Iran Turns East

In choosing his first foreign trip as Iran’s new president, Ebrahim Raisi skipped the United Nations General Assembly meeting in New York last month. Instead, he flew east—to Dushanbe, Tajikistan, for a summit of the Shanghai Cooperation Organization (SCO), Eurasia’s political, economic, and security partnership. The choice was substantive as well as symbolic. On Sept. 17, nearly 14 years after Iran initially applied for full membership in the SCO, it finally won approval.

“The world has entered a new era,” Raisi declared at the time, in a not-so-veiled swipe at Washington. “Hegemony and unilateralism are failing. The international balance is moving toward multilateralism and redistribution of power to the benefit of independent countries.”

Facing crushing U.S. sanctions and generally treated as a pariah by the West, Iran is looking for a way out.

Facing crushing U.S. sanctions and generally treated as a pariah by the West, Iran is looking for a way out. It believes Asian powers are rising at Washington’s expense and that China and Russia do not share U.S. interests in containing Iran and stifling its economy. On the contrary, those countries might be willing to embrace Iran in order to further their own interests in the Middle East.

In this context, Iran’s acceptance into the SCO, which could take up to two years to finalize, was hailed as a major victory by the Iranian press. It enhances Tehran’s cooperative relationship with China and Russia, as well as with other SCO member states, including India, Tajikistan, Kazakhstan, Kyrgyzstan, Uzbekistan, and Pakistan. According to Tasnim News Agency—which is close to Iran’s Islamic Revolutionary Guard Corps—Iran’s full membership in the SCO can neutralize Western countries’ efforts to isolate Iran by strengthening its levers of power and consolidate Iran’s position in West Asia.

Raisi will now try to capitalize on that success. Iranians of all stripes are frustrated by the broken deal to limit the country’s nuclear program, the Joint Comprehensive Plan of Action (JCPOA), which the Trump administration abrogated in 2018, three years after it was signed. And at a time when nuclear talks with the Biden administration appear stalled, China in particular could offer negotiating support or perhaps even alternative options through its Belt and Road Initiative and foreign direct investment in Iran—if it’s willing to challenge the United States.

Accordingly, Raisi and his administration are pursuing what Iranians call a “Look to the East” policy. They regard Rouhani’s previous efforts to revive the JCPOA as a kind of “Look to the West” approach and ultimately a dead end. Following his return from the SCO summit in Tajikistan, Raisi harshly criticized Rouhani and accused him of dependence on the West. The new administration will not necessarily abandon nuclear negotiations, but it believes that even if the negotiations conclude, the sanctions will not be lifted effectively.

New officials such as Ali Bagheri Kani, the deputy foreign minister for political affairs, are famous for their anti-JCPOA statements. They see sanctions as the United States’ means to curb Tehran’s nuclear and missile programs and contain its growing influence in the Middle East. Therefore, they believe Iran’s only recourse is to find new strategic powerful allies, such as China and Russia. At the very least, Iran hopes to gain Russian and Chinese political support during the nuclear talks.

Iran’s tilt to the East is perhaps more profound than it might at first appear.

Iran’s tilt to the East is perhaps more profound than it might at first appear. Traditionally, Iran has been economically entwined with the West—and dependent on it, since at least the time of the Shah. Back then, Iran was an official ally of the United States. The Joint Commission on Economic Cooperation between Iran and the United States sought to expand bilateral economic ties. Following the commission’s establishment, Tehran and Washington signed a huge agreement in November 1974 to increase the value of their economic exchanges to $15 billion over five years. The United States was also the main supplier of military weapons to the former Iranian regime.

This trend continued in the post-revolutionary period, despite strong animosity between Iran and the United States. European oil companies such as TotalEnergies, for instance, have enjoyed the lion’s share in the development of Iran’s oil and gas fields. But when U.S. sanctions prevented European countries from continuing to invest in Iran’s energy sector, Chinese companies stepped in.

When Total had to withdraw from the South Pars gas project in 2018 due to U.S. sanctions against Iran, China’s CNPC replaced it. Although the Chinese company also stopped investing in Iran’s energy sector shortly afterward, the new administration hopes that Iran’s membership in the SCO and closer ties between Tehran and Beijing will lead Chinese companies to invest in Iran’s energy sector.

In July, Iran and Russia agreed to extend a previous bilateral cooperation agreement, originally signed in 2001. According to Iran’s ambassador to Moscow, Kazem Jalali, it was Khamenei who suggested the Russian president renew and extend the agreement for 20 years.

Iran foresees many benefits to joining the SCO. First and foremost, it believes it can neutralize U.S. efforts to isolate it.

Now Iran hopes to join China’s Belt and Road Initiative, the Chinese megaproject envisaged as a “21st-century Silk Road” connecting South Asia to Europe. The Raisi administration seeks to attract Chinese investment by joining this colossal project. Chinese foreign investment can help sanctions-hit Iran to improve its economy. Besides, Iranians hope to turn their geopolitical potential to reality by joining the Belt and Road’s corridors. Iran sees itself as a bridge between east and west and also the north and south of Eurasia.

For its part, the Iranian parliament has also sought to reinforce economic cooperation with China. Recently, 59 Iranian lawmakers proposed a bill facilitating foreign investment in Iran for those countries that stood by Iran in the face of U.S. sanctions. According to the proposed bill, the companies that have continued their trade with Iran despite foreign sanctions would be eligible for tax exemptions in the future. Although the bill doesn’t mention specific countries, it’s clearly aimed at China, which continued importing oil from Iran even while sanctions were in effect.

Iran foresees many benefits to joining the SCO. It believes that by joining the world’s largest regional organization in terms of geographic scope and population, it can neutralize U.S. efforts to isolate it. Second, full accession to the organization could establish a new role for Iran in the regional security order of Central and South Asia as an influential player that respects multilateralism in the region and beyond.

This is particularly relevant in the wake of the U.S. withdrawal from Afghanistan. Third, Iran hopes to boost foreign trade with SCO member countries. Fourth, membership in the organization could provide an opportunity for Iran to promote defense cooperation with China and Russia and extend its defensive perimeter farther to the east. Iran, as a full member of the SCO, would participate in the joint military maneuvers of the organization and boost its security cooperation with members of the SCO to fight against terrorism in the region. And finally, Iran’s membership in such a security-oriented organization could prompt Russia and China to sell more sophisticated arms to Tehran.

To gain such benefits from China, Iran will of course need to deliver something in return. It could come in the form of diplomatic support. As soon as he came to office, Raisi signaled that Iran would back China in international disputes. In his first phone conversation with Chinese President Xi Jinping, Raisi condemned the politicization of studies on the origin of COVID-19, calling it an attempt to isolate Beijing. He also declared full support for Beijing’s “One China” policy and accused the United States of interfering in China’s internal affairs.

Although there seems to be a broad consensus among new officials in Iran about the necessity of tilting to the East, it’s less clear that such a shift will solve the country’s most pressing challenges. While Iranian policymakers believe that the future world order will eventually be dominated by Asia, that envisaged future remains murky.

In the meantime, U.S. sanctions are still a large impediment to foreign companies hoping to invest in Iran, and political disputes with the United States and its allies continue to be formidable barriers to expanding trade relations with Iran’s eastern neighbors. It’s also possible—perhaps even likely—that China and Russia see their interests in the Middle East differently than Iran imagines and that Iranian aspirations are not among their top priorities.