Iran’s trade with Shanghai Cooperation Organization’s member states, excluding crude oil exports, stood at 16.19 million tons worth $13.29 billion in the first four months of the current fiscal year (March 21-July 22), latest data released by the Islamic Republic of Iran Customs Administration show.
China with 11.25 million tons worth $10.04 billion, India with 1.85 million tons worth $1.43 billion and Iraq with 1.36 million tons worth $831.03 billion were Iran’s main trade partners among SCO member states during the period.
Iranian exports hit 13.05 million tons worth $6.95 billion.
China with 10.06 million tons worth $5.62 billion, India with 1.33 million tons worth $566.9 million and Pakistan with 854,779 tons worth $376.65 million were the main export destinations.
Imports stood at 3.14 million tons worth $6.33 billion.
China with 1.19 million tons worth $4.42 billion, India with 527,673 tons worth $858.7 million and Russia with 930,267 tons worth $598.74 million were the major exporters.
The Shanghai Cooperation Organization is a Eurasian political, economic and security organization. In terms of geographical scope and population, it is the world's largest regional organization, covering approximately 60% of the area of Eurasia, 40% of the world population and more than 30% of global GDP.
SCO is a successor to the Shanghai Five, a mutual security agreement formed in 1996 between China, Kazakhstan, Kyrgyzstan, Russia and Tajikistan. On 15 June 2001, the leaders of these nations and Uzbekistan met in Shanghai to announce a new organization with deeper political and economic cooperation; the SCO Charter was signed on July 7, 2002, and entered into force on Sept. 19, 2003. Its membership has since expanded to eight states, with India and Pakistan joining on June 9, 2017. Several countries are engaged as observers or dialogue partners.
Iran to Become Full-Fledged SCO Member in September
Iran will be admitted to the Shanghai Cooperation Organization this year, with a memorandum on the country's obligations to be signed at a summit in Samarkand, which will take place from Sept. 15-16, Uzbekistan's Foreign Minister Vladimir Norov said recently.
According to RIA Novosti, speaking at a penal meeting in Moscow, Norov said on July 11, "This year, within Uzbekistan's chairmanship, Iran, as an observer state will ... become a full-fledged member of SCO. Besides, a memorandum on Iran's obligations as an SCO member will also be signed in Samarkand."
Iran came one step closer to becoming a full member of Shanghai Cooperation Organization on Sept. 17 last year with the approval of its bid, 15 years after it first applied. On Sept. 17, 2021, SCO launched the procedures of Iran's accession to SCO, which are expected to take "a fair amount of time".
SCO’s dialogue partners include Armenia, Azerbaijan, Cambodia, Nepal, Sri Lanka and Turkey.
Initially focused on regional security, including border conflicts and terrorism, its activities have expanded to cover economics, trade, transport and law enforcement. However, security and economic cooperation also remain priorities.
China and Russia are dominant members. Russia regards Central Asia as its sphere of influence but Chinese economic sway is growing. At an informal level, SCO is a diplomatic platform that helps address and contain potential friction, Asia Plus reported.
Uzbekistan, which currently holds the rotating SCO presidency, has shared a draft memorandum listing conditions for Iran's accession with other members.
Media Analysis
Iran’s accession to SCO is a watershed event for diplomacy, which can open up new frontiers for the country’s economy, 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 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 the Persian economic daily Donya-e-Eqtesad.
“Iran has unparalleled capacities through which cooperation with SCO members can be facilitated. The country is practically located on corridors extending from north to south and west to east; Iran remains the most important corridor to cross West Asia, although many countries tried to somehow replace it over the years. According to statistics, the country has one of the largest oil and gas reserves in the world, which are needed by China and India, two key members of SCO.”
Iran’s ascension to full SCO membership was widely seen to be inevitable, considering the comprehensive strategic partnership agreement Iran signed with China in March and a similar agreement it subsequently signed with Russia.
As unsurprising as it is, Iran’s full membership in SCO is significant. 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 largely by Moscow in recent years.
Still, participation in SCO has proven important for its members in developing bilateral trade and financial relations with one another, China in particular.
The Chinese president’s visit to Iran in 2016 kickstarted the process of developing a comprehensive strategic partnership between Tehran and Beijing, and previous political barriers to that process have apparently 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 the growth of political and economic relations between the two countries as well as between Iran and other members, reducing the bite of Western sanctions against Tehran. The bloc already registered $330 billion in trade among 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 geoeconomically 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 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.
Mohsen Jalalpour, former president of Iran Chamber of Commerce, Industries, Mines and Agriculture, is 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 years, we did not forge 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?”
