Defending Iran is Asia’s Existential Imperative
Farwa Sial
The escalating Israeli attack on Iran has now entered a phase of sustained regional destabilisation, with Israel’s Operation Rising Lion targeting a broad array of nuclear, military, and infrastructural sites deep within Iran. These strikes are not simply tactical in scope; they represent the most significant foreign military intervention in Iran since the Iran-Iraq War and yet another blatant defiance of international law in attacking a sovereign country amidst Israel’s on-going genocide in Palestine and on-going attacks in Lebanon and Syria.
While the immediate consequences are starkest within Iran itself, the implications ripple outward across South and Central Asia, the BRICS coalition, and the Global South. For Pakistan; a nation bound to Iran by geography, shared history, economic and defence relations, the repercussions of a weakened or collapsed Iranian state are existential. Equally for the wider anti-hegemonic bloc, Iran remains the last functioning bulwark against full-spectrum US domination in West and South Asia with major repercussions for East Asia, including China. Iran’s contemporary self-defence is therefore rooted in a long-history of third-world struggles against imperialism.
The strategic irreplaceability of Iran
Iran has long served as the only state in the Middle East capable of contesting US and Israeli military power without being entirely dependent on external patronage. Unlike the Gulf monarchies, which remain tightly embedded in and dependant on U.S-centred security architectures, Iran has pursued regional autonomy through indigenous defence capabilities, and South-South alignment. As a country undergoing one of the longest US-led sanctions regime, the strength and defiance of the Iranian economy remains unparalleled. More so, in light of the fact that unlike the 54 highly indebted countries of the world today, Iran has no recourse to Bretton Woods institutions like the IMF and the World Bank and has continued to seek alternative ways of financing. In its defiance, economic resilience, and consistent ability to preserve regional independence in contrast to its Saudi and Emirati counterparts, Iran’s global anti-imperialist significance is undeniable. Within an increasingly authoritarian regional landscape, Iran’s persistence as a non-client state with autonomous policy has systemic implications for the balance of power across Asia.
Iran-Pakistan relations: A fragile equilibrium
Iran and Pakistan share a 900-kilometre border and a long history of guarded engagement. Iran was the first state to recognise Pakistan following its independence, and both countries were briefly aligned within the U.S-oriented CENTO framework. However, Iran’s 1979 revolution and Pakistan’s deepening ties with Saudi Arabia introduced ideological friction. Shia-Sunni cleavages, external manipulation, and competing regional priorities have further complicated relations. Recent escalations over Kashmir; particularly Modi’s hardline policies and Pakistan’s retaliatory rhetoric, have added another layer of strain, pushing Islamabad closer to Tehran as a counterweight against India’s US-backed regional ascendancy. Tehran, meanwhile, has cautiously supported Pakistan’s position on Kashmir, balancing its rhetoric to avoid alienating New Delhi entirely; a reflection of its own delicate ties with India
Nevertheless, pragmatic cooperation has endured. The Iran-Pakistan gas pipeline, though blocked by US sanctions, exemplifies the shared economic logic that underpins their energy interdependence. Informal trade and cross-border communities have kept bilateral ties from severing completely. Yet, recent border skirmishes; notably the January 2024 exchange of airstrikes, demonstrate the fragility of this balance. Were Iran to collapse into internal disorder or fall fully under US or Israeli suzerainty, Pakistan would lose its last buffer against full Saudi clientelism and regional Wahhabi expansionism. Equally it is highly unlikely that Islamabad would be able to tolerate an inevitably hostile Tel-Aviv installed regime at its south-western flank, in the longer term.
Also read: No Condemnation from Modi, Only 'Deep Concern' Over US Strikes in Phone Call With Iran President
The nuclear triangle: Iran, Pakistan, India
Iran’s contested nuclear programme and Israel’s targeting of enrichment facilities risk triggering cascading effects across the South Asian strategic triad. Pakistan, already in possession of a nuclear arsenal aimed at countering India, exists in a delicate deterrence regime. The precedent of bombing nuclear sites with impunity sets a destabilising norm: should pre-emptive strikes become normalised, Pakistan’s own nuclear posture becomes more vulnerable.
Further, if Iran accelerates its nuclear ambitions in response to Israeli attacks, the Gulf monarchies may pressure Pakistan to act as a nuclear shield. There have long been concerns that Saudi Arabia views Pakistan as a latent nuclear partner; rendering the kingdom a state capable of providing a viable deterrent without domestic capability. In this scenario, Pakistan would be forced to navigate a near-impossible choice between Iranian autonomy and Gulf patronage.
China and the Eurasian Arc
China remains the most critical external actor across this geopolitical theatre. Through the Belt and Road Initiative, China has invested heavily in Iranian infrastructure, notably in oil, transport, and digital corridors. It maintains a trilateral security axis with Iran and Russia, grounded in shared opposition to US unipolarity.
For Pakistan, China is its largest creditor, infrastructure partner, and diplomatic shield. The China–Pakistan Economic Corridor (CPEC) hinges on regional stability, particularly in Baluchistan; a province increasingly vulnerable to cross-border insurgency should Iran descend into chaos. Moreover, both Iran and Pakistan serve as pivotal land corridors for China’s vision of continental integration. An Iran weakened or fragmented by Israeli action directly undermines Beijing’s ambitions for Eurasian cohesion.
Macroeconomic fallout across Asia
The immediate economic consequence of Israel’s attacks has been an uptick in oil prices, which surged between 7-11% in the days following the initial strikes. Yet this volatility is only superficial. Any sustained disruption to the Strait of Hormuz; through which approximately one-third of global seaborne oil passes, would produce a price shock not seen since the 1970s but with fewer alternatives (given dwindling global reserves and OPEC+ spare capacity). For Asia, this could potentially mean up to $150+/barrel oil potentially adding some $500 billion to the continent’s annual import bill. For South and Southeast Asia, heavily dependent on hydrocarbon imports, this would lead to significant current account imbalances, fiscal tightening, and inflationary spirals.
Pakistan, already under IMF supervision and facing record deficits, would be among the first casualties. Iran’s informal provision of discounted crude through intermediaries has long functioned as a backdoor subsidy for Pakistan’s energy import bill, accounting for $1-2 billion annually. The elimination of this subsidy, combined with price spikes on global markets, risks producing stagflation and political unrest. With 40% of its national budget already dedicated to debt servicing, and 17% to defence, fiscal space would vanish entirely, leaving critical sectors like counterterrorism, public health, and energy security unfunded.
Pakistan could potentially face an IMF mutiny with austerity measures imposed under IMF conditionalities provoking domestic unrest and trigger urban riots, as already witnessed during past compliance episodes, whilst inevitable fuel subsidies to quell unrest would invite sovereign default. The Iran-Pakistan informal trade network, estimated at $4-6 billion per year and employing up to half a million people would disintegrate, potentially triggering localised famines in Baluchistan.
India, despite stockpiling discounted Russian oil, would face a 30 to 50% increase in shipping costs due to rerouting around Africa. This could add 1.5 to 2% to inflation, derailing Reserve Bank of India plans for rate cuts. Fertiliser prices would also spike due to Iran’s central role in ammonia and urea exports, exacerbating rural distress. Meanwhile, any disruption in petrochemical flows notably ethylene, where the middle-east supplies in excess of 10% of global output, could paralyse Asia’s textile and light manufacturing hubs in Bangladesh and Vietnam.
China’s Strategic Petroleum Reserves may cover 90 days of demand, but disruptions in refinery inputs tailored to Iranian and Saudi blends would cause output shocks in the plastics and chemical sectors, compounding its industrial slowdown. Strategic uncertainty along western land corridors would threaten BRI supply chains, intensifying concerns about economic decoupling.
The broader BRICS bloc would also feel the reverberations. Brazil and South Africa, reliant on commodity exports, would suffer from declining demand. An oil-induced recession would likely create currency instability across emerging markets, especially if the crisis forces a reversion to dollar-denominated energy markets.
The fragility of the BRICS bloc
The Israel-Iran conflict has exposed fault lines within BRICS. While China and Russia have unequivocally condemned Israeli aggression, India; once a vocal advocate for Palestinian rights, has grown closer to Tel Aviv, fuelled by arms deals, intelligence cooperation, and Hindu nationalist alignment with Zionist rhetoric.
This divergence risks paralysing BRICS as a counter-hegemonic force. If member states cannot formulate a coherent position on violations of sovereignty, the bloc’s promise as an alternative to Western-led institutions effectively evaporates. Iran, a recent invitee to BRICS+, now finds itself under attack with minimal bloc coordination. The absence of a collective economic or diplomatic response not only undermines Iran’s faith in multilateral solidarity but signals to other Global South nations that anti-imperial rhetoric may not be matched by action.
Currency instability looms large. De-dollarisation efforts, such as local currency trade mechanisms, rely on stable energy flows. An oil shock would compel members to revert to USD markets, eroding their monetary autonomy. A forced return to dollar markets would cripple BRICS’ gold-backed currency experiments, as seen in 2022 when India’s rupee-ruble mechanism collapsed under oil sanctions. China’s yuan, despite its strategic positioning, lacks the liquidity and global acceptance to anchor crisis-era trade, leaving a gap the G7 economies will exploit. Investment could flee from BRICS infrastructure funds like the New Development Bank into G7 bonds, starving Global South development initiatives.
India faces a sharp dilemma: it depends on Israeli defence technology while, prior to sanctions, it sourced up to 12% of its oil from Iran. Any explicit tilt towards Israel could provoke retaliatory restrictions, straining domestic energy security.
Wider consequences and the imperative for collective action
The ripple effects of attacks on Iran demand urgent regional and global cooperation. Rather than allowing the fragmentation of Iran’s security apparatus, particularly the Islamic Revolutionary Guard Corps (IRGC), to create vacuums exploitable by transnational jihadist groups, neighbouring states and allies must act to stabilise governance and prevent spill-over violence. The risk of Saudi and Emirati-backed actors stepping into this vacuum only heightens the need for inclusive regional dialogue to curb heightened Wahabism and preserve ideological balance.
The disruption of critical South-South trade corridors present another shared challenge. Iran plays a central role in facilitating Russian wheat exports to Africa and the Middle East. A breakdown in this corridor could threaten food security from Cairo to Karachi. Pakistan, which relies on Iranian transit for around 15% of its wheat imports, has a vital interest in preventing such collapse, not only to avoid inflationary shocks, but to maintain regional equilibrium. Strengthening partnerships across the Global South and reinforcing multilateral food security pacts may help avert famine-level crises before they take hold. The tools for collective defense exist but require activation; BRICS+ could deploy its Contingent Reserve Arrangement to offset oil volatility, the Shanghai Cooperation Organisation (SCO) might broker Iran-Pakistan-Afghanistan border security pacts and OIC members could enforce an Islamic Development Bank food reserve.
An Iranian collapse could be engineered to invite foreign occupation or a protectorate regime under the guise of stabilisation. US or Israeli basing on Iranian territory would complete the strategic encirclement of Central Asia, posing existential threats to Russian and Chinese strategic depth. Turkey, despite its ambiguous posture, would also find itself marginalised amid new security realignments it cannot control, with a likely undesirable client-state on its southern flank.
Iran today functions as the last coherent pillar of autonomous strategic resistance in the Middle East. Its removal would leave not only a security vacuum but an ideological void. In its place could emerge a patchwork of client regimes, militant enclaves, and permanent Western bases; a geopolitical reordering reminiscent of the post-Ottoman partition, but magnified by nuclear and macroeconomic complexity. A stable Iran is not only in Tehran’s interest, but also in that of Pakistan, China, and the broader Global South.
This article first appeared on the website of the International Development Economics Associates Limited (IDEAs), a pluralist network of progressive economists across the world. It was republished with permission.
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