Chabahar Port: Gateway to Opportunities for SCO Members

EghtesadOnline: The Chabahar Port’s geostrategic location in southeastern Iran will provide wider accessibility for member states of the Shanghai Cooperation Organization to conduct global trade and commerce, says Ali Asadi Khomami, an expert on international studies.

News ID: ۷۸۷۱۰۱

04 October 2021

A translation of his write-up for the news outlet of the Ministry of Roads and Urban Development follows:

The consent of the member states of Shanghai Cooperation Organization to Iran’s accession is currently one of the top stories in international relations. The procedure of acceding to SCO has been initiated with the go-ahead of the member states and Iran is expected to officially join the pact within one to 1.5 years.

SCO is perhaps the most important international organization in the East; it guarantees military, security, political, cultural and economic cooperation of its member states. A number of economically-powerful countries, including China, India and Russia, are members of SCO.

Being a part of this body could offer openings to Iran to energize its foreign trade. But how is it possible to enjoy the benefits of this membership? The answer is through the southeastern port of Chabahar.

Chabahar consists of two port terminals, namely Shahid Beheshti and Shahid Kalantari. It is the only oceanic port of the country with direct access to high seas via the Arabian Sea and the Indian Ocean. It is in the vicinity of one of the busiest maritime trade routes in the world, namely the Indian Ocean, and is able to accept large cargo ships without any capacity restrictions. These characteristics allow Chabahar to become the starting point of key international trade corridors from Iran.

The North-South International Corridor, for example, which begins from Chabahar Port and ends in Bandar Anzali and Astara, can connect India to Azerbaijan, Russia and Northern Europe. It can also provide access to sea for Central Asian countries and those in West Asia. For instance, the trilateral Chabahar agreement signed by Iran, India and Afghanistan ensures trade between India and Afghanistan via Chabahar.

However, the promotion of multilateralism and creation of positive leverage among the lead actors in Chabahar is vital. The key port should not turn into a ground for rivalry and competition among players. India has expressed interest in making investment in Chabahar and China has also invested in Pakistan’s Gwadar to connect one of the routes of its Belt and Road Initiative to Central Asia.

Given the competition between India and China and tensions between India and Pakistan, it might seem that the region will become an arena for rivalry between the two economically powerful countries.

Iran and Pakistan have time and again emphasized that they are not interested in competition and are just seeking collaborative ties. Iran has signed a 25-year cooperation agreement with China, which includes participation in the Belt and Road Initiative.

Iranian officials have declared that Chabahar’s development project won’t be executed exclusively by one country and that all countries are free to invest and avail themselves of the opportunities offered by Chabahar Port.

It seems that Iran’s accession to an organization, which has both India and China as its members, can set the stage for the establishment of positive leverage in Chabahar. Membership to Shanghai Pact guarantees the trade and economic participation of its members, namely India, China and Iran, on the one hand and agreements that have been signed within the framework of SCO regarding banking cooperation on the other hand can resolve Iran’s international financial issues to some extent and facilitate foreign investment in Chabahar.

However, seizing this opportunity has preconditions that Iran should not hesitate to meet, one of which is completing transportation infrastructures in Chabahar. For example, Zahedan-Chabahar and Rasht-Astara railroads are the missing links of the North-South rail corridor. Therefore, the swift completion of these projects can dramatically reduce transportation costs and turn Chabahar into an economically viable port.

Iran needs to take hold of the 1.5-year opportunity for becoming the official member of SCO and finalize transportation infrastructures and upgrade Chabahar into SCO’s gateway.