The membership in Shanghai Cooperation Organization, as a turning point in the improvement of Iran’s political and economic status in the region, will greatly strengthen mutual trust and unity among member states (China, India, Kazakhstan, Kyrgyzstan, Russia, Pakistan, Tajikistan and Uzbekistan) and help safeguard regional security and stability, the deputy head of Tehran Chamber of Commerce, Industries, Mines and Agriculture for international affairs, Hesameddin Hallaj, prefaced an article recently published in the news portal of the chamber with this note. A translation of the full text follows:
With the changing world order, a key factor that facilitated Iran’s membership in SCO, the member countries have expressed their utmost willingness to consolidate cooperation with Iran within the framework of the organization, as it will help access a large market of member countries, promote trade exchanges, reinforce regional security and upgrade political cooperation.
Naturally, membership in SCO will give rise to both benefits and obligations for Iran, as it will help promote production and joint ventures, reduce obstacles, simplify trade procedures and offer supportive mechanisms.
Political Viewpoint
From the political viewpoint, Iran’s membership increases regional influence and strengthens relations with other member states. With the presence of countries such as China, Russia and some from South Asia and Central Asia in SCO, a suitable ground will be prepared for Iran’s participation in effective political dialogues and decision-making processes. The advantages of participation in the regional security discourse to stabilize peace and security will entail positive effects on the business environment.
Cultural Viewpoint
From the cultural viewpoint and within the framework of SCO’s cultural exchange program, various measures can be defined with the aim of increasing understanding and increasing exchanges in this area, such as organizing events, holding exhibitions and events, encouraging exchange of students, forging tourism cooperation and holding film and music festivals.
Iran has a rich cultural heritage and well known as a potentially attractive tourist destination. Therefore, valuable capacities have been provided to expand exchange programs and develop tourism infrastructure through joint cooperation with the SCO member countries.
Economic Viewpoint
From the economic viewpoint, Iran’s membership in this organization offers diverse advantages, such as increasing opportunities for business cooperation and presents a positive outlook for investment in Iran.
Due to its strategic location at the crossroads of Asia, Europe and the Middle East, Iran will take advantage of the facilitation of regional economic integration by the Shanghai Cooperation Organization. The organization promotes trade development and regional economic cooperation through its subsidiary institutions such as the SCO Trade Council, which facilitates trade interactions.
The SCO’s Inter-Bank Consortium, which includes eight main banks and three supervisory banks, facilitate banking operations and finance development projects in the member states, through interaction with other banks and financial institutions such as the China Development Bank. It will be a suitable platform for the implementation of various joint investment projects such as the Belt and Road Initiative for the benefit of all countries. Boosting cooperation in areas such as foreign currency swap arrangements, cross-border payment systems and infrastructure financing will also facilitate the flow of trade and investment by boosting economic interactions.
The emphasis of SCO on the development of infrastructure and communication projects will enhance transportation and trade facilitation by discovering hidden export opportunities and strengthening Iran’s economic prospects. Iran can take measures in cooperation with other members for the development of transportation infrastructure such as building and improving highways, railroads and ports.
In addition, due to the presence of significant energy reserves in Iran, cooperation in the energy sector also provides numerous opportunities. Joint investments in exploration and production projects, as well as in renewable energy infrastructures in the fields of solar and wind farms, can be defined to take advantage of Iran’s potential in the field of green and clean energy and establish new oil and gas transmission lines from Iran to India and China through Central Asia and reviving the peace pipeline within the framework of the SCO Energy Club.
The agricultural sector also plays a decisive role in the economy of SCO member countries. Iran can cooperate with other members to increase productivity in agriculture and transfer technology and knowledge. Joint projects related to irrigation systems, crop diversification and agricultural research could help ensure food security and promote sustainable agricultural practices.
Cooperation with member countries in the areas of research and development, and technology transfer related to telecommunications, biotechnology and aerospace, creating the capacity for joint cooperation in the field of education to strengthen the capabilities of human resources such as student exchange programs, scholarships and professional training projects, are only a few examples of potential projects, which measures are determined through discussion and agreement with members and by taking into account the strengths and priorities of each country.
In line with the development of all the above-mentioned capacities, Iran can benefit from the experiences of member countries by participating in different working groups and forums, for developing the level of industrial cooperation, bolstering production and increasing innovation.
Other Such Memberships, Trade Deals
With regard to Iran’s membership in and agreements with other economic organizations and unions, such as the preferential and free trade agreements with the Eurasian Economic Union, given its positive effect on the country’s private sector economy and public livelihood in the past two years, it seems that membership in such organizations is the only prerequisite for getting out of isolation and developing comprehensive relationships.
A sufficient condition, in addition to having an agile economy based on reducing government intervention in the economy and encouraging competition among private sector players in those markets, requires the proper use of these agreements, prerequisites and special requirements for overcoming all kinds of trade restrictions.
As an example of constructive and structural measures, India, as a member of SCO, buys oil from Russian, another member of the organization, and pays for it with yuan, which is the national currency of a third member of the organization; this seems to be in line with the drive to de-dollarize trade.
By adapting corresponding initiatives, there is a possibility of bypassing a large part of financial/banking sanctions imposed by the West. However, determining the extent of applying these solutions to our country due to the two major challenges of “multiple sanctions” and “Iran’s status in the Financial Action Task Force list” is deferred to future analyses.
Obviously, adopting a balanced view in Iran’s foreign policy in its interactions with the East and the West, and clarifying the principle of “global attitude, regional separation of interests and national activism” in the field of economic diplomacy and international interactions to protect the country’s interests and creating optimism for business owners should be considered by politicians and policymakers.
