Iran and member states of the Shanghai Cooperation Organization traded 21.41 million tons of goods (excluding crude oil from Iran) worth $17.05 billion during the first five months of the current Iranian year (March 21-Aug. 22) to register a 31% increase compared with the similar period of last year, according to the Islamic Republic of Iran Customs Administration.
Iran’s exports (excluding crude oil) stood at 17.38 million tons worth $9.08 billion, which indicate a 10% rise in value compared with the similar period of last year, IRICA Spokesman Rouhollah Latifi was quoted as saying by IRNA.
“China was our biggest export destination among SCO member countries during the period, as the country imported $6.72 billion worth of Iranian products to register a 14% year-on-year rise.”
China was followed by India with $729 million (up 20%), Afghanistan with $641 million (down 25%), Pakistan with $475 million (up 13%) and Russia with $291 million (up 32%), he added.
Uzbekistan with $88 million, Kazakhstan with $61.2 million, Tajikistan with $45.6 million, Kyrgyzstan with $18.4 million, Belarus with $7.2 million and Mongolia with $156,000 were other export destinations of Iran among SCO member states.
Iran imported 4.03 million tons of goods worth $7.98 billion from SCO during the same period, registering a 68% rise compared with the corresponding period of last year, IRICA says.
Latifi said China also topped the list of SCO exporters to Iran by dispatching $5.52 billion worth of goods during the period to register a 53% year-on-year rise.
China’s export volume to Iran was followed by India with $1.16 billion (up 142%), Russia with $715 million (up 50%), Pakistan with $429.3 million (up 375%) and Kazakhstan with $78.4 million (up 174%).
Uzbekistan with $32.5 million, Tajikistan with $26.2 million, Afghanistan with $10.4 million, Belarus with $3.9 million, Kyrgyzstan with $2.7 million and Mongolia with $1.3 million were other SCO exporters to Iran during the period.
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 the successor to the Shanghai Five, a mutual security agreement formed in 1996 by 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.
Permanent Membership Deal to Be Signed in September
Endorsing Iran’s bid for permanent membership in the Shanghai Cooperation Organization in September 2021, Russian President Vladimir Putin stressed that the Islamic Republic “plays an important role” in the region and “works closely” with SCO, Sputnik News reported.
An agreement on Iran obtaining the status of an official member of SCO will be signed at its upcoming summit in Uzbekistan, Iranian Foreign Ministry Spokesman Nasser Kanani has announced.
In a statement published on the ministry’s Telegram account on Monday, Kanani said “the process of admitting Iran to SCO is nearing completion”, touting the Islamic Republic’s membership in the organization as “viable and mutually beneficial”.
“An important country in the region, Iran has the potential to benefit the SCO thanks to its energy resources, great economic potential and location on the route of the North-South transportation corridor,” the Iranian Foreign Ministry spokesman added.
The statement came as the press service of Uzbek President Shavkat Mirziyoyev reported that discussions with his Iranian counterpart Ebrahim Raisi are due to take part during the SCO summit scheduled for Sept. 15-16 in the city of Samarkand.
The press service noted that Samarkand would also host “high-level talks” between Raisi and Mirziyoyev, who are expected to discuss the development of Iran-Uzbekistan collaboration.
Iran currently has observer status within SCO. In 2008, the country applied for full membership, but the organization refused to consider the application amid UN sanctions against Iran over its nuclear program.
Media Analysis
Iran’s accession to SCO 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 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 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 these 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 Iran 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 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.
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 SCO 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 Tehran has entered into a “concert of non-Western great powers”, which will give Tehran 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 ambivalent.
“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?”
