NOURNEWS - The strategy of the 13th government in expanding relations with neighboring countries has seen significant results, especially in recent months.
Today, when the countries of the region have freed themselves from the Iran phobia strategy of the Western-Zionist axis and have changed their approach towards the development of relations with Iran at the same time with the strategy of the 13th government, this opportunity has been provided for our country to establish trade relations with its close neighbors and by creating a safe and favorable economic environment, Iran will witness positive prospects in the future.
Considering that the strengthening of economic diplomacy can have a very positive function in the development of business relations and roadmaps with neighbors, it is important to examine the strengths and weaknesses of the country's economic diplomacy in improving trade relations.
What you are reading below is the description of a conversation with "Reza Tavakoli", Executive Secretary of the Institute for Economic Diplomacy Studies Imam Sadiq University and an expert of the Economic Diplomacy Think Tank in this regard:
Nournews: In your opinion, what are the main obstacles and challenges in Iran's economic diplomacy and what is the role and position of the government in this process?
Tavakoli: Iran's economic diplomacy has weaknesses in its institutional structure and fragmentation in decision-making and executive management. If we consider Iran's economic and commercial relations with any country, we suffer from this challenge. For example, from the Ministry of Industry, Mine and Trade, Iran Trade Promotion Organization, to the Central Bank and the Export Guarantee Fund, which are active in the transfer of funds, and the Ministry of Foreign Affairs, which is responsible for providing political grounds, to the private sector, which handles trade and investment operations. Does not work in a coordinated manner at the decision-making levels and international economic operations.
Also, there are weaknesses in terms of infrastructure in the country that the drawing of business prospects with countries is not consistent with the existing infrastructure in the country.
Another fundamental challenge is the lack of sufficient knowledge of international markets and the lack of information banks and commercial and financial data that can be analyzed based on up-to-date data and opportunities can be identified and planned and analyzed accordingly. Please note that this confusion in having a grand plan of foreign economic relations has led to the fact that in our country, until a political and security condition is provided with a country, all attention goes towards that country.
If we had a comprehensive plan, today, we should have known about Saudi Arabia and how important cooperation with this country is in the priority hierarchy of the partners of the Islamic Republic of Iran. And which topics are we supposed to communicate with them? But sadly, currently, the vision and recognition and acknowledgement of priorities, fields and methods of economic and commercial cooperation of Iran with other commercial parties for the next ten years are vague and out of mind. But we should be able to recognize based on a national document that, for example, the country of Chile, which has special capacities for the country, despite its geographical distance, is a higher priority for us, or the country of Jordan, which is closer to Iran, but is far from us politically? This year, the Supreme Leader raised the issue of relations with Africa in his New Year's speech, but there is no business plan or business strategy by Iran Trade Promotion Organization in this regard, which unfortunately we do not have in today's world of global trade, these are elementary issues.
Nournews: Can economic diplomacy restore the level of relations between Iran and Saudi Arabia until reaching the commercial capacity of about one billion dollars in 2006, as estimated by economic officials, or even surpass it?
Tavakoli: The one billion dollars is a drawing of the perspective of the commercial relations between the two countries, which, of course, cannot be an accurate perspective considering the changes in the world's conditions. In recent years, the economic diplomacy of Saudi Arabia has been transformed in the direction of achieving the grand strategy known as Vision 2030. Saudi Arabia, a monarchy with a centralized decision-making system, has decided in recent years to become a developmental state, economic development at the center of its grand strategy and the most important tool for legitimizing the political system.
This change of strategy has been manifested in the form of Vision 2030, a very high-flying macro-strategy and economy-oriented, in which Arabia hopes not only to be the most important country.
In the process of development in the Islamic world, it should be transformed into a regional center of trade and investment.
Today, the gross domestic product of Saudi Arabia is almost 2.5 times that of Iran, while in 2009, Iran was at the same level as Saudi Arabia in gross domestic product. Saudi Arabia has not been sanctioned so far and the country's new policies, despite its good relations with China, show that it does not want to rely on the US.
Saudi Arabia's ambitious plan to launch the new city of Neom and the new projects it has showcased before, show its decision not to depend on crude oil export revenues. Currently, this country has high imports. Therefore, the two countries can have opportunities for joint investment in various projects, such as infrastructure development, renewable energy projects, research and development of emerging technologies, tourism, especially in the field of health. Iran also has good export capacities in the fields of petrochemicals, agriculture and pharmaceuticals, knowledge-based products, military equipment, mineral exploration and processing, steel, construction materials, and the export of technical engineering services, which can be the basis for commercial cooperation between the two countries.
Nournews: What is your assessment of the atmosphere governing the commercial and economic relations between Iran and Saudi Arabia?
Tavakoli: Iran's trade and economic relationship with Saudi Arabia is political and security, and the challenge that was created due to various geopolitical conflicts and proxy wars in the region and caused the termination of relations was also a political and security challenge, as a result of the termination of political relations, the amount of exchanges Trade with Saudi Arabia was reduced to zero in 2020. However, with the start of negotiations between the authorities of the Islamic Republic of Iran and Saudi Arabia, the trade between the two countries improved in 2022, and the amount of Iran's exports to this country reached 15 million dollars, which is a significant jump compared to the figures of previous years. In more precise terms, it should be noted that security fields are necessary for political relations and political fields are necessary for economic relations. When the security relations between the two countries are disrupted, the embassies and consulates will be closed in the political environment, and after that, the economic relations will naturally be cut off. At current circumstances, the security and political framework Have been established between Iran and Saudi Arabia, and we will probably see commercial and economic exchanges soon. When Iran and Saudi Arabia engage in economic diplomacy, they can benefit from mutual benefits, and economic diplomacy allows them to use each other's strengths and resources. Of course, this is a round trip, which means that economic diplomacy has the potential to reduce political tensions between the two countries and prevent new security challenges by creating a positive atmosphere for cooperation.
Nournews: How do you evaluate China's strategy in regulating and meditating the relations between Iran and Saudi Arabia? What is the position of economic diplomacy in this strategy?
Tavakoli: The Chinese are highly dependent on energy supply, which is mainly supplied from Russia, Saudi Arabia, and Iran. The tension created in the Persian Gulf endangers the security of energy transmission, which will naturally affect prices. Chinese interests are to control tension in the region and security of energy lines. As the investment in Gwadar port of Pakistan is mainly for energy transmission lines. Now, Iran can invest in oil products with the participation of the Chinese and Saudi Arabia.
Nournews: Diplomacy is one of the strategies to cancel the sanctions, how can the sanctions be made ineffective in this way?
Tavakoli: Regarding sanctions, there are two approaches, one is that the sanctioning party uses sanctions pressure tools to fulfill its demands, in which case political negotiations must be conducted, and as a result, it reached international legal documents that the sanctioning party is required to cancel the imposed sanctions. One of the examples of this approach was the JCPOA document, which, despite its positive capabilities, today has challenges and we see that it may not be able to have a specific executive guarantee, although it is a strong international document that has the signature of 5 world powers and Iran. The other path is the neutralization of sanctions, that is, the path that either makes it impossible for the other party to carry out sanctions or leads him to the conclusion that it is not profitable. That is, in the cost-benefit equation, the sanctioning party should come to the conclusion that the benefits they get from sanctioning are less than when they impose sanctions.
The main strategy in this matter is economic diplomacy. Therefore, with economic diplomacy, we can find diverse and multiple economic links. Either through trade and investment or technology transfer, or through active presence and not being isolated in international economic organizations, we will gain a share of the global economy and be present in the global economic chain in such a way that removing the country from the international stage is a costly matter for the sanctioning party. An example of such neutralizing advantages was in the world energy market, when Japan and India were exempted from importing Iranian oil because they were too dependent. Now look, if our country had a significant amount of foreign investment and if 70 or 80 percent of our foreign trade, both in terms of exports and imports, was not provided with only 5 or 6 countries, the cost of sanctioning Iran would be very high. The current situation means that if 4 countries cut Iran's imports, more than 70% of Iran's imports will be disrupted. For example, China, the UAE, India, and Germany in terms of imports, if they decide to disrupt trade relations with Iran, our trade cycle will easily be destroyed, but the export and import of a large country like China, which is over a thousand billion dollars, is related to a lot of other countries, and in this situation, 50 countries cannot be justified to give up their interests in relation to China.
BY: Mohammad Ghaderi