Economy

Iran’s Stance on Opening of Transport Links Between Azerbaijan And Armenia

Orkhan Jalilov Analysis 2 July 2021
Iran’s Stance on Opening of Transport Links Between Azerbaijan And Armenia

Iran is trying to intensify its involvement in the geopolitical processes of the South Caucasus following the second Karabakh war. Main powers in the region - Russia and Turkey - gained increased power in the region, while Iran’s leverage in the region declined.

As part of the Moscow-brokered November 2020 ceasefire between Armenia and Azerbaijan, Yerevan is opening up the strategic Zangazur corridor through its territory. The corridor will restore the shortest connection between Azerbaijan’s mainland and its southwestern exclave of Nakhchivan Autonomous Republic, and allow Baku to transport goods directly to its exclave.

These transportation routes could link Russia directly to Turkey and Iran, creating new north-south and east-west connections, which would potentially enhance the presence of Moscow and Ankara in the region and create new links between the Caspian Sea, the Mediterranean, and the Persian Gulf.

In addition, earlier this year Turkey announced a new natural gas pipeline to supply Nakhchivan with energy. Currently, Azerbaijan relies on Iran to provide natural gas to Nakhchivan, but later Iran will be less important for Azerbaijan in terms of transport routes and gas delivery.

Iran now suffers from stagnant economy following severe sanctions imposed by former US President Donald Trump’s administration, and is involved in multiple geopolitical and military ventures in the Middle East. Iran had been enjoying the relative stability of the status quo on its northern borders for 26 years. Iran also considers it important to preserve 42 kilometers of its border with Armenia.

Unclear political situation in Armenia, the lack of a comprehensive peace or stabilization plan in Nagorno-Karabakh, and Iran’s continued geopolitical isolation will complicate this future strategic plan for regional transportation.

Armenia has removed non-tariff barriers and lowered transport costs which have helped a rise in the bilateral trade with Iran. The volume of trade between the two countries reached $136m in the first four month of the year, which shows an increase of 35% as compared to the same period in 2020. According to the statistics published by Armenia, Iran’s export to Armenia increased by 56% in the period reported. Iran provides 8% of Armenia’s imports and ranks next to Russia and China. 

On 10 June, Iran’s ambassador to Yerevan Abbas Badakhshan Zohouri, told Armenia’s acting economics minister, Vahan Kerobyan that Iranian construction companies are very interested in participation in the rehabilitation and reopening of the Sisyan-Kajaran section of the North-South rail corridor in Armenia. 

US-based political analyst, Paul Goble, believes that the reopening of the corridors “gives Iran new leverage in the area, something certain to trouble Russia, Turkey and the West, albeit for different reasons. Russia will be upset that Armenia now has someone else who can provide it with help. Turkey won’t like this end run in an area it considers its own backyard. And the West won’t be happy about Iran playing a larger international role”. 

“Now that Iran has made an offer of a kind – and no details have yet been provided – other countries are going to be challenged to come up with offers of their own, perhaps setting the stage for a bidding war that could simultaneously lead to a reopening of corridors and spark new tensions between newly confident Baku and Yerevan,” the expert added.

After the 44-day war between Azerbaijan and Armenia, Ankara suggested a new format, the “Six-Country Regional Cooperation Platform,” which would bring together Turkey, Russia, Azerbaijan, Iran, Georgia and Armenia.  

Tehran also introduced a similar model “3 + 3”, including the three South Caucasus countries -Azerbaijan, Armenia, Georgia and plus Russia, Turkey and Iran, that could serve as a new post-war regional integration platform. Late January, during his official visit to Moscow, Iranian Foreign Minister Javad Zarif announced that “we are looking to form a six-party cooperation union in the region”.

In a meeting with Azerbaijani President Ilham Aliyev on 25 January, Zarif welcomed the six-party regional cooperation initiative, expressing Iran’s readiness for help and cooperation in any field contributing to regional peace, stability and calm.

Tehran’s 3 + 3 cooperation plan for the South Caucasus can also combine two important trans-continental transportation corridors in the region. The 7,200-kilometer-long freight route International North-South Transport Corridor (INSTC),” which crosses India, Iran, Azerbaijan and Russia, through the uncompleted Rasht–Astara railway line. Another corridor, the “Persian Gulf–Black Sea Transit Corridor” links up Iran, Armenia, Georgia, Bulgaria and Greece.

Referring to the first train jointly operated by the Azerbaijani, Russian, and Iranian railway companies which left Finland for India’s port of Nhava Sheva via the INSTC on 21 June, Iranian Ambassador to Azerbaijan, Seyyed Abbas Mousavi, said the completion of the construction of the Rasht-Astara railway line within the North-South corridor can be kept in the spotlight as one of the main priorities of the new Iranian government.

The construction of the Rasht-Astara railway in northern Iran will be completed in 4 years, and about 80 km of this railway line will be built through a bridge or tunnel, and 80 km – on land.

Reviving the Soviet-era railroads in the South Caucasus can also help the region converge and strengthen peacebuilding efforts between Azerbaijan and Armenia.

Iran is bordering with Azerbaijan and its exclave Nakhchivan region and Armenia, and Tehran has for decades been the only communication route Azerbaijan’s mainland and its southwestern exclave of Nakhchivan, but it is planned that the multi-modal transport route Zangazur corridor will restore the shortest connection between the mainland and exclave. The route will be further extended to the eastern parts of Turkey.

The creation of the Zangazur corridor comes as part of the restoration of transport links in the South Caucasus after last year’s war between Armenia and Azerbaijan. The tripartite ceasefire statement signed by Armenia, Azerbaijan and Russia on 10 November, 2020, calls for restoration of all economic and transport links in the region.

In case of the revival of transport links through the Zangazur corridor, Tehran will be provided with two new rail routes starting from the city of Julfa, in Iran’s northwestern province of East Azerbaijan. The first route will link the Julfa railway to Nakhchivan, and then onward to Yerevan and Tbilisi. The second route will also connect Julfa and Nakhchivan, but then it will cross the southern borders of Armenia and Azerbaijan to Baku, heading to Russia.

On 24 June, asked about Tehran's attitude towards the prospect of the opening of the Zangezur corridor, the Iranian ambassador to Baku said that "we support the operation of any corridors, along any routes, without changing the borders of states. The opening of this corridor is a matter between Azerbaijan and Armenia. A forcible change of borders using military means would disrupt stability in the region, and so far, there are no prospects of this happening”. 

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