The Shanghai Cooperation Organization waits for Iran

With the negotiators representing the P5+1 and Iran still trying to overcome a few tricky issues related with the lifting of sanctions and the inspections and verification regime, the question of what use the Iranian government will give to the flow of funds that will follow the gradual lifting of sanctions is under increasing scrutiny.

The case that Iran’s pressing domestic economic needs and the expectations of the Iranian population will be enough to avoid a big chunk of those funds reaching the Assad regime, Lebanon’s Hezbollah, Iraqi Shiite militias, or the Houthis in Yemen seems unconvincing to the say the least.

With that assumption, proponents of the impending comprehensive nuclear deal seem unable or unwilling to distinguish apples from oranges. One thing is the prospective merit of the deal in curbing Iran’s nuclear ambitions and avoiding a potential nuclear arms race in the Middle East, another are the aftereffects of the deal in various other dimensions beyond nuclear proliferation.

Yet another likely consequence of the deal that can have great impact in Iran’s economy has gone largely unnoticed: Iranian membership of the Shanghai Cooperation Organization (SCO).

Geographical expansion

The SCO’s annual summit is being held this week in Ufa, Russia, and is expected to confirm the organization’s geographical expansion by kicking off the process of India and Pakistan’s accession. This represents a big step forward from the original Central Asian focus of the Shanghai Five, which emerged in April 1996 with the signature in Shanghai of the Treaty of Deepening Military Trust in Border Regions by China, Russia, Kazakhstan, Kyrgyzstan and Tajikistan. In 2001, the so-called Shanghai five would be institutionalized with the creation of the SCO and the addition of Uzbekistan as a member.

The organization’s security goals, among which are the fight against terrorism, separatism and extremism and to work as sort of a counterweight to NATO, quickly widened. Today, SCO member-states cooperate in various areas, from trade and energy to science and education. The SCO also reached out to other states, with Mongolia in 2004 and Afghanistan, India, Iran and Pakistan in 2005 being granted observer status.

Under the populist President Mahmoud Ahmadinejad, Iran sought full membership of the organization but those ambitions were curbed by the SCO rules of admission that block any state under U.N. sanctions. However, with the prospect of a nuclear deal and the gradual lifting of sanctions, Iranian membership will be only a matter of time.

In January, following the visit of senior Iranian official Ali Akbar Velayati to Moscow, Iranian press reported that Velayti had secured Putin’s support for Iranian membership. It also speculated that Iranian membership would be endorsed in this year’s annual summit.
Nevertheless, Iran is likely to be offered a conditional acceptance tied to the progress of its cooperation with the International Atomic Energy Agency. Plus, the membership process is not straightforward. In comments made in February this year, Russian Foreign Minister Sergey Lavrov expressed his hope "that progress in resolving the Iranian nuclear problem will allow us to consider this application as well. The SCO accession process is rather lengthy. A prospective member country will have to sign and ratify 20-30 SCO documents."

What will come of Iran’s membership?

So what will Iran’s membership of the SCO mean? From the perspective of China and Russia, it is a mechanism to pull Iran East and tackle their fear of seeing the Iranians being dragged into the Western sphere of influence. For the Chinese in particular, Iran represents a vital part of its new Silk Road mega economic project, backed by a multi-billion dollar infrastructure investment fund.

For China and Russia, Iran is also a hugely attractive market and the lifting of sanctions will only boost that attraction. For the energy-hungry China, Iran has been a source of cheap oil and there is great interest in investing in Iran’s deficient energy infrastructure. On the security front, Iran is seen as a potential partner in SCO’s efforts to stabilize Afghanistan among other issues.

For Iran, the economic benefits are potentially huge. Trade with and investment from SCO member-states will increase exponentially. There is also prestige, a break from Iran’s isolation, recognition of Iran’s importance and a reinforcement of Iran’s strategic role.

For the Middle East, a big question about Iran’s SCO membership is whether China and Russia will turn a blind eye to Iran’s behavior in the region for the sake of mutual economic interests. If Iran is granted conditional membership, Russia and China should use their leverage to do far more to curb the influence of radical factions and contain Iran’s highly aggressive and disruptive foreign policy.

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Manuel Almeida is a writer, researcher and consultant on the Middle East. He holds a PhD in International Relations from the London of Economics and Political Science and was an editor at Asharq Al-Awsat newspaper. He can be reached on @_ManuelAlmeida on Twitter.