Iran and the Shanghai Cooperation Organization Blunting the West’s Sanctions Environment

This article was last updated on September 19, 2022

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Iran and the Shanghai Cooperation Organization – Blunting the West’s Sanctions Environment

While it was much ignored, recent news from Iran is a fascinating development in our ever-changing, multipolar world.

Here is how the development was reported in the Tehran Times on September 11, 2022:

…and on September 15, 2022:

Here is a quote from the September 15, 2022 article in Tehran Times:

“Tonight, in the historical city of Samarkand, I signed the memorandum of commitments of the Islamic Republic of Iran’s permanent membership at the Shanghai Cooperation Organization, with the secretary-general,” Amir Abdollahian tweeted.

“Now, we have entered a new stage of diverse economic, commercial, transit, energy, and… cooperation,” he added.

The SCO secretary general praised Iran’s steps to join the bloc, saying, “Today is an important and determining day for the Islamic Republic of Iran and the Shanghai Cooperation Organization, thereby I congratulate Iranian friends and colleagues and also my colleagues in the organization.”

Zhang added Iran as a stable, secure and powerful country is important for the SCO. He also said Iran’s accession to the SCO will strengthen the organization….

Iran and the organization started a formal process for Tehran’s accession to the bloc in March. Iran’s membership in the body was later approved by the Iranian administration. On Wednesday, government spokesman Ali Bahadori Jahromi said the draft legislation outlining Iran’s membership in the organization had been submitted to the Iranian parliament for approval.“

Here’s how the news was reported by China’s Global Times in an editorial dated September 15, 2022:

Here is a quote from the Global Times editorial with my bolds:

“As the world’s largest and most populous regional organization, the SCO has a prominent feature: openness and inclusiveness. The second round of SCO expansion is one of the core agendas of the Samarkand Summit. As the current members, observers and dialogue partners of the SCO are all non-Western countries, some of which are being sanctioned by the US and the West, such as Russia, Iran and Belarus, the SCO has attracted some suspicions from American and Western public opinion. They describe the SCO’s exploration of new multilateral cooperation mechanisms as wanting to “compete” with the West or “against the West.”

The SCO summit, held in the context of the Russia-Ukraine conflict, was even described by some Western media as creating an “anti-Western front.” If there is a Chinese proverb to comment on this, it is “ask not the sparrow how the eagle soars.” They can only understand and speculate about the SCO’s concepts with their own narrow cognition. The minds of American and Western elites are full of domineering and paranoid confrontational thinking.“

…and here is a key quote:

“… In the 21 years since its establishment, the SCO, which has been “bad-mouthed” by the US and the West, has not broken up, but instead has shown vigorous vitality and attractiveness. Ten countries, including Saudi Arabia, the United Arab Emirates and Qatar, all hope to join the SCO. Differences in the political system, history, and culture of the SCO member states, and even territorial disputes and ideological differences have not become obstacles to the development of the SCO. It explored a path beyond the Cold War mentality in a world with increasing diversity and differences.“

Not to be ignored, Russia’s TASS news service reported the development here:

The formation of the intergovernmental international organization, the Shanghai Cooperation Organization or SCO, was announced on June 15, 2001 when Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan agreed to its formation.  The SCO Charter was signed at a meeting in St. Petersburg, Russia in June 2002 and was entered into force on September 19, 2003.  Since its formation, the SCO has added Pakistan, Uzbekistan and India as well as four observer states that are interested in acceding to full membership including Afghanistan, Belarus, Iran and Mongolia and six dialogue partners which includes Armenia, Azerbaijan, Cambodia, Nepal, Sri Lanka and Turkey.  In 2021, Egypt, Qatar and Saudi Arabia were added to the list of dialogue partners.

The main goals of the SCO are as follows:

 

Members of the SCO will adhere to the following principles:

Since its foundation, Memoranda of Understanding have been signed with the Commonwealth of Independent States, the Association of Southeast Asian Nations, the Collective Security Treaty Organization, The Economic Cooperation Organization, the United Nations, the UN Office on Drugs and Crime, the UN Economic and Social Commission for Asia and the Pacific, the Conference on Interaction and Confidence-Building Measures in Asia and the International Committee of the Red Cross.  In 2004, the United Nations General Assembly adopted a resolution which provide the SCO with observer status in the UNGA.  

Since its inception, the SCO has focused mainly on regional development and economic cooperation through its Business Council as well as security issues including the fight against regional terrorism, ethnic separatism and religious extremism through its Regional Anti-Terrorist Structure (RATS).  In 2005, the SCO Interbank Consortium was established to provide funding and bank services for investment projects that are sponsored by SCO member states.  Here is a quote from SCO’s website which explains the organization’s priority areas of cooperation:

“1.) providing funding for projects that focus on the infrastructure, basic industries, high-tech industries, export-oriented sectors, and social projects

2.) issuing and making loans based on the generally accepted international banking practices

3.) organising pre-export financing to stimulate trade and economic cooperation between the SCO Member States, and other areas of common interest.

It’s obvious that the Shanghai Cooperation Organization has grown into a highly influential and powerful entity since its 

inception two decades ago.

While Washington spends its energy criticizing, threatening and sanctioning some of the partners in the Shanghai Cooperation Organization, this group is making significant advances toward complete independence from any need to trade or cooperate with the United States and its allies in Europe.  According to the Global Times, in 2021, the combined GDP of SCO members reached $23.3 trillion, accounting for nearly 25 percent of global GDP, an increase of 1300 percent since the group’s founding in 2001.  With Iran joining the group, four members including Russia, Uzbekistan and Kazakhstan will have control of a significant portion of the world’s energy supplies, leaving the West highly vulnerable to additional supply interruptions as are currently being experienced in Europe.  As well, given that SCO member states basically border each other, they can avoid the European Union and the United States in terms of transportation and settlements which will be settle in yuan, blunting the negative impact of EU/US sanctions against any member of the Shanghai Cooperation Organization.