Iran’s trade with Shanghai Cooperation Organization member states stood at 23.86 million tons worth $15.05 billion in the first six months of the current fiscal year (March 21-Sept. 22), according to the latest statistics announced by the Islamic Republic of Iran Customs Administration.
Exports to the eight SCO member states hit 20.31 million tons worth $8.56 billion.
China with 14.83 million tons of exports worth $6.57 billion, India with 2.92 million tons worth $829.88 million and Pakistan with 1.36 million tons worth $544.13 million were the top three export destinations.
Imports stood at 3.56 million tons worth $6.49 billion.
The top three importers to Iran were China, Russia and India.
Iran’s trade with SCO hit 47.93 million tons worth $25.63 billion in the fiscal 2020-21 (ended March 20, 2021).
Exports to SCO members stood at 38.88 million tons worth $12.26 billion during the period.
The top three export destinations were China with 26.96 million tons worth $8.08 billion, India with 7.6 million tons worth $1.28 billion and Pakistan with 2.55 million tons worth $1 billion during the period under review.
Imports from SCO member states hit 9.05 million tons worth $13.37 billion in the last fiscal year.
The imports mainly came from China with 3.56 million tons worth $9.84 billion, India with 2.21 million tons worth $2.14 billion and 2.93 million worth $1.07 billion during the period.
SCO Accounts for One-Third of Iran’s World Trade
Iran’s total foreign non-oil trade stood at 79.1 million tons worth $45 billion in H1 fiscal 2021-22, registering a 47% growth in value compared with the similar period of last year, according to the head of the Islamic Republic of Iran Customs Administration.
This means SCO accounted for one-third of Iran’s trade with other countries.
“Iran’s total exports stood at 60 million tons worth $21.8 billion over the six-month period, showing a 30% and 61% rise in weight and value respectively year-on-year,” Mehdi Mirashrafi was also quoted as saying by Iribnews.ir.
The exports mainly included liquefied natural gas, methanol, polyethylene, semi-finished steel products, steel ingots, propane, urea, petroleum, steel bars and cathodes.
Imports during the six months under review amounted to 19.1 million tons worth $23.14 billion, registering a 15% and 37% rise in tonnage and volume respectively compared with the corresponding period of last year.
The imports mainly included corn, soybeans, sunflower oil, soymeal, wheat, barley, sugar, palm oil and unrefined vegetable oil.
Iran’s Accession Process Begins
Shanghai Cooperation Organization’s member states are China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Uzbekistan, India and Pakistan.
In an SCO summit held in Dushanbe, Tajikistan, last month, Chinese President Xi Jinping announced the commencement of procedures to grant Iran full membership in SCO.
“Iran’s accession to Shanghai Cooperation Organization is a watershed event for diplomacy, which can open up new frontiers for the country’s economy as well,” says Mohammad Lahouti, the head of Iran Export Confederation.
“Iran is now a member of an organization that accounts for one-third of the Earth’s land surface and 42% of the world population. Close to 25% of the global GDP are being generated by SCO members … A good opportunity has been provided for the country to shift its economic approach to focus on the development of foreign trade (both export and import) with these countries and boost its economic cooperation with the members of Shanghai Pact. In doing so, the country will be bound to contribute to the 25% GDP of the world and increase its role on the economic front,” he was quoted as saying by Donya-e-Eqtesad.
“Iran has unparalleled capacities through which cooperation with SCO members can be facilitated. The country is practically located on corridors from north to south and west to east; Iran remains the most important corridor to cross the West Asian region, though many countries tried to somehow replace it over these years. According to statistics, the country has one of the largest oil and gas reserves in the world needed by China and India, two key members of SCO.”
Iran’s ascension to full SCO member was widely seen inevitable, considering the comprehensive strategic partnership agreement Iran signed with China in March and a similar agreement Iran subsequently signed with Russia.
With the admission of Iran, SCO now has all the relevant players to address regional issues ranging from security, connectivity and economic development, reads an article published by The Diplomat.
According to Washington, D.C.-based think tank Jamestown Foundation, although SCO is mainly security and politically focused, membership in the organization is also supposed to have an economic dimension, although this has been hampered in recent years largely by Moscow.
Still, participation in SCO has proven important for its members in developing bilateral trade and financial relations with one another and China in particular.
Chinese President Xi Jinping’s visit to Iran in 2016 kick-started the process of developing a comprehensive strategic partnership between Tehran and Beijing, and previous political barriers to that process have apparently now been removed.
Notably, this past spring, the two sides signed a 25-year cooperation agreement that pledges Chinese investments of $400–600 billion. Some observers argue that permanent membership in SCO will greatly facilitate this growth of political and economic relations between the two countries as well as between Iran and other members, reducing the sting of Western sanctions against Tehran.
The bloc already registered $330 billion in trade among the member states in 2017.
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, wrote Inside Arabia.
According to Hamidreza Azizi, a visiting fellow at the German Institute for International and Security Affairs, Iran’s SCO membership means that Tehran has entered 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.
Mohsen Jalalpour, former president of Iran Chamber of Commerce, Industries, Mines and Agriculture, remains skeptical.
“Is accession to SCO a real historic event? I personally believe it is; such developments are very important for Iran’s economy; they shouldn’t be regarded in passing. Yet, what is central is whether the country will be able to tap into such opportunities. Therefore, the event per se is significant but we probably won’t achieve the favorable outcome of it all,” he wrote for Donya-e-Eqtesad.
“Where does my pessimism come from? The fact of the matter is that over the past few years, we did not forge any economic relations with any, I repeat, any country. Our relations, even with our neighbors were based on security and political issues. I urge you to think twice if you believe I’m wrong. In relation with what country, did economic issues come first?”
