If you’re counting on Asia’s many new power centres to compete and clash – don’t. The Greater Eurasia Partnership is set to integrate them all – from the SCO, EAEU, and BRICS, to emerging new currencies – in order to replace the ‘rules-based order.’
On July 4, at a New Delhi summit, Iran will finally become a full member of the Shanghai Cooperation Organization (SCO). That will be one of the key decisions of the summit, held via video conference, along with the signing of a memorandum on the path by Belarus to also become a member state.
In parallel, Russian Deputy Prime Minister Alexei Overchuk has confirmed that Iran and the Russian-led Eurasian Economic Union (EAEU) should sign a free trade agreement (FTA) by the end of 2023. The FTA will expand an interim deal that already lowers customs duties on hundreds of categories of goods.
Russia and Iran – two key poles of Eurasia integration – have been getting closer and closer geoeconomically since the West’s sanctions tsunami that followed Russia’s February 2022 Special Military Operation (SMO) in Ukraine.
The EAEU – as much as the SCO and BRICS – is on a roll: FTAs are expected to be clinched, from middle to long term, with Egypt, India, Indonesia, and the UAE.
Overchuck admits negotiations may be “very difficult” and “take years,” considering “the interests of all five EAEU member states, their businesses, and their consumers.” Yet despite the obvious complexities, this high-speed rail geoeconomic train has already left the station.
In a parallel track, the members of the Asian Clearing Union (ACU), during a recent summit in Iran, decided to launch a new cross-border financial messaging system this month as a rival to the western-centric SWIFT.
The ACU comprises the Central Banks of India, Pakistan, Bangladesh, Bhutan, Maldives, Nepal, Sri Lanka, Myanmar, and Iran: a healthy mix of West Asia, Southeast Asia, and South Asia. It was the Central Bank of Iran – still under harsh sanctions – that developed the new bank messaging system, so new it’s not yet known by its own acronym.
Crucially, the Governor of Russia’s Central Bank took part in the ACU summit as an observer, along with officials from Belarus, which applied for ACU membership two weeks ago.
Iranian Central Bank Governor Mohammad Reza Farzin confirmed not only the interest of potential members to join the ACU but also the drive to set up a basket of currencies for payment of bilateral trade deals. Call it a de-dollarization fast track.
As Iran’s first Vice President, Mohammad Mokhber summed it up: “De-dollarization is not a voluntary choice by countries anymore; it is an inevitable response to the weaponization of the dollar.”
Iran is now at the heart of all things multipolar. The recent discovery of a massive lithium field holding roughly 10 per cent of the world’s reserves, coupled with the quite possible admission of Iran into the expanded BRICS – or BRICS+ – as early as this year, has bolstered scenarios of an upcoming BRICS currency backed by commodities: gold, oil, gas and – inevitably – lithium.