CRS Report IV: Iran and South and Central Asia

November 1, 2016

The following are excerpts from a recently published report by Kenneth Katzman, Specialist in Middle Eastern Affairs at the Congressional Research Service, on Iran’s foreign and defense policies.

Iran’s relations with countries in the Caucasus, Central Asia, and South Asia vary significantly, but most countries in these regions conduct relatively normal trade and diplomacy with Iran. Some of them, such as Uzbekistan and Pakistan, face significant domestic threats from radical Sunni Islamist extremist movements similar to those that Iran characterizes as a threat.

Most of the Central Asia states that were part of the Soviet Union are governed by authoritarian leaders and Iran has little opportunity to exert influence by supporting opposition factions. Afghanistan, on the other hand, remains politically weak and divided and Iran is able to exert influence there. Some countries in the region, particularly India, apparently seek greater integration with the United States and other world powers and, until the implementation of the JCPOA in January 2016, limited or downplayed cooperation with Iran. The following sections cover those countries in the Caucasus and South and Central Asia that have significant economic and political relationships with Iran.

 

Afghanistan

In Afghanistan, Iran is pursuing a multi-track strategy by helping develop Afghanistan economically, engaging the central government, supporting pro-Iranian groups and, at times, arming some Taliban fighters. An Iranian goal appears to be to restore some of its traditional sway in eastern, central, and northern Afghanistan, where “Dari”-speaking (Dari is akin to Persian) supporters of the “Northern Alliance” grouping of non-Pashtun Afghan minorities predominate. The two countries are said to be cooperating effectively in their shared struggle against narcotics trafficking; Iranian border forces take consistent heavy losses in operations to try to prevent the entry of narcotics into Iran. Iran has also sought to use its commerce with Afghanistan to try to blunt the effects of international sanctions against Iran. Iran also shares with the Afghan government concern about the growth of Islamic State affiliates in Afghanistan, such as Islamic State—Khorasan Province, ISKP, an affiliate of the Islamic State organization that Iran is trying to thwart on numerous fronts in the region.

Iran has sought influence in Afghanistan in part by supporting the Afghan government, which is dominated by Sunni Muslims and ethnic Pashtuns. In October 2010, then-President Hamid Karzai admitted that Iran was providing cash payments (about $2 million per year) to his government, through his chief of staff. Iran’s close ally, Dr. Abdullah Abdullah, who is half-Tajik and speaks Dari, is “Chief Executive Officer” of the Afghan government under a power-sharing arrangement with President Ashraf Ghani that resolved a dispute over the 2014 presidential election. It is not known whether Iran continues to give cash payments to any of Afghanistan’s senior leaders. …

 

Pakistan

Relations between Iran and Pakistan have fluctuated over the past several decades. Pakistan supported Iran in the 1980-1988 Iran-Iraq War, and Iran and Pakistan engaged in substantial military cooperation in the early 1990s. It has been widely reported that the founder of Pakistan’s nuclear weapons program, A.Q. Khan, sold nuclear technology and designs to Iran. However, a rift emerge between the two countries in the 1990s because Pakistan’s support for the Afghan Taliban ran counter to Iran’s support for the Persian-speaking and Shiite Muslim minorities who opposed Taliban rule. Afghan Taliban factions still reportedly have a measure of safe haven in Pakistan, and Iran reportedly is concerned that Pakistan might harbor ambitions of returning the Taliban to power in Afghanistan. In addition, two Iranian Sunni Muslim militant opposition groups—Jundullah (named by the United States as an FTO, as discussed above) and Jaysh alAdl—operate from western Pakistan. These groups have conducted a number of attacks on Iranian regime targets. Iran and Pakistan continue to conduct some military cooperation, such as joint naval exercises last held in April 2014. …

 

India

India and Iran have overlapping histories, civilizations, and interests and are aligned on several strategic issues such as their support for minority factions based in the north and west of Afghanistan. Tens of millions of India’s citizens are Shiite Muslims. As international sanctions on Iran increased in 2010-2013, India sought to preserve its long-standing ties with Iran while cooperating with the sanctions regime. In 2010, India’s central bank ceased using a Tehran-based regional body, the Asian Clearing Union, to handle transactions with Iran. In January 2012, Iran agreed to accept India’s local currency, the rupee, to settle nearly half of its sales to India. In subsequent years, India reduced its purchases of Iranian oil at some cost to its own development, receiving from the U.S. Administration exemptions from U.S. sanctions for doing so. However, India has increased oil purchases from Iran to nearly pre-2012 levels now that sanctions have been lifted, and in May 2016 India agreed to transfer to Iran about $6.5 billion that it owed for Iranian oil shipments but which was held up for payment due to sanctions.

Some projects India has pursued in Iran involve not only economic issues but national strategy. India has long sought to develop Iran’s Chabahar port, which would give India direct access to Afghanistan and Central Asia without relying on transit routes through Pakistan. India had hesitated to move forward on that project because of U.S. opposition to projects that benefit Iran. India has said that the implementation of JCPOA sanctions relief in January 2016 paves the way for work to begin in earnest on the Chabahar project. However, observers say there is little evidence of additional work being performed on the port.

Click here for the full report.