While the media attention has almost exclusively been focussed on Donald Trump roaming through Asia, things also keep moving in other parts of the world. As has widely been reported recently, Vladimir Putin went to see the Iranian leadership in Tehran, meeting with president Hassan Rouhani and the supreme leader Ali Khamenei. Less known is the fact that the Azeri president, Ilham Aliyev, joined them.
It is natural that countries that have had US sanctions imposed on them, such as Russia and Iran, feel in inclined to meet up, compare notes and potentially look to get closer to each other. But observers shouldn’t be naive. These leaders don’t hold a summit to merely demonstrate to the world that they protest America’s behaviour. There is obviously much more to it than the eye can see.
Let’s not forget, Russia holds the largest amount of natural gas reserves in the world. Iran holds the second largest gas reserves. Together the two account for approx. 50% of total world reserves. By aligning and collaborating they could significantly influence the hydrocarbon market. Ali Khamenei has been quoted as saying that trade of such resources should from here on be transacted in national currencies as opposed to the US dollar.
Despite the US sanctions and the uncertainty of the nuclear deal Iran cannot wait to be re-integrated into the world economy. Putin may well turn out to be the vicarious agent in this process. For one, last week’s declaration from Tehran formulates the intent to develop a massive transport infrastructure project mainly linking Russia and Iran but including 10 other countries in the immediate proximity.
And Azerbaijan is the obvious connecting route, controlling the area between the Black and Caspian Seas. Reportedly, the project is also meant to connect by rail and sea route both Indian Ocean and the Persian Gulf with the Caspian Sea. In the end, the infrastructure network is to connect the wider region from Turkey into the Middle East and the extended Eurasian plate. So, this is bigger than sipping tea with the Ayatollah. It’s all part of a grand plan.
Secondly, a key aspect here would be an official rapprochement between the Eurasian Economic Union and Iran. A free trade agreement has already been negotiated and is expected to be signed by the end of the year. For Washington, such development may not be in the eye of the beholder, but with powerful allies such as Moscow and the support of Beijing it will be difficult to wind back the global economic interest in Iran.
In all this, Azerbaijan will be playing a central role. As the professor friend, who is an expert on the region, has been observing, Azerbaijan has been struggling with its banking crisis and an ailing economy. But he is confident they will get over this. Baku, as he describes a city looking like Bangkok in 1997, with partially finished buildings and empty towers everywhere, is a hotbed of investment opportunities for those who know what they are doing.
If more of these cross-border initiatives come to life and Putin realises his dream of a Eurasian plate widely united by economic interests, Baku could become one of the most important junctures of the 21st century. While America keeps meddling in the geopolitics of retaining its influence in the Middle East and containing China, it appears the rest of the world is busy moving on and continuing to build a future economic era throughout Eurasia.
Think about this notion of countries united by economic interests again. It has long begun with China’s east-west economic imperialism, pivoting South East Asia, Belt and Road and all. And it is now being perfected by Russia’s north-south alignments, reaching from Saint Petersburg all the way to India. One wonders what role America can play in this, and how they will be able to exert influence going forward.
Trump may be sightseeing in Beijing, but real deals are being done elsewhere.
