Iran's Q1-3 Trade With SCO Tops $24b
EghtesadOnline: Iran’s trade with the Shanghai Cooperation Organization member states stood at 36.85 million tons worth $24.47 billion during the current fiscal year’s first nine months (March 21-Dec. 21), latest data released by the Islamic Republic of Iran Customs Administration show.
China with 23.84 million tons worth $18.61 billion, India with 5.86 million tons worth $2.39 billion and Russia with 3.56 million tons worth $1.67 billion were Iran’s top trade partners in the bloc.
Exports to the eight SCO member states hit 30.26 million tons worth $13.45 billion.
With 21.31 million tons of imports worth $10.2 billion, China led the pack and was followed by India with 4.91 million tons worth $1.34 and Pakistan with 2.17 million tons worth $910.76 million.
Imports reached 6.59 million tons worth $11.03 billion.
China also topped Iran’s import list of SCO members with 2.53 million tons worth $8.41 billion. It was followed by Russia with 2.73 million tons worth $1.22 billion and India with 952,941 tons worth $1.05 billion.
Iran’s trade with SCO hit 47.93 million tons worth $25.63 billion in the fiscal 2020-21 (ended March 20, 2021).
Exports to SCO members stood at 38.88 million tons worth $12.26 billion during the period.
The top three export destinations were China with 26.96 million tons worth $8.08 billion, India with 7.6 million tons worth $1.28 billion and Pakistan with 2.55 million tons worth $1 billion during the period under review.
Imports from SCO member states hit 9.05 million tons worth $13.37 billion in the last fiscal year.
The imports mainly came from China with 3.56 million tons worth $9.84 billion, India with 2.21 million tons worth $2.14 billion and 2.93 million worth $1.07 billion during the period.
Iran’s foreign trade (excluding crude oil exports) stood at 122.5 million tons worth $72.1 billion during March 21-Dec. 21, registering an 11% and 38% year-on-year growth in weight and value respectively, according to IRICA.
This means SCO accounted for around one-third of Iran’s foreign trade.
Iran’s Accession Process Begins
In an SCO summit held in Dushanbe, Tajikistan, in November, Chinese President Xi Jinping announced the commencement of procedures to grant Iran full membership in SCO.
Iran will embark on the path of becoming a full-fledged member of SCO at the next summit in September 2022, a Russian envoy to the eight-nation bloc said recently.
The Eurasian political organization currently comprises China, India, Kazakhstan, Kyrgyzstan, Pakistan, Russia, Tajikistan and Uzbekistan, with Iran as an observer state.
"We expect a memorandum to be signed in Samarkand, Uzbekistan, in September 2022. This means Iran will begin the concrete process of accession," Bakhtiyer Khakimov told reporters on the sidelines of an SCO national coordinators' meeting in Tashkent, Uzbekistan.
Uzbekistan, which holds the rotating SCO presidency, has shared a draft memorandum listing conditions for Iran's accession with other members. Khakimov said that every aspiring member state has a tailored list of criteria to meet, Sputnik International reported.
Iran’s accession to the Shanghai Cooperation Organization 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 practically located on corridors extending from north to south and west to east; Iran remains the most important corridor to cross West Asian region, 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 kick-started the process of developing a comprehensive strategic partnership between Tehran and Beijing, and previous political barriers to that process have apparently now 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 the other members, reducing the bite of Western sanctions against Tehran. The bloc already registered $330 billion in trade among the 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 geo-economically 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 that Tehran has entered into a “concert of non-Western great powers”, which will give Tehran some 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 skeptical.
“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 or not. 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 any economic relations with any, I repeat again, 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?”