Iran and Taliban ‘s Economic Concerns
Mostafa Naderi, Member of Iranian Association of West Asian Studies
The re-emergence of the Taliban in Afghanistan in 2021 has reshaped the dynamics of the region. The transfer of power in Iran’s eastern neighbor is important for Iran’s regional policies. Despite deep cultural and religious ties, Iran and Afghanistan have experienced fluctuations in their relations. The change in political power in Afghanistan has placed Iran in a dilemma: whether to welcome it or not? And, whether to view the Taliban as a potential gateway to increase its influence in the region?
Well, in this regard, Iran has followed a non-ideological and realistic appraoch. First, contrary to the beliefs of some experts that ideological differences will hinder the development of good ties between Iran and the Taliban, Iran was one of the first states to recognize Taliban. Second, Iran has sought to expand its influence in Afghanistan-controlled Taliban.
However, Iran faces several challenges. The Hamoon River water dispute with the Taliban is a major and historical challenge, for example. Recently, this issue has caused commotion in both Iran and Afghanistan, with the heads of the two states threatening each other. Nevertheless, both Iran and Taliban have not allowed the water problem to overshadow their overall relations.
Apparently, the new approach of Iran’s foreign policy has placed more emphasis on economic diplomacy. After Taliban gained power in Afghanistan in 2021, Iran’s exports continued through three official borders: Dogharon in Khorasan Razavi Province, Mahirood in South Khorasan Province, and Milak in Sistan and Balochistan Province.
According to the official reports of Iran’s Customs, despite a 20% decrease, Iran’s exports to Afghanistan reached $1.8 billion in 2021. Afghanistan is considered one of the first five destinations for Iran’s exports. In 2022, despite an 11% decrease in export volume from Iran, Afghanistan remained the fourth destination for Iranian exports after Iraq, Turkey, and the United Arab Emirates.
Unlike Afghanistan which is landlocked, Iran’s geopolitical situation has access to the open seas and maritime trade routes. This natural factor can strengthen economic ties between the two states.
Moreover, progress on the Sistan Free Trade Zone is vital for Iran. For that Iran needs to maintain good relations with Taliban. In terms of attracting investors and developing trade, the Taliban’s role in securing or destabilizing the borders is significant. Iran has made considerable efforts to ensure security in Sistan and Balochistan Province, thus recognizing that border insecurity poses serious economic challenges.
On the other side, Taliban know very well that a friendly Iran is very important for them. The new rulers of Afghanistan have announced that they consider Chabahar port and the Khaf-Herat railway to be important for expanding their trade relations.
Therefore, it is evident that facilitating transit of essential goods, increasing exports of electricity and oil products, and transferring technology from Iran to Afghanistan—in the mining sector for instance—can alleviate economic concerns for both countries and contribute to Afghanistan’s development.