Iran’s Long-term Secretive Economic and Military Accord with China and Russia
Iran’s Long-term Secretive Economic and Military
Accord with China and Russia
Brigadier (Retd.) Dr. Ahsanur Rahman Khan
(Courtesy: OILPRICE.com report dated 6 July 2020)
‘Haze of Secrecy’
It is certainly a very important news. However, somehow it is still mostly shrouded in the haze of secrecy – being merely hinted by certain media outlets. There is some news that it is also being debated in Iran’s parliament; yet its details are not yet published by media.
However, that haze of secrecy has been pierced by Simon Watkins. He is a former senior FX (foreign exchange) trader and salesman, financial journalist, best-selling author, and author of five books on finance, oil, and financial markets trading. He has published fair amount of details of this Accord, which he has managed to find out through a reliable but unnamed source. He has published those details in his article titled “China Inks Military Deal With Iran Under Secretive 25-Year Plan”, published by OILPRICE.com dated 6 July 2020 (https://oilprice.com/Energy/Energy -Geneal/China-links-military-deal-With-Iran-Under-Secretive-25-year-Plan.htm).
Extract of Significant Details of the Accord
Simon Watkins’ article is quite lengthy; but is very informative and appears to be a note-worthy piece of very important information. Extract of significant details of that Accord are given in succeeding paragraphs.
“Last August, Iran’s Foreign Minister, Mohammad Zarif, paid a visit to his China counterpart, Wang Li, to present a roadmap on a comprehensive 25-year China-Iran strategic partnership that built upon a previous agreement signed in 2016. Many of the key specifics of the updated agreement were not released to the public at the time but were uncovered by OilPrice.com at the time. Last week, at a meeting in Gilan province, former Iran President Mahmoud Ahmadinejad alluded to some of the secret parts of this deal in public for the first time,———”.
“According to the same senior sources closely connected to Iran’s Petroleum Ministry who originally outlined the secret element of the 25-year deal, not only is the secret element of that deal going ahead but China has also added in a new military element, with enormous global security implications”.
“One of the secret elements of the deal signed last year is that China will invest US $280 billion in developing Iran’s oil, gas, and petrochemicals sectors.—–. There will be another US $120 billion of investment, —– for upgrading Iran’s transport and manufacturing infrastructure, and again subject to increase in each subsequent period should both parties agree. In exchange for this, to begin with, Chinese companies will be given the first option to bid on any new – or stalled or uncompleted – oil, gas, and petrochemicals projects in Iran”.
“China will also be able to buy any and all oil, gas, and petchems products at a minimum guaranteed discount ——-.”
Report also mentioned that China will be granted the right to delay payment for up to two years and, significantly, it will be able to pay in soft currencies that it has accrued from doing business in Africa and the Former Soviet Union states; Iran can convert that soft currency to hard currency from its friendly Western banks, albeit possibly at lower exchange rate. (Currencies having stable exchange rate over a longer period like US dollar, British pound sterling, euro and Japanese yen are called hard currencies, while currencies whose exchange rate fluctuates from time to time are called soft currencies.)
“Another key part of the secret element to the 25-year deal is that China will be integrally involved in the build-out of Iran’s core infrastructure, which will be in absolute alignment with China’s key geopolitical multi-generational project, ‘One Belt, One Road’ (OBOR)”.
“To begin with, China intends to utilise the currently cheap labour available in Iran to build factories that will be financed, designed, and overseen by big Chinese manufacturing companies with identical specifications and operations to those in China. The final manufactured products will then be able to access Western markets through new transport links, also planned, financed, and managed by China”.
“In this vein, around the same time as the draft new 25-year deal was presented last year by Iran’s Vice President, Eshaq Jahangiri (and senior figures from the Islamic Revolutionary Guard Corps and intelligence agencies) to Iran’s Supreme Leader, Ali Khamenei, Jahangir announced that Iran had signed a contract with China to implement a project to electrify the main 900 kilometre railway connecting Tehran to the north-eastern city of Mashhad”.
“Jahangiri added that there are also plans to establish a Tehran-Qom-Isfahan high-speed train line and to extend this upgraded network up to the north-west through Tabriz. Tabriz, home to a number of key sites relating to oil, gas, and petrochemicals, and the starting point for the Tabriz-Ankara gas pipeline, will be a pivot point of the 2,300 kilometre New Silk Road that links Urumqi (the capital of China’s western Xinjiang Province) to Tehran, and connecting Kazakhstan, Kyrgyzstan, Uzbekistan and Turkmenistan along the way, and then via Turkey into Europe”.
“Now, though, another element that will change the entire balance of geopolitical power in the Middle East has been added to the deal. “Last week, the Supreme Leader [Ali Khamenei] agreed to the extension of the existing deal to include new military elements that were proposed by the same senior figures in the IRGC [Islamic Revolutionary Guard Corps] and the intelligence services that proposed the original deal, and this will involve complete aerial and naval military co-operation between Iran and China, with Russia also taking a key role,” one of the Iran sources told OilPrice.com last week. “There is a meeting scheduled in the second week of August between the same Iranian group, and their Chinese and Russian counterparts, that will agree the remaining details but, provided that goes as planned, then as of 9 November, Sino-Russian bombers, fighters, and transport planes will have unrestricted access to Iranian air bases,” he said”.
“This process will begin with purpose-built dual-use facilities next to the existing airports at Hamedan, Bandar Abbas, Chabhar, and Abadan,” he said. OilPrice.com understands from the Iranian sources that the bombers to be deployed will be China-modified versions of the long-range Russian Tupolev Tu-22M3s, —— and the fighters will be the all-weather supersonic medium-range fighter bomber/strike Sukhoi Su-34, plus the newer single-seat stealth attack Sukhoi-57. It is apposite to note that in August 2016, Russia used the Hamedan airbase to launch attacks on targets in Syria using both Tupolev-22M3 long-range bombers and Sukhoi-34 strike fighters”.
“At the same time, Chinese and Russian military vessels will be able to use newly-created dual-use facilities at Iran’s key ports at Chabahar, Bandar-e-Bushehr, and Bandar Abbas, constructed by Chinese companies”.
“These deployments will be accompanied by the roll-out of Chinese and Russian electronic warfare (EW) capabilities, according to the Iran sources. This would encompass each of the three key EW areas – electronic support (including early warning of enemy weapons use) plus electronic attack (including jamming systems) plus electronic protection (including of enemy jamming). Based originally around neutralising NATO’s C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) systems, part of the new roll-out of software and hardware from China and Russia in Iran, according to the Iran sources, would be the Russian S-400 anti-missile air defence system: “To counter U.S. and/or Israeli attacks.” The Krasukha-2 and -4 systems are also likely to feature in the overall EW architecture, as they proved their effectiveness in Syria in countering the radars of attack, reconnaissance and unmanned aircraft”.
“It is also apposite to note that Iran’s EW system can easily be tied in to Russia’s Southern Joint Strategic Command 19th EW Brigade (Rassvet) near Rostov-on-Don, which links into the corollary Chinese systems. “One of the Russian air jamming systems is going to be based in Chabahar and will capable of completely disabling the UAE’s and Saudi Arabia’s air defences, to the extent that they would only have around two minutes of warning for a missile or drone attack from Iran,” one of the Iran sources told OilPrice.com last week”.
“An indication of what Iran hopes to receive in return its co-operation with China, and Russia, came last week when Zhang Jun, China’s permanent United Nations (U.N.) representative, in a statement to the Security Council, told the U.S.: “To stop its illegal unilateral sanctions on Iran—.
“Aside from this support and the US$400 billion+ of investments pledged by China, the other reason that Iran has agreed to such Chinese (and Russian) influence in its country going forward is that China has guaranteed that it will continue to take all of the oil, gas, and petchems that Iran requires”.
This report being the first media report on this very sensitive and secretive matter certainly deserves scrutiny of its credence by cross–checking it from comparative reports on the subject. Still, this report does appear to have fair degree of credence due to the news that the Accord reported in it is being debated in Iran’s parliament.
It is obvious that due to US’ continuing anti–Iran illegal unilateral sanctions and long–arm jurisdiction, Iran was left with no option but to join the newly emerging ‘coming together’ of China and Russia with the probability of forming a new geopolitical power bloc in the international arena – that too with the clear signs that this new geopolitical power bloc is not likely to face much geoeconomic opposition from EU and other important countries.
Keeping in view the dynamics of Iran’s internal politics, it is noteworthy that this plan has already been presented to Iran’s Supreme Leader Ali Khamenei by Iran’s Vice President along-with senior officials of IRGC and Iran’s intelligence agencies; as such, debate in Iran’s parliament does not appear to be a hurdle in the final approval of this Accord by Iranian government.
It is also worth noting that the major portion of this Accord relates to the massive ‘economic cooperation’ between China and Iran; and apparently for most part that portion has already been agreed upon by both countries. The reported 2nd week’s meeting next month (August) (between the government, IRGC, and Intelligence officials of Iran and their Chinese and Russian counterparts) is most likely to decide upon the military portion of this Accord. And, keeping in view the ‘mutuality of geopolitical interests’ of the three countries, approval of this portion also does not appear to be difficult – even if with some amendments.
Once this Accord is finally approved and gradually implemented, it will bring a major change in the hitherto prevailing geopolitical world order led by US. The planned communication network of this Accord will bring Iran too into the geoeconomic fold of China’s ‘One Belt, One Road’ (OBOR) setup – thereby connecting China-Pakistan-Iran-Turkey, and Russia in a powerful geopolitical power bloc in the international arena.
The aspect to watch, however, will be as to how India (which has a strategic partnership agreement with Iran, and have invested in Chabahar port) will react to the reportedly planned use of Chabahar port by Chinese and Russian military vessels.