Shanghai – The Opportunity to Develop a Secure Economy

By Staff

By the acceptance of the Islamic Republic of Iran as a member of the Shanghai Organization in September of this year, this is a matter for international relations analysts and regional studies to consider what the SCO's capacity is. Basically, we are discussing about what this organization is, what is the perspective of this organization and does it have the necessary potential to become a common substrate for economic convergence like those formed in the European Union, ASEAN and NAFTA? 

Of course, this strategic issue must be considered that following the path affected by international conditions and contexts intergovernmental organizations encounter changes in macro goals and strategies. Functionalist theories in international relations claim the fact that convergence carries within itself the principle of extension. In other words, cooperation in a security and political field finally ends to economic and trade interactions. The consistency and evolution of the European Union took place in such an environment.

The main European powers with cooperation in the soft and cultural areas, they have gradually entered the phase of economic, political and security convergence. No doubt the role and will of the main powers is that forming an organization is an important and fundamental factor in the dynamism and forward movement of that organization.

Therefore, if the Shanghai Organization is going to become a new centrality and pole in international cooperation in trade and economic aspects; the intention of the two major members of the organization, Russia and China, is decisive. An important component in this regard is the existence of the essential terms for Shanghai to become an influential and effective organization in the field of international economy.

Looking toward to the capacity of the members of this organization, which covers an area of about 37 million square kilometers of the Earth, which includes one third of the land mass has 42% of the world population, 25 GDP, annual export value of more than $ 400 billion, which is close to 20% of total world exports and 16 % of total world imports shows the potential of Shanghai in the economy.

The fundamental issue is that the realization of these capacities requires a strategic view of the member powers of the organization and drawing a prosperous future for the organization. For this it’s necessary the internal tensions and rivalries within the organization to be degraded and managed on the one hand between Russia and China and on the other hand between India and Pakistan. However, there are four nuclear powers within the organization, each with its own priorities, strategic goals, and concerns.

Therefore, in the first step, definition a common output between the interests as well as the threats of the members of the organization and in an atmosphere of mutual trust, convergence deepens within the organization. China, for example, seeks to establish a common economic market and free trade zone in the Shanghai Cooperation Area and attempt to use the capacity of the organization to operationalize this belt.

China's policy is opposed by Russia, and Moscow is concerned about China's growing influence and its weakening position. These competitions must be managed in an interactive and diplomatic environment, and efforts must be stepped up to enhance the economic value of Shanghai, Which is the main desire and need of the member countries of the organization. On the other hand, the experience of other organizations, especially the Eurasian Economic Union and, most importantly, the ECO, should be considered by the main powers of the organization and consider that the atmosphere of competition and mistrust will eventually lead to the deactivation of the capacities of the organization and its symbolism, as we are witnessing such situations in the ECO. 

ECO Economic Organization was established in the 1960s with the aim of developing economic cooperation based on upstream documents between the three countries of Iran, Pakistan and Turkey and it went through its founding and formation stages well then entered the initial activities following regional and international developments, especially the collapse of the Soviet Union and the independence of the surviving republics, the ECO entered a phase of expansion. Along with the three founder countries, five Central Asian countries and the Republic of Azerbaijan joined the organization in the Caucasus, afterward came the issue of Turkish-Cypriot society. 

As members grew, Echo entered its heyday. During this period, various documents were compiled and structures were formed. For example, there has been considerable development in various economic areas, from banking to insurance, airlines, infrastructure and public transport companies, visas, economic and commercial visas.

In this time especially new members felt there are considerable capacities which they can benefit especially in the economic dimension, this organization could provide these countries the easy access to world markets, and this was very crucial for the newly independent republics especially since these countries faced many economic problems in the early period of independence. But over time, on the one hand, due to the political and economic stabilization of these countries and the opening of new spaces in their foreign relations, their view of ECO changed. On the other hand, the concerns of Iran, Turkey and Pakistan and their lack of will to determine the structure of the organization affect the functioning of the ECO. In this situation, the ECO faced a period of recession and then a period of fall and is now in a period of wane.

Regarding this important, the members were not able to take full advantage of the strategic opportunity created during the development of ECO's activities, and the organization had declined, but this does not mean that member states do not pay attention to ECO, rather it seems that their mentality is that there are capacities in eco, and these capacities can be the ground for interaction and enhancement of interests. For this reason, we still see the least interaction at this time. Meetings are held, including summits, and this indicates that members are willing to maintain the structure. Eco experience has shown the fact that in the case of regional organizations; the success of any organization in the first step requires the definition of common areas of cooperation. Common interests and threats can motivate the founders of the organization to survive.

It is necessary for the members of the Shanghai Organization with a forward-looking strategy and understanding of the fact that the advancement of macroeconomic policies depends on economic convergence; They must from the security and political phases, enter to the stage of joint economic and trade cooperation ,this is especially true at a time when both China and Russia are facing the threat of unilateral US sanctions in recent years, and there is no doubt that both powers urgently need new economic and trade blockades to get rid of US sanctions. 

The volume of Shanghai's economic and territorial capacity provides the opportunity to form a new economic order in the face of the dominant Western order.