Pakistan Invited to Join Chabahar Project

EghtesadOnline: Iranian Foreign Minister Mohammad Javad Zarif on Monday invited Pakistan to participate in Chabahar's seaport project and development of its link with Gwadar Port, as he sought to allay concerns in Pakistan over Indian involvement in the Iranian port.

News ID: ۷۴۵۰۹۹

14 March 2018

“We offered to participate in the China-Pakistan Economic Corridor. We have also offered Pakistan and China to participate in Chabahar,” Zarif, who is on a three-day visit to Pakistan, was quoted as saying by the Pakistani newspaper Dawn.

Zarif was delivering a lecture at the Institute of Strategic Studies in Islamabad to mark the 70th anniversary of the establishment of Pakistan-Iran diplomatic relations.

The Iranian foreign minister earlier held bilateral talks with his Pakistani counterpart Khawaja Asif at the Foreign Office and addressed a trade conference. The visiting foreign minister is being accompanied by a large trade delegation from Iran, according to Financial Tribune.

Pakistan had always been concerned about Indian involvement in Chabahar Port. These concerns got amplified after Iran last month signed a lease agreement with India, which would give operational control of the port to the latter.

Emphasizing that both Gwadar and Chabahar were important projects for the development of deprived eastern and southeastern Iran and southwestern Pakistan, he said that both needed to be linked through sea and land routes.

“We are taking measures to do that and there is an open invitation to Pakistan to participate in that,” the foreign minister said.

Zarif clarified that the Chabahar Port project was not meant to “encircle Pakistan … strangulate anybody”. He twice said Iran would not allow anybody to hurt Pakistan from its territory much like Pakistan would not allow its soil to be used against Iran.

He likened Iran’s relations with India to Pakistan’s ties with Saudi Arabia.

“Our relations with India, just like Pakistan’s relations with Saudi Arabia, are not against Pakistan as we understand Pakistan’s relations with Saudi Arabia are not against Iran,” he said.

Zarif also laid out his vision for better ties between Pakistan and Iran, which envisaged the realization of long delayed Iran-Pakistan gas pipeline, establishment of banking ties, signing a Free Trade Agreement and making Gwadar and Chabahar ports complementary.

> Absence of Regular Banking Channels

Banking relations are considered crucial to expanding bilateral trade, which is currently at $1.2 billion. The target is to increase it to $5 billion per annum over the next few years, but it appears to be a difficult goal in the absence of regular banking channels.

In April last year, the State Bank of Pakistan signed a Banking and Payment Arrangement with the Central Bank of Iran, for providing a trade settlement mechanism to promote bilateral trade.

The central banks of the two countries were to subsequently invite commercial banks to carry out transactions under the BPA, but no progress was made due to the Pakistani banks' lack of interest.

Similarly, there is consensus that IP gas project is beneficial for Pakistan’s economy, but still it is frozen on the Pakistani end due to external and internal factors.

During bilateral talks, a Pakistani Foreign Office statement said: “The two sides agreed to continue engagement for enhancing economic cooperation, including bilateral trade, investments and commercial interaction to promote shared prosperity … addressing tariff and non-tariff barriers” in addition to concluding FTA on priority.

“The foreign ministers underlined that as two brotherly neighboring countries Iran and Pakistan would deepen connectivity between the two sister ports of Gwadar and Chabahar to benefit from their commonalities,” the statement added.

The two sides decided to expedite the operationalization of two new border crossings that was agreed a long time ago.

> Meeting With Pakistani Premier

Pakistan's Prime Minister Shahid Khaqan Abbasi said Iran should work together and make utmost efforts for enhancing bilateral trade to $5 billion by 2021.

In a meeting with Zarif, the premier reaffirmed Pakistan’s desire to enhance mutually beneficial economic cooperation with Iran, including bilateral trade, investments and commercial interaction.

During the meeting, both sides discussed efforts for strengthening bilateral relations and cooperation related to peace and security in the region.

Abbasi emphasized the need to deepen connectivity to harness benefits from regional economic integration. He expressed his commitment to help resolve issues related to the implementation of the Iran-Pakistan gas pipeline project, including the financing of pipeline infrastructure and the scope of snapback clause.

The prime minister said Pakistan is working to realize its vision of a peaceful and interconnected region for shared progress and prosperity.

“We believe that a peaceful and stable Afghanistan is vital for economic progress of the region and Pakistan and Iran as the two neighboring countries can make important contribution for achieving this objective,” he said.

Abbasi thanked the Iranian leadership for their steadfast support to the principled struggle of Kashmiris.

The Iranian foreign minister appreciated the increasing high-level interaction between the two countries. He said the efforts of the two countries have enhanced economic and people-to-people interactions, which should be further strengthened.

Zarif also appreciated Pakistan’s efforts for strengthening border management to prevent illegal cross-border activities.