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Prospects of co-operation between Kazakhstan and Iran in conditions of crisis

Iran Materials 26 May 2006 12:14 (UTC +04:00)

(Gazeta.kz) - Iran continues to be interested in a growth of co-operation in Kazakhstan, particularly in the trade in grain and oil.

Ramin Mehman Parast, Ambassador Extraordinary and Plenipotentiary of Iran to Kazakhstan, made such statement at a press conference in Almaty on May 22, reports Trend.

Teheran is ready to increase its oil swaps with Kazakhstan: if last year it received 1.4 million tonnes, this year the volume will triple. "We have good offers on the grain swaps. According to the current project, during the first day since the beginning of such joint activities 1 million tonnes of grain can be imported and then the swaps can grow by million tonnes each year during five years.

It means that as a result the quantity of the grain exported by Kazakhstan is going to reach 5 million tonnes. We are waiting for a Kazakhstani delegation to visit Teheran to resolve these issues," - he said.

The importance of this statement is not only in the expression of readiness to co-operate with our country - Iran has never declined from it; on the contrary, it has probably shown more energy in intensifying the relationship than Kazakhstan.

What is important is that this subject has been mentioned by the ambassador in the heat of the conflict over the nuclear programme of this neighbor country. By this Iran seems to be showing that it does not doubt that the crisis will be resolved favourably for it, which means that it remains a serious political player in the Caspian region and a potential big economic partner.

It is not a secret for anybody that the tension between the USA and Iran kept restraining Kazakhstan from intensifying economic co-operation with this big Middle Eastern country.

Politically Kazakhstan could not ignore the well-known "Iranophobia" of Washington that economically entailed profits lost that potentially could be gained through this bilateral economic co-operation. Indeed, there are different ways of transporting Kazakh oil to open seas, i.e. to the world market, but the Iranian route is the shortest one. And consequently - the cheapest.

The transit potential of the "North-South" system, of which both Iran and Kazakhstan make part, is also far from being fully used. Nevertheless, the economic co-operation and trade kept developing and growing despite all. Until the last year, when the threat of repeating the fate of Iraq started to loom over Iran suspected of possessing nuclear arms. Such development would be completely undesirable for Kazakhstan. A military conflict between the USA and Iran can paralyse oil production on the Caspian and clearly it would afflict the Kazakhstani economy. But it seems that Iran is defending itself successfully. At least at the press conference the ambassador confidently answered all questions about a possible military aggression against his country on the part of the USA saying: it's impossible.

Many experts keep saying it from the very beginning - such military operation would completely undermine the world oil market. But the crisis was scary anyway… Now it seems that the situation is gradually being resolved, but it is not completely clear yet.

Let us say once more, a US-Iranian war would be disastrous for Kazakhstan, no matter what shape and scale it would take. It directly threatens our economy and security, apart from lost potential profits in many areas. For instance, the swaps with Iran not only bring us profits from the trade in oil or grain, they also allow us to develop our own fleet, metallurgy, and mechanical engineering.

If the situation around the nuclear programme of Iran will become less tense, it will give another important effect to Kazakhstan. It is already well-known that Iran is going to launch its own petroleum stock exchange that will carry out its operations in euros.

All corresponding documents have been adopted, soon it is going to start functioning, - the ambassador said.

It is highly probable that the idea will be supported by other oil producing states and even by oil importers, such as India, China, Japan. This Asian stock exchange can become a serious alternative to New York and London counterparts, playing an important role in the price formation on the world energy market.

Kazakhstan being geographically close to Iran and regularly swapping oil with it, can become an important participant of such a project, playing its own role in the price formation.

At the moment the republic does not play any role whatsoever in this project…

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