The Challenge Next Door

Iran also played a vital role for Pakistan in the Indo-Pakistani War of 1971, supplying military equipment as well as diplomatic support against India. In addition to military aid, Iran offered considerable developmental aid to Pakistan, including oil and gas on preferential terms. Iran in the 1960s-70s, enjoyed a strong economic and industrial base and was the undisputed regional superpower. However, Iran’s total dependence on the United States at that time for its economic development and military build-up invoked the hostility from the more Soviet-aligned Arab world, a confrontation that is still simmering.

The fall of East Pakistan in December 1971, however, convinced Iran that extraordinary effort was needed to protect the stability and territorial integrity of its eastern flank. With the emergence of Bangladesh as a separate state, the “Two-Nation Theory” and Pakistan itself were negatively affected and the Iranian establishment wondered whether West Pakistan could hold together and remain a single country. Events of this period caused significant perceptional changes in Tehran regarding Pakistan. Since this period Iran has remained the most complex foreign relations dilemma for Pakistan.

Under Gen. Zia’s term beginning in 1977, Pakistan was ideologically ultraconservative and religiously oriented in its nature and approach in contrast to the more secular Iran at the time, causing a rethink of relations in Iran. This rethink further jelled with the Iranian Revolution and subsequent overthrow of the Shah of Iran to be replaced by the newly established Islamic Republic of Iran that was violently opposed to the United States. Khomeini withdrew Iran from CENTO and ended its association with the United States.

This significant change in Iran prompted the imbalance in Pakistan-Iran bilateral relationship. Pakistan, a Sunni majority nation undergoing radicalization at the hands of General Zia’s orthodox religious guidelines while the revolution had made Iran a Shi’ite Islamic republic. The sectarian rift widened and led to sectarian clashes in Pakistan during the 90s when Iran started funding Shi’ite religious institutions in Pakistan while the Arab states promoted Deobandi Islam followed by the Taliban.

However, Iran fully supported Pakistan during the Balochistan insurgency phases against the armed separatist movement in 1974–77. It took approximately 100,000 Pakistani and Iranian troops to quell the separatist organizations in Balochistan and successfully put the resistance down in 1978–80. During this period Iran offered significant support to Pakistan with military hardware, including thirty AH-1 Cobra attack helicopters, intelligence, and $200 million in aid.

In the beginning the religiously influenced dictatorship of Zia-ul-Haq and the Islamic Revolution had convergence of views with no major diplomatic and political disputes between them but in 1979, Pakistan became one of the first countries to recognize the new revolutionary regime in Iran. Responding swiftly to this revolutionary change, President Zia-ul-Haq declared that “Khomeini is a symbol of Islamic insurgence”. Despite Shi’a-Sunni divisions, the common desire for a pan-Islamic identity became an important factor in shaping new Iranian–Pakistani relations. By 1981, however, Zia-ul-Haq formed close ties with the United States during the jihad against the Soviet Union against the invasion of Afghanistan, a position that Iran was not very comfortable with and our relations began to drift slowly.

Relations further deteriorated and sectarian tensions increased in the 1980s as Pakistani Shi’a Muslims claimed that they were being discriminated against under the Sunni-biased Islamization program being imposed by General Zia-ul-Haq. Following the 1979 Islamic Revolution, Iran and Saudi Arabia gradually began to use Pakistan as a battleground for their proxy sectarian conflict, and Pakistan’s support for the Taliban organization in Afghanistan during the civil wars in the 1990s became a problem for Shi’a Iran, which opposed a Taliban-controlled Afghanistan.

In today’s political scenario there is more than one significant stakeholder in international affairs. On the regional level, instability has prompted countries like Iran, India, China, Russia and Pakistan to assume a more pronounced role. China’s emergence as an economic power with its increasing its engagement in Asia, Europe, Africa and Latin America is also a sign of changing political dynamics. This is a subtle indication of power transition from its previously acknowledged centre of the US and its Western allies.

China’s plan of regional outreach in the form of Belt and Road Initiative (BRI) is in line with the shifting geopolitical trends in the world when more and more countries are warming up to regional connectivity initiatives but the US is opting out of them, complicating the international and regional political environment. The U.S. withdrawal from international agreements such as Trans-Pacific Partnership (TPP), the Paris Climate Treaty and the Joint Comprehensive Plan of Action (JCPOA) has further destabilized the state of global politics. The U.S withdrawal from JCPOA has left many countries, especially Pakistan, in a limbo with regard to its projects with Iran, once again highlighting the U.S. factor in our bilateral relations. On Iran’s nuclear programme, Pakistan adopted a policy of neutrality and played a subsequent non-belligerent role in easing the tension in the region. On the international front, Pakistan is a great advocate for Iranian use of nuclear energy for economics and civil infrastructure. Pakistan’s support on Joint Comprehensive Plan of Action (JCPOA) and commitment towards Iran despite the US’ unilateral sanctions has been greatly appreciated in Iran.

The evolving international environment has given rise to a unique range of challenges for the states co-existing in a fluid global order. The current international system has entered a phase of transition where the lack of effective global leadership has played a major role in forging new alliances and fraying of old ones. Developments in the region, including heightening tensions and competition between China and the U.S.A are now posing challenges for the regional countries, including Pakistan and Iran. With new alliances taking shape and India being prepped by the West to take the role of net security provider and a counterweight to rising China, both Pakistan and Iran need to tread carefully to avoid the pitfalls of this geo-strategic and geo-economic flux likely to be played out in the Indian Ocean region. Bilateral relations are undergoing a transformative phase and there is a renewed energy and growing positivity and desire to work together between the two countries.

On the economic front, both countries continue to cooperate where possible and are forming alliances in a number of areas of mutual interest, such as fighting the drug trade along their border and combating the insurgency in the Balochistan region. In view of the recurring threats, Pakistan decided to fence the Pakistan-Iran border. In order to control cross border terrorism and smuggling, Iran has also expressed an interest in joining the China–Pakistan Economic Corridor (CPEC) as part of the larger Chinese Belt and Road project. Economically, Iran and Pakistan trade with each other through three border crossings. The two countries’ central banks signed a banking and payment agreement in 2017, expanding financial cooperation and loosening credit requirements. However bilateral trade remains far below the potential with determination shown by both sides to take it up to five billion dollars by 2023 which at the moment does not look feasible.

On the political front, Pakistan has adopted a cordial and frank approach towards Iran; something also accepted and appreciated by Iranian officials. Similarly, the Pakistani government didn’t seal borders with Iran and allowed Pakistani pilgrims to return even when the first wave of Covid-19 had gripped the entire country. These steps contributed to politically streamlining and improving the bilateral relationship.

The persistent issue of a regional gas pipeline linking the two countries does not appear to be nearing resolution. Pakistan has not yet constructed the pipeline on its side of the border to the increasing frustration of Iranian officials as Iran has completed its section of the gas pipeline up to the border. This is a blatant violation of the commitments made by Pakistan. As an incentive, Iran promised $500 million in financial assistance for the construction of the pipeline, but Pakistan again refused, citing high gas prices. Iranians perceive this as intentional delay due to U.S pressure on Pakistan to not import gas from Iran.

With a complicated backdrop where Pakistan is aligned to the United States and Saudi Arabia who are against Iran, it is very important for Pakistan to balance its relationship not just between Riyadh and Tehran, but also between Beijing and Washington. Similarly, it is important for Iran to improve its relations with Pakistan and use this link to improve ties for better regional peace prospects. The lowering tensions between Pakistan and Iran have more than just a bilateral dimension; they are intrinsically linked to Chinese investment in Balochistan; the frontline province for CPEC and Belt and Road Initiative (BRI).

The Iran-Pakistan relationship has been evolving over time. Ties between the two neighbours have been shaped by bilateral security concerns and strategic interests on the one hand and flux in political identity of the two states on the other. Analysts and experts on Pakistan-Iran relations believe that the current economic interests as well as security concerns for Pakistan are because of Indian involvement in Chabahar Port. There are political and economic paradoxes along with economic developmental opportunities. India and China see each other as potential regional economic and political rivals. Both intend to advance their interests in the region through economic, strategic and business activities. Pakistan and Iran both can gain economic and political benefits by cooperating through CPEC and Chabahar and by improving security, transparency, law and order, improved trading facilities along with encouraging and promoting their respective private sectors.