Alwaght- After President Sayyed Ibrahim Raeisi who looks boosting relation with East as a priority took office in Iran, senior official from many countries have visited the Islamic Republic to expand relations with Tehran. The latest is Turkmenistan President Serdar Berdimuhamedow who headed a high-ranking political and business delegation to Tehran. On Monday, he talked to senior Iranian officials and discussed boosting ties and removing the obstacles to trade. President Raeisi called bolstering ties with Caspian Sea states a "priority" to his government's foreign policy, adding that bilateral ties between Tehran and Ashgabat would contribute to upgrading the regional and international cooperation. They set to form a joint committee to follow up on the decisions of this trip and to report the results of its work on a regular basis. Berdimuhamedow described the energy and transportation sectors as the most important and strategic sectors of the two countries' relations, and said that they would try to use the capacity of these sectors effectively to expand interactions.
After Berdimuhamedow's meeting with Raeisi, several cooperation documents were signed between various ministers. Trade, transit, science, culture MoUs were signed between Iran's Northern Khorasan and Golestan and Turkmenistan's border provinces. Agreements on investment and gas swap were also reached by the two sides. Afghanistan was another common issue for discussion for the two neighbors. With Iran and Turkmenistan sharing borders with Afghanistan, spread of insecurity to them can leave irreparable consequences for the two. This motivates efforts by Tehran and Ashgabat to push forward peace in Afghanistan.
Economy, key part of bilateral ties
The visit of the Turkmenistan leader to Iran can be examined from a set of angles in the current conditions. Since economic relations play a leading role in today's world, economy is a top case in the two countries' relations and the MoUs reached bear witness to this reality. Sharing borders, with increase of their business ties they can meet part of each other's needs. The goods of the two countries are complementary, so by increasing trade exchanges, due to the close distance, they can save money on exports and imports.
Although the business ties between the two countries have been at a lowest level in recent years, under President Raeisi's administration, efforts have been made to upgrade the trade relations. Driven by this aim, the trade has increased since last year. In the not-so-distant past, their trade volume touched $6 billion a year, but for some reasons, these relations plummeted to $200 million annually last year, with officials of both sides expressing unhappiness with this low volume.
According to the Iranian customs spokesman, since the beginning of the President Raeisi's government, 1,014,474 tons of goods worth $299.7 million was the trade volume of the two countries, growing 22 percent in weight and 79 percent in value compared to the year before. Iran's share of this non-oil trade was 987,755 tons for $276.6 million, growing 16 percent in weight and 89 percent in value. Turkmenistan's share was 35,719 tons for $23.92 million. Despite 38 percent fall in weight, they increased 14 percent in value. Their trade continues to grow and would substantially increase with new agreements inked.
According to statistics provided by Turkmenistan customs, in the first five months of 2022, Iran was among the top 10 trade partners of Turkmenistan, a sign the country's officials considerably care about boost of economic interactions with Iran. The report further suggests that non-oil trade over the first five months of this year was $150 million, showing a growth of 83 percent.
Iran's border provinces with Turkmenistan, including North Khorasan, Khorasan Razavi, and Golestan, which share culture and civilization with it, can play a role in facilitating the trade. Meetings of the local authorities of the two sides is important in activating their trade exchanges. If border markets are established between the two countries, they can facilitate the exchange of goods and also increase the trade volume between the two sides and provide job opportunities. With the officials of the two countries showing seriousness to boost trade, border provinces are expected to see economic boom in the coming years. To this end, the secretariat of the Iranian Council for State and Private Sector Dialogue of Khorasan Razavi province said that it suggested constant trade data sharing, holding two meetings annually for exchange boost, addressing visa and movement problems for the businesspeople, and establishing joint commerce chambers in various provinces.
Turkmenistan setting eyes on North-South Corridor
Turkmenistan president's visit to Iran came in the middle of Ukraine war's negative impacts on economy and politics in Central Asia. Given that Turkmenistan, like other countries in the region, is unable to trade with the Europeans through Russia due to Western sanctions against Moscow, finding alternative routes for the transfer of goods to other regions has been a priority in its foreign policy recently. Due to its good geopolitical position and access to land and sea routes, as well as some transit infrastructure for the transportation of goods, Iran is one of the most economical and safest ways for Turkmenistan to export energy and non-oil goods. Due to its proximity to the Persian Gulf and the Sea of Oman, Iran is the best and shortest possible route for transporting Central Asian goods abroad. So, Turkmen government is also trying to use Iran's transit routes in the current situation. The issue gains more traction with launch of North-South Corridor. Turkmens can send their goods to high seas via Iran's southern waters, with a cheaper costs. The country is landlocked and connecting itself to Iran via railways would allow it to access the Persian Gulf and Indian Ocean. Connecting Turkmenistan railway to Iran's Sarakhs and from there to Port of Bandarabas in southern Iran and cooperation to expand the North-South Corridor are the most important activities the two sides can do in transit sector.
Gas swap, among important plans
During Berdimuhamedow's visit, gas swap was discussed with the Iranian officials. Iranian sources held that the gas swap pact was signed by the two sides and Turkmenistan is set to transfer 5-6 million cubic meters of gas daily to Azerbaijan via Iran. The main swap deal was reached by Iran's President Raeisi's and his Azerbaijani and Turkmenistani counterparts along with oil ministers of the three countries last year on the sidelines of ECO summit. According to the deal, Iran agreed to pass 2 billion cubic meters of Turkmenistan gas to Azerbaijan annually. Additionally, it would provide gas to 5 of its border provinces from the expected pipeline. In addition to ending gas shortage in some of its border provinces, Iran can also earn from the gas transit. After Russia, Iran and Qatar, Turkmenistan is the fourth largest gas reserves holder and can supply gas to the northern and eastern provinces of Iran.
Purchasing power to meet daily needs
Power is another area where Iran and Turkmenistan can strengthen their partnership. Iran has been buying electricity from Turkmenistan for many years to meet its needs, and according to the Iranian electricity industry, about 140 megawatts, which is used for consumption in the northern and eastern provinces, is bought from Turkmenistan. Iran has been facing power shortages in recent years and Turkmenistan can meet its needs as it has a massive power production capability. According to the head of Iran's Power Generation and Distribution Company, the second grid of Turkmenistan power to Iran was recently launched, saving 1 million liters of fuel to Iran daily and decreasing electricity consumption in the winter. Turkmenistan ministry of energy announced in a report that it intends to increase its electricity production to 35.5 billion kilowatt hours by 2030, which means a good opportunity for Iran to buy electricity to meet domestic needs and earn from its transit. Iran can pass Turkmenistan electricity to Iraq, Afghanistan, Turkey, Azerbaijan, and Armenia.
Turkmenistan is the largest Central Asian trade partner to Iran and is Iran's gate to Central Asia. The more trade ties with Turkmenistan grow, the more trade ties with the regional states grow. Driven by its look to the neighbors for stronger relations, President Raeisi's administration would do its best to shore up ties with Ashgabat.
