Iran's Membership in the Shanghai Cooperation Organization and its Impact on the North-South Corridor
Iran's Membership in the Shanghai Cooperation Organization and its Impact on the North-South Corridor
By: M. Qurbani
Abstract: This scholarly article examines the implications of Iran's full membership in the Shanghai Cooperation Organization (SCO) and its potential impact on the North-South Corridor. After 18 years as an observer, Iran's request for full membership was accepted, aligning it with China, Russia, India, Pakistan, and several Central Asian countries. The article highlights the economic dimension of the SCO, emphasizing its significant presence in global trade and its potential to surpass the economies of the Group of Seven (G7) in the future. Iran's membership in the SCO opens doors to East and Central Asian markets, particularly facilitating the export of petroleum and petrochemical products. Furthermore, the article explores the implications for transportation, banking, customs, and agricultural cooperation between Iran and the SCO member countries. The membership also strengthens the North-South Corridor, a vital trade route for Iran, Russia, and India. The article concludes by emphasizing the potential for increased trade and economic growth through Iran's participation in the SCO and its impact on the North-South Corridor.
1. Introduction
Iran's recent full membership in the Shanghai Cooperation Organization (SCO) marks a significant development in its relations with China, Russia, India, Pakistan, and Central Asian countries. This article explores the economic implications of Iran's membership and its potential impact on the North-South Corridor.
2. The Economic Significance of the SCO
2.1 SCO's Growing Presence in Global Trade
The SCO comprises a substantial portion of the world's land, population, and economy. With a gross domestic product (GDP) of 96 trillion dollars in 2021, the SCO accounts for 25% of the world's GDP. The organization's member countries have also witnessed a notable increase in exports, reaching 4.5 trillion dollars in 2021.
2.2 Iran's Economic Opportunities
Iran's membership in the SCO provides economic opportunities, especially in terms of accessing East and Central Asian markets. Iran's non-oil trade with SCO member countries increased by 31% to over 17 billion dollars from March to August in the previous year. This membership offers smoother export channels for Iran's petroleum and petrochemical products.
3. Cooperation Axes within the SCO
3.1 Transportation, Banking, Customs, and Agricultural Cooperation
Transportation projects, banking partnerships, customs agreements, and agricultural cooperation are key areas of collaboration between Iran and the SCO. Economic analysts predict that Iran's membership will contribute to a significant increase in the country's total income, estimated at around 370 million dollars.
3.2 Strengthening the North-South Corridor
Iran's participation in the SCO reinforces transportation along the North-South Corridor. Tripartite meetings between Iran, Russia, and India have been instrumental in enhancing economic and trade relations among neighboring countries. The North-South Corridor, currently handling 10 million tonnes of goods, aims to increase its transit capacity to 50 million tonnes.
4. Future Prospects and Opportunities
4.1 Trade Growth and Regional Collaboration
Iran's membership in the SCO is expected to foster substantial trade growth between Iran and SCO member countries. With India and Russia as important members, trade volumes are likely to increase significantly, particularly through the North-South Corridor.
4.2 The Potential of the North-South Corridor
The North-South Corridor offers a cost-effective and secure route for goods transportation from North to South. Ongoing projects within the member countries of the corridor amount to 38.2 billion dollars, promising to achieve the goal of transiting 50 million tonnes annually. Iran's participation in the SCO further strengthens the potential of the North-South Corridor.
5. Conclusion
Iran's full membership in the SCO presents significant economic opportunities and enhances its trade relations with East and Central Asian countries. The membership also strengthens the North-South Corridor, contributing to increased trade volumes and economic growth. This article provides a scholarly analysis of the implications of Iran's SCO membership and its potential impact on the North-South Corridor.
