Domestic Economy

Iran’s Gains From SCO Membership

Iran’s Gains From SCO Membership
Iran’s Gains From SCO Membership

Iran officially joined the Shanghai Cooperation Organization in September, marking a landmark moment in Tehran’s growing relationships with China and Russia — the Eurasian pact’s two leading powers.
Although there are limits to what SCO membership will provide the Islamic Republic, there will be certain political, diplomatic, economic and security gains for Iran. Perhaps most important is the fact that Tehran’s position vis-à-vis the West could strengthen, particularly regarding the stalled nuclear talks in Vienna, Austria, reads an article published by Inside Arabia. Excerpts follow:
SCO’s precursor was the Shanghai Five (comprised of China, Kazakhstan, Kyrgyzstan, Russia and Tajikistan), which was formed in 1996 as a mutual security, political and economic organization. The Shanghai Five became SCO when Uzbekistan joined in 2001.
The multilateral organization’s purpose was to monitor developments in the wider region while combating the “three evils”, specifically terrorism, extremism and separatism. Today, members of the world’s largest regional organization make up one-third of all land on earth and 40% of the global population.
By 2005, Iran became an “observer member” of SCO. Iranian efforts to become a full-fledged member — launched in 2008 — failed because of UN sanctions against Tehran.
In 2016-17, when all signatories to the historic Joint Comprehensive Plan of Action were in compliance with the accord, both China and Russia declared their support for Iranian membership in SCO. Even after the US withdrew unilaterally from the nuclear deal in May 2018 and reimposed crippling sanctions on Tehran, Beijing and Russia maintained their positions in favor of bringing Iran into the Eurasian pact.
By starting the process of becoming a member, Iran will be joining non-Western countries in ways that can help partially compensate for Tehran’s unfavorable standing with Washington and other Western governments.
“In recent years, Iran has always tried to show to the United States that political, economic and diplomatic pressure cannot isolate Iran on the international scene, and that Iran has alternative options,” explained Hamidreza Azizi, a visiting fellow at the German Institute for International and Security Affairs, in an interview with Inside Arabia.

Desire to Forge Deeper Ties With Tehran

What is clear is the desire, not only from China, but also Russia, to forge a deeper partnership with Tehran. After all, Iran could have gained full membership in SCO only with the greenlight from Beijing and Moscow.
“In light of the statements and pledges made by Iran’s previous leadership and the speech by Iran’s new president, Ebrahim Raeisi, that Iran was prepared to open and share with the SCO all of its potential capabilities, there are very serious reasons to believe that it will be very useful,” according to Bekhtiyer Khakimov, Moscow’s special presidential envoy for SCO affairs.
“The SCO member-countries made the corresponding decision on the basis of thorough analysis of the entire combination of factors. In this sense, we see eye to eye with our partners,” he added.
Khakimov noted that Moscow is pleased with “the prospects for Iran’s involvement in such activities as [the] struggle against terrorism, drug trafficking and the work for stability and security in the region and on a wider scale”.
Experts maintain that Russia’s growing interest in further strengthening relations with Iran is related to the new administration in Tehran. “Russia seems more comfortable deepening ties with Iran after Ebrahim Raeisi’s election,” Sina Toossi of the National Iranian-American Council told Inside Arabia.
“The previous administration of Hassan Rouhani focused on improving Iran’s relations with the West. After the JCPOA was struck, Iran prioritized giving contracts to Western firms over Chinese and Russian ones.”
As Iran’s former foreign minister, Mohammad Javad Zarif, explained in a leaked interview that Russia was not genuinely supportive of JCPOA because of Moscow’s fears that Iran’s relations with Western powers would grow at the expense of Iranian-Russian relations.
“With Raeisi in power, Russia no longer worries that Iran will pivot to the West at its expense,” said Toossi.
Accession to SCO membership will help boost Iran’s position in regional trade. By increasing Iran’s interconnectivity and interdependence with its neighbors and other Asian countries, Iranians would be advancing as the country’s president and Leader desire.
As Toossi stated, “Raeisi’s self-professed foreign policy priority is deepening ties with Iran’s neighbors, not restoring the JCPOA and improving relations with the West.”

Implications for JCPOA

Despite SCO membership, Iranians will still pay prices for life under Washington’s pressure.
“The US is still a much [more] valid actor on the global economic scene and most countries, even Eastern powers like Russia and China, have their limits in establishing and maintaining any effective anti-sanctions mechanisms nd athis is going to be the case for the foreseeable future,” stated Azizi.
“The experience of the US’ ‘maximum pressure’ policy proved that even the most remote countries of the world prioritize their economic interests in having ties with the US over conducting trade with Iran. As a result, Iran’s SCO membership cannot immediately affect Washington’s potential to pose economic pressure on Iran.”
Ultimately, it is safe to conclude that Iran joining the SCO will not be a substitute for a timely revival of JCPOA. Having just started the process of becoming a full-fledged member, Iran will need to wait years before it becomes one.
“So, the [SCO] victory does not have short-term practical consequences for [Iran’s] economy,” explained Bijan Khajehpour, an economist at the Vienna-based strategic consultancy Eurasian Nexus Partners.
Furthermore, the Financial Action Task Force blacklist remains an issue for Tehran, which SCO membership will not overcome.
“To maximize the economic benefit, it will gain by joining the SCO, Iran needs the JCPOA and the normalized international banking relations that come with it,” argued Toossi.
Looking ahead, although the US will continue being able to punish Iran economically, Tehran’s SCO membership will undermine Washington’s ability to isolate the Islamic Republic diplomatically and geopolitically. Sanctioned heavily by the US, Iran has moved east geo-economically and sees its future in a Chinese- and Russian-led order in Asia.
As Azizi put it, Iran’s SCO membership means that Tehran has entered into a “concert of non-Western great powers”, which will give Tehran some new forms of leverage vis-à-vis the West. This will come with important ramifications for the stalled JCPOA talks, as Tehran is now probably less likely to sway on demands and concessions at the negotiating table.

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