Iran is one of the key geopolitical actors of the Middle East. Despite the current “diplomatic isolation and maximum economic pressure” campaign launched by the US President Trump Administration, Iran retains its capabilities of making a serious impact on regional geopolitics. It exerts political and economic influences in Iraq, Syria, Lebanon and Yemen through various state and non-state actors and has a vast toolbox of asymmetric methods of political, economic and military struggle.
The South Caucasus is an integral part of Iran's neighborhood and plays significant roles in Tehran's geostrategic calculations. Definitely, South Caucasus is not a vital region for Iran as the Middle East, but from an Iranian perspective, it is part of a common Iranian civilizational area. It's worthy to mention that until the first half of the 19th century vast territories of current Armenia and Azerbaijan were part of the Persian Empire, and Persia also influenced Georgia.
However, given Iran's current geopolitical and geo-economic difficulties, Tehran has no resources to increase its influence in the South Caucasus. As for now, the key priority for Iran is to prevent the use of the South Caucasus as a launch pad for Anti-Iranian activities and protect the current level of its involvement and influenza.
Several factors are shaping Iran's attitude towards Armenia. The most significant one is Armenia's role as a buffer between Turkey, Azerbaijan and Central Asia. Despite growing cooperation with Turkey since Erdogan's ascendancy to power including Turkey's rolls in circumventing US sanctions during the President Obama administration, Turkey and Iran are strategic competitors in the Middle East. Iran clearly understands that in the case of a land corridor becoming operationally connecting Turkey and Azerbaijan, it will strategically increase Turkey's capacities and capabilities.
Not surprisingly, Iran keeps balanced and neutral stance on Karabakh conflict. During meetings with Azerbaijani leaders Iranian officials sometime make some Pro-Azerbaijani statements, but in reality they are sending messages that Iran is fully satisfied with the current status quo, opposing any changes in the line of contact and possible deployment of peacekeeping forces along the Nagorno-Karabakh - Iran border.
Another important function of Armenia for Iran is the Yerevan's role as an alternative land corridor to Russia and Europe via Georgia. Currently, Turkey serves as the main land route for Iranian exports and imports to Europe and Azerbaijan is the main land corridor connecting Iran with Russia. However, Iranians always prefer to have alternatives and Armenia perfectly fits there. As a path towards increasing its involvement in Armenia Iran creates favorable conditions for Iranian citizens to live and buy real estate in Armenia. The visa free regime between Iran and Armenia launched in August 2016 facilitates this process.
Iran is also a war of US activities in Armenia. Iranians clearly understand that one of the key tasks of the huge US embassy in Yerevan is monitoring over Iran. In this context, 2018 “Velvet revolution” in Armenia has raised some anxiety in Iran. Tehran was fully satisfied with the pre-revolution status quo of Armenia being under Russian control. Given the fact that some key members of the Armenian new authorities prior to the revolution were actively working or acquiring funds from Western organizations, such as the Transparency International and Open Society Foundation, Tehran was concerned that the "Velvet Revolution" may transform Armenia into some spot of possible Anti-Iranian activities. The new Armenian authorities are making every effort to disperse these concerns. Prime Minister Pashinyan made an official visit to Iran in late February 2019 and at the beginning of July 2019 the 16th Session of Iran - Armenia intergovernmental session was held in Tehran.
As for economic cooperation, the two sides have little to no bolster about the “Gas for Electricity” program through which Armenia receives natural gas via Iran - Armenia pipeline, transforms it into electricity and exports to Iran by 3 kw electricity for one cubic meter gas scheme. (Electricity covered 83.5 percent of all Armenian exports to Iran in 2018. Armenia imported 567 million cubic meter gas from Iran and exported 1 billion 839 million kw hour electricity that year).
Azerbaijan is probably the most important country for Iran in the South Caucasus. It has the majority of the Shia Muslim population, which creates strong religion bonds between the two states, though due to the 70 years of Soviet rule, the Azerbaijani society is much less pious. But the key factor for Iran's attention towards Azerbaijan is the existence of approximately 20 million Azerbaijani speaking population in Iran leaving alongside the Iran - Azerbaijan border. This part of the Iranian society is well integrated into the Iranian state system and many high level officials, including Supreme Leader Khamenei, are representatives of the Azerbaijani speaking population.
However, Iran has concerns that the Azerbaijani territories may be used as a launch pad to sow dissent and separatist sentiment in these regions. The establishment of the short lived Azerbaijan People's Government with the support of the Soviet Union in the late 1945 in the Azerbaijani speaking territories of Iran is a warning to Tehran about the possibility of a new separatist movement fostered by outside forces. The several reports on US and Israeli intelligence services activities in Azerbaijan targeting Iranian interests only increase concern in Tehran.
Iran seeks to use the signs of growing activities of Islamic movements in Azerbaijan to bolster its influenza there. Meanwhile, Azerbaijan is a wary of such developments. The key center of the Azerbaijani Shia movement - Nardaran, located some 30 km outside Baku, has been kept under constant attention of Azerbaijani security services. In November 2015 Azerbaijani law enforcement forces launched a military operation in Nardaran against Shiite activists who launched several casualties. Azerbaijan's Interior Ministry and Prosecutor General's Office have issued a statement regarding the incident, which said the Shiite leaders plan to change the constitutional order with violence and apply new rules to Sharia.
Azerbaijan is perceived by Tehran also as a significant economic partner allowing to establish land corridor with Russia and then to Europe. Iran, Azerbaijan and Russia are active members of the North-South international corridor that will connect India through Iranian Persian Gulf ports, Azerbaijan and Russia with Northern Europe. Azerbaijan has already connected its railway with the Iranian border town of Astara and offered Iran a $ 1 million loan to construct Astara - Rasht railway which will connect the Azerbaijan railway system with the Iranian internal network. As for Azerbaijan, the North-South corridor is a possibility to bolster Azerbaijan's transit roll alongside the Trans Caspian International Transport Route, which connects China via Kazakhstan, the Caspian Sea, Azerbaijan and Turkey to Europe.
The Presidents of Azerbaijan, Iran and Russia hold two trilateral summits in August 2016 and November 2017 and the third summit will take place in August 2019 in Sochi. Iran view Azerbaijan also has a vital link to connect Iranian and Russian energy systems which will allow for import and export of electricity.
Compared to Armenia and Azerbaijan, Georgia has less importance for Iran. Two states share no land border, and Georgia's path towards Euro-integration, including membership in the EU and NATO, as well as strategic partnership with the US, some objective restraints on relations. However, Iran views Georgia as an alternative route to Europe via Armenia and alongside Georgia, Armenia, Greece and Bulgaria is involved in negotiations to launch a Persian Gulf - Black Sea multimodal transport corridor that will link Iranian Persian Gulf ports with Europe via Armenia and Georgian Black Sea coast.
Iran is also interested in connecting its energy systems with Russia not only through Azerbaijan, but via Armenia and Georgia too. The four states (Armenia, Georgia, Iran and Russia) have signed a Memorandum of Understanding on the establishment of an energy corridor in April 2016. However, the project may be implemented only after the launch of the third high voltage electricity transmission line between Armenia and Iran (construction supposed to be completed at the beginning of 2019, but currently only 20-25 percent of the line is ready and it will be finished in late 2021), as well as after the launch of the new electricity transmission line between Armenia and Georgia, construction of which has not started yet.
As for Georgia, Iran is an interesting gateway to the Middle East and the Indian Ocean. The mutual visa free travel regime was reintroduced in February 2016 immediately after the elimination of some international nuclear related sanctions. Georgia may also become the top destination for Iranian tourists in the South Caucasus eventually putting aside Armenia. Given Georgia's interest in expanding its cooperation with China and being included in the "Belt and Road" initiative of increasing cooperation with Iran may be welcomed by China too. However, Georgia's strategic course is Euro-Atlantic integration; Georgia will show restraint in coming to Tehran.
Perspectives of Relations
Iran will closely watch domestic and foreign policy developments in Armenia. Any deterioration in Armenia - Russia relations will raise concerns in Iran, as Tehran will perceive it as a step towards increasing US influenza in Yerevan. Iran will continue to send clear messages to Armenia that raises US influenza or Armenia's actions to reduce cooperation with Iran due to American pressure will definitely affect changes in Iranian policy. One of the possible trump cards for Tehran in its relations with Armenia is the change in its balanced policy on Karabakh. In more extreme cases, Tehran may support Azerbaijani efforts to present the Karabakh conflict as a religious one, thus creating serious difficulties for Armenia and Karabakh. However, in the event of no significant changes in Armenian foreign policy, the current level of Armenia - Iran cooperation will remain intact, with possible increases in gas / electricity exchange scheme volumes.
Iran will continue its multifaceted policy towards Azerbaijan. Tehran will seek deep economic cooperation, also in trilateral Iran-Azerbaijan-Russia format, trying to create economic incentives for Azerbaijan to refrain from Anti-Iranian policy. However, the key leverage for Iran in its relations with Baku is growing Islamist activities in Azerbaijan. Tehran will continue to tacitly support these movements, while simultaneously hinting to Baku that in the case of a crossing of red lines by Azerbaijan Iran has both capacities and capabilities to destabilize the domestic situation there.
Iran - Georgia relations will continue to be less developed. Simultaneously, both countries are ready to expand economic cooperation and develop new transportation infrastructure, but here much depends on Yerevan's ability to significantly improve highways connecting Georgia and Iran via Armenia.
Dr. Benyamin Poghosyan, Chairman, Center for Political and Economic Strategic Studies, Executive Director, Political Science Association of Armenia