Halal trade cooperation between Iran and Russia

On Jan. 19, 2022, Iranian President Ebrahim Raisi met along with his Russian counterpart, Vladimir Putin, for the primary time in Moscow to debate reviving the Joint Complete Plan of Motion (JCPOA), strengthening strategic ties in Syria and Afghanistan, and boosting navy and financial cooperation within the face of U.S. hostility and sanctions. Throughout Iran’s first presidential assembly with Russia since 2017, Raisi additionally explored reextending a multiyear settlement on bilateral cooperation that former Iranian President Mohammad Khatami (1997-2005) had signed with Putin in 2001. Because the fall of the Soviet Union and the rise of Putin within the Nineties, navy and financial relations between Iran and Russia have improved, as their tensions with the West have intensified.

One side of those relations that has acquired little consideration is their rising financial and commerce cooperation involving the manufacturing, export, and import of halal meat and different merchandise since 2015. On Nov. 18, 2020, Iran and Russia held a digital convention that was hosted by the Iranian Embassy in Moscow on the topic and led to the approval by Russia of a strategic doc on strengthening bilateral halal commerce cooperation. The Iranian ambassador to Russia, Kazem Jalali (2019-present), acknowledged that the purpose was to “strengthen and develop the personal sectors of Iran and Russia” by rising halal and different commerce between them. Equally, Marat Vazykhovich Kabayev, the president of Russia’s Worldwide Affiliation of Islamic Enterprise (IAIB) — which seeks to strengthen Moscow’s ties to the Muslim world — expressed a readiness to cooperate with Iran within the commerce of halal meat and different financial actions.

The efforts of Iran and Russia to pursue halal commerce cooperation reveal the significance they’ve positioned on positioning themselves in a worldwide market with an estimated worth of $129 billion in 2019 that was anticipated to succeed in $140 billion in 2024, and with over 1.9 billion Muslims who comprise practically 25% of the world’s inhabitants. Whereas Iran is a Muslim-majority nation and Russia is a Christian-majority one, each include sizeable markets for the manufacturing and commerce of halal meat and different merchandise. In 2019, Iran and Russia ranked sixth and seventh in halal tourism (e.g., gender-segregated and family-friendly eating places, resorts, and resorts that serve halal meals and include prayer rooms), with the 2 international locations grossing revenues of $8 billion and $7 billion, respectively, on this subsector of the journey business.

The prospect of better halal commerce cooperation between Iran and Russia is critical for 2 causes. First, it highlights the alternatives and capacities that Iran and Russia may leverage to bolster halal and different commerce between themselves and different international locations, notably neighboring ones in Central Asia and the Center East with sizeable Muslim populations. On the identical time, this cooperation is rife with obstacles, probably the most outstanding of that are U.S. and worldwide sanctions which have incentivized Iran and Russia to strengthen financial and commerce relations as a way of circumventing these sanctions. Second, a better examination of the Iranian and Russian organizations and people concerned within the settlement and commerce in halal merchandise and different items sheds mild on key variations within the varieties and types of governance between the 2 international locations, even when the political outcomes are comparable.                     

Alternatives and obstacles

For Iran and Russia, elevated cooperation within the halal commerce serves to counteract U.S. and worldwide sanctions — a purpose of the digital convention that was explicitly acknowledged by Jalali. It isn’t a coincidence the convention was held after the US withdrew from the JCPOA and reimposed financial sanctions towards Iran in 2018, which pushed it to rely extra on Russia for navy and financial help. Between 2019 and 2020, Iranian exports to Russia practically doubled from roughly $400 million to $800 million and Russian exports to Iran elevated from nearly $1.2 billion to over $1.4 billion. Between 2018 and 2019, the US, European Union, and different international locations and multilateral organizations intensified sanctions towards Russia for its function within the Russo-Ukrainian Struggle (which started in February 2014) and different malign actions. Since 2015, the sanctions have prompted Europe to halt its meals commerce with Russia, making the latter’s efforts to export halal meat and different agricultural merchandise to different areas much more necessary.   

Higher halal commerce cooperation between Iran and Russia may assist them alleviate financial stress by opening extra export markets. Russia is a sizeable marketplace for halal exports from Iran, which reportedly produced 1,500 types of such meals merchandise, as of November 2020. That 12 months, round 20% of the Russian inhabitants, or 25 million out of over 144 million, have been Muslim and lots of of them presumably consumed halal meat and different merchandise. It ought to be famous {that a} examine revealed in 2015 confirmed that halal meat had change into more and more standard with non-Muslims in Russia and Europe as effectively, in response to meals scandals surrounding mainstream merchandise and public perceptions that halal merchandise have been more healthy and extra humane. As such, the consumption of Iran’s halal exports to Russia wouldn’t be restricted to Muslim customers. To facilitate exports, Russia authorised Iran’s request on the digital convention to determine an IAIB consultant workplace or company inside its territory on the Anzali port. The IAIB has consultant places of work in no less than 20 international locations all over the world in South America (Brazil), North America (the US), Western Europe (Germany), Scandinavia, Jap Europe (Bosnia-Herzegovina and Serbia), the Center East (Saudi Arabia, Turkey, and the UAE), Asia (India, Singapore, and South Korea), and former Soviet Republics (Azerbaijan, Kazakhstan, Kyrgyzstan, Lithuania, and Uzbekistan). Nevertheless, some international locations in these areas would seemingly be reticent to import or commerce halal and different merchandise with Iran given the chance of being subjected to secondary sanctions by the US.

On the flip aspect, Iran constitutes a sizeable marketplace for the halal exports of Russia, even when the latter reportedly solely produced 1.3 million tons of halal meat, as of November 2020. With a inhabitants of practically 84 million that’s over 99% Muslim, Iran is house to a big market of customers of halal meat and different merchandise. Whereas one survey carried out in 2020 confirmed that the variety of Iranians who recognized with Islam was declining and utilized to simply over 40% of respondents, halal meals and different merchandise are presumably standard with and conceivably consumed by Iranians who don’t affiliate with Islam as effectively. Home consumption and non secular demographics apart, Iran may function a conduit for the export of Russia’s halal merchandise and different items to markets in Central Asia and the Center East. Since sanctions have been imposed towards Russia in 2015, it has prioritized the Center East, alongside India and China, instead market to Europe for halal and different agricultural exports. Along with signing extra commerce and barter offers in these sectors with Iran and different Center Jap international locations, Russia may leverage Iran’s Anzali Port and Free Zone, that are situated on its Caspian coast and north-south hall with Russia. As of 2015, Iran has imported halal meat from Russia’s two largest producers and despatched their livestock merchandise to international locations within the area and past. For the general public, parastatal, and personal sectors of Iran and Russia, increasing halal commerce may pave the way in which for better bilateral financial and commerce cooperation and international direct funding in different areas, reminiscent of agriculture, business, and hydrocarbons.

Organizations and people

On the November 2020 digital convention, three Iranian organizations and people participated alongside just one Russian one. From the Iranian aspect, negotiating and signing strategic paperwork, memoranda of understanding, and different agreements on this space requires the participation of the Ministry of Overseas Affairs, Iran’s embassy and commerce counselors in Moscow, and its ambassador to Russia, Jalali, a longtime parliamentarian and official. Like a rising variety of Iran’s ruling elite, Jalali earned a PhD from Imam Sadiq College, which integrates Islamic training and custom with the trendy humanities and sciences. He served as a member of parliament (2000-16), the president of its analysis middle (2012-19), and the vp of the Inter-Parliamentary Union (2017-19), a multilateral group of nationwide parliaments. Although a conservative politician, Jalali turned a senior member of the pragmatic-centrist Moderation and Growth Get together headed by Hassan Rouhani in 1999 earlier than resigning in 2007. Afterward, he turned the president of the conservative parliamentary group, Followers of the Wilayat [al-Faqih] (2012-16), and a detailed affiliate of the conservative Speaker of Parliament Ali Larijani (2008-20). Throughout his second time period as president in 2019, Rouhani appointed Jalali the Iranian ambassador to Russia and he has remained on this put up below the present conservative president, Raisi (2021-present).   

The Anzali Port and Free Zone would function the infrastructure that facilitates this commerce by land, sea, and air between Iran, Russia, and different markets. Within the course of, the Anzali Free Zone Group may supply Russia favorable phrases of commerce, together with no double taxation, lowered customs duties and different commerce obstacles, and cooperation on transport and transportation. For that reason, in the course of the digital convention, the Group’s managing director, Dr. Mohammadoli Roozbehan, invited the Russian consultant, Kabayev, to go to Anzali to raised perceive what it could actually supply. Throughout the convention, Roozbehan additionally projected that elevated financial cooperation involving halal and different merchandise between Iran and Russia may quadruple their commerce quantity between 2020 and 2022. In actuality, Iran’s complete commerce with Russia between 2020 and 2021 elevated by simply over 19%, with its imports from Russia rising by nearly 43% whereas its exports to Russia decreased by practically 23%.  

Throughout Rouhani’s presidency between 2015 and 2020, the Iranian authorities, Anzali Free Zone Group, and different entities reached agreements and held conferences to broaden Iran’s financial cooperation with Russia, Kazakhstan, and different members of the Eurasian Financial Union (EEU). For Iran, these efforts have been aimed toward rising mutual commerce, decreasing import tariffs, and buying and selling in nationwide currencies moderately than U.S. {dollars} to bypass sanctions. The Iranian authorities and Anzali Free Zone Group may additional these goals by boosting Iran’s bilateral commerce of halal merchandise with Russia.              

Whereas the Iranian Ministry of Overseas Affairs and the Anzali Free Zone Group respectively signal agreements and supply the infrastructure to bolster the bilateral commerce, the Iran-Russia Joint Chamber of Commerce (IRJCC) and its vp, Jalil Jalalifar (who studies to its president, Dr. Hadi Tizhoush Taban), would carry collectively public, parastatal, and personal corporations and businesspeople on either side to take part within the enterprise. Primarily based in Tehran, the IRJCC develops relations, organizes occasions, and furthers the pursuits of Iranian and Russian corporations that function in Iran. Just like the Iranian authorities and Anzali Free Zone Group, the IRJCC has sought to enhance infrastructure and planning (e.g., enhanced transport and aviation applications and lowered commerce laws) to extend Iran’s commerce, barter, and trade of oil and non-oil merchandise with Russia and different neighboring international locations in Central Asia and the Center East.  

Not like Iran, Russia had just one group, the IAIB, take part within the November 2020 digital convention. The IAIB is a commerce union that brings collectively businesspeople and entrepreneurs from completely different international locations to broaden Russia’s share of Islamic commerce, together with the export and import of halal meat and different merchandise, and to create jobs contained in the nation by this commerce — even when political and financial elites stand to reap probably the most advantages. Primarily based in Kazan, Tatarstan and later Moscow (the place Iran respectively has a consulate and its embassy), the IAIB operates a logistics and distribution middle of halal meals and different merchandise within the Muslim-majority Russian republic of Dagestan. The IAIB additionally opened a non secular and academic middle and mosque that promotes interfaith dialogue and a average and tolerant type of Islam that’s conducive to Russia’s nationwide safety and sociopolitical stability. Members of the IAIB come from completely different areas of Russia and from different international locations, and consultant places of work all over the world work to advance Russia’s industrial pursuits domestically and globally. To this finish, the IAIB collaborates with the Group of Islamic Cooperation and convenes financial boards, enterprise missions, and cultural occasions regionally and internationally.

To the skin observer, it could appear unusual that the IAIB’s president, Kabayev, moderately than a authorities official or diplomat had the authority to approve a strategic doc on halal commerce cooperation with Iran’s ambassador to Russia, and that the doc would carry any weight. On the floor, Kabayev may have been thought-about Jalalifar’s extra senior counterpart.  Nevertheless, Kabayev can be a detailed affiliate of Russian President Putin and a member of his inside circle. Kabayev is a retired skilled soccer coach and former participant. He’s additionally the daddy of the Olympic gymnast, former politician, and media mogul, Alina Kabayeva, reportedly Putin’s longtime, secret accomplice. Because the IAIB’s president, Kabayev is reportedly the chief of the enterprise neighborhood of Tatarstan, a Muslim-majority republic inside Russia’s Volga area, and Putin’s unofficial envoy in Central Asia. For that reason, in the course of the 2019 Volga Funding Summit and World Halal Day in Samara, enterprise leaders recognized Kabayev because the one particular person with the facility and authority to determine Islamic banking and finance in Russia by selling cooperation between the Financial institution of Russia and the Islamic Growth Financial institution in Saudi Arabia.

Trying forward

The eventual extent of bilateral halal and different commerce between Iran and Russia stays to be seen. Although Iran might produce extra halal merchandise than Russia, each international locations boast the home demand and consumption to represent main export markets for these merchandise, even when the demographic and non secular developments inside Iran current some points in the long run. Furthermore, by Iran’s Anzali Port and Free Zone and Russia’s IAIB, each international locations possess the infrastructure to facilitate this commerce each on a bilateral degree in addition to with different international locations within the area and past. The organizations and people concerned within the November 2020 digital convention on halal commerce additionally reveal necessary variations between Iran, an electoral authoritarian state with a factionalized elite (even when the conservatives at present maintain the higher hand), and Russia, an autocratic presidential republic with a sultanistic system by which personalistic politics could also be extra prevalent and pronounced. Regardless of these systemic variations, the prospects for better financial cooperation within the halal commerce and different areas between Iran and Russia seem like promising, notably if their tensions with the West persist.  

Eric Lob is an affiliate professor within the Division of Politics and Worldwide Relations at Florida Worldwide College and a non-resident scholar with MEI’s Iran Program. The views expressed on this piece are his personal.

Photograph by PAVEL BEDNYAKOV/SPUTNIK/AFP by way of Getty Pictures