Iranian President Ebrahim Raisi during a virtual summit to join the Shanghai Cooperation Organization (SCO) on July 4, 2023

Iran Joins Shanghai Cooperation Pact, Hoping To Reduce Isolation

Tuesday, 07/04/2023

Iran joined the Shanghai Cooperation Organization (SCO) during the group’s virtual summit Tuesday, representing a foreign policy achievement amid its isolation.

This is the first time Tehran joins a regional pact since the 1979 revolution and the establishment of the Islamic Republic.

The SCO also known as the Shanghai Pact is a Eurasian political, economic and security alliance formed in 2001 with Russia, China, Kazakhstan, Kyrgyzstan, Uzbekistan and Tajikistan, with one of its goals being cooperation against extremism. India and Pakistan joined the pact in 2017 and Belarus is also slated to become a member.

Iran, which has become more isolated from the global economy since the United States imposed sanctions in 2018, hails its membership in SCO as an achievement for its Eastern oriented foreign and economic policy.

The SCO also seeks to expand its influence by accepting more members, although two of its biggest members, Russia and Iran face more diplomatic and economic isolation than ever.

Iranian President Ebrahim Raisi during a virtual summit to join the Shanghai Cooperation Organization (SCO) on July 4, 2023

The summit Tuesday was hosted by Indian Prime Minister Narendra Modi, who emphasized the original mission of the organization to jointly fight terrorism. He also said the world is embroiled in disputes, tensions and the impact of the pandemic and global food, fuel and fertiliser crises are big challenges for all countries.

"We need to think together that are we, as a group, capable of meeting the expectations and ambitions of our people? Are we capable of facing modern challenges?" Modi said. "Is SCO becoming a group that is completely ready for the future?"

Russian President Vladimir Putin, China’s President Xi Jinping, Pakistani Prime Minister Shehbaz Sharif and leaders of four central Asian countries took part in the online proceedings as well as Iranian President Ebrahim Raisi.

Although Russia and Iran claim SCO will reduce Western influence and can be a vehicle for replacing the US dollar in international trade, Modi visited the United States in June and received a warm welcome. 

China does offer trade in its currency yuan, but that is mostly helpful in bilateral transactions with Beijing. Neither the Chinese yuan nor the Indian rupee are considered global hard currencies like the US dollar or the euro.

Also, it is debatable whether Iran’s membership will add much to the influence SCO hopes to have, while Russia has also become seriously weakened not only by sanctions, but also by its invasion of Ukraine and the recent mutiny by the mercenary Wagner group.

President Vladimir Putin reassured others in his address to the summit of Russia's stability and unity.

"The Russian people are consolidated as never before," Putin told the virtual meeting.

"Russian political circles and the whole of society clearly demonstrated their unity and elevated sense of responsibility for the fate of the Fatherland when they responded as a united front against an attempted armed mutiny."

Putin's emphasis on Russia's unity at a meeting with key allies appeared to show how keen he is to remove any doubts about his own authority on the world stage after the short-lived mutiny led by Wagner mercenary founder Yevgeny Prigozhin late last month.

Russia and Iran constantly speak of countering US unilateralism, but the fact is that Europe appears united with the United States in countering Russia’s military adventure and putting pressure on Iran.

China has also been threading carefully and so far, a substantial Chinese backing for the Russian war effort has not materialized.

In Iran’s case, China is buying illicit Iranian oil shipments in violation of US sanctions, but remains unclear how much it pays in hard currency, since Tehran is facing a serious financial and economic crisis.

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