Iron horses roar on to the Silk Road gets a
Tuesday 14 May 1996
Leaders of states like Iran and Turkey and the new countries of Central Asia flocked to an inaugural ceremony for the newly built 300-km Mashad- Tedzhen connection at Sarakhs, a remote dust-blown outpost on the border between Turkmenistan and Iran.
Sarakhs was once a spot where British players of the old imperial Great Game against Moscow entered or left then-friendly Persian territory. Yesterday's opening is a symbol of the advantage that Iran, now anti-Western, has gained in the new game that pits it not only against Russia but also Turkey, China, other regional states and Western oil and mining multinationals.
The opening will be followed by a gathering today of leaders of the Economic Cooperation Organization, which groups 250 million people in the non-Arab Middle East and Muslim south-west Asia. It is the descendant of the Baghdad Pact and other anti-Soviet alliances of the old "northern tier" but has gone in a different direction than was ever intended by its architects in Washington.
"We don't know quite what to do about the Sarakhs opening," said a US official in Central Asia. "On 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." The US has backed its secular Nato ally, Turkey, against Iran in the region and although Turkish businessmen are becoming ever more successful throughout the region, Ankara has been sidelined by its own weakness and geo-political difficulties in routing oil pipelines through Turkey.
Whether Washington likes it or not, Iran has been doing better in Central Asia and the Caucasus in the past couple of years. It has dropped its emphasis on Islamic fundamentalism to pursue a more traditional Iranian foreign and trade policy which has, for instance, led it to form a closer relationship with Christian Armenia than with Shia Muslim Azerbaijan.
Iran enjoys natural geographical advantages. For those ready to deal with its bureaucracy, it offers a direct route to warm-water ports from Armenia, Azerbaijan, Turkmenistan and Kazakhstan, by road, by a short voyage across the Caspian Sea, or now by rail.
On Saturday President Nursultan Nazarbayev of Kazakhstan signed an agreement with Iran that will allow 40,000 barrels a day of Kazakh oil exports through Iran, by means of "swaps" with Iranian oil in the Gulf for now and in the future by pipeline through Turkmenistan.
Iran also looks likely to take a 10-per-cent stake in an Azeri oil project to develop the Shakh-deniz field.
Western pressure had forced Baku to cancel a stake offered to Iran in the first BP-led consortium that will develop three fields further north.
"The Silk Road railway ... is the bridge for the region and the world and is a clear example of Iran's priority on regional cooperation," the Iranian President, Hojatoleslam Ali Akbar Hashemi Rafsanjani, said at a ceremony in Sarakhs.
Former Soviet states around the Caspian also need to court Iran in their dispute with Russia over whether the Caspian is a lake, whose underground resources must be shared, or a sea, whose oilfields are the property of the state whose shoreline is closest.
Iran has so far backed Russia's attempt to force everyone to share natural resources under the "lake" definition. This would help to re-establish Moscow's hegemony in the area and give it a say in the activities of Western oil companies.
Perhaps partly because Washington has tried so hard to freeze Iran out, Central Asian states have had little room for maneouvre. Russia has reasserted a dominance built on two centuries of tsarist and Soviet rule of the Caucasus and a century in Central Asia. Georgia has given back basing rights to Russian troops and Armenia has signed dozens of joint military agreements. Kazakhstan and Kyrgyzstan this month joined the customs union with Russia and Belarus.
Moscow's blockade of Kazakhstan's oil exports has been resolved by an agreement to build the main Kazakh pipeline through Russia to the Black Sea port of Novorossiysk. Russia has been given a 25-per-cent stake and the Russian LUKoil conglomerate a 12.5-per-cent stake.
Azerbaijan, which is still resisting taking back Russian troops, has also given a stake to LUKoil in its main BP-led consortium and has pledged to export half of its first flows of oil through Russia to the Black Sea.
The other half is to go to the Black Sea through Georgia. But Turkey's new government has withdrawn an offer to finance the pipeline, upset that the consortium had not agreed to its conditions and still hoping a pipeline can be built to the Mediterranean across Turkey. Ankara has also reiterated warnings that it will prevent large amounts of oil from Russia's Black Sea ports using the Bosporus, where tankers pass within metres of parts of Istanbul, with its millions of people. As yet, however, little new oil or gas is being exported from anywhere.
And in the meantime it is often Turkish entrepreneurs who are opening up businesses all over the Caucasus and Central Asia, from bakeries and restaurants to banks, bottling plants, bus and truck-making factories and textile mills.
These are often done with Western partners. In fact, virtually no projects belong exclusively to any one country.
And it is entirely typical that one of the pioneers exporting oil from Central Asia by ship and rail through Iran was actually a Turk.
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