Iran: Chinese investment in railway and renewable energy projects

First Vice President of Iran on Thursday discussed the strengthening Tehran-Beijing ties with Premier of the People’s Republic of China Li Qiang in Bishkek, Kyrgyzstan. The meeting was held on the sidelines of the 22nd session of the Council of Heads of Government of the Shanghai Cooperation Organization (SCO). Iran officially became a full member of the SCO in April 2023.

Mohammad Mokhber said the relations between Iran and China rooted in history and culture and said Iran has extensive capacities and capabilities that can be put to use in the two countries’ ties. 

Mokhber announced that Iran sees the development of ties with China as extremely important. “The development of Makran and Chabahar coasts, the construction of 15,000 megawatts of renewable power plants, mining development, Tehran-Mashhad and Tehran-Isfahan high-speed train projects, and transit cooperation in the west and east are all on Iran's agenda, and we welcome China's participation and investment in these areas,” the official noted. 

The vice president also emphasized the full implementation of the 25-year cooperation agreement between Iran and China. The deal signed in 2021 includes economic, military and security cooperation.

Mokhber also took the time to thank Beijing for its stance on Israel’s brutal attacks on Gaza which have so far resulted in the death of more than 7,000 civilians. 

“The bitter events in Gaza and Palestine hurt the heart of every noble, free, and conscientious person, and unfortunately, in the current chaotic situation and war crimes being committed by the Zionist regime in Gaza, most of the casualties are among civilians, women, and children”. 

The Chinese premier, for his part, described Iran as one of the major and influential countries in the West Asian region. “Iran's full presence and membership in Shanghai and BRICS will strengthen these organizations and be very useful for regional and global peace and stability,” he said. 

“The relations between the two countries have always had a growing trend since the establishment of political relations fifty years ago, and this year important agreements have been concluded between Tehran and Beijing with two meetings between the presidents of the two countries,” Li said, adding that Beijing regards Tehran as an important partner and seeks to further enhance ties with the West Asian country. 

 

SCO and transformation of world order

Iran's inclusion in the Shanghai Cooperation Organization (SCO) is a significant development, considering the UN Security Council sanctions it still faces. The SCO members had previously agreed that any state wishing to join should not have any UN Security Council sanctions imposed on it. This issue holds importance when analyzing the transformation in the world order.

Iran's membership in the SCO is not a result of the removal of Security Council sanctions through the JCPOA. Iran continues to be sanctioned by the Security Council, and a list of Iranian individuals and entities under these sanctions can be found on the UN website.

It is worth noting that the members of the Shanghai Cooperation Organization no longer attribute the same importance to the UN Security Council in the current circumstances. This suggests that even if the West triggers the snapback mechanism and reinstates previous Security Council resolutions against Iran, it is unlikely to affect Iran's membership in the SCO.

The UN Security Council has traditionally been viewed as a fundamental pillar of the post-Cold War world order. However, Iran's inclusion in the SCO signifies a significant blow to its authority, emphasizing the operational phase of the transformation in the world order.

The US victory in the Cold War, is facing a crisis of attractiveness and effectiveness. The number of liberal democracies in the world has decreased, and only a small percentage of the global population lives in such countries.

United States, as the leader of the liberal order, is experiencing economic and social crises rooted in the liberal ideology. The effectiveness of the US hard and soft power in safeguarding the liberal order has diminished, and it has been repeatedly defeated by its rivals.

The RAND Corporation has proposed the concept of Power to Coerce as an alternative to the US traditional power sources. This concept includes financial sanctions, cyber operations, and support for internal opposition. Financial sanctions have been a crucial tool in America's foreign policy toolbox, but their effectiveness is diminishing due to overuse.

Ukraine crisis and unprecedented sanctions against Russia have provided an opportunity to neutralize the US financial sanctions through the development of non-dollar payment systems and reserves.

There is a consensus about the emergence of a new multipolar order. However, with the collapse of communism and liberalism, there will no longer be an order based on a hegemonic ideology claiming civilization.

Instead, international cooperation and interactions will be based on mutual interests, with power units and weaker countries operating within their spheres of influence.

China and Russia are economic and military power units but lack a civilizational ideology to lead the creation of a new order.

In this context, Islam can emerge as the only leading ideology for creating a new civilization.

In light of the current challenges faced by the liberal order and the emergence of a new multipolar order, it is crucial for Islamic countries to assert their interests and values.Islamic countries should adopt a two-pronged strategy in the current period.

The first prong should focus on undermining the remaining foundations of the US leadership in order to end the liberal order. The second prong should focus on shaping a new internal order based on shared Islamic values.

It is proposed that Muslim countries establish a charter based on their shared Islamic values. This "Muslim Nations Charter" with its special institutions would serve as an alternative to the current "United Nations Charter," which is rooted in liberal values and has institutions dedicated to its defense.

 

Xi Jinping visit to Saudi Arabia

When Chinese President lands in Saudi Arabia this week, he will be touching down in an energy-rich region with a growing interest in being a part of the Beijing-led Shanghai Cooperation Organization, says a report by South China Morning Post.

Xi Jinping’s expected arrival in the Gulf state for a China-Arab summit comes as the kingdom and other members of the OPEC Plus alliance are at odds with the United States over oil supplies and Russia’s war in Ukraine.

Observers say Xi’s trip could be another step in the westward expansion of the SCO, with China growing not only as a trade partner but also an investor in the Gulf’s lucrative energy sector.

“It’s going to be a very, very energy-focused meeting,” said Raffaello Pantucci, a senior fellow at the S. Rajaratnam School of International Studies in Singapore.

“It’s also going to be another meeting that’s focused in this direction because what we’ve seen with the Saudis is a clear reticence by them towards the United States.”

The US ties with Saudi Arabia, the world’s biggest crude oil exporter, and other suppliers in the OPEC Plus alliance, soured after they decided to sharply cut production to support prices.

The US said the decision would worsen global inflation and support Russia’s oil revenue from China and other markets that is used to fund war efforts in Ukraine

Nevertheless, Saudi Arabia remained China’s biggest source of oil in October, according to Chinese customs data. It is also an SCO dialogue partner interested in an upgrade to observer status.

Pantucci said the Gulf’s tensions with the US presented an opportunity for China in Riyadh.

“The Chinese want to capitalize on that and highlight the fact that Saudi Arabia is a great independent country who works with us happily. I think that’s one narrative they want to push out,” Pantucci said.

Elsewhere in the Middle East, Egypt and Qatar have also become SCO dialogue partners, and sanctions-battered Iran – whose largest petroleum customer is China – passed a bill late November to join the group.

Russia, China’s second-biggest oil supplier, is a founding member.

Li Lifan, head of the SCO centre at the Shanghai Academy of Social Sciences, said that once Iran joined the group, it could help the SCO expand its energy club – a Moscow-led platform for SCO countries to discuss energy trade without binding commitments.

SCO leaders have already identified the transition towards renewable energy sources as an area for cooperation, with ambitions of developing a common energy strategy across Eurasia.

Beijing has touted the 3,666km (2,280-mile) Central Asia-China pipeline that supplies natural gas from Turkmenistan to China as a success, and in November Chinese Premier Li Keqiang called on SCO counterparts to advance cooperation over energy security.

However, there are questions about the SCO’s role beyond dialogue on securing energy for China and counterbalancing Western energy interests in the region.

Pantucci said the focus in the West was more on tangible outcomes, which the SCO did not appear to generate.

“I think the problem in the West, at least the Western analysis, is an obsession with things, doing things, and this organization doesn’t do much,” Pantucci said. “Our collective response in the West is, ‘Well, it doesn’t do much then it can’t be important.’”

But he said the SCO membership would help Iran rhetorically, and practically, allowing it to take part in regular talks with other countries.

“Who knows what benefits might come from there?

“For Iran, to be able to associate itself with such a structure and be a member of it shows the Iranian people, for one thing, and it shows the world that Iran isn’t an isolated country.”

Li, the SCO researcher in Shanghai, agreed that Iran could use the group as a platform to grow its influence against what it sees as hegemony from the West.

“Even if it is being squeezed out in the United Nations, at least the SCO can give it a platform every year for its ministers, department heads, state leaders and prime ministers. That way, it can have a say in the international arena,” he said.

Li said the SCO could play a further role in reducing the use of US dollars in energy trade by promoting local currencies, pointing to a Russia-China gas deal denominated in the rouble and the yuan.

Sana Hashmi, a postdoctoral fellow at Taiwan-Asia Exchange Foundation in Taipei, said that while the SCO was not developed as an “anti-West coalition”, China had become an economic guarantor to SCO countries, and the group could keep US influence out of Central Asia.

One advantage China had over the US was its willingness to cooperate with no strings attached, she said. “Every country has a very different reason why they are becoming anti-West, but at least they have a common reason to be a part of something like SCO.”

 

 

 

Iran's Joining Shanghai Cooperation Organization

Iranian Foreign Minister Hossein Amirabdollahian praised Iran’s decision to move forward with an accession bill to the Shanghai Cooperation Organization (SCO), noting that a recent vote on the bill for the accession of the Islamic Republic of Iran to the SCO shows the determination and seriousness of our country to develop regional, international, and economic cooperation and strengthen its view of Asia.

The SCO includes countries in Central Asia, including Kazakhstan, Tajikistan, Russia, Pakistan, Uzbekistan and China. These are important countries because Russia and China tend to position themselves at odds with the US. This is increasingly true with Russia after the Ukraine invasion. Russia and the West appear to have completely destroyed their relations, and Iran would like to swoop in and benefit.

Iran calls this multilateralism. Recently in an interview with the Chinese People’s Daily Online published on Saturday, Mohammad Keshavarzzadeh stated that the SCO seeks to assist in providing better answers to the problems faced by member states as well as the region.

He argued that there was great “significance of Iran joining the bloc by pointing out that the organization includes members from Central and Eastern Asia in addition to other regions, and this can give Iran a platform to make overtures with all of these countries.”

The reason Iran likes the SCO is that it views it as an organization that has no Western members. “On a question that some Western nations equate the SCO with NATO, Keshavarzzadeh said such a comparison is wrong because the SCO is an inclusive bloc and not a military alliance,” a report in Tehran Times noted. These are pro-regime publications and reflect Iran’s stance.

An article at the Carnegie Endowment for International peace notes that Iran joining the SCO will bring some benefits to Tehran, but there are also hurdles.

“Iranian officials still maintain that officially joining the SCO – which is slated to occur by April 2023 – will bring benefits in the economic, commercial, and strategic sectors. Furthermore, from the perspective of the SCO itself, Iran’s political cooperation may be useful for the organization’s relations with the Islamic world,” the report noted.

It also notes that trade between Iran and SCO countries surpassed US$651 billion last year. But Iran will need to modernize its infrastructure to take advantage of any new opportunities. Also, the new China-Iran partnership will take a while to be realized in terms of benefits for Tehran.

 

Iran joins Shanghai Cooperation Organization

The 22nd Shanghai Cooperation Organization (SCO) summit ended on Friday on a positive note. Iran officially joined the SCO, and all the participants signed the Samarkand Declaration in the end.

Iran's full membership in the SCO was announced by the President of Uzbekistan, which was applauded by the participants. China, Russia, India, Iran, Uzbekistan, Kazakhstan, Belarus, Turkey, Azerbaijan, Kyrgyzstan, Pakistan, Mongolia, Tajikistan and Turkmenistan attended the 22nd SCO summit.

Iran’s President Ebrahim Raisi spoke at the second day of the summit on Friday, stressing that maximum interaction and relation with the countries of the region, including the SCO states. He also said effective presence in regional and international orders are the focus of Iran’s foreign policy.

Uzbekistan, which chaired the SCO for one year, will hand over the SCO presidency to India. India will assume the next SCO rotating presidency and hold the next meeting of the council of heads of state of the SCO in 2023.

During the summit, an agreement was reached on admitting Bahrain, the Maldives, the UAE, Kuwait and Myanmar as new dialogue partners. Relevant parties noticed that MOUs granting Egypt, Saudi Arabia and Qatar the status of SCO dialogue partners had been signed.

The Samarkand Declaration which was signed by all countries participating in the summit underlined that the world is undergoing global changes and has entered a new period of rapid development and major transformation, with the trend towards a multi-polar world intensifying, countries increasingly interdependent, and informatization and digitalization accelerating. 

“Based on the principles of the Charter of the Shanghai Cooperation Organization, the member states oppose grouping, and ideological and confrontational approaches to solving international and regional issues, and stick to a coordinated manner to security threats and challenges in traditional and non-traditional fields,” the declaration added.

Considering the views of the SCO member states, the declaration reaffirmed that it is of great practical significance to work together to build a new type of international relations featuring mutual respect, fairness and justice as well as win-win cooperation, and to build a community with a shared future for mankind.

In the declaration, the SCO states also emphasized the continuous implementation of the Joint Comprehensive Plan of Action (JCPOA) and within the framework of UN Security Council Resolution 2231.

The SCO members also called on the JCPOA parties to commit to their obligations in line with the comprehensive, full and effective implementation of the JCPOA.

“The member-states stand for respecting the right of the people of all countries to independently choose their own paths of political, economic and social development,” according to the declaration.

The SCO emphasizes continuous implementation of the Joint Comprehensive Plan of Action (JCPOA) within the framework of UN Security Council Resolution 2231.

They also reaffirmed that differences and disputes between countries should be resolved peacefully through dialogue and consultation.

Elsewhere in the declaration, the member-states reiterated their steadfast commitment to combating terrorism, separatism and extremism.

They pointed out that the interference in the internal affairs of other countries under the pretext of combating terrorism and extremism is unacceptable, as well as the use of terrorist, extremist and radical groups for one's own purposes.

The member states underlined the key role of the United Nations in responding to threats in the information space, calling for creating a safe, fair and open information space on the basis of respect for sovereignty and non-interference in the internal affairs of other countries.

The member states that are signatory to the Treaty on the Non-Proliferation of Nuclear Weapons are committed to strict compliance with the provisions of the treaty and consolidating the international nuclear non-proliferation regime, according to the declaration. 

The member-states also underlined that the only solution to regional conflicts is through political and diplomatic means “on the basis of adherence to universally recognized principles and norms of international law.”

They noted that the coordination of the situation in Afghanistan at an early date is one of the important factors for maintaining and consolidating security and stability in the SCO region. The SCO reaffirmed support for Afghanistan to become “an independent, neutral, united, democratic and peaceful country, which is free of terrorism, war and drugs.”

Pakistani Prime Minister meets world leaders at Shanghai Cooperation Organization meeting

Pakistani Prime Minister, Shehbaz Sharif arrived in Samarkand Thursday on a two-day trip to attend the 22nd annual meeting of the Council of Heads of State of the Shanghai Cooperation Organization (SCO). Uzbekistan PM Abdulla Aripov received him at the airport.

Foreign Minister Bilawal Bhutto Zardari, Finance Minister Miftah Ismail and Defence Minister Khwaja Asif are also accompanying him.

Shortly after arriving, the prime minister visited Khizr Complex and paid his respects at the mausoleum of Uzbekistan’s first president, Islam Karimov.

One of his important meetings was with Russian President. Vladimir Putin said that pipeline gas supplies to Pakistan were possible, revealing that necessary infrastructures were already in place, according to state-owned news agency RIA.

On the sidelines of the SCO summit, Shehbaz met several world leaders including Iran’s President Ebrahim Raisi. The two leaders acknowledged moving forward positive trajectory of bilateral relations.

The prime minister also met Belarusian President Alexander Lukashenko and Kyrgyz President Sadyr Japarov.

Earlier in the day, the premier held a meeting with Uzbekistan President Shavkat Mirziyoyev and discussed issues of mutual interest.

The meeting focused on strengthening Pak-Uzbek ties in diverse fields for the benefit of the two brotherly nations.

The PM also met President of Tajikistan Emamoli Rahmon. Both leaders agreed to bolster and expand the scope of mutually beneficial fraternal ties.

Shehbaz thanked Tajikistan for its support to the flood affectees in Pakistan and shared details of the devastation caused by the massive floods, induced by climate change.

Furthermore, he underlined the importance of regular meetings on bilateral institutional mechanisms and the establishment of mutually beneficial cooperation in the implementation of energy projects.

The premier is scheduled to meet other world leaders including Turkiye President Recep Tayyip Erdogan.

However, Foreign Office Spokesman Asim Iftikhar told Shehbaz had no plans to meet his Indian counterpart Narendra Modi.

Prior to his departure, PM Shehbaz took to Twitter to share his views on the SCO summit.

“The global economic turbulence has necessitated the need for more cooperation among SCO member countries,” he said, adding that the “SCO vision” represented the aspirations of 40% of the world’s population.

“Pakistan reiterates its commitment to ‘Shanghai Spirit’. Mutual respect and trust can be the bedrock of shared development and prosperity,” he said.

“The SCO has great potential to chart a way forward at a time of deeply worrying transformation in geopolitical and geoeconomic fields,” he concluded.

 “At the forthcoming event, the SCO leaders will deliberate on important global and regional issues, including climate change, food security, energy security, and sustainable supply chains,” according to Radio Pakistan.

They will also approve agreements and documents that would chart the future direction of cooperation among SCO member states.

 

Iran: Neighborhood policy neutralizes impact of US sanctions

A year into his administration, Iranian President Ayatollah Seyed Ebrahim Raisi succeeded in diversifying Iran’s foreign policy options through the nascent neighborhood policy he set out last year.

When he assumed office last year in August, Ayatollah Raisi made it clear that he had a new agenda for Iran’s foreign policy. He outlined his foreign policy goals within what came to be known as the Neighborhood Policy, which rests on fostering mainly economic relations with neighboring countries and non-Western powers. 

The new policy orientation soon yielded results, leading to Iran’s membership in the Shanghai Cooperation Organization (SCO) in the first weeks of Raisi’s presidency. Since then, the President traveled to many countries in a bid to advance his foreign policy goals. This included visits to Russia, Turkmenistan, Tajikistan, Oman, and Qatar, to name a few. 

A senior Iranian lawmaker has said that the neighborhood policy of Raisi played in a major role in Iran’s efforts to neutralize US sanctions. The lawmaker, Javad Karimi Quddousi, who is a member of the Iranian parliament’s National Security and Foreign Policy Committee, said the Raisi presidency marked a shift in Iranian foreign policy.

According to the lawmaker, one reason that why the US sanctions had negative impact on Iran’s economy was that the previous government failed to prioritize enhancing economic relations with neighboring countries and focused its time and energy on boosting Iran’s relations with Europe, which has been seeking to sow divisions among Muslim states. 

“Sanctions were also effective in cases where our relations with neighboring countries were strained in the previous government. When I asked Saif (Valiullah Saif, the former governor of the Central Bank) to make bilateral agreements for the exchange of national currencies between other countries, his answer was that this issue was not realized. While diplomacy and many trips between countries are for the realization of this goal,” he told Iran’s state news agency IRNA. 

Qoddousi added, “The 13th government created a unique and unprecedented transformation in foreign relations with neighboring countries in the shortest time. Membership in unions such as Shanghai [SCO], Eurasia, (and possibly) BRICS, etc., signing important agreements with countries in the region and the world in various fields are among the successful goals of the 13th government that have been achieved.”

The Raisi administration is continuing the neighborhood policy. On Monday, President Raisi received Azerbaijani Foreign Minister Jeyhun Bayramov, who also met his Iranian counterpart Hossein Amir Abdollahian. The visit came amid diplomatic efforts to upgrade relations between Tehran and Baku. 

It also came against a backdrop of broader diplomatic efforts by Iran in the region to improve ties with regional heavyweights such as Turkey and Saudi Arabia. Amir Abdollahian recently paid a visit to Turkey where he met Turkish President Recep Tayyip Erdogan and Foreign Minister Mevlut Cavusoglu.

In parallel, Iran and Saudi Arabia seem to be on the verge of restoring ties as a result of mediatory efforts by Iraqi Prime Minister Mustafa al-Kadhimi. The Iraqi premier visited Iran and Saudi Arabia in the past week. According to Arab press reports, Iran and Saudi Arabia could soon announce the restoration of diplomatic ties in a meeting in Baghdad. 

 

 

Iran ramps up neighborhood diplomacy

Iranian President Ayatollah Seyed Ebrahim Raisi gave a new boost to his administration’s policy of cementing ties with neighbors as part of new foreign policy agenda of the country. 

President Raisi had a busy weekend in terms of holding meetings with foreign leaders. He left Tehran on Wednesday for Ashgabat to attend an important regional summit held in Turkmenistan’s capital.

He met with a number of foreign leaders on the sidelines of the 6th summit of the Caspian Sea littoral states, which provided him with a unique opportunity to advance his “neighborhood policy”. It marked a new orientation in Iran’s foreign policy which is aimed at strengthening ties with neighbors. 

President Raisi visited Turkmenistan with a clear goal in mind to further advancing the neighborhood policy. In his meeting with the Chairman of the People's Council of Turkmenistan, Gurbanguly Berdimuhamedow, Raisi said his administration “has a special program in the field of foreign policy to develop neighborly relations, and Iran-Turkmenistan relations are expanding rapidly based on extensive cooperation and mutual trust.”

He reiterated this in his meeting with Turkmen President Serdar Berdimuhamedow, saying that his administration “attaches a special priority to develop relations and cooperation with neighbors”.
President Raisi pointed out that the relations between Tehran and Ashgabat are expanding rapidly based on the development of neighborly relations and on the basis of mutual trust and extensive cooperation.

Raisi also addressed the Caspian Sea summit, where he underlined Iran’s sincerity in its quest for building better relations with its neighbors. He described this as a strategy of Iran.

“The interaction of the Islamic Republic of Iran with its friends and neighbors is original, and this interaction and cooperation not only will lead to economic prosperity and increase the welfare of our nations, but also strengthen regional peace and stability and solve the problems of the Caspian Sea zone merely through its coastal countries. This major strategy of the Islamic Republic of Iran will continue, regardless of international developments,” Raisi said. 

This policy was initiated a year ago when President Raisi assumed office in August 2021. Back then he expressed his administration’s strong desire for fostering cooperation with neighboring countries. The Raisi administration has made great strides. In the early days of his administration, Raisi succeeded in ironing out Iran’s membership in the Shanghai Cooperation Organization (SCO). Interestingly, the SCO membership was achieved during a summit in Dushanbe, Tajikistan. 

Iran is now eyeing a similar membership in the BRICS group of emerging countries which includes Russia, China, Brazil, India, and South Africa. President Raisi was invited by China to address the recent BRICS summit. Russia and China have voiced support for Iran’s membership in the group. 

The Raisi administration is pursuing regional diplomacy simultaneously with its efforts to hammer out a deal with the West over reviving the 2015 nuclear deal. The latest round of talks in this regard was held in Doha, Qatar, on Tuesday and Wednesday. 

Get ready to trade in Russian Gold and Chinese Petroyuan

According to Information Clearing House, for a long time the world has been waiting to end trade in the currency of United States. The trade war initiated by United States against Russia and China indicate that finally some key contours of the foundations on new multipolar world have started appearing.

After a recent videoconference meeting, the Eurasian Economic Union (EAEU) and China agreed to design the mechanism for an independent international monetary and financial system.

The EAEU consists of Russia, Kazakhstan, Kyrgyzstan, Belarus and Armenia, is establishing free trade deals with other Eurasian nations, and is progressively interconnecting with the Chinese Belt and Road Initiative (BRI).

For all practical purposes, the idea comes from Sergei Glazyev, Russia’s foremost independent economist, a former adviser to President Vladimir Putin and the Minister for Integration and Macroeconomics of the Eurasia Economic Commission, the regulatory body of the EAEU.

In this article, Glazyev’s key role in devising the new Russian and Eurasian economic/financial strategy has been examined. He saw the western financial squeeze on Moscow coming light-years before others.

Quite diplomatically, Glazyev attributed the fruition of the idea to the common challenges and risks associated with the global economic slowdown and restrictive measures against the EAEU states and China.

Since China is as much a Eurasian power as Russia, both the countries need to coordinate their strategies to bypass the US unipolar system.

The Eurasian system will be based on a new international currency, most probably with the yuan as reference, calculated as an index of the national currencies of the participating countries, as well as commodity prices. The first draft will be discussed by the end of March this year.

The Eurasian system is bound to become a serious alternative to the US dollar, as the EAEU may attract not only nations that have joined BRI (Kazakhstan, for instance, is a member of both) but also the leading players in the Shanghai Cooperation Organization (SCO)as well as ASEAN. West Asian actors – Iran, Iraq, Syria and Lebanon – will be inevitably interested.

In the medium to long term, the spread of the new system will translate into the weakening of the Bretton Woods system, which even serious US market players/strategists admit is rotten from the inside. The US dollar and imperial hegemony are facing stormy seas.

Meanwhile, Russia has a serious problem to tackle. This past weekend, Finance Minister Anton Siluanov confirmed that half of Russia’s gold and foreign reserves have been frozen by unilateral sanctions. It boggles the mind that Russian financial experts have placed a great deal of the nation’s wealth where it can be easily accessed – and even confiscated.

At first it was not exactly clear what Siluanov had meant. How could the Central Bank’s Elvira Nabiulina and her team let half of foreign reserves and even gold be stored in Western banks and/or vaults? Or is this some sneaky diversionist tactic by Siluanov?

No one is better equipped to answer these questions than the inestimable Michael Hudson, author of the recent revised edition of Super Imperialism: The Economic Strategy of the American Empire.

Hudson was quite frank, he said “When I first heard the word ‘frozen,’ I thought that this meant that Russia was not going to expend its precious gold reserves on supporting the ruble, trying to fight against a Soros-style raid from the west. But now the word ‘frozen’ seems to have meant that Russia had sent it abroad, outside of its control.”

“It looks like at least as of last June, all Russian gold was kept in Russia itself. At the same time it would have been natural to have kept securities and bank deposits in the United States and Britain, because that is where most intervention in world foreign exchange markets occurs,” Hudson added,

Essentially, it is all still up in the air, “My first reading assumed that Russia must be doing something smart. If it was smart to move gold abroad, perhaps it was doing what other central banks do, lend it to speculators, for an interest payment or fee. Until Russia tells the world where its gold was put, and why, we can’t fathom it. Was it in the Bank of England – even after England confiscated Venezuela’s gold? Was it in the New York Fed – even after the Fed confiscated Afghanistan’s reserves?”

So far, there has been no extra clarification either from Siluanov or Nabiulina. Scenarios swirl about a string of deportations to northern Siberia for national treason. Hudson adds important elements to the puzzle.

“If the reserves are frozen, why is Russia paying interest on its foreign debt falling due? It can direct the freezer to pay, to shift the blame for default. It can talk about Chase Manhattan’s freezing of Iran’s bank account from which Iran sought to pay interest on its dollar-denominated debt.

It can insist that any payments by NATO countries be settled in advance by physical gold. Or it can land paratroopers on the Bank of England, and recover gold – sort of like Goldfinger at Fort Knox. What is important is for Russia to explain what happened and how it was attacked, as a warning to other countries.”

As a clincher, Hudson could not but wink at Glazyev: “Maybe Russia should appoint a non-pro-westerner at the central bank.”

It’s tempting to read into Russian Foreign Minister Sergey Lavrov’s words at the diplomatic summit in Antalya last Thursday a veiled admission that Moscow may not have been totally prepared for the heavy financial artillery deployed by the Americans.

“We will solve the problem – and the solution will be to no longer depend on our western partners, be it governments or companies that are acting as tools of western political aggression against Russia instead of pursuing the interests of their businesses. We will make sure that we never again find ourselves in a similar situation and that neither some Uncle Sam nor anybody else can make decisions aimed at destroying our economy. We will find a way to eliminate this dependence. We should have done it long ago.”

One of its planks will be the Eurasian financial system. Meanwhile, the market (as in, the American speculative casino) has judged (according to its self-made oracles) that Russian gold reserves – the ones that stayed in Russia – cannot support the ruble.

That’s not the issue – on several levels. The self-made oracles, brainwashed for decades, believe that the Hegemon dictates what the market does. That’s mere propaganda. The crucial fact is that in the new, emerging paradigm, NATO nations amount to at best 15 percent of the world’s population. Russia won’t be forced to practice autarky because it does not need to most of the world – as we’ve seen represented in the hefty non-sanctioning nation list – is ready to do business with Moscow.

Iran has shown how to do it. Persian Gulf traders confirmed that Iran is selling no less than 3 million barrels of oil a day even now, with no signed JCPOA (Joint Comprehensive Plan of Action agreement, currently under negotiation in Vienna). Oil is relabeled, smuggled, and transferred from tankers in the dead of night.

Another example, Indian Oil Corporation (IOC), a huge refiner, just bought 3 million barrels of Russian Urals from trader Vitol for delivery in May. There are no sanctions on Russian oil – at least not yet.

Washington’s reductionist, Mackinderesque plan is to manipulate Ukraine as a disposable pawn to go scorched-earth on Russia, and then hit China. Essentially, divide-and-rule to smash not only one but two peer competitors in Eurasia who are advancing in lockstep as comprehensive strategic partners.

As Hudson sees as, “China is in the cross-hairs, and what happened to Russia is a dress rehearsal for what can happen to China. Best to break sooner than later under these conditions. Because the leverage is highest now.”

All the blather about crashing Russian markets, ending foreign investment, destroying the ruble, a full trade embargo, expelling Russia from the community of nations, and so forth –that’s for the zombified galleries. Iran has been dealing with the same thing for four decades, and survived.

Historical poetic justice, as Lavrov intimated, now happens to rule that Russia and Iran are about to sign a very important agreement, which may likely be an equivalent of the Iran-China strategic partnership. The three main nodes of Eurasia integration are perfecting their interaction on the go, and sooner rather than later, may be utilizing a new, independent monetary and financial system.

But there’s more poetic justice on the way, revolving around the ultimate game-changer. And it came much sooner than we all thought.

Saudi Arabia is considering accepting Chinese yuan – and not US dollars – for selling oil to China. Beijing told Riyadh this is the new groove. The end of the petrodollar is at hand – and that is the certified nail in the coffin of the indispensable Hegemon.

 

Iran attains full member status of SCO

While the West impatiently waits for an affirmative nod from Iran for resuming the stalled Vienna nuclear talks over reviving a 2015 nuclear deal, the new administration of Iran patiently carves a strategic path toward cementing ties with the East. 

On Friday, Iran ended a 16-year peripheral status at the Shanghai Cooperation Organization (SCO) and became a full member in the regional body.

At the end of the 21st Summit of SCO held in Tajik capital Dushanbe, the leaders of the eight main members of the organization agreed to change the membership of the Islamic Republic of Iran from an observer member to a full member.

The membership was attained during the first foreign visit by Ayatollah Seyed Ebrahim Raisi in his capacity as President of Iran. This gives Raisi team a boost at the start of their Asia-oriented foreign policy. 

Iran’s attaining full membership of SCO could be termed the first step on the path of the Raisi administration’s stated policy of strengthening relations with neighbors and regional organizations. 

Addressing the SCO summit in Dushanbe, Ayatollah Raisi elaborated on this policy. “When I took over the presidency of the Islamic Republic, I introduced my foreign policy orientation as focusing on ‘economic multilateralism’ and strengthening ‘neighborhood policy’ in its broadest sense, and strengthening its presence in regional organizations,” he said. 

“The combination of the Eurasia and One Road-One Belt initiatives can be an objective realization of this approach, and the vast potential of the Islamic Republic of Iran in terms of geopolitics, population, energy, transportation, human resources, and most importantly spirituality, culture and civilization can cause a significant stimulus to this outlook,” Iranian president added,

Iran’s top diplomat, Hossein Amir Abdollahian, described the country’s membership in the SCO as “strategic” that will have an important impact on Iran’s “comprehensive” cooperation within the framework of the Neighborhood and Asia-oriented Policy.

The membership was made possible due to Russia’s support and diplomacy. Preparations for the realization of Iran’s joining the SCO first came to light in mid-August when Ali Shamkhan, Secretary of Iran’s Supreme National Security Council, announced after a phone call with his Russian counterpart Nikolai Patrushev that Iran will soon become a full member of the SCO.

“Fortunately, the political obstacles to Iran's membership in the Shanghai CO have been removed and Iran’s membership will be finalized,” Shamkhani said on Twitter in August. 

Abdollahian also said that his Russian counterpart Sergei Lavrov and Russian President Vladimir Putin have supported Iranian membership. In a tweet on Friday, Abdollahian said he met with Lavrov on the sidelines of the SCO summit in Dushanbe and thanked him and Putin for their support of Iran’s membership in the organization.

Iran has been in talks with Russia and China in the last few years to sign long-term strategic partnerships that could shape its foreign policy for decades to come. By joining the SCO, Iran stepped closer to finalizing these partnerships and pushed forward its new Asia-centered foreign policy, which rests on two pillars: enhanced ties with neighbors and strategic partnerships with non-western powers. 

Iranian Foreign Ministry spokesman Saeed Khatibzadeh underlined this new policy in a tweet on Friday.

“Warmly welcome the decision of the SCO to approve Iran's full membership. It is a major step toward enhanced ties with neighbors and an important impetus for our Asia-centered foreign policy. We'll continue our efforts to build on indigenous initiatives for the good of the region,” Khatibzadeh said. 

Great Game Begins in Afghanistan

The latest Shanghai Cooperation Organization (SCO) meeting of Foreign Ministers in Dushanbe, the Tajik capital, may have been an under-the-radar affair, but it did reveal the contours of the big picture of Afghanistan.  

Chinese Foreign Minister Wang Yi laid out the basic road map to his Afghan counterpart Mohammad Haneef Atmar. While stressing the Chinese foreign policy gold standard – no interference in internal affairs of friendly nations – Wang established three priorities:

1. Real inter-Afghan negotiations towards national reconciliation and a durable political solution, thus preventing all-out civil war. Beijing is ready to “facilitate” dialogue.

2. Fighting terror – which means, in practice, al-Qaeda remnants, ISIS-Khorasan and the Eastern Turkestan Islamic Movement (ETIM). Afghanistan should not be a haven for terrorist outfits – again.   

3. The Taliban, for their part, should pledge a clean break with every terrorist outfit.

Atmar fully agreed with Wang. And so did Tajik Foreign Minister Sirojiddin Muhriddin. Atmar even promised to work with Beijing to crack down on ETIM, a Uighur terror group founded in China’s western Xinjiang. Overall, the official Beijing stance is that all negotiations should be “Afghan-owned and Afghan-led.”

It was up to Russian Presidential envoy Zamir Kabulov to offer a more detailed appraisal of the Dushanbe discussions.  

The main Russian point is that Kabul and the Taliban should try to form a provisional coalition government for the next 2-3 years, while they negotiate a permanent agreement. Talk about a Sisyphean task – and that’s an understatement. The Russians know very well that both sides won’t restart negotiations before September. 

Moscow is very precise about the role of the extended troika – Russia, China, Pakistan and the US – in the excruciatingly slow Doha peace process talks: the troika should “facilitate” (also Wang’s terminology), not mediate the proceedings.  

Another very important point is that once “substantive” intra-Afghan negotiations resume, a mechanism should be launched to clear the Taliban of UN Security Council sanctions.

This will mean the normalization of the Taliban as a political movement. Considering their current diplomatic drive, the Taliban do have their eyes on the ball. So the Russian warning that they should not become a security threat to any of the Central Asian “stans” or there will be “consequences” has been fully understood.

Four of the five “stans” (Turkmenistan is the exception) are SCO members. By the way, the Taliban have sent a diplomatic mission to Turkmenistan to ease its fears.  

In Dushanbe, a special meeting of the SCO-Afghanistan Contact Group, established in 2005, for the first time was held at the foreign minister level.

This shows that the SCO as a whole is engaged in making its “facilitate, not mediate” role the prime mechanism to solve the Afghan drama. It’s always crucial to remember that no fewer than six SCO member-nations are Afghanistan’s neighbors.

During the main event in Dushanbe – the SCO Foreign Ministers Council – the Russians once again framed Washington’s Indo-Pacific strategy as an attempt to deter China and isolate Russia.

Following recent analyses by President Vladimir Putin and Foreign Minister Sergey Lavrov, the Russian delegation explained to its SCO counterparts its view counterposing Moscow and Beijing’s effort to develop a polycentric world system based on international law, on the one hand, with the Western concept of the so-called “rules-based world order.”

The Western approach, they said, puts pressure on countries that pursue independent foreign policy courses, ultimately legitimizing the West’s “neocolonial policy.”

While the SCO was discussing the drive towards a polycentric world system, the Taliban, on the ground, kept doing what they’ve been doing for the past few weeks: capturing strategic crossroads.

The Taliban already controlled border crossings with Tajikistan, Uzbekistan, Iran and Turkmenistan. Now they have taken over ultra-strategic Spin Boldak, bordering Balochistan in Pakistan, which in trade terms is even more important than the Torkham border crossing near the Khyber Pass.

According to Taliban spokesman Suhail Shaheen, “the Spin Boldak district in Kandahar province has been cleared of the enemy” – Kabul’s forces – “and the district is now under the control of the mujahideen.” The term “mujahideen” in the Afghan context means indigenous forces fighting foreign invaders or proxies.       

To have an idea of the importance of Spin Boldak for the Taliban economy during their years in power, see the third chapter of a series I published in Asia Times in 2010, here and here. Eleven years ago, I noted that “the Afghan-Pakistan border is still porous, and the Taliban seem to believe they may even get their Talibanistan back.” They believe that now, more than ever.

Meanwhile, in the northeast, in Badakhshan province, the Taliban are getting closer and closer to the border with Xinjiang – which has led to some hysteria about “terrorism” infiltrating China via the Wakhan corridor.

What’s way more relevant is that the Ministry of Public Works in Kabul is actually building a 50-kilometer road – for the moment unpaved – between Badakhshan province and Xinjiang, all the way to the end of the Wakhan corridor. They will call it the Wakhan Route. 

SCO member Pakistan remains arguably the key to solve the Afghan drama. The Pakistani ISI remains closely linked to every Taliban faction: never forget the Taliban are a creation of legendary General Hamid Gul in the early 1990s.   

At the same time, for any Jihadi outfit it’s easier to hide and lie low deep in the Pakistani tribal areas than anywhere else – and they can buy protection, irrespective of what the Taliban are doing in Afghanistan. Prime Minister Imran Khan and his circle are very much aware of it – as much as Beijing. That will be the ultimate test for the SCO in its anti-terror front.

China needs an eminently stable Pakistan for all the long-term Belt and Road/China-Pakistan Economic Corridor projects and to fulfill its goal of incorporating Afghanistan. Kabul would be bound to benefit not only from increased connectivity and infrastructure development but also from future mineral including rare earth exploration projects. 

Meanwhile, Hindu nationalists would love to outflank Pakistan and extend their influence in Kabul, encouraged by Washington. For the Empire of Chaos, the ideal agenda is – what else? – chaos, disrupting Belt and Road and the Russia-China road map for Eurasian integration, Afghanistan included.    

Added hysteria depicting Russia and China involved in Afghan reconstruction as but a new chapter in the never-ending “graveyard of empires” saga does not even qualify as nonsense. The talks in Dushanbe made clear that the Russia-China strategic partnership approach to Afghanistan is cautiously realistic.

It’s all about national reconciliation, economic development and Eurasian integration. Not included military component, hubs for an Empire of Bases, foreign interference. Moscow and Beijing also recognize, pragmatically, that fulfilling those dreams will not be possible in an Afghanistan hostage to ethno-sectarianism.    

The Taliban for their part seem to have recognized their own limits, hence their current inter-regional diplomatic drive. They seem to be paying close attention to the inevitable heavyweights – Russia and China – as well as the Central Asian “stans” plus Pakistan and Iran.

Trade between Iran and SCO members exceeds US$23 billion

The value of trade between Iran and the members of Shanghai Cooperation Organization (SCO) rose to US$23.165 billion during the first 11 months of the current Iranian calendar year. This was disclosed by Ruhollah Latifi, spokesman of the Islamic Republic of Iran Customs Administration (IRICA) announced.

Iran has cross-border trade with 11 key member states and observer states of the Shanghai Cooperation Organization that include China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, Mongolia, Pakistan, India, Afghanistan and Belarus. Among these the largest volume of trade was with China amounting to US$15.518 billion, the IRICA spokesman stated.

He put Iran’s export to the SCO members at 33.339 million tons valued at US$11.173 billion during the period under review. Out of this the highest amount of export has been to China, amounting to US$6.724 billion and the lowest was to Mongolia, amounting to US$412,809.

Iran’s imports from the member countries weighing 8.408 million tons was worth US$11.991 billion Latifi said, adding the highest amount of imports was from China (US$8.793 billion), and the lowest was from Mongolia (US$2.448 million).

The Shanghai Cooperation Organization (SCO) is a Eurasian political, economic and security alliance. Its creation was announced on 15th June 2001 in Shanghai, China by the leaders of China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan. The SCO Charter was signed in June 2002 and became effective on 19th September 2003.