Economy, Domestic Economy

Accession to SCO: At What Price?

Accession to SCO: At What Price?Accession to SCO: At What Price?

Shanghai Cooperation Organization once again refused to initiate Iran’s accession in a summit held in the Uzbek capital Tashkent last week.

Iran applied for full membership in SCO in 2008, but has been blocked by rules in the organization’s charter that forbid membership for any country under United Nations sanctions.

International punitive restrictions over the country’s nuclear program that had kept the issue off the table were removed under Tehran’s nuclear deal with world powers last July. Despite this, the country’s bid to join the organization was rejected by the member states.

Deputy Agriculture Minister Ali Qanbari reflects on this issue in an opinion piece recently published in the Persian daily Sharq, which has been translated as follows.

It’s time for a rethink over the necessity of accession to Shanghai Cooperation Organization. There is no denying the fact that politico-economic benefits of joining SCO are significant but they would come at a price, particularly now that 11 years have passed since Iran obtained observer status and about a decade since the country applied for full membership, only to be denied accession over these years. Therefore, it seems better to ask which hold higher value if we join SCO: economic or political advantages?

SCO is a political organization to many. They do not see Iran gain economic leverage by joining the bloc led by China and Russia. On the contrary, accession to SCO might keep Iran from achieving the envisioned goals of the 20-Year Vision Plan, which is aimed at turning Iran into a superpower in the Middle and Far East.

China and Russia have recently proposed the megaproject named Silk Road Economic Belt to establish the Eurasian Economic Union. From a geographic perspective, these two projects are for the member states of SCO and would serve the economic interests of China and Russia through regional integration.

But in practice, these initiatives have had little economic achievements and do not provide strong grounds for justifying Iran’s membership in SCO.

Despite the fact that Iran’s geographical position requires the country to join SCO, the benefits of doing so should be measured up against its costs. Joining hands with economies, except for China and Russia, which are either weaker or on the same level as Iran, would increase Iran’s economic vulnerability. It would not only bring about economic shocks but also give rise to political shocks for the country.

Although the organization seems passive as we speak, things might start to change and the politico-economic consequences of being a member of SCO might emerge.    

One of the advantages of joining SCO is establishing the free trade zone with its member states. This can be a giant stride toward globalization.

However, in their recent meeting, the members turned down Tehran’s bid despite a request from Russia. This comes as the United Nations sanctions against Iran are a thing of the past.

The Central Asian countries enjoy a high strategic position and are facing economic and security challenges that have made them eager to form such an organization. They are constantly seeking a system within which their security is guaranteed. One of these systems, which is led by Russia and China, is SCO.

Last week, the UK voted to leave the European Union, an important confirmation on vulnerability of economies that join unions or politico-economic organizations. This comes as SCO’s political aspects are far more dominant than the economic opportunities it may offer to Iran.

Also, the fact that Iran’s bid has been repeatedly declined over years would undermine the country’s international relations. Taken together, it’s better to make a bid for accession when all the necessary negotiations are conducted and a positive response is a sure thing.  

SCO is a Eurasian political, economic and military organization founded in 2001 in Shanghai by the leaders of China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan. These countries, except for Uzbekistan, had been members of the Shanghai Five, founded in 1996; after the inclusion of Uzbekistan in 2001, the members renamed the organization.

On July 10, 2015, the SCO decided to admit India and Pakistan as full members, but not Iran. India and Pakistan signed the memorandum of obligations on 24 June 2016 in Tashkent, thereby starting the formal process of joining the SCO as a full member. The process will take some months and they are expected to become full members by the next meeting at Astana, Kazakhstan, in 2017.