The year 1973 was significant for both Iran & Pakistan. For the first time both officially inaugurated the port war. Shah Reza Pahlavi on one side and Zulfikar Ali Bhutto on the other locked horns to promote Chabahar and Gwadar respectively. Both were eying United States to be their partner. This war continues till today but with different sponsors, but the common thread remained just as before: geoeconomics!
Growing insurgency in the Sunni dominated Sistan Baluchistan province prompted the Persian shah to unveil an ambitious Chabahar transit hub along with establishing an American naval base. Trade intended to uplift the living standards of the Baloch who were below the poverty line and safety was the underlying purpose for naval base. Sounded well in theory. But events overtook him when the Oil Crisis predicated the port project. Stripped of the trade angle the Shah persisted with the Pentagon to locate sea & air naval base in Chabahar.
Crossing the lines in the post, Bhutto who became President in 1973, surreptitiously as he wont to conduct business deals, offered Gwadar as naval base to President Richard Nixon, who acquiesced to the suggestion. Bhutto immediately earned the enmity of the Shah on one side, but the most belligerent response came from within USA. Henry Kissinger shot it down with his strategic manoeuvre. This is due to the fact, that when Kissinger broached the subject of US looking for a possible naval base in Pakistan Chairman Mao expressed his misgivings. Henry Kissinger did not wish upsetting the blossoming relation with China.
Both parties quit for the time being as a result, the port war was shelved. Turn of events after the Iranian Revolution of 1979 and consequent sanction regimes imposed on her by USA, Iran was caught in the cleft wood. Persian Gulf was policed by America and Iran’s major port that handled more than 70% of cargo in Bandar Abbas was located within the Persian Gulf and had to navigate Strait of Hormuz. The only escape route is Chabahar which is located in the Oman Sea well beyond the choke point of Hormuz.
Consequently Iran was negotiating with India for joint port development of Chabahar. Initially India was forthcoming in a big way as Chabahar could fit in well in the “International North South Transport Corridor (INSTC)”. There were two pulses: one is Sistan Baluchistan has immense hydrocarbon reserves, most of it still to be tapped. Second and most vital plus in geoeconomics as Chabahar allows India to bypass Pakistan in her trade with Afghanistan. The Bombay-Chabahar Zahedan trajectory was most appealing to Indian designs in carving out a large share of trade between Afghanistan and the rest of the world via Bombay as the loading or unloading point. Chabahar Zahedan Railway link of 628 km was the major conduit to facilitate land based transport. Iran agreed for the construction and operating of the Chabahar port by India.
Progress of the construction of the port project left much to be desired though. After two decades the cargo handling quantum was a meagre 12 million tonnes per diem as against the promised 80 million tonne daily. Never mind this, as there was a sweetener by way of India getting waivers from Trump’s sanctions over oil imports from Iran. However, this sanction waiver window was short lived. Suddenly Trump decreed that no more renewal would be given for waiver to India past May 2, 2019. Read
A string of bad moves in geoeconomics also earned Iranian displeasure for India resulting in Iran cancelling The 628 km railway link from Chabahar port to the city of Zahedan on the Afghan border. More than that Iran also showed her middle finger re developing and operating Farzad - B Gas Field in the Persian Gulf by India. Read
Finally knockout punch was delivered by Pakistan when both China and the latter included Gwadar as part of the China Pakistan Economic Corridor (CPEC). Can Iran rise to her feet, by the count of ten?
Cheers!
Muthu
Ashraff Rajulu
Business Strategist
Mobile: + 94 777 265677
E-mail: cosmicgems@gmail.com
Blog: Business Strategist
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