Iran has positioned itself as an important regional actor in Central Asia and is committed to playing a role in neighboring Afghanistan. As U.S. troops draw down their numbers in Afghanistan, Washington should consider how improved U.S.-Iranian relations could further long-term U.S. policy goals in Afghanistan and in the region.

While the future of U.S.-Iranian relations remains unclear, any improvement in the relationship would facilitate the success of U.S.-supported initiatives in Afghanistan: the “New Silk Road” strategy, which seeks to improve Afghanistan’s economic ties with Central and South Asia, and the “Heart of Asia” confidence-building process, which fosters high-level dialogue on security, political, and economic cooperation among Afghanistan and its neighbors. Both are catchwords for Washington’s policy of trying to shift more responsibility for Afghanistan’s reconstruction to the states of the region. But the international sanctions against Iran and the state of U.S.-Iranian relations are making it difficult for policymakers in Washington to implement this regional approach.

Iran’s Close Ties to Central Asia

Iranian leaders pride themselves on being important actors in Central Asia, and they take advantage of all available international forums to make this case. For their part, the region’s other countries maintain normal diplomatic and trade relations with Iran.

The respect accorded to Iran in Central Asia was underscored by the presence of the presidents of Kazakhstan, Tajikistan, and Turkmenistan at Iranian President Hassan Rouhani’s inauguration. The presidents of Afghanistan and Pakistan attended as well. Uzbekistan, which has kept somewhat more distance from Iran, sent the head of its parliament, as did Russia.

The three Central Asian presidents used their presence to bring up the topics of greatest importance to them. For the Tajiks, who share a language and culture with the Iranians and call Iran a “strategic partner,” this meant discussing Tajikistan’s hydroelectric plans.

Kazakh President Nursultan Nazarbayev used his visit to reiterate his country’s interest in continuing to host the P5+1 nuclear talks between Iran and the five permanent members of the UN Security Council plus Germany, which are under the chairmanship of EU High Representative for Foreign Affairs and Security Policy Catherine Ashton. Kazakhstan hosted P5+1 sessions in Almaty in February and April 2013.

Transport links were major themes for both the Kazakh and Turkmen leaders. With Iran, these countries are constructing a new railroad to link Uzen in Kazakhstan with Gyzylgaya, Bereket, and Etrek in Turkmenistan and end at Gorgan in the Iranian province of Golestan. The railroad will expand access for the Central Asian nations to Persian Gulf ports.

The Kazakh and Turkmen presidents jointly opened the first section of the railroad on May 11, 2013, during Turkmen President Gurbanguly Berdymukhamedov’s official visit to Kazakhstan. The nearly 50-mile Iranian portion was inaugurated later that month.

But international sanctions against Iran have complicated Tehran’s attempts to gain influence in Central Asia. Given Iran’s participation in the project, for example, the new railroad could not secure international multilateral institution funding. Instead, it is being built with funds of the national railway companies of Iran, Kazakhstan, and Turkmenistan.

Furthermore, Iran is not part of the Asian Development Bank (ADB) or the Central Asian Regional Economic Coordination, the ADB’s ten-country partnership that is sponsoring six new transport corridors to better link Afghanistan and Central Asia with Europe and Asia.

Sanctions against Iran have also limited international oil and gas export routes from the region by making it impossible to secure international financing for such projects. While the new rail link will create options for Kazakhstan to send oil by rail to the Persian Gulf, the Kazakhs have been frustrated in their desire to transport “big oil” or “big gas” through Iran. They do, however, supply northern Iran with oil and receive the export income from oil swapped by the Iranians in the south.

Turkmenistan has also had to fund its own projects in Iran. Years before the prospect of shipping large amounts of gas through China became possible, the Turkmen, angered by the terms of trade with Russia, agreed to build a gas pipeline from Korpezhe in Turkmenistan to Kurt Kui in Iran. Built in 1997 with a maximum capacity of 8 billion cubic meters per year (bcm/y), or 282 billion cubic feet per year (bcf/y), 35 percent of the gas went to pay for Turkmenistan’s share of construction costs during the first years. A second Turkmenistan–Iran line, the Dauletabad–Khangiran Pipeline, with a capacity of 12 bcm/y (424 bcf/y) was completed in 2010.

In addition to cooperation on transport, all of the Central Asian countries trade actively with Iran; in 2010 Iran was the fourth-largest exporter to Central Asia, with 4.8 percent of all exports, following distantly behind China, Russia, and the EU. Iran is a major buyer of Central Asian cotton, traditionally purchasing from Tajikistan, but it also became an important source of cotton sales for Uzbekistan after the EU introduced trade restrictions against Tashkent.

Rouhani has signaled the importance of the Central Asian region by deciding to make his first international trip a visit to Bishkek to attend the Shanghai Cooperation Organization (SCO) summit being held there on September 3, just days before the G20 meeting in St. Petersburg. This will also be Rouhani’s first meeting as president with Vladimir Putin.

Iran, an observer in the SCO, has long sought full membership in that organization. But Russia has spoken out against Iran receiving full membership because of the difficulties that this might pose for the organization as a whole given the international sanctions in place against Iran. Afghanistan is also an observer of the SCO, and Turkey just took on this status in April, suggesting that the SCO might well be positioning itself to play a greater role in Afghanistan after the withdrawal of U.S. troops in 2014.

Iran’s Engagement in Afghanistan

Playing a greater role in Afghanistan seems a clear goal of Iran. The two states share a border that is more than 560 miles long, and senior Iranian officials have participated in virtually every major international meeting on Afghanistan that they have been eligible to attend.

Ambassador James Dobbins, who served as U.S. special envoy for Afghanistan in 2001 and was appointed special representative for Afghanistan and Pakistan in May 2013, notes that the suggestion that Hamid Karzai should lead Afghanistan was raised by the Iranian delegation to the international conference on Afghanistan in Bonn, Germany, in 2001.

According to Dobbins, he and Javad Zarif, then Iran’s delegate to the conference and today the newly appointed minister of foreign affairs, found informal settings in which to “accidently” meet and hold important substantive discussions. Dobbins noted that Iran pledged $540 million in assistance at the first Tokyo conference in 2002, the largest commitment made by any non-Organization for Economic Cooperation and Development nation. Most of this assistance, according to Dobbins, was actually provided.

The U.S.-Iranian relationship soured soon after, when Mohammad Khatami was still president, and deteriorated dramatically during Mahmoud Ahmadinejad’s presidency.

This created a very awkward moment for the United States at the fifth Regional Economic Cooperation Conference on Afghanistan meeting in March 2012. U.S. officials played a major role in helping organize the conference but were left playing more of a backstage role at the event itself given the participation of Ahmadinejad.

The Iranian leader used the occasion to attack the U.S.-led NATO presence in Afghanistan, demanding that reparations be paid to the Afghan people. This prompted the U.S. delegation, led by Assistant Secretary of State Robert Blake, to leave the room. But this departure failed to have the desired effect—the room was so enormous that only those seated near the U.S. delegation noticed the delegates’ exit.

Because the U.S. delegation was headed by Assistant Secretary Blake, it ranked way down on the protocol lists for speakers, especially given that Tajikistan, Afghanistan, Iran, and Pakistan were all represented by their presidents. Tajik President Emomali Rahmon also convened a summit of these four presidents in the days before the conference opened, on the occasion of Nowruz, the traditional spring holiday in the region, creating an exclusive format for discussions of Afghanistan’s future in which “outsiders,” including the United States, were not included.

U.S.-Iran Relations and the Future of Afghanistan

There is no reason to think that U.S. priorities on Afghanistan will be of anything other than marginal concern when the Obama administration considers how to deal with the new Rouhani administration.

The lifting of international sanctions against Iran depends on a breakthrough in the P5+1 talks on Iran’s nuclear industry and on the international community being satisfied that Tehran is indeed only pursuing the peaceful use of nuclear energy.

But an improved U.S.-Iranian relationship would yield many other dividends to U.S. foreign policy goals, not the least of which is that it would make the regional solution to Afghanistan’s economic recovery that Washington yearns for a much more realizable goal. Hopefully Javad Zarif and James Dobbins will have new opportunities to negotiate with each other and shape a more productive relationship for Iran, the United States, and Afghanistan.