Following the forced removal of former Prime Minister Imran Khan by the Pakistani parliament and the decision of the country’s Supreme Court, his successor, Prime Minister Shehbaz Sharif, has faced a variety of new political and economic challenges. Sharif is adjusting Pakistan’s foreign policy apparatus, establishing new relationships abroad responding to domestic developments. The visit of Pakistani Foreign Minister Bilawal Bhutto Zardari to Iran in June presents new opportunities for both Pakistan and Iran, if leaders and officials in Islamabad and Tehran can understand and seize them.
Growing Relationships
Iran and Pakistan share more than 900 kilometers of border and have many mutual geopolitical, cultural, and religious interests. The situation in Afghanistan, corridors of communication, the trafficking of arms, humans, and narcotics, the issue of refugees, the fight against terrorism, and both countries’ relations with China are among the commonalities in the Pakistani-Iranian bilateral relationship.
From a security perspective, Afghanistan is the most important issue shared between the two countries. After the collapse of the Afghan government in August 2021, both countries found themselves in the uncomfortable and unenviable position of bordering the Taliban, a militant group still regarded as a terrorist organization and shunned by several Western countries. Both Islamabad and Tehran have had ties to the Taliban in the past and have established military and educational ties with some Taliban-aligned groups.
In the past year, however, the Taliban have marginalized members of the group who are close to Iran, such as Mullah Fazel and Sadr Ibrahim, and appointed them to positions well outside the group’s inner circle of decision-makers. As a sign of its disdain for regional relationships, the Taliban did not even attend a meeting of Afghanistan’s neighboring foreign ministers in October 2021 in Tehran despite having been expressly invited.
Insecurity on the Iranian-Afghan border has increased since the Taliban came to power. Several border clashes have erupted between Iranian and Taliban border guards, leading to the temporary closure of the border. Pakistan has also faced security consequences from the group’s takeover; in spite of its historic ties to the Taliban, some reports indicate that the Afghan Taliban now supports and shelters the Tehrik-e Taliban Pakistan (TTP), an Islamist anti-government militant group which has conducted terror attacks within Pakistan in the past. Insecurity and the growing potential for the presence of terrorist groups on Afghan territory, and the lack of an inclusive government, are concerns in both Tehran and Islamabad, providing a common ground for their security cooperation.
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.
In 2020, Iran’s export to Pakistan reached 352 million dollars to rank third in Iran’s exports. The two countries have ambitious plans to increase their bilateral trade to five billion dollars by 2023. Overall, according to Iranian customs, Iranian exports to Pakistan in the first half of the current year have amounted to $321 million, while imports from Pakistan have reached $110 million.
Challenges and Inconsistencies
Changing geopolitical dynamics are not new to the South West Asia region, and Iran-Pakistan relations have also shifted in recent years. The changing nature of several strategic and tactical issues have affected relations between the two countries.
First and foremost, is the issue of dealing with regional terrorist groups. Some Iranian opposition terrorist groups, such as Jundullah, Jaish-ul Adl, and Harakat Ansar, are present in Pakistan. These groups have been involved in several armed attacks and kidnappings in southeastern Iran, fleeing to Pakistan after every operation. Tensions between Islamabad and Tehran sharply rose in April 2017 after the Jaish-ul Adl group killed 10 Iranian border guards and fled across the Pakistani border. Maj. Gen. Mohammad Bagheri, the chief of the general staff of the Iranian Armed Forces, called on Pakistan to confront the groups, warning that if it failed to do so, Tehran had the capacity to hit militant “safe-havens, wherever they are.”
Another persistent issue between the two countries has been the regional gas pipeline linking the two countries. The gas pipeline agreement was introduced in 1990 intended to export Iranian natural gas to India and Pakistan. It will be, when completed, 2700 km long, of which 1100 km was agreed to be built by Iran, 780 km by Pakistan, and 600 km by India. The pipeline will export 150 million cubic meters of gas per day, of which Pakistan’s share is 60 million cubic meters.
Unfortunately, Pakistan has displayed great inertia in constructing the pipeline, to the increasing frustration of Iranian officials. Iran completed its section of the gas pipeline up to the border, but Pakistan did not, persistently refusing to fulfill its commitments. As an incentive, Iran promised $500 million in financial assistance for the construction of the pipeline, but Pakistan again refused, citing high gas prices. Iranian observers have perceived American influence behind Pakistan’s reticence, as the United States has pressured Pakistan to refrain from importing Iranian gas.
Securing the allegiance of tribal groups for political pressure on each other has also caused alarm and worsened relations between the two countries. On January 25, 2022, a group of Pakistani Baloch—a group historically opposed to the Pakistani government—attacked a checkpoint in the Kech district of Balochistan province, killing 10 Pakistani soldiers. Pakistan accused Iran of supporting the attack. During the February 2022 visit of Iranian Brigadier General Ahmad Ali Goudarzi to Pakistan, Pakistani officials warned him that “we know about the use of Iranian soil by Baloch insurgents. If there are more attacks, we will take decisive action.” Pakistan has many security levers available for use against Iran, such as supporting and arming terrorist groups inside the country. If Islamabad’s security challenges are not managed by the two countries, it seems apparent that they will provoke endless terrorist insecurities.
Financial Influence
Finally, relations between the two countries are affected by the intervention of other foreign powers—most notably Saudi Arabia, which is decidedly uninterested in strengthening relations between Islamabad and Tehran.
Saudi Arabia has had a great deal of influence in Pakistan for decades, and the challenging relations between Iran and Saudi Arabia and the severance of ties between the two countries in January 2016 have affected relations between Tehran and Islamabad. Saudi Arabia has extensive influence over Pakistan’s Sunni population, and Riyadh pays for Pakistani religious schools to influence their ideas and ideologies. Due to Saudi Arabia’s influence among the fundamentalists, Islamabad is forced to refrain from provoking them while exercising caution in its relations with Iran, where 90 percent of the population is Shi’ite.
In addition to the issue of religious education, Pakistan is financially dependent on Saudi Arabia in a broader sense, and Riyadh has repeatedly used the leverage of economic aid to force Pakistan to take positions it would otherwise oppose. For instance, Saudi Arabia pushed Pakistan not to attend the “Islamic Summit” in Malaysia in December 2019, on the basis that it represented a rival to the Jeddah-based Organization of Islamic Cooperation.
Saudi Arabia has consistently offered generous economic assistance to Pakistan in pursuit of its geopolitical goals. In October 2021, Riyadh announced $4.2 billion worth of economic assistance. Earlier, in 2018, Pakistan received a bailout package worth $6 billion. Moreover, a large chunk of the Pakistani workforce—2.6 million, or more than seven percent of Saudi Arabia’s total population—resides in Saudi Arabia and sends back remittances vital to keeping Pakistan’s economy afloat. A report by the State Bank of Pakistan estimates that remittances received from Pakistani workers in Saudi Arabia amounted to $821.6 million in the 2019/2020 financial year, underlining the enormous economic importance of Saudi Arabia to Pakistan. Saudi Arabia has sought to leverage its great financial influence over Islamabad to distance it from Iran, helping to further isolate Tehran in the region and assist the U.S.-led campaign of “maximum pressure.”
Despite of these efforts, Riyadh has been unable to fully decouple Iran and Pakistan; the neighboring countries are too interdependent thanks to their mutual economic, geopolitical, and security needs. There have been many ups and downs in the history of relations between Iran and Pakistan, but they have consistently managed them, and have repeatedly brought relations back from the brink due to their inseverable mutual interdependence.
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