The Shanghai Cooperation Organization is of great importance for Iran and Tehran’s effort to finalize its membership is considered a significant initiative in the field of diplomacy, Mohammad Lahouti, the head of Iran Export Confederation, said in an interview with the Tehran Chamber of Commerce, Industries, Mines and Agriculture’s news portal.
According to the official, SCO members possess a third of the world's landmass, 43% of the world's population and 25% of the world's gross domestic product, which indicate the significance of this organization at the global scale.
On July 4, Iran officially became a permanent member of SCO during a virtual summit hosted by India for the SCO Heads of State Council.
No Miracles
Recalling the government's policy of focusing on trade with neighbors and looking to the East instead of focusing on trade with the West, Lahouti said, “Iran's membership in SCO will facilitate trade with some countries, but we cannot expect miracles in the face of commercial obstacles impeding Iran's foreign trade due to sanctions.”
Iran's exclusion from the international economy has created problems for businessmen and economic players, he added, saying that in parallel with interactions with the world's major economies in the form of Shanghai Treaty, efforts should be made to remove restrictions imposed by sanctions in the field of foreign trade.
“Iran's trade with the member states of Shanghai Treaty is very small compared to the volume of trade these countries have with the world. Last year, more than 50.60 million tons of goods were exchanged between Iran and 11 SCO member countries. Therefore, we must have an action plan for these countries,” he said.
According to the official, Iran’s trade with the SCO member states in 2022-23 Iranian year recorded a rise of 6.5% compared with the previous year, and the import share of this volume of trade, with a growth of 34%, was about 8.9 million tons.
Afghanistan was among the top five export destinations of Iranian goods to the member countries with imports exceeding $1.48 billion.
Potential Benefits
Among the potential benefits of Iran’s membership, Lahouti referred to development of employment and investment, neutralization of sanctions, removal of obstacles in the way of financial and economic exchanges, and preparation of grounds for the use of regional currencies instead of the US dollar.
“To achieve these goals, the support and cooperation of private and public sectors as well as the public with the government is essential,” he added.
According to Lahouti, Iran had been an observer member of SCO since 2005, and by joining the organization as a permanent member, the country can hope that the level of its foreign trade with member states such as China, Russia and India, as the three major economic powers, will increase.
“It will also be possible to withstand restrictions imposed by Europe and the US against Iran's economy with more strength. However, it should not be forgotten that Iran's extensive interactions at different political levels with other countries should be put on the agenda as a strategic solution by Iran in the international arena,” he said.
A Force to Reckon With
Stressing the significant weight of SCO at the international level, Lahouti noted that four of the world's nuclear powers, namely Russia, China, India and Pakistan, are members of this treaty, and the first two are among the five permanent members of the UN Security Council, which are also the main pillars of SCO.
“This is sufficient for any observer to understand why the Shanghai Cooperation Organization is more than a regional security organization,” he said.
The IEC chief stated that Iran's role in the One Belt, One Road project and the 25-year cooperation document between Iran and China can also supplement this agreement.
“By being a permanent member of this organization, Iran is also linked to the vast markets of SCO member countries and as a regional power, it can have positive economic interactions with these countries in various fields of trade, transit and energy. As Iran recently became an observer member of the Eurasian Economic Union, participation in the Shanghai Cooperation Organization can complement the process for Iran to use the economic capacities of countries of the region, which account for 65% of the world's population and resources.”
Lahouti said it is also important for SCO members to work with a regional power like Iran, which has rich energy resources for economic cooperation and is a bridge between East and West Asia as well as North to South.
“Tehran's closer collaboration with the Shanghai Cooperation Organization and Iran’s pronounced role on the Silk Road will be beneficial for all parties,” he concluded.
