Land Participation: Russia and Iran discuss steps to build the Resht-Astara Road
Russia and Iran agreed on further steps in the implementation of the project for the construction of the Resht-Astara railroad section. On December 23, a Russian government delegation headed by Deputy Prime Ministers Alexei Overchuk and Vitaly Savelyev visited Tehran. The parties, in particular, agreed that the republic will present a schedule for the purchase of land in this section of the territory. The road is being built as part of the North-South international transportation corridor: Moscow and Tehran attach high importance to its development. On the visit of the Russian delegation to Iran and economic cooperation between the two countries under sanctions - in the material of "Izvestia".
The visit of the Russian delegation to Iran
Russia continues to strengthen political and economic relations with Iran. On December 23, a delegation headed by Deputy Prime Ministers Alexei Overchuk and Vitaly Savelyev arrived in Tehran. The group included Transport Minister Roman Starovoit, as well as the head of Russian Railways Oleg Belozerov. The guests held meetings with Iranian President Masoud Pezeshkian, First Vice President Mohammad Reza Aref, and Minister of Roads and Urban Development Farzaneh Sadegh. The main topics were economic development and transportation ties.
It is worth noting that Russia and Iran are successfully establishing mutually beneficial cooperation amid unprecedented sanctions imposed by the West. During a walk along the streets of the capital, a tourist who comes here will not immediately realize that the Islamic Republic has actually been under restriction for more than 40 years. There are a lot of foreign cars around, shops are full of various goods, and communication shops even sell American iPhones. However, not everyone can afford Western imports.
- You can freely buy iPhones and everything else in Iran. However, it is very expensive," a local resident told Izvestia.
Western restrictions - especially in the area of international finance - are pushing Moscow and Tehran to find alternatives for making mutual payments. Thus, in November it became known that the Russian Mir system was connected to Iran's Shetab. The first stage of integration will allow holders of these cards to use them in ATMs of Russian organizations. It is expected that soon it will be possible to pay with Mir in the Islamic Republic.
However, the process of interfacing the two payment systems has not yet been completed and one of the problems preventing this is the difficulty of converting Iranian currency. By the way, there are three independent systems for determining the rial exchange rate in the country - market, official for local banks and for transfers abroad. The situation is also complicated by the confusion with rials and fogs.
- When a foreigner comes to buy goods, Iranians quote prices in fogs. And the currency is called rial. One removes two zeros, the other removes three (formally, 1 fog is equal to 10 rials. - Ed.). Iranians understand each other, but foreigners do not. At the same time, there is no such currency as fog. It's just that it has become so commonplace that everyone calls prices in fog," a resident of Tehran told Izvestia.
However, the new authorities apparently want to try to streamline and simplify the financial system. The other day, the country's President Masoud Pezeshkian submitted to parliament a draft law on the official transition to the fog, which will replace the rapidly depreciating rial - inflation in the country is about 30%. An integral part of the monetary reform should be the denomination of the national currency in the ratio of 10,000:1. It is noteworthy that the draft law was approved by the government back in 2019, when Hassan Rouhani was president of the country.
Development of trade and economic relations between Russia and Iran
The key topic of the intergovernmental talks was the implementation of the North-South International Transport Corridor (ITC). At a meeting with Russian Deputy Prime Minister Vitaly Savelyev, Masoud Pezeshkian said that one of the priorities of the Iranian government remains the construction of the 162-kilometer Resht-Astara railroad section. Russia and Iran signed an agreement on its joint laying in May 2023. This route will connect the land sections of the North-South ITC and increase the economic efficiency of the trans-Caspian route.
Moscow provides Tehran with an interstate loan of €1.3 billion for the project, while the total cost of construction is estimated at €1.6 billion. Vitaly Savelyev said that the negotiations were "quite complicated". According to him, the meeting with the Minister of Roads and Urban Development lasted two hours.
- We have now made strategic decisions, and we very much hope that in the near future we will start moving towards their realization," he said. - We have talked through four points now. I would not like to name them now. Both sides have agreed on their implementation. Including the Iranian side has committed itself to providing a timetable for land redemption. This was the most sensitive issue for us in our negotiations.
According to the Transport Strategy of the Russian Federation until 2030, as well as the Strategy for the Development of Railway Transport of the Russian Federation until 2030, the North-South ITC is one of the most important elements of Russia's foreign trade strategy.
- Moscow and Tehran attach high importance to the development of the North-South transport corridor. First of all, the developed logistics within the framework of the corridor will allow reducing the time and cost of cargo transportation, as well as creating alternative routes for the movement of goods. Besides, joint participation in the project raises the international prestige of Russia and Iran, emphasizing their resistance to the sanctions pressure of Western countries," Leonid Tsukanov, an orientalist, told Izvestia. - Finally, this is an opportunity to attract additional investments in the development of certain points along the ITC route - for example, the Iranian port of Chabahar, through which the export of goods delivered along the corridor is carried out.
In addition, Russia is extremely interested in the entry into force as soon as possible of the agreement on a free trade zone (FTA) between Iran and the EAEU. It has been approved in the republic's parliament, but still has to be approved by the Constitutional Guardian Council. Moscow expects the document to enter into force no later than the first half of next year. By the way, trade between Russia and Iran has grown by 14.7% over the past nine months and reached $3.3 billion.
- Iran is our important partner. It is a large country, a large economy, 85 million people. And, of course, rapprochement with the EAEU here will play a positive role for the development of both the union's market and the Iranian market," Russian Deputy Prime Minister Alexei Overchuk said.
He added that a meeting of the Supreme Eurasian Economic Council is scheduled for this week, where the issue of Iran joining the EAEU as an observer is on the agenda.
- Russian-Iranian trade relations have a great potential for development, which is not limited to the framework of the FTA, - said Leonid Tsukanov. - The parties are consistently increasing the volume of trade turnover, working on expanding relations in the format of public-private partnership, improving logistics. After Iran's integration into BRICS and strengthening ties with it within the EAEU, there are additional opportunities to launch joint trade and economic projects, develop infrastructure and logistics plans. In the context of increased sanctions pressure, the parties can not only expand but also improve the quality of trade relations in all spheres, including the advanced technology sector.
In addition, Russia and Iran intend to sign a comprehensive strategic partnership agreement in January. It is possible that President Massoud Pezeshkian will come to Moscow for this purpose. The conclusion of this agreement was planned back in October at the BRICS summit in Kazan, but the parties decided that for such an important event it was necessary to organize a separate summit.
Tense situation in the Middle East
Apart from the fact that Russia and Iran are developing trade and economic cooperation, political interaction, including in the Middle East, is not the least important part of their relations. The war between Israel and Hamas and Hezbollah remains an important factor of instability in the region. This year Iran and Israel exchanged missile strikes for the first time, which was an unprecedented case in relations between the two states. In addition, Moscow and Tehran have recently faced a new regional challenge following the change of power in Syria with the departure of Bashar al-Assad.
- The Russian visit to Iran took place under tense conditions. Tehran wants guarantees of closer relations with Moscow. "Especially in the next stage, in which Iran is moving away from military methods and towards diplomacy in solving problems," Iranian international relations specialist Hadi Issa Daloul told Izvestia.
According to him, the republic expects more support from Russia in regional affairs. At the same time, Moscow considers Tehran its strategic partner.
