Prior to the 1979 Islamic Revolution, the only economic block Iran was a member of was the Economic Cooperation Organization, which was founded by Iran, Pakistan and Turkey, and later joined by other countries, Hadi Haqshenas, an economist, prefaced an article for the Persian daily Arman-e Melli with this note. A translation of the full text follows:
In the post-revolution era, Iran did not join any economic bloc until the previous government, during which term we joined the Eurasian Economic Union.
Accession to the Shanghai Cooperation Organization has been discussed for almost the past two decades, which process was finalized on Tuesday. For many years, Iran tried to become a member of the General Agreement on Tariffs and Trade, which later became the World Trade Organization, but that process was prolonged and Iran has not yet become a member of WTO.
Iran has become a permanent member of the Shanghai Cooperation Organization. This is a potential capacity and in order to turn it into an actual capacity, requirements need to be put into place.
Before mentioning the requirements, it is necessary to remember an important point. Countries included in such economic blocs mainly intend to create common interests, use each other’s capacities and reap the political benefits of such alliances in international forums.
For example, at present, in international assemblies, whether in the United Nations or in other international organizations, member states of the Arab League, or the countries of the Persian Gulf vote en bloc.
In the case of the European Union, a majority of votes of member states in international forums are also aligned. Iran, however, due to its lack of membership in economic unions and blocs, has rarely used this advantage. Therefore, such unions and organizations can have both economic benefits, such as using each other’s capacities because of the mutual observance of preferential tariffs, and political benefits.
Naturally, political benefits are linked to the power of political diplomacy, but the condition of enjoying economic advantages depends on a number of requirements, such as the existence of a monetary system, having a transportation infrastructure and having goods and services for supply and export. In other words, if we think that merely being a member of an organization will have an economic advantage for us is erroneous.
The same issue is relevant regarding the North-South or East-West corridors for transit of goods. The Silk Road may have passed through Iran for centuries, but today the share of transit through Iran is not commensurate with the available capacity due to a number of reasons. For example, our northern ports enjoy a loading and unloading capacity of more than 30 million tons, but less than 10% of this capacity are used. Our road transportation capacity is in the same situation.
Therefore, in order to take advantage of Iran’s membership in the Shanghai Cooperation Organization, our banking and transportation systems and infrastructures should be ready to roll. When we are under sanctions, or on the FATF blacklist, using the economic capacity of the Shanghai Cooperation Organization or Eurasian bloc will face obstacles. The use of the full capacities of Eurasian countries, the grouping of which Iran joined in the previous government, as well as the recent membership in the Shanghai Cooperation Organization, will be possible when we overcome regional or international challenges.
