Strengthening of Iran-Venezuela relationship amid tensions with U.S
The phrase 'Enemy's enemy is your friend' is very relevant in international politics and has been used as a tool to further one's (a country) interest. The same is true for Iran and Venezuela, whose relationship has been invigorated in past few years. Both the countries have faced the wrath of USA in form of sanctions which has not only shaken their global stance but also the economy. While United State seeks to exert pressure on both the countries, the respective governments of Iran and Venezuela seek to deepen their ties and create a united front against their bully, the USA. This article is a brief overview of the Iran-Venezuela relations and how they are jointly collaborating to resist the growing authority of USA.
The 70th anniversary of Iran and Venezuela in August, 2020 marked new chapter in the bilateral relationships. “Deep, brotherly and unbreakable relations have been formed between the two countries during recent years and have been boosted through defending sovereignty", stated Maduro on the anniversary eve. Iran and Venezuela have formed a strategic relationship to circumvent the US sanctions imposed on both the countries. Iran President, Hassan Rouhani commended the Venezuela's resistance to U.S pressure and called the efforts "praiseworthy". The bilateral relationship between the two countries has made headlines when Iran decided to ship fuel to Venezuela along with experts to fix the ailing refinery and a ship of food amid the US sanctions on the South American country.
Iran-Venezuela ties are historical and date back to the 1960's. At that time, Shah was still in power in Iran and Venezuela was just a young democracy. Both the countries established bilateral ties and proceeded with cooperation in the oil sector. In 1960, both these countries along with the Iraq, Kuwait and Saudi Arabia - together founded Organisation of Petroleum Exporting Countries (OPEC). When the Shah was overthrown in 1979 and the new Iranian government was established, Venezuela was one of the first country to recognise and legitimacy to the new government.
While bilateral relations existed between the two countries was mainly limited to the oil industry, Iran's relationship strengthened when Hugo Chavez was elected as the president of Venezuela in 1999. Between 2001 and 2005, the bilateral trade between both the countries increased steadily while the energy cooperation continued. The then Iran President, Khatami signed Iran's first free trade agreement with the Venezuela during a visit to Caracas. This agreement included cooperation in the sectors of mining, shipping, oil and gas trade and marine trade.
Between 2005 and 2013, under the leadership of Mahmoud Ahmadinejad of Iran and Chavez, both the countries became political allies who often stood their ground against the United States. Around 300 agreements were signed in the duration of 8 years. One thing which set apart this relationship was the strengthening of personal relationship between the two leaders. On many occasions, the personal camaraderie of the leaders had a positive impact on the bilateral relationship. Chavez had supported Iran's nuclear program and development of peaceful nuclear technology and stated that it was Iran's legitimate right. In 2008, Venezuela and Iran signed a signed a science and technology agreement to cooperate in the sphere of nuclear technology. In 2009, both the countries established a bi-national development bank in Caracas with an investment of $200 million to jointly support economic, industrial and mining projects.
By 2012, Iran's investments and loans in Venezuela were valued at $15 billion. But most of these investments did not result in gains which both the countries thought they would. A cement factory which was announced in 2005 did not start production until 2012. A car factory, which Chavez claimed would produce around 25,000 units per year, only produced 2000 units. Some of these initiatives were also used to facilitate illegal activities. For example, in 2008, Turkish officials seized 22 Iranian containers bound for Venezuela which were labelled as "tractor parts" but reportedly contained materials for an explosive lab.
The relationship between both the countries was, however, mutually benefiting. Even through the actual investment in Venezuela by Iran was less, Iran's developmental efforts inside Venezuela boosted the Chavez's image in his home country and advanced his anti-imperialistic agenda. For Iran, Venezuela became a gateway to establish connections with the other Latin American countries and expand its commercial interests. As Chavez made Iran an ally, it opened many channels for Iran to which led to the agreements between Ahmadinejad government and the governments of Ecuador, Bolivia and Nicaragua. Iran benefited from these connections through the Bolivian Alliance for the Americas (ALBA) as new trade links opened up during the time Iran faced increasing financial isolation due to U.S sanctions.
When Chavez died in 2013, he was replaced by Vice President Nicolas Maduro. Both the leaders, Maduro and Rouhani did not focus on the bilateral relationship and the ties between both the countries diminished until 2015. In the June 2015, the two countries signed six agreements in the economic, financial, scientific and technological spheres.
But the paradigm shift in the bilateral relationship came when Iran sent a gasoline shipment to Venezuela (1.53 million barrels of gasoline and refining component) circumventing the US oil sanctions imposed on Venezuela. On 8 June 2020, Iran also sent medical equipment to Venezuela to help combat the COVID-19 outbreak. On June 21, 2020, Golsan, an Iranian cargo ship transported 23,000 tons of food products to Venezuela to stock in the first Iranian supermarket in the country. This has led to the renewal the commitment between the two countries. Both these pariah countries have been rebuked by United States and this has deterred many nations from trading with these two countries with the fear of being punished by Washington.
The sanctions had a negative impact on the economic growth of both the countries as their export revenues tumbled along with fiscal deficits and depreciation of their currencies. But this is what has drove Venezuela and Iran to re-invigorate their bilateral relationship. While Iran is not performing as poorly as Venezuela at the economic front, scholars anticipate that the on-going recession which is now fuelled by the pandemic and the resulting inflation may lead to a Venezuela type situation for Iran.
In this light, Iran reaching out to Venezuela is a good solution for both the countries as it will not only result in trade and economic cooperation but will also strengthen their stance against United States. It will also aid Iran in re-invigorating its ties with the other Latin American countries. In a recent report, it has been stated that Iran's Foreign Minister, Mohammad Javad Zarif will embark on a tour of Bolivia, Venezuela and Cuba. These three countries represent a bulwark of anti-American sentiment on the South American continent.
This can prove as a setback for Washington as its imposition of sanctions on Venezuela has not generated into the regime change the wanted. While Iran and Venezuela are still cooperating less than what they did during Chavez's time, it is the beginning of a relationship, which if strengthened can change the global dynamics. But both the countries need to put in more effort to strengthen their ties and Venezuela carry out technical upgrades without any delays, mismanagement and corruption. While this may seem unlikely given the long list of the failed partnerships, the paradigm shift in the both the country’s foreign policy can pose a significant challenge to United States.
Pic Courtesy-Kevin Keith
(The views expressed are personal)
