Jahangir Karami

Past, Present and Future of Tehran-Moscow Economic Ties

Date of publication : February 29, 2016 14:35 pm
Past, Present and Future of Tehran-Moscow Economic Ties

The implementation of the Joint Comprehensive Plan of Action (JCPOA) and the removal of financial restrictions are going to give Iran's foreign relations new blood. Among different priorities, economic cooperation is on top of the list of priorities the Tehran's government seeks to expand. The current developments in the Middle East are strongly hinting that Russian Ruble and market matter to Iran. Theoretically speaking, economic relations provide a basis for wider cooperation among different nations. Without them, in case of severity of ties, the bilateral and/or multilateral political, military, cultural relations, to name but a few, would be in peril. Although Iran and Russia has been enjoying an appropriate regional cooperation, their bilateral trade ties had been far below the acceptable level during the past three decades. Tehran expects the removal of sanctions can lead to the expansion of bilateral economic relations and the strength of political, security and military cooperation with Moscow.

In 1989, economic and technical cooperation between Iran and the then Soviet Union began with a ten-billion-dollar contract. Post-Soviet Russia and successive Iranian governments continued the same path more rigorously. The beginning of the new century was a new era for bilateral relations. Official meeting of the head of two countries on the sideline of the U.N. general assembly in 2000 and Khatami visit to Moscow on March 2001 improved bilateral cooperation within a fixed and legal framework. In April 2002, the then Iranian foreign minister Kamal Kharrazi visited Russia for a series of high-level meetings with his counterpart, Minister Igor Ivanov. Talks focused on the implementation of Russian-Iranian accords reached in Moscow in March 2001. Kharrazi and Ivanov exchanged ratification letters on the treaty on principles of relations and cooperation between Iran and Russia that was signed in March 2001. Since then, Iran and Russia have had a fluctuating level of contact. Russian Medvedev's nod to U.N. Security Council resolutions against Iran had reached the bilateral relations to its lowest level for years.

Russian Putin's third presidency in 2012 along with the deterioration of relations between the United States and Russia in the wake of the 2014 Ukraine Crisis creates a unique opportunity for the Iranian ingoing president to cement the economic ties and strengthen the partnership in war-torn Syria. There is much hope the trade exchange between the two countries would exceed the level existed before the sanctions against Iran. Undoubtedly, economic interdependence between Tehran and Moscow underpins political and security relations. Under current circumstances and given economic pressures exerted on Russia by the West following the crisis in Ukraine, Russia's strained relations with Turkey and the necessity of struggling against terrorism and extremism in Syria, expanding economic ties between the two countries would be of great importance to the long-term national interests of both nations.

Jahangir Karami, an associate professor at the University of Tehran, is the senior fellow at The IRAS Institute.
ID: 1112
Author : Jahangir Karami