A lot has been written over the past several months about Iran's trade relations with the BRICs, referring to Brazil, Russia, India and China, and Persian/Arabian Gulf countries. To a certain degree, it has become somewhat trite to point out Iran's geographic centrality and millennia-old commercial and diplomatic connections to each of these countries (excluding Brazil).
In this context, it is not surprising that without exception, each BRIC country has been reluctant to agree to anything that would compromise its expanding political and economic ties to Iran. At the same time, all four countries have an even greater interest in maintaining a good rapport with the EU, the US and other states carrying out sanctions, forcing the BRIC countries to avoid citing their own political and economic interests when justifying their opposition to imposing sanctions on Iran.
Some have gone further than others to seek a diplomatic solution to Iran's standoff with the US, UN and EU over its nuclear program. From May through July of this year, Brazil and Turkey championed an independent agreement that would allow Iran to swap most of its 3.5 percent of enriched uranium for the 20 percent of enriched fuel to be used in its reactors. For the most part, Western governments have dismissed these efforts as too little too late, emphasizing widely held concerns that Iran may have nuclear ambitions beyond providing power for its population.
Russia has wavered considerably, helping to build and supply uranium to Iran's first nuclear power station near Bushehr, while also nominally supporting UN plans to temper Iran's nuclear ambitions. Most countries do not consider the power plant a threat given the IAEA's oversight on the ground, but Russia's blatant opportunism has left many questioning the country's long-term aspirations.
China, like Russia, has supported various UN resolutions—and even sanctions related to Iran's nuclear program—but given the economic superpower's ever-increasing energy needs, has done everything in its power to avoid saying or doing anything that would threaten its mutually beneficial relationship with Iran. Likewise, 8.3 percent of Iranian imports in 2009 came from China.
Despite ironically supporting both sanctions and “Iran's right to pursue peaceful nuclear technology,” India has expanded its economic relationship with Iran by leaps and bounds over the past few years. Bilateral trade between Iran and India has grown from around $6 billion in 2006 to over $14 billion in 2009—a staggering increase. In July, the two countries began negotiating the construction of a $7.4 billion natural gas pipeline from Iran to India, which could potentially facilitate even more extensive commercial alliances between the two countries.
The GCC countries have continuously expressed the concern that a nuclear Iran could destabilize the region and may even challenge their own security and economic supremacy in the region. Nonetheless, plenty of subtle disparities exist between individual Gulf countries' policies and their attitudes surrounding Iran.
The UAE, for instance, has a large and influential ethnic Persian minority and is Iran's biggest trading partner in the Arab world, accounting for over 19.3 percent of Iranian imports in 2009. Persians are thought to control about 20 percent of Dubai's economy (and constitute an equal percentage of Dubai's population), no doubt playing a major part in tripling trade between the emirate and Iran between 2005 and 2009 to $12 billion.
On the other hand, as the loosely recognized leader of the Sunni Muslim world, the Kingdom of Saudi Arabia largely views Iran as both its Shi'a counterpart and a regional threat. For various reasons, though, Riyadh has been indecisive over whether to support UN sanctions on Iran.
Regardless of the nuance behind these countries' relationships with Iran, few pundits concentrate on the booming trade—both legal and illicit—between Iran and some of its most immediate neighbors, the Kurds. The Iraqi, Turkish and Armenian portions of Kurdistan surround almost all of Iran's northwestern borders. The Kurds, who many consider the world's largest stateless nation, have strong ethnic, cultural and linguistic ties to Iran, which itself has a large Kurdish minority (an estimated 7 percent of the country's population).
While the dollar amount of bilateral trade between Iran and (the extraterritorial areas of) Kurdistan does not even begin to approach that of the trade between Iran and its most significant trading partners, the lack of attention devoted to the situation underscores the potential inefficacy of economic sanctions.
In April, Feiz Ali Khorshid, a prominent member of Iraqi Kurdistan's legislative council, told Iran's semi-official Fars News Agency, "The volume of exchanges between the Iraqi Kurdistan and Iran will increase [from $2 billion] to $4 billion this year."
And that only accounts for legitimate trade between Iran and Iraqi Kurdistan. In May, Sam Dagher of The New York Times published an exposé claiming “hundreds of millions of dollars in crude oil and refined products are smuggled over the scenic mountains of Iraqi Kurdistan [to Iran] every year,” adding that “Day after day, without formal authorization from Baghdad, more than a thousand tankers snake through this town on Iraq’s border with Iran [...] undercutting recent American sanctions.”
Kurdistan's rugged alpine terrain offers a natural advantage to locals and foreigners alike who evade border patrols altogether—something that Shane Bauer, Sarah Shourd and Josh Fattal, the three now famous American hikers turned Iranian captives, learned the hard way while backpacking after accidentally crossing the Iranian border.
Furthermore, as a stateless, largely disenfranchised people, the Kurds may have the most to gain from continuing and growing trade with Iran. To Turkey and even Iraq, hundreds of millions of dollars sounds like mere statistics. To Turkish and Iraqi Kurds, hundreds of millions of dollars could mean tangible changes to their local economies or even to their collective quality of life.
In August, the BBC ran an article explaining the extent to which ethnic Turks and Kurds in Turkey constantly and clandestinely smuggle goods from Turkish Kurdistan to Iran. The contraband ranges from local fruit to airplane parts, highlighting that nearly everything is available to Iranians—for a price.
This is perhaps the most important variable for the global community to keep in mind while debating the prospect of punishing Iran, or any large country for that matter, with economic isolation: porous borders and crafty, albeit silent, trading partners will inevitably threaten the efficacy of sanctions.
Jon Weinberg - A 2009 graduate from Harvard College, where he studied Government and Near Eastern Languages and Civilizations. He is now based in New York City as a freelance journalist concentrating on the Middle East and North Africa.
