Economic Relations and Influence

This chapter focuses on Iran’s economic relations and influence to understand whether Tehran has used economic tools, for example, coercive diplomacy and economic sanctions, to achieve its political goals. The chapter also explores how Iran’s economic influence is viewed in both countries. the fall of Taliban regime in 2001 provided Iran with an ideal opportunity to expand its economic relations with Afghanistan and gain economic influence which is significant in western parts of the country. Now that the Taliban are back, Tehran has shown no signs of downscaling its economic relations with Afghanistan. Conversely, Iran’s economic relation with Pakistan had ups and downs. In the early years of the establishment of the Islamic Republic, the economic relation between the two countries significantly grew, but during the 1990s there was a decline because of international sanctions on Iran due to which both countries have not been able to exploit the full potential of their economic cooperation.