The New Silk Route

IT was the biggest gathering of foreign dignitaries in Iran since the proclamation of the Islamic Republic in 1979. Senior officials from at least 40 countries, including 11 heads of state, gathered in the dusty town of Sarakhs, on the Iran-Turkmenistan border, on May 12.

The occasion: the inauguration of a 300-km railway line linking Iran with Turkmenistan. Aptly described as the 'New Silk Route', this railway line links the markets of the Central Asian republics with Iran and Turkey and through these countries with other parts of Asia and Europe. More importantly, it gives them easier access to Bandar Abbas, Iran's port on the Indian Ocean.

The new railway link starts from Mashad, Iran's second largest city, and moves through the rough landscape of northeastern Khorasan province to the border town of Sarakhs. There it links with the rail network of Turkmenistan, which in turn is linked with almost all other former Soviet republics and with China via Kazakhstan. Iran already has rail links with Turkey and Azerbaijan and the latter is connected with Moscow, though the Armenia-Azerbaijan conflict has effectively stalled traffic on that route. Apart from cutting transportation costs by at least 30 per cent, it will cut the time needed to transport goods—mostly oil—between the Central Asian and West Asian nations by at least a week. It also gives the Europeans faster access to the thriving Central Asian markets as well as the ports in the Gulf via Turkey and Iran.

 Built totally by Iranian experts at an estimated cost of $1 billion, the project took over a decade to complete. For now, it is expected to carry over 2 million tonnes of goods, mostly oil, and 500,000 passengers annually, but this is expected to rise to 1 million passengers and 10 million tonnes of goods within a decade. The Iranian ambassador to India, Ali Reaza Sheikh Attar, asserts that India too stands to gain from the new rail link.

The Central Asian nations, he says, have always been a traditional market for Indian goods. A major part of Indian exports to the former Soviet Union was consumed by these nations, and the new rail link will give India easier access to those markets via the port of Bandar Abbas. Earlier, India—as well as other South-east Asian, African and European nations—had to ship its goods all the way to the ports in the Black Sea or the Baltics, from where they were distributed to the Central Asian region by road and rail. After the disintegration of the Soviet Union, this route became almost inaccessible due to the new geo-political problems posed by the breakaway republics.

The Sarakhs link also gives some of the landlocked Central Asian countries, Russia and the Baltic states access to a warm water port in the Gulf, says Attar, enabling them to cut export costs.

Iran itself plans to step up its own exports to the Central Asian region while opening its markets to them. It has also entered into a swap agreement with Kazakhstan that will allow the latter to export 40,000 barrels of oil a day by just sending it to the Iranian border. Iran, in turn, will despatch a similar amount of oil from its refineries near the Persian Gulf to Bandar Abbas, from where it will be picked up for transport to the buyer.

In the jockeying for space in Central Asia, the rail route gives Iran a sudden advantage over Russia, Turkey, China, other regional states and Western countries and their companies. Attar agrees. Commercial gains are only part of the benefit Iran expects from the new rail link, he says. The link will give Teheran a firmer political foothold in the region. "Security is the most important aspect," he says. "You know how vulnerable and problematic this area is. Security is not an individual issue. We need mutual cooperation."

Shaking off the communist regime for new systems has caused immense cultural, economic and political upheaval in the area, and for things to settle down quickly, the main prerequisite is security and stability, he says. This requires comprehensive cooperation among the states, and Iran is more than willing to act as a catalyst. Also, by forging close ties with these nations and helping them develop both economically and politically, Iran hopes to avoid problems like the one it faced with Afghanistan from where millions of refugees streamed into Iran. Even now, more than two million continue to live there.

Iran's assertive role in the region has obviously upset its arch enemy, the US, which resents Teheran's growing influence in the region. "We don't quite know what to do about the Sarakhs opening," an American official in Central Asia was quoted as saying. "On the one hand, it is helping trade and stability in the new states. On the other, it is opening the way for Iran. I expect we'll be standing on the sidelines wagging our finger, but without much spirit."