well as legal status of the Caspian region accompanied logistic issues. When it comes to the issue of legal status of the Caspian region, trilateral format, even under the most positive scenario, can only help partially, since Kazakhstan and Turkmenistan also have claims for Caspian resources. Don't forget that in Russia-Iran-Azerbaijan trio, Baku acts more as an intermediary between Tehran and Moscow in their energy and logistic projects. At the same time, Azerbaijani side is quite happy with this situation at the current stage, since it allows it to obtain additional sources of income as a transit country. Moreover, Azerbaijan's main rival, Armenia, also tries to obtain similar role, although so far Armenia's attempts have pretty much failed. Perhaps the biggest innovation of these trilateral talks is the project of gas corridor from Russia to Iran through the territory of Azerbaijan. It's difficult to call this result a breakthrough, but successful implementation of a new project combined with the launch of the "North-South" corridor can raise the importance of trilateral cooperation.

Response to challenges

Since the beggining the attention of external observers focused on interaction between Iran and Russia at the talks. It was the tenth meeting between Vladimir Putin and Hassan Rouhani. Frequent contacts emphasize the presence of political will to develop relations between countries at the highest level. Negotiations had friendly tone, bilateral cooperation was evaluated positively. At the same time, a number of previous events increased the significance of this meeting.

Vladimir Putin visited Tehran after October 13, when the US announced its new Iran strategy, which again threatens the "nuclear deal" and shows Washington's intention to make Tehran change its policy in the region. At the same time, assessing cooperation between Moscow and Tehran on the nuclear issue and the Syrian settlement, Putin highlighted effectiveness of cooperation between Russia and Iran. In other words, this last meeting can be regarded as Moscow's response to Washington's threats against Iran.

The feeling that Iran and Russia are in the same sanctions boat appeared in 2014 after the accession of Crimea. As US pressure increased, consolidation between the sides only intensified. Statement made by main conservative and most influential person in the Islamic Republic, Ali Khamenei, can be regarded as an attempt to bring collective anti-Americanism to a new level. During a meeting with Vladimir Putin, he suggested to jointly "isolate" the US by switching to national currencies in international operations.

The idea of isolating the US is more like a rhetorical instrument, aimed at the audience in Iran. However, judging by Putin's statements, this initiative corresponds to the interests of two other countries. Last meeting can be regarded as Moscow's response to Washington's threats against Iran.

In addition to countering the US, meeting in Tehran may look like a response to yet another event. On October 30, the Baku-Tbilisi-Kars railway was officially opened. It will become a part of the new "Silk Road" and connect China to Europe. This route wasn't called a direct competitor of the "North-South" transport corridor, but it's still an alternative logistic project, which is implemented without Russia's participation.

Khamenei's signals to Russia

Russia and Iran became inseparable partners in the Syrian war both politically and militarily. This cooperation is accompanied by an unprecedented number of military contacts and information exchanges in modern history. Both sides are sure that joint fight against common threats in Syria should continue. These countries need each other, which is confirmed by statements made in Tehran. However, latest talks also reveal contradictions between Russia and Iran in this direction.

Emerging information, combined with official statements made in Tehran, suggest that today Moscow seeks to reduce military presence in Syria and move on to a political settlement process. At the same time, Ali Khamenei's statement, made during the talks with Vladimir Putin, contains the following message: Iran doesn't believe that the war is at its end. Therefore, it's unlikely that Iran will o support the withdrawal of Russian troops from Syria.

Iran benefits from the defeat of the "Islamic State" (ISIS, Daesh), since Tehran's influence in the region is continuing to grow. The main threat on this path is the position of America and its allies. They won't allow Iran to maintain its current positions. That's why there is a growing excitement about possible negotiations between Russia and Washington on the Syrian settlement.

Khamenei urges Russia to be on guard during talks with the United States. Tehran believes that Donald Trump's foreign policy is directed against Iran, and therefore the US will never allow Iran's influence in the region to grow.

Economic deadlock?

Both sides are sure that cooperation between Russia and Iran should continue. The intensity of Russian-Iranian contacts, as well as many joint projects, confirm that both sides are aware of the need to develop bilateral economic ties. Long-term cooperation between Iran and Russia can't be built solely on common interests in Syria and anti-Americanism. Latest negotiations showed that Moscow and Tehran want to bet on the development of projects in energy sector. In addition to above mentioned gas corridor, there was another major news during the Tehran talks. Rosneft and the National Iranian Oil Company (NIOC) announced that they signed a road map for strategic projects in the field of oil and gas production in Iran. Total investment will amount to up to $30 billion.

However, results of this agreement won't become evident soon. Almost all oil companies of Russia expressed their interest in Iran for several years. Economic conditions of future contracts and their practical implementation remain the key issue. As a result, right now cooperation is limited to signing of non-binding agreements that don't lead to real consequences.

If we assess economic cooperation between the two countries, positive trend that appeared in recent years are obvious. In 2016, trade turnover between Iran and Russia doubled compared to 2015 and reached $2.2 billion. Despite this, current trade volume clearly doesn't match the size of two countries' economies. Moreover, it still didn't reach the level of 2010-2011, when it amounted to $3.6-3.7 billion. Judging by the current dynamics, the situation won't fundamentally change in 2017. The government departments of both countries are trying to work in this direction by creating large-scale projects that help to promote economic cooperation. This trend continued during the talks in Tehran.

Large projects signed with the support of state structures usually require additional financing. Both countries experience a currency deficit. Therefore, only a small number of projects receive government loans.

Long-term cooperation between Iran and Russia can't be based solely on current interests in Syria and anti-Americanism. The biggest difficulty in expanding economic cooperation between Russia and Iran is that countries can't provie enough products that can compete in the world market. In addition, development of economic relations is hindered by problems with bank payments between Russian and Iranian counterparts, inflated transport costs due to lack of modern logistic infrastructure, bureaucratic obstacles and corruption. All these problems can't be solved quickly.

Forecast

- Natural limitations of trilateral Russia-Iran-Azerbaijan negotiation format hinder the process of making breakthrough decisions in the framework of this platform, but they allow us to continue working on the "North-South" project and cooperate in the framework of other initiatives;

- Baku will continue to actively participate in Russia's and Iran's projects as a transit country;

- Russia will support Iran in the framework of the "nuclear deal";

- Statement made by Iran's Supreme Leader Ali Khamenei on "isolation of America" should be viewed as a rhetorical game. At the same time, it's possible that national currencies will play bigger role in cooperation between Iran and Russia;

- Despite contradictions between Russia and Iran in the Syrian settlement, at this stage they see each other as irreplaceable partners and will continue to cooperate;

- Iran will try to convince Russia that the US approach to resolving problems in the Middle East is not constructive and that it's impossible to continue full fledged dialogue with them;

- Russia and Iran won't be able to significantly affect economic basis for cooperation in the short term;

- Major projects with participation of the governments will remain the main basis for development of economic relations between Russia and Iran.

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