Iran’s acting president Mohammad Mokhber on July 4 proposed the creation of a joint bank and a common free zones network within the Shanghai Cooperation Organisation (SCO), according to ISNA.

Mokhber was addressing the 24th summit of the Council of SCO heads of state in Kazakhstan’s capital, Astana, in place of Ebrahim Raisi, who died in a helicopter crash in May and will be replaced by a new president after the runoff elections on July 5. 

Due to its location, Central Asia plays a crucial role in China’s Belt and Road Initiative (BRI). Beijing has been building its influence in the region for years, securing access to raw materials and transport routes down to the Persian Gulf and Arabian peninsula.

He said the establishment of a "joint Shanghai bank" could enhance the level of economic and financial cooperation among the member states, as evidenced by the experiences gained under the organisation’s Interbank Consortium.

As Iran’s international trade is impeded by Western sanctions, it has been looking for alternative ways to secure its transactions with other countries.

Mokhber commended the SCO’s agenda for fostering commercial exchanges via national currencies, expressing support for continued expert dialogue to achieve “the ultimate goal of reducing or phasing out the US dollar in multilateral transactions”.

He also said member states can use The (International) North-South Transport Corridor (INSTC) and the southern ports of Iran to engage in trade exchanges with the rest of the world faster and more cost-effectively.

The INSTC is a multi-modal network of ship, rail, and road routes for moving freight between India, Iran, Azerbaijan, Russia, Central Asia, and Europe. Iran plays a pivotal role in the INSTC as a critical transit route connecting the Persian Gulf with the Caspian Sea, and further on to Russia and Northern Europe. The southern Iranian port of Bandar Abbas is a crucial connection point on the INSTC.

Highlighting the complementary roles of transit and trade, Mokhber proposed the creation of a “common free zones network”, besides economic treaties such as preferential and free trade agreements within the organisation, to facilitate international trade for member states.

Iran’s acting president also voiced Iran’s strong opposition to the use of political tools, especially “unjust unilateral sanctions” in the energy sector, saying the Islamic Republic pursues a policy of multilateralism in this regard as a major producer of energy resources, namely oil and gas.

Toward this end, Iran actively participated in drafting an “SCO energy cooperation strategy document” and supported its approval and implementation, according to Mokhber.

US sanctions have seriously hampered Iran’s oil exports, the lifeblood of its economy, although it has been able to sell record quantities of the fuel in recent months to other SCO members, including China and via third parties in Singapore.

Iran joined the SCO as a full member in July 2023, in the most successful move by the Raisi administration following the entry to the Eurasian Economic Union (EEU) free trade zone led by Russia. The country also joined the China-led BRICS group the same year, pushing Tehran into the throws of the Asian powerhouses, Saudi Arabia and the United Arab Emirates.

However, Tehran's entry has been one of the most troubling aspects of the last group to join BRICS for European and North American powers, considering its ongoing opposition to Israel and support for groups including Hezbollah, Hamas and Iraq's paramilitary groups.  

Meeting with Putin

Mokhber also met Russia’s President Vladimir Putin on the sidelines of the event in the Kazakh capital.

He described relations between Iran and Russia as “deep, strategic and unchangeable,” saying it has changed the equations of power in the world and challenged the unjust world order based on unilateralism.

Mokhber said that Raisi’s policies have opened a new chapter in Tehran-Moscow relations that will benefit not only the two countries but also the region and the world.

There have been concerns from several groups in Iran that Russia would pull back from cooperation with Iran following Raisi's death. The move by the remnants of the administration to lock in deals before a new president comes to power is part of that eleventh-hour push by that faction in Iran. A potential presidency led by Reformist Masoud Pezeshkian could attempt to sideline Russia. 

Mokhber also delivered a message from Iran’s top cleric and leader, Ali Khamenei, saying, “Bilateral relations with Russia are deep and will not be subject to change with the change of governments.”

The Russian president said relations between Moscow and Tehran are “friendly and constructive” and will further strengthen regardless of the result of the elections in Iran.

According to Putin, since the beginning of this year, the trade volume between the two nations has risen by 14% compared to the corresponding timeframe in 2023, while the inflow of Russian visitors to Iran has seen a 25% uptick.

Mokhber stressed the need to expedite finalising and implementing a comprehensive cooperation plan between the two countries.

Iran and Russia signed a strategic partnership agreement in 2001 for 20 years, which, as per reports from Russia's TASS news agency, was renewed in 2020 for an additional five years. In 2020, both countries agreed to prepare a new agreement.

Deputy Russian Foreign Minister Andrei Rudenko said in late June that the agreement is expected to be signed in the very near future, as work on its text is close to completion and the necessary terminology has been found.