Economic Benefits Galore in Iran’s Accession to SCO

“Iran’s accession to SCO can bring about a series of benefits economically and culturally,” Yalda Rahdar, chairperson of ICCIMA's Competition and Privatization Commission, was quoted as saying by ICCIMA's news portal.

“Despite the geographical distance between Iran and some SCO members like China, Iran’s aim to develop various economic sectors offers numerous investment opportunities to members of the organization.”

China and Russia are the most influential states in the bloc, which was established in 2001 by the leaders of Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, according to Financial Tribune. 

SCO's initial goal was security-related, notably for fighting terrorism and drug trafficking, but the bloc’s agenda was later expanded to the economy as well.

Despite its firm intention to become a full member, Iran, an observer member since 2005, has until recently been unable to gather all-out support due to international sanctions imposed on the country over its nuclear program.

Even after Tehran did clinch a nuclear deal with six world powers in 2015, which led to the lifting of sanctions in January 2016, Beijing refused to back Iran’s membership last year, despite the full support of Moscow.

Chinese authorities, however, have recently changed their stance. Assistant Chinese Foreign Minister Li Huilai said early June that China supports Iran's membership and the subject was to be discussed at the group's annual summit. The session was held on June 8-9 in Astana, Kazakhstan.

“China highly appraises this. China welcomes and supports Iran's wish to become a formal member of the SCO," he was quoted by Reuters as saying. “I think that at this meeting all sides will continue to conscientiously study the issue of Iran becoming a member on the basis of the SCO's relevant rules and consensus through consultations.”

China has close economic and diplomatic ties with Tehran, as it served an instrumental part in pushing through the nuclear deal. The landmark deal opened the gates to abundant opportunities in Iran's emerging economy following years of underinvestment.

The Islamic Republic boasts stability in a volatile region as well as its strategic location to attract investment post sanctions.

“By becoming a member of the organization, Iran can add to its geopolitical and geostrategic importance. Given the opportunities it offers in transit of goods and energy to the Persian Gulf and Middle East in general, it can help connect SCO member states to the strategic Persian Gulf region,” Rahdar added.

China is well aware of Iran’s emerging connectivity role in the region and beyond. It is investing $2.2 billion in an Iranian railroad that is part of China's much-heralded "One Belt, One Road" initiative to facilitate transportation of goods and energy across Eurasia. 

Last year, a train travelled from China’s Urumqi directly to Tehran in 14 days, marking a major development in connectivity between Beijing and Tehran, both of which have set an ambitious $600 billion goal in bilateral trade.

In its latest annual session, SCO formally launched accession process for Pakistan as well as India, which has become a close economic partner for Iran in the past few years. 

Iran and India are cooperating to develop Chabahar Port on the shore of the Sea of Oman and build railroads to carry goods shipped by the sea from Indian ports to Afghanistan, Azerbaijan, Russia and Europe, and vice versa.

“Upon the completion of the process for the full accession of Pakistan and India, SCO will certainly become a leading bloc in the vast Eurasia region. Therefore, Iran can take advantage of this opportunity both economically and politically,” Rahdar added. The ICCIMA official believes Central Asia's landlocked geographical situation poses a huge problem. 

“Accordingly, the members of SCO strongly need Iran’s effective presence in the organization to proceed with their large-scale economic goals,” Rahdar concluded.