What is the importance of the Russian investment in completing the international corridor through Iran?

Tehran- After Western sanctions imposed on Iran impeded the completion of the North-South Transport Corridor for more than two decades, the sanctions imposed on Moscow contributed to Russian investments to create the last link of the corridor that aims to connect India and Russia via Iran.

Iranian President Ebrahim Raisi and his Russian counterpart Vladimir Putin witnessed the signing last Wednesday an agreement With an amount of $1.6 billion to finance and construct a 162-kilometer railway between the cities of Rasht and Astara (northwestern Iran), to be part of a transport corridor aimed at linking Russian ports with Iranian ports overlooking the Gulf waters.

While Iran describes the agreement as “an important and strategic step in the field of bilateral cooperation between Tehran and Moscow,” Russia says that this corridor can compete with the Suez Canal as a major route for global trade.

The Iranian president and his Russian counterpart signed an agreement of $1.6 billion to finance and build a railway (Reuters)

Face the penalties

After Russia, Iran and India signed the first document to establish the corridor in 2000, Iranian observers see the Western sanctions imposed on both Tehran and Moscow as a key factor that prompted the Iranian and Russian sides to accelerate the completion of the project in order to circumvent the sanctions.

Meanwhile, Vedant Patel, deputy spokesman for the US State Department, commented – in a press conference last Wednesday – by saying that “any project to avoid sanctions is a matter of concern to us.”

For his part, Farzad Ahmadi, a researcher in political economy, describes the Russian investment in the railway as a “late step,” adding that “better late than never,” adding that the Russian war on Ukraine increased the rift between East and West, which contributed to the acceleration By completing the “North-South” corridor.

Speaking to Al-Jazeera Net, Ahmadi believes that Western sanctions closed the doors of Europe to Russian goods, which urged Moscow to invest in the “north-south” corridor to open new markets in East Asia and compensate for the markets it lost in Western countries.

international challenges

The Iranian researcher attributed the reason for the Russian delay in contributing to the “North-South” corridor project to its loss of the required economic feasibility compared to trade with Western countries, and he expected growing cooperation between his country and Russia in the coming years to confront Western sanctions imposed on the two countries.

Ahmadi pointed out that about 10% of global maritime trade passes through the Suez Canal, which connects the Mediterranean Sea with the Red Sea, describing the Russian talk about the ability of the corridor linking Russia and India via Iran to compete with the Suez Canal as exaggerated and comes to highlight the importance of the new corridor.

The length of the corridor extending from the Russian city of St. Petersburg on the Baltic Sea through the Caspian Sea, Iran, and the Gulf waters to the Indian Ocean is 7,200 km, and reduces the time period by up to 30 days compared to the traditional corridor through the Suez Canal.

Ahmadi concluded that the parties imposing sanctions on both Iran and Russia will work to obstruct the transformation of the new corridor into a major route for global trade, especially in the Gulf waters.

A north-south corridor consists of a network of sea, land and railway lines (Iranian Presidency)
The “North-South” corridor consists of a network of sea, land and railway lines (Iranian Presidency)

regional rivalry

In the context, economic researcher Ghulam Reza Moqaddam reads the project to extend the new railway (northwestern Iran) in the context of regional and international competition, explaining that the new railway will be used in the north-south and west-east corridors that connect Kazakhstan with Turkey and Europe through Iranian territory.

As for Western pressure on Russia, it constitutes an opportunity for the Iranian side to activate the blocked corridors due to the financing deficit, and increase its share of global trade, according to Reza Moqaddam, who explained to Al Jazeera Net that his country was very late in completing the network of corridors, and that it fears at the present time that its geostrategic position will be lost as a result. .

The Iranian researcher pointed out that there are two other corridors whose construction is in full swing, east and west of Iran, explaining that the agreement of Uzbekistan, Pakistan and Afghanistan in 2021 on the 600-kilometer railway project that extends from Mazar-i-Sharif, Kabul and Peshawar will link Europe and Asia after its completion.

He described the Baghdad and Ankara agreement last March to link the Iraqi port of Faw on Gulf waters with Turkish territory as the second corridor that would compete with the “north-south” corridor through Iranian territory, and urged Tehran to complete it before the completion of the two competing corridors east and west of his country.

Reza Moghadam concluded by saying that the capacity of the “North-South” corridor will reach about 30 million tons of goods annually after it is fully operational, which constitutes a strong boost to the Iranian economy, noting that its current capacity does not exceed two million tons.

Although Iran had announced the inauguration of the corridor two years ago and the transfer of a shipment of paper from Finland to India, via trucks from the Iranian port of Astara on the Caspian Sea to the Gulf waters via train and then by sea to India, the project faltered for reasons that have not yet been announced, but observers attribute the reason to Not completing the railway between Rasht and Astara.

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