Iranian President Mahmoud Ahmadinejad Speaking at Columbia University, New York City, USA (Photo by Daniella Zalcman, available at Wikipedia Commons) Using economic leverage and financial cooperation, Iran is forging a network of states friendly to its own interests

March 01, 2009

Iranian Soft Power

Using economic leverage and financial cooperation, Iran is forging a network of states friendly to its own interests. As these informal associations strengthen into political partnerships, Iran can increasingly rebuff American and UN attempts to isolate it for its defiance of Security Council resolutions. Even without a formal alliance system, Iran’s growing influence will complicate any attempts to ensure that the Islamic Republic acts responsibly and peaceably. American policymakers and allies should therefore consider Iran’s informal influence as well as its conventional power when deciding how best to approach Tehran and the security threat it poses.


Table of contents:

Commited Partners

Potential Partners

Junior Partners




Over the past decade, Iran has deepened relations with a number of countries in direct response to international pressure over its controversial nuclear program. Although state efforts to expand bilateral or multilateral ties with others for trade, security, and international cooperation are not unusual, it seems that Iran has begun to build its global relationships into an anti-Western network intended to contest American interests around the world. The extent of Iran’s global relations also brings into serious question the feasibility of “isolating” Iran, as many advocates of increased economic sanctions propose.

Iran has begun to leverage economic partnerships to organize security and political agreements, particularly over the past decade. Although it has formed partnerships in many regions, including Latin America and Africa, these developments have escaped significant attention, largely because of their unofficial nature. As a result, increased trade, aid, and economic cooperation agreements—and the ensuing political benefits for Iran—have grown unimpeded. Many economic agreements are concluded entirely separately from high-profile political negotiations and can be mistakenly dismissed as normal bilateral trade or aid. Upon closer examination, it becomes clear that increased infrastructure investments, oil partnerships, and foreign aid agreements represent a concerted Iranian effort to build a greater international support network. Iran has sought, in effect, to buy political friendship that the Islamic Republic can then translate into security agreements and alliances, including political support for the Iranian nuclear program.

These efforts, coupled with the rise in anti-Western and particularly anti-American sentiment over the past few years, have helped create a de facto association of states over which Iran increasingly presides. This association is not a formal alliance network, but rather a reflection of the converging policies of states that have moved toward Iran in their diplomatic, economic, and, in some cases, military policies. By building a global support network, Tehran seeks not only to counter the United States—which has historically been the regime’s ideological arch nemesis—in the nuclear standoff, but also to influence international events and economies to its advantage.

Many of the recipient countries of Iran’s advances have gradually moved closer to Tehran. Trade relations alone plainly do not necessarily indicate a more sinister alliance, but extensive trade can often create strong interconnections or even economic dependence that inclines Iran’s trading partners to offer increased political support for Tehran. These partnerships become most dangerous, however, when they evolve into military cooperation or security agreements. The most benign of these security agreements prevent signatories from participating even passively in any military actions that Iran deems hostile to its interests. The most threatening security agreements to American interests are true arms accords and alliances of force that Iran could bring to bear against the United States and its allies in the event that military conflict arises. Iran could also rely on sufficient economic leverage to dissuade American partners from supporting Washington’s interests, without ever negotiating any explicit agreements. 

 Iran’s alliances can be divided into levels of influence based on each partner’s respective regional power and its willingness to use that power to help expand Iran’s network. Global powers, particularly Russia and China, have significant economic and political ties with Iran. These states cannot be considered either clients or even equals of the Islamic Republic; instead, both China and Russia can more accurately be described as senior partners or mentor states with considerable influence within Iran. Both of these bilateral relationships are complex and multidimensional in scope. Detailed discussions of these relationships can be found in other papers in this series.[1]

A second group of states representing Iran’s peers in both political and economic power have developed close political and economic relations with Tehran. States in this group act as Iran’s partners in international affairs and have proven willing to help Iran extend its influence within their own regions. Venezuela is the most prominent example. Tehran’s partnership with Caracas has developed from a mainly economic relationship into an extensive political and military entente. Iran has been able to leverage its close relationship with Venezuelan president Hugo Chavez in order to pursue relations with Latin American countries that are dependent upon goodwill and economic aid from Caracas. Partner countries like Venezuela provide Iran with resources and ideological support, and can act as a tool with which Iran can extend its influence into other regions around the world. Other states such as Pakistan and South Africa may be moving in this direction, growing closer to the Islamic Republic through political and economic relations and multilateral agreements.

Regional powers that are growing closer to Tehran but have not yet committed significant political support comprise a third group of Iran’s associates. These states are important players within their own regions and have responded well to Tehran’s economic overtures, but have refrained from forging greater cooperative partnerships with the Islamic Republic either because they are wary of Tehran or have conflicting regional interests. Turkey is one such example, as it has both the economic and political power to open important doors for Iran in Eastern Europe using energy leverage, among other tools, but thus far has refrained from extensively pursuing such opportunities, as it has instead focused on gaining EU membership. Because of its alliance with the United States and desire to join the European Union, Turkey has been a difficult acquisition for Tehran. In recent years, however, Turkey has gradually increased its economic cooperation with Iran, particularly in the energy sector, and has acted as a conduit for Iranian oil to reach European markets, despite the U.S. government’s disapproval.[2] Should these trends continue, Turkey could become a more committed partner of Iran if given significant incentives, lending political support to the Islamic Republic.[3] As Iran’s relationships with its potential partners are still uncertain, however, these uncommitted colleagues may be swayed by pivotal international events either toward or away from Tehran.

Iran also possesses a group of allies over which it has a great deal of influence, though these states do not possess any significant regional power and therefore tend to act more as client states than equal partners. Sudan is an example of such an ally, as it cannot act to extend Iran’s influence beyond its own borders into weaker regional states, but is itself dependent upon support from the Islamic Republic. Though these junior partners cannot act as powerful allies for Iran, they can provide the Islamic Republic with friendly outposts in distant regions. In return, junior partners like Sudan are quick to translate Iranian economic assistance into overt political support for Iran. [4] As Iran’s influence around the world grows, it will become more difficult to ensure that the Islamic Republic acts responsibly and peaceably.


Committed Partners:

Several of Iran’s peers in economic, military, and diplomatic power have forged significant relations with Tehran in trade, infrastructure development, or business investment, and have expanded the economic partnership into overt political support. These countries can act as catalysts for Iran’s spreading network and some already have proven willing to help Iran expand its sphere of influence within their own regions. As a result, members of this category of states threaten American interests as they help Iran extend its influence against the interests of the U.S. and its allies. 

Of Iran’s closest allies, Venezuela has proven to be one of Tehran’s most vocal supporters in recent years. Iranian president Mahmoud Ahmadinejad and Venezuelan president Hugo Chavez have appeared together many times since Ahmadinejad’s election in 2005, making joint statements and expanding bilateral trade. The two leaders have developed a political friendship centered on their mutual hostility toward the United States, while also building upon the firm foundations of economic interdependence. [5] Both Venezuela and Iran are oil-exporting countries that rely heavily on these exports to provide domestic economic growth. Both also use their oil revenue to fund development, trade, and aid deals with weaker regional states, allowing them to act as economic heavyweights within their respective regions. As a result, much of the cooperation between these two states has included bilateral development of energy infrastructure or joint ventures, and has helped Venezuela open Latin American markets to Iran.

Iran and Venezuela have had minor bilateral dealings for many years, starting before 2000. During Mohammad Khatami’s presidency (1997–2005), Iran and Venezuela developed their relations into progressively more extensive energy cooperation and private sector investment. [6] Tehran and Caracas also began to deliver united foreign policy messages, with the two leaders appearing together for public media broadcasts with increasing frequency over the years. The rhetoric that the two states developed became increasingly anti-Western, referring to a bilateral unity that would “reduce the influence of certain world powers.”[7] In 2005, at the end of Khatami’s presidency, Chavez presented the Iranian leader with the Golden Key of the City of Caracas as a sign of gratitude for Khatami’s efforts to promote ties between the two countries. [8]

Following the election of President Ahmadinejad in 2005, the amity between Caracas and Tehran deepened to a more personal and anti-American entente. At the start of Ahmadinejad’s presidency, Iran and Venezuela signed a string of bilateral agreements, including two on oil exploration and car production, among others. [9] As the two forged an economic relationship, they also took significant steps to develop their political alliance. At the Non-Aligned Movement Summit in Cuba in 2006, Chavez claimed that he would defend Iran from any threat of invasion. [10] Not long after, Ahmadinejad publicly stated that he would back Venezuela’s bid for a seat on the United Nations (UN) Security Council.[11] In 2007, the two leaders claimed that they were strengthening an “axis of unity” against the United States, courtesy of a joint petrochemical plant and a series of economic cooperation agreements.[12]

Like Tehran under Ahmadinejad, Caracas under Chavez turned to Russia and China for aid in its military development plans, drawing Iran and Venezuela even closer under a common defense umbrella. In July 2008, Chavez visited Russia to finalize the purchase of military equipment, including Tor-M1 air-defense systems, diesel submarines, and Ilyushin warplanes.[13] He followed with a similar visit to China to negotiate bilateral relations agreements and, reportedly, to offer to buy Chinese K-8 military training planes.[14] In September 2008, Chavez announced that he was “interested in developing nuclear energy, for peaceful ends of course,” claiming that Russia had offered to help with this program, just as it had with Iran’s current program.[15] Beyond its growing connection to Iranian sponsors China and Russia, Venezuela has also been tightening ties with Hezbollah through Tehran.[16] According to a report from the U.S. Department of the Treasury, the Director of Political Aspects at Venezuela’s embassy in Lebanon used his position to raise funds for Hezbollah and facilitate travel for Hezbollah members to and from Venezuela.[17] Through these connections to Russia, China, and Hezbollah, Caracas has increased cooperation with Tehran both indirectly and openly.

These extensive economic, political, and military ties between Caracas and Tehran should not be misconstrued as normal bilateral relations between countries with similar international agendas. The Caracas-Tehran partnership has recently moved beyond bilateral agreements, extending into greater Latin America. Since 2005 and the creation of a Tehran-Caracas regional partnership, Iran has begun wooing a number of Venezuela’s allies with energy deals and aid agreements. Brazil, Bolivia, Cuba, Ecuador, Nicaragua, and Paraguay all have benefited from Tehran’s efforts to gain a higher profile in Latin America.[18]

In 2008, Iran invited Brazil , an ally of Venezuela, to join the Organization of the Petroleum Exporting Countries (OPEC).[19] Significantly, this invitation to the exclusive association came soon after Brazilian companies began exporting goods[20] to Tehran via the United Arab Emirates (UAE), thus helping circumvent the strict UN sanctions that have been placed on Iran for its nuclear program. [21] According to the Brazilian ambassador to the UAE, Flavio Sapha, Brazilian sugar and meat are making their way to Iran via the UAE, defying economic trade sanctions against Iran. One Brazilian poultry company, for example, identified the Iranian government as its biggest client.[22] According to Sapha, “Every time there is a sanction against Iran, there are Brazilian companies celebrating.”[23] Through this triangular trade network, Brazilian companies have managed to gross $2 billion a year in trade with Iran as Brazilian-Iranian political relations have improved.[24]

Venezuela has also helped Iran gain a foothold in Bolivia in recent years. Bolivian president Juan Evo Morales claimed in 2007 that “La Paz relies very much on Iran’s aid in industry, capital investment, and production,”[25] a reliance that only increased in 2008. Venezuela and Iran agreed to loan Bolivia $225 million for a state-owned cement company, while Iran pledged $1.1 billion in aid to develop the Latin American country’s gas industry.[26] The flow of Iranian money into La Paz has provided political benefits for the Islamic Republic, as well. In June 2008, Bolivia publicly backed the “peaceful nature of Iran’s atomic program and expressed support for Tehran's ‘peaceful and scientific’ efforts to utilize civilian nuclear technology,”[27] a significant show of support for a program that has resulted in numerous UN sanctions.

It is clear that Venezuela has played an integral role in winning Iran this new addition to its list of Latin American friendships. According to former Bolivian president Jorge Quiroga, Iran “is making incursions in nuclear proliferation and sponsoring terrorism. Just imagine, what interest could we have in relations with countries of that type? Only one: being an ally of Hugo Chavez on account of the oil, with Chavez obliging us to have relations with Iran.”[28] Despite the questionable ambitions of the Islamic Republic and the negative attention it has received from the UN in recent years, President Morales hopes to deepen ties with Tehran and has even declared his plans to move Bolivia’s only embassy in the region to Tehran in an effort to enhance diplomatic ties.[29] Venezuelan oil, Iranian money, or some combination of both incentives has thus procured Ahmadinejad another Latin American supporter in President Morales.

Like Bolivia, Nicaragua and Ecuador have both been longtime allies of Venezuela and recently entered into a number of joint investment projects with Iran and Venezuela. In 2007, Nicaragua received a $231 million loan from Iran to build a hydroelectric dam[30] and an additional $350 million from Venezuela and Iran together to build a seaport near Monkey Point on Nicaragua’s Caribbean coast.[31] Ecuador recently became an OPEC member, opening Ecuadorian markets to Iranian gas and investment aid through the organization.[32] Relations with both Nicaragua and Ecuador, with the aid of Chavez’s personal friend Ecuadorian president Rafael Correa, are warming considerably toward Tehran. In exchange for its significant monetary investments in both countries and its political support for the two recently elected reformist presidents, Iran has received support from both Nicaragua and Ecuador against sanctions by the UN.[33]

Policymakers should be aware of Iran’s growing influence in Latin America and the challenge that influence poses to any notions of isolating Iran internationally or economically. Iran has been able to develop this influence throughout the region, partly as a result of its political ties with Venezuela. By securing Venezuela’s support and assistance in creating bilateral ties with many countries in Latin America—ties that extend beyond oil and often beyond simple economic agreements to include public political support for the regime—the Islamic Republic has procured a certain legitimacy to compete with UN and American sanctions.


Potential Partners:

Iran’s potential partners have increased their cooperation with the Islamic Republic over recent years, but thus far have shied away from an outright alliance. Cooperation between Iran and these partners has been limited to increasingly extensive trade and financial cooperation agreements, often in the form of lucrative oil deals. No single action or agreement as yet can be labeled sinister, but together, they are cause for concern. Countries like Turkey, Pakistan, and South Africa are powerful and influential in their own right. Should their cooperation with Iran continue and escalate, they would be well placed to help the Islamic Republic challenge Western and American interests abroad. The extensive economic agreements and political accords they have forged provide Tehran with certain leverage over these associates, even without more formal treaties. These states might be enticed away from the Islamic Republic, however, if convinced that cooperation would bring them more international punishment than Iran could offer in rewards.

Over the past few years, Turkey and Iran have increased their financial cooperation gradually, largely through oil, deepening their relationship through growing trade and bilateral investment. As Turkey’s energy needs have increased, Iran has actively sought new markets for its most important export, providing an excellent base with which to develop greater avenues of cooperation. Iran has specifically targeted Turkey as an important customer[34]—a NATO member, U.S. ally, and hopeful EU member—with recent oil and gas deals and has been quite successful in closing these deals, despite U.S. government officials’ messages of caution to Ankara.[35] Although Ankara has a favorable status with regard to American interests in its near abroad, it recently increased its bilateral trade with Tehran significantly, and the two have discussed the construction of a pipeline that would run Iranian oil across Turkey to Italy, thus greatly expanding the scope of Iran’s oil markets in Western Europe.[36] Despite repeated economic sanctions by the United States and the UN to halt international investment in Iran’s energy sector, Turkey has stated that such sanctions will not prevent its cooperation with Iran in supplying its own and Europe’s growing energy needs.[37]

Iran began courting Turkey as a powerful new partner in 2002, when Turkish president Ahmet Necdet Sezer made an unprecedented visit to Iran.  It seems that Tehran hoped to enhance complicated political and security ties and improve trade and economic relations.[38] The visit was a very qualified success: though “politically at odds with Iran over many regional issues, the Turkish president [held] awkward discussions with his Iranian hosts amid signs of improving economic relations.”[39] Since 2002, when Turkey’s Islamic Justice and Development Party became the dominant party in the Turkish parliament, and as economic cooperation has deepened between Tehran and Ankara, their political relations have also improved.[40] For the five years following that important visit in 2002, trade between Turkey and Iran increased more than sixfold, hitting $7.5 billion in 2007.[41]

Beginning in August 2008, when Ahmadinejad made an official visit to meet with Turkey’s president and prime minister, Turkey and Iran have begun to formalize political relations. During Ahmadinejad’s visit, the two countries’ presidents signed five memorandums of understanding on security cooperation, combating organized crime, economic cooperation, and education. These agreements followed a particularly successful period during which trade between Iran and Turkey reached $6.1 billion in the first seven months of the year, a 37 percent increase over the corresponding period during the previous year.[42] This growth represents increased financial interdependence between the two countries, despite significant opposition from the United States and the international community over Iran’s nuclear program.[43]

By August 2008, Iran was already calling for more than $10 billion in bilateral trade agreements with Turkey for the year.[44] Most recently, Turkey agreed to follow through with a comprehensive oil and natural gas agreement that was stalled in August 2008, likely due to pressure from the United States.[45] The deal, a lucrative agreement in which Iran will transport oil and gas to Europe through Turkey, will significantly add to the amount of Iranian oil already flowing through Turkey via a pipeline that runs between the two countries.[46] Ankara also recently announced its support for Iran’s right to possess nuclear energy for peaceful purposes. [47] The guarded statements of support for Iranian peaceful nuclear rights—which have been echoed by Iran’s closest allies around the world as a show of support for Tehran against the reproach from the United States and the West—demonstrate that Turkey is becoming increasingly willing to work with Tehran as the financial rewards get sweeter, despite disapproval from Washington, its longtime ally.[48]

 Within its own region, Tehran has found a useful partner in Pakistan, another friend of the U.S. and a nuclear neighbor. The two countries began cooperating in energy and bilateral trade in 1991, when Iran began negotiating an oil deal with Pakistan and Qatar.[49] This initial cooperation, however, was limited and slow to progress into anything more substantial. Iran again tried negotiating with Qatar regarding the construction of gas pipelines to Pakistan in 1995,[50] but was unsuccessful. Cooperation regarding energy has nonetheless increased since the 1990s and helped provide the foundation for a more thorough bilateral trade network between Iran and Pakistan in recent years. In 2002, Iran again began courting Pakistan to counter the growing American military presence in the region brought on by the War on Terror in Afghanistan, a mutual neighbor of both Iran and Pakistan. By 2005, Pakistan was actively seeking Iranian investment in bilateral trade and energy cooperation, demonstrating the increasing influence of Tehran in undermining U.S. alliances in the region.[51]

In recent years, Pakistan and Iran have deepened their economic partnership considerably beyond smaller multilateral oil agreements. In 2008, Iran and Pakistan met at the seventeenth session of their Joint Economic Commission,[52] where Iranian foreign minister Manouchehr Mottaki claimed that Iran and Pakistan have the potential to increase their already-significant economic cooperation “far [beyond] the present volume of trade between them which is US$500 million annually.”[53] At the meeting, both governments’ representatives expressed their hope to increase their bilateral trade to $1 billion in the near future.[54]

Since 2005, Islamabad has increasingly turned to Tehran to supply Pakistan’s growing energy needs. In August 2008, Iran agreed to finance a robust energy project that would allow Pakistan to import 1,000 megawatts of electricity to overcome its power shortage.[55] The project is a $60 million endeavor that will run a 100-kilometer (62-mile) electric line to help augment the 40 megawatts of electricity Pakistan already receives daily from Iran. Beyond their bilateral energy deals, Tehran and Islamabad have even cooperated in the past few years on a mutual energy deal with India, another energy-starved nuclear power and U.S. ally in the region.[56]

The 2,600-kilometer, $7.4 billion Iran-Pakistan-India Pipeline—IPI Pipeline, dubbed the “Peace Pipeline”—will pump crude Iranian oil from the South Pars oil field to Pakistan and India.[57] Tentative talks on the pipeline began in 1994 but stalled in 2007, when Iran and Pakistan accused India of folding under pressure from Washington not to cooperate with Iran. Washington has repeatedly urged India and Pakistan not to follow through with the deal while Iran is under sanctions for its nuclear enrichment program, explaining that the lucrative pipeline would undermine international efforts to pressure Iran to cooperate. While India has stalled, in December 2008 Pakistan discussed possibly buying India’s share or finding alternate buyers in order to secure the vital energy supply.[58] In January 2009, members of the Indian Petroleum Ministry suggested that progress on the “Peace Pipeline” was unlikely in the aftermath of the Mumbai terror attacks of November 2008 for which India blamed Pakistan.[59] In February 2009, Iran announced it would increase the price of gas through the IPI pipeline, which would make the gas the most expensive in India and an agreement involving India even less likely.[60] Pakistan, however, has continued to push for a resolution with Iran, with or without India’s cooperation, and has discussed alternate buyers to ensure the deal succeeds.[61] Both Russia and China have taken significant interest in the the pipeline, with Russia’s Gazprom offering to help supply oil and China holding talks with Iran and Pakistan in 2008 to replace India in case New Delhi decided to follow U.S. urgings to forsake the partnership. [62]  

Beyond the energy sector, Iran and Pakistan cooperate in a number of trade groups and have agreed on a list of 300 tradable items in an effort to stimulate mutual trade.[63] Iran is active in the Economic Cooperation Organization (ECO)—a trade and investment group that includes all the central Asian countries, plus Iran, Turkey and Pakistan, and is also an observer to the Shanghai Cooperation Organisation—a regional security group[64] that aims to provide a counterweight to U.S. power in central Asia.[65] Additionally, Pakistan has helped encourage trilateral trade with Iran and Turkey in commercial goods, as well as infrastructure development beyond the programs of regional organizations like the ECO. Pakistan has claimed that it shares extensive ties with Iran “based upon faith, belief, joint history and culture. Expansion of cooperation in the fields of trade and investment can further strengthen the bilateral ties.”[66] These promises indicate Pakistan’s intention to continue building the partnership—a partnership that can increasingly compete with American interests in the region as it grows.

These growing bilateral ties have worried the United States, as Pakistan has shown greater willingness to allow its cooperation with Tehran to develop beyond low-level commercial ties to include intelligence sharing and support for Tehran’s nuclear program.[67] Washington has expressed suspicions that Islamabad may have—either intentionally or inadvertently—aided Iran in acquiring nuclear technology. Although Pakistan officially denies any involvement, some still suspect Pakistani scientists (Dr. A. Q. Khan, for one) employed by the Pakistani military of playing a crucial role.[68] Henry Sokolski, former deputy for nonproliferation policy in the Office of the Secretary of Defense, explained in 2003 that “the notion that Pakistan wasn’t involved is getting less and less tenable.”[69] Since then, inspectors have found in Iran’s possession documents from Dr. Khan detailing how to shape uranium for nuclear warheads, while in 2004, former Pakistani president Pervez Musharraf pardoned Dr. Khan for his sale of nuclear technology.[70] According to a report by the Congressional Research Service published in 2005, Dr. Khan “could not have functioned without some level of cooperation by Pakistani military personnel, who maintained tight security around the key nuclear facilities, and possibly civilian officials as well.”[71] Over the past several years, Pakistan has increasingly called for peaceful reconciliation on the international nuclear standoff, despite the UN’s and Washington’s rising concerns over the issue.[72] Even Pakistani officials have linked Islamabad’s reliance on Iran for energy with its defense of Iran’s right to nuclear technology,[73] which demonstrates a powerful connection between the growing commercial ties and the political ramifications.

Not only has Pakistan become increasingly dependent upon Iranian energy and oil—a dependency that will only be compounded with the completion of the IPI pipeline—it also has begun publicly defending Iran’s right to nuclear technology and worked to increase military cooperation with Iran on border security and counterinsurgency in Afghanistan.[74] Taken together, these developments paint a picture of an American ally working closely with and becoming ever more financially dependent upon a country that is one of America’s greatest security concerns. The more Pakistan increases its energy dependence on Iran and the more the two countries pursue joint deals in the region, the more the United States must question the loyalty of its allies as tensions with Tehran escalate.

 South Africa, another country with friendly political relations with the United States, has also significantly increased its trade with Iran in recent years. Iran supported the African National Congress (the majority party in the South African government) as long ago as the apartheid era and has since been a major supplier of oil and infrastructure aid to South Africa.[75] By 1995, Iran had begun developing agreements with Pretoria to store its surplus oil in the African country. Despite the fact that it interfered with its friendly relationship with the United States, South Africa agreed to store 15 million barrels of Iranian oil, gaining $208 million in the initial signing, but with the potential to earn up to 50 percent of the proceeds as the oil was sold.[76]

Oil deals grew after 1995 and broadened into greater official cooperation beyond the energy sector. South Africa also increased its bilateral trade and corporate relations with Tehran so that by August 2008, South Africa put bilateral trade at $4 billion between the two countries.[77] Pretoria also recently agreed to several joint development projects in Iran, including refineries and a massive mobile phone contract for South Africa’s Mobile Telephone Network (MTN). MTN alone invested $1.5 billion over 2007 and 2008, providing cellular coverage for more than 40 percent of Iran’s population.[78]  

In 1997, Nelson Mandela’s government discussed selling enrichment expertise from its own nuclear program to Iran. Javad Vaidi, an Iranian official from the Islamic Republic’s National Security Council, reported that South Africa even offered to sell uranium oxide concentrate to Iran and proposed to take part in the stalled enrichment activities in a memorandum of understanding signed in December 2005.[79] Iran could use the highly reactive uranium oxide in its reactors at Isfahan and Bushehr as part of a nuclear program that already has caused great international concern over its secrecy and repeated disregard for International Atomic Energy Agency (IAEA) regulations. Although South Africa has publicly denied agreeing to take part in any enrichment activities, Pretoria’s contribution of uranium oxide demonstrates that South Africa and Iran reached significant diplomatic ties by 2005.[80] In July 2008, South Africa reiterated its position on Iran’s right to peaceful nuclear technology and claimed that the IAEA, not the UN Security Council, should deal with the issue. South Africa has insisted that once Iran’s program is deemed peaceful by the IAEA, the international community should treat Iran with equal nuclear rights. South Africa has called for the United States and Israel to cease their threats against Tehran and its nuclear program[81] and has suggested that all embargos, including arms and financial bans, against the Islamic Republic and the Revolutionary Guard be dropped in order to encourage more diplomatic engagement.[82] Despite claiming that it wants to ensure that Iran does not use its nuclear program to create nuclear weapons, South Africa has repeatedly spoken out against confrontation that could threaten both regional and international peace.

As financial agreements have developed into comprehensive bilateral cooperation deals and, most recently, into public calls for an end to threats against the regime, South Africa has brought its official position of neutrality toward Iran into question. South Africa’s friendship with the United States makes it all the more appealing to Tehran, and its partnership with Iran makes it all the more threatening to American interests. Pretoria is well on its way to becoming a committed partner of Iran if trends continue.


Junior Partners:

Countries worldwide with significantly less economic or military clout nonetheless can serve as vital bases of Iranian power abroad, though they do not have the regional influence to help Iran extend its power into neighboring states. Countries like Sudan reciprocate Iranian investment in their economies either through aid or trade with overt political support for the Islamic Republic. Even without major regional influence, Iran has sought to procure these junior partners as friendly outposts around the world.

 One example of Iran’s less influential partners is Sudan, which has strengthened its relationship with the Islamic Republic since the end of the 1980s.[83] In recent years, Iran and Sudan have increased their bilateral cooperation to include economic, military, and nuclear issues. As Russia and China have backed away from overtly cooperating with Sudan’s military in the midst of the crisis in Darfur, Iran has stepped in to train, fund, and supply Sudan’s military.[84] In exchange, Sudan has repeatedly supported Iran’s nuclear program in its public rhetoric and provided Iran with a loyal partner in the Horn of Africa.

Tehran and Khartoum began to extend their cooperation in 1989, when Brigadier Omar al-Bashir took power in Sudan in an Islamist-inspired coup. Over the course of the revolution, the Shia Islamic Republic of Iran began sending weapons and oil supplies to Bashir’s Sunni revolutionaries.[85] Iran also began sending Iranian Revolutionary Guard Corps forces to train Bashir’s army shortly after the revolution, and in 1991, Iranian president Akbar Hashemi Rafsanjani pledged to augment assistance with $17 million in financial aid to Khartoum. He also added $300 million worth of Chinese weapons and pledged to sell Sudan 1 million tons of oil each year.[86] Iran followed up this deal four years later with a new assessment of Sudan’s military needs, which yielded Bashir more valuable military deals in the form of armored cars, heavy artillery, and radar equipment. One year later, the two countries signed an agreement to broaden the scope of their military and political cooperation.[87]

In recent years, Sudan has become the “centerpiece of Iranian strategy [to increase its influence] in the Red Sea region and black Africa. . . . The two countries have signed more than 30 agreements ranging from agro-business to joint ventures to training for Sudanese army and intelligence officers in Iran.”[88] In March 2008, the two countries signed a mutual defense agreement, providing for consolidated defense ties and joint efforts to strengthen peace and security in the Horn of Africa.[89] Iranian defense minister Mostafa Mohammad Najjar said the two countries were expanding their military ties in “all fields, including the field of defense.”[90]

In return for the continuous military and economic support that Iran has provided over the past two decades, Sudan has been a consistent and vocal supporter of Iran’s contentious nuclear program. In a rare private meeting with a foreign head of state in 2006, Ayatollah Khamanei told Bashir that “the Islamic Republic is ready to transfer this experience and the technology and knowledge of its [nuclear] scientists” to friendly countries like Sudan. In return, Bashir called Iran’s enrichment of uranium a great victory for the Islamic world and supported Iran’s right to its peaceful nuclear program.[91] Again in March 2007[92] and March 2008,[93] the Sudanese president reiterated his support for Iran’s nuclear program, despite growing international concern over possible proliferation activities. Just as Iran defied UN embargos on military sales to Sudan that might end up in Darfur, Sudan defied UN embargos on trading with Iran’s sanctioned entities and continued to offer unwavering support for the Islamic Republic as Tehran became Khartoum’s most generous arms and financial aid supplier.

Iran is clearly working to cement that relationship of dependence, just as it is trying to expand its influence in Sudan’s vicinity. Sudan has a number of geopolitical assets that appeal to the Islamic Republic: a long coast on the Red Sea, important sea-lanes to the Persian Gulf, a Muslim nation located opposite Saudi Arabia and next door to Egypt, and control of oil resources and the White Nile—a major water source for an entire African region. Ensuring Sudan’s continued friendship provides Tehran with valuable resources and political support in Africa, and illustrates to other African countries the economic and military benefits that can come with partnering with the Islamic Republic.



The spread of Iranian influence based on financial payoff as well as economic or energy dependence is in no way inadvertent or benign. Understanding the motives of the Islamic Republic and the possible benefits it stands to gain from building such a coalition is critical to crafting an effective foreign policy to counter it. If Iran can successfully use economic incentives to buy other states’ support, the United States and its allies will have to reevaluate their current security situations in each of the affected regions and the methods used to pressure Iranian compliance with international demands.

Iran’s rapprochements with countries around the world could complicate American interests in the recipient states and even within their immediate regions. Considered collectively, the rapidly developing Iranian network could seriously threaten American strategic goals and security worldwide as it provides Iran with a means of striking indirectly at the United States. Beyond demonstrating Iran’s desire to create an international security network, Iranian foreign influence in key areas would hamper American attempts to isolate the regime and counter its reckless behavior. As Tehran strengthens its own power through economic incentives and informal allegiances, it challenges the global influence of the United States and its allies.


[1] See Ahmad Majidyar, Russian-Iranian Relations From Iran’s Perspective, available at, and Michael Mazza, China-Iran Relations,
[2] “Turkey, Iran Gas Del Likely Soon,” International Herald Tribune, August 5, 2008
[3] Tait, Robert, “Iran Sought Turkey’s Help To Mend Links With US, Say Erdogan,” The Guardian, February 24, 2009
[4] “A New Alliance for Terror: US Eyes Growing Ties Between Iran and Sudan,” Newsweek, February 24, 1992.
[5] “Iran, Venezuela in ‘Axis of Unity’ Against US,” Reuters, June 2, 2007.
[6] “Building Latin Ties,” Iran Daily, September 4, 2008.
[7] “Khatami Says Iran, Venezuela No Threat to Any Third Country,” Islamic Republic News Agency (IRNA), March 11, 2005.
[8] “Iran, Venezuela Ink Several Agreements,” Mehr News Agency, March 12, 2005.
[9] “Iran and Venezuela Bolster Ties,” BBC News, September 17, 2006.
[10] Ibid.
[11] Ibid.
[12] “Iran, Venezuela in ‘Axis of Unity’ Against US,” Reuters, June 2, 2007.
[13] “Venezuela: Hugo Chavez in Moscow to Sign $2B in Arms Deal,” Guardian, July 23, 2008.
[14] “Venezuelan President Arrives in China,” CNN, September 23, 2008.
[15] “Chavez Interested in Nuclear Help from Russia,” CNN, September 28, 2008.
[16] “Fendel, Hillel, Venezuela Tighten Ties with Iran, Hezbollah,” Israel National News, August 28, 2008, and Webb, Braden, “Paraguay’s Persian Presence: Iran’s New Friend in Latin America,” Center on Hemispheric Affairs, August 21, 2008.
[17] U.S. Department of Treasury, “Treasury Targets Hizballah in Venezuela,” news release, June 18, 2008, and “Fears of a Hezbollah Presence in Venezuela,” Los Angeles Times, August 27, 2008.
[18] “Building Latin Ties,” Iran Daily, September 4, 2008.
[19] “Iran Invites Brazil to Join OPEC,” Economic Times, September 4, 2008.
[20] These goods have included Brazilian sugar and meat, in defiance of economic trade sanctions against Iran.
[21] “Brazilian Firms Ignoring UN Trade Sanctions on Iran: Report,” Agence France Presse, February 5, 2008.
[22] “Brazilian Firms Ignoring UN Trade Sanctions on Iran: Report,” Agence France Presse, February 5, 2008.
[23] “Brazilian Product Bypasses UN Embargo and Arrives in Iran via Dubai,” O Estado de Sao Paulo, February 6, 2008.
[24] Ibid.
[25] “Bolivia Counts on Iran,” Fars News Agency, November 18, 2007.
[26] “Building Latin Ties,” Iran Daily, September 4, 2008.
[27] “Bolivia Urges Implementation of Joint Projects with Iran,” Fars News Agency, June 1, 2008.
[28] “The President of Iran Comes with an Energy Plan,” La Razon (Bolivia), September 25, 2007.
[29] “Bolivia Moving Mideast Embassy to Iran,” Associated Press, September 5, 2008.
[30] “Building Latin Ties,” Iran Daily, September 4, 2008.
[31] “Iran’s Romance of Nicaragua,” Time, September 10, 2007.
[32] “Building Latin Ties.” Iran Daily, Number 3212, 9/4/2008
[33] “Unholy Alliance Between Caracas and Tehran,” available at, January 13, 2008.
[34] “Iran Revamps Oil and Gas Deals to Woo Turkey,” Arabian Business, August 26, 2008.
[35] U.S. Department of State, daily press briefing, July 16, 2007
[36] “Pipeline Construction Scoreboard: Projects Planned and Under Construction,” Pipeline and Gas Journal, September 2008
[37] “Turkish Daily Says UN Fails in Anti-Gas Deal Attempts,” IRNA, September 28, 2007.
[38] “Turkey’s Sezer Seeks to Settle Complicated Ties in Groundbreaking Visit to Iran,” Associated Press Worldstream, June 17, 2002.
[39] Ibid.
[40] Mann, Jonathan, and Walter Rodgers, “Landslide Win For Islamic Party In Turkey,” CNN, November 4, 2002
[41] International Monetary Fund, “Data & Statistics,” available at
[42] “Iran-Turkey Trade Reaches US$6 Billion in 7 Months,” Asia Pulse, September 5, 2008.
[43] U.S. Department of State, Daily Press Briefing, July 16, 2007.
[44] “Iran-Turkey Transactions to Hit $20 Bln,” Fars News Agency, August 6, 2008.
[45] “Turkey: Iran Gas Deal Unswayed by US,” PressTV, August 18, 2008.
[46] “Turkey to Carry Iran Gas to Europe,” World Bulletin, December 19, 2008
[47] “Iran President Holds Turkey Talks,” BBC News, August 14, 2008.
[48] U.S. Department of State, Daily Press Briefing, July 16, 2007.
[49] “Iran, Qatar Pipeline Scheme Gathers Pace,” Power Asia, September 23, 1991.
[50] “Iran, Qatar, Pakistan: Gasoline Consortium Set Up,” International Gas Report, February 3, 1995
[51] “Iran Courts Pakistan to Counter US,” Asia Times Online, January 11, 2002.
[52] A joint economic commission is a meeting of government leaders in which they can agree on future economic and business practices that will promote mutual prosperity and further their financial partnership.
[53] “Iran, Pakistan Sign 4 MoUs on Mutual Cooperation,” Fars News Agency, June 30, 2008.
[54] Ibid.
[55] “Pakistan to Import 1,000 MW of Electricity from Iran,” Fars News Agency, August 11, 2008.
[56] “Iran Looks for Allies Through Asian and Latin American Partnerships,” Power and Interest News Report, November 27, 2007.
[57] Ibid.
[58] “Pakistan Vies for India’s Share in IPI,” Fars News Agency, December 26, 2008
[59] Mehdudia, Sujay, “IPI Pipeline Faces Uncertain Future,” The Hindu, January 5, 2009
[60] Zaidi, Ammar, “Iran Hikes Gas Price for Iran-Pakistan-India Pipeline,” Press Trust Of India, February 20, 2009
[61] “Turkey Eyes Israel For Pipeline Route,” Pipeline And Gas Journal, January 2009
[62] “Russia’s Seeking to Expand Business with Iran,” Fars News Agency, July 15, 2008.
[63] “Iran, Pakistan to Enhance Trade Volume by $1 Bn.,” Fars News Agency, June 27, 2008.
[64] The group includes China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan as permanent members, and India, Iran, Mongolia, and Pakistan as observers.
[65] “Iran Expanding Ties with Central Asian States to Counterbalance US Geopolitical Pressure,”, April 13, 2006.
[66] “Pakistan PM Seeks Wider Trade with Iran, Turkey,” Indo-Asian News Service, November 11, 2007.
[67] “Iran Admits Foreign Help on Nuclear Facility: U.N. Agency’s Data Point to Pakistan as the Source,” Washington Post, August 27, 2003.
[68] “A Hero At Home, A Villain Abroad,” The Economist, June 19, 2008.
[69] “Iran Admits Foreign Help on Nuclear Facility: U.N. Agency’s Data Point to Pakistan as the Source.” Washington Post, August 27, 2003
[70] “A Hero At Home, A Villain Abroad.” The Economist, June 19, 2008
[71] Richard Cronin, Alan Kronstadt, and Sharon Squassoni, “Pakistan’s Nuclear Proliferation Activities and the Recommendations to the 9/11 Commission: I.S. Policy Constraints and Options,” Congressional Research Service, January 25, 2005.
[72] “Pakistan PM Seeks Wider Trade with Iran, Turkey.” Indo-Asian News Service, November 11, 2007
[73] “Iranian Issue Should Be Resolved Using Diplomatic Channels While Pak Values UAE Relations; Says PM,” Frontier Star (AsiaNet-Pakistan), June 11, 2007.
[74] “Afghanistan, Iran, Pakistan Agree on Border Cooperation,” Voice of the Islamic Republic of Iran in BBC Monitoring, June 25, 2008.
[75] “S. Africa, US Find Thorns in Rosy Ties; Iran, Other Trade Issues Trigger Disputes,” Washington Post, August 4, 1995.
[76] Ibid.
[77] “Iran Telecoms: MTN Plans Mobile-Phone Roll-Out,” Economic Intelligence Unit, July 21, 2006.
[78] Ibid.
[79] “Analysis: Why Is South Africa Helping Iran?” Jerusalem Post, December 6, 2005.
[80] “South Africa Denies Proposing Iran Nuclear Enrichment,” Agence France Presse, November 7, 2005.
[81] “South African Foreign Minister Dlamini Zuma in Iran, South Africa Review Ties,” Fars News Agency, July 18, 2008.
[82] “South Africa Guts Big Power Deal on Iran Sanctions,” Reuters, March 20, 2007.
[83] “A New Alliance for Terror: US Eyes Growing Ties Between Iran and Sudan,” Newsweek, February 24, 1992.
[84] Ibid.
[85] “A Deadly Love Triangle: Why Iran and Hamas Adore Darfur’s Genocidal Dictator,” Weekly Standard Online, August 6, 2008.
[86] Ibid.
[87] Ibid.
[88] Amir Taheri Amir, “Sudan: An Expanding War with an Iran Connection,” International Herald Tribune, April 9, 1997.
[89] “Sudan, Iran Sign Military Cooperation Agreement,” Sudan Tribune, March 8, 2008.
[90] “Sudan the Pivot of Iran-Africa Relations: Defense Minister,” Tehran Times, March 6, 2008.
[91] “Iran ‘Could Share Nuclear Skills,’” BBC News, April 25, 2006.
[92] “Iran, Sudan ‘to Defend Islam,” Business Day (South Africa), March 2, 2007.
[93] “Sudan, Iran Vow to Defeat ‘Enemies of Islam,’” Agence France Presse, March 1, 2008.
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