ECO and its future as a non-Arab regional bloc

The Economic Cooperation Organization (ECO), comprising Iran, Turkey, Pakistan, Afghanistan and six Muslim former Soviet republics, recently held its latest summit meeting in Istanbul, Turkey, where President Ahmadinejad handed over the rotating presidency of this regional organization to President Abdullah Gul of Turkey.

ECO is a low-profile regional economic integration organization, headquartered in Tehran, which was originally founded by Iran, Turkey and Pakistan . Following the collapse of the Soviet Union, ECO expanded its membership to the Muslim Central Asian republics of the former Soviet Union as well as Afghanistan.

ECO has so far gained modest achievements in the area of commercial and economic cooperation among its members despite a plethora of preferential commercial and economic agreements signed among its member states over the past two decades.

The three founding members of ECO act as the key players of this regional organization as most of the acceded members still remain uncertain about the benefits of deeper regional integration within ECO.

Turkey’s role in ECO is primarily driven by its interests in gaining preferential access to the markets of other member states, a fact which explains why it is the major driving force behind trade liberalization in the ECO region. Iran initially weighed political benefits from regional integration under ECO more heavily in its calculations than its potential economic gains, as it provided Iran a break from isolation by its hostile neighbouring Arab countries in the 1980s.

After the collapse of the Soviet Union, Iran has also viewed ECO as a framework for promoting its geopolitical position as a transit route for the land-locked Central Asian republics. Increased international diplomatic pressure on Iran over its nuclear program in recent years has increased the political stake of ECO in Iran’s eyes.

Two major developments are particularly noteworthy about the latest ECO summit held in Istanbul.

First, the attendance of Iraqi president Jalal Talabani as the head of a non-member state at the ECO summit was a new development for this regional grouping. Talabani’s attendance makes particular sense in light of the fact that Iraq has officially applied for membership in ECO. Membership of Iraq in ECO would mark a break from the non-Arab identity of this regional organization and would pave the way for the membership of some other Arab countries in this organization.

In light of the geographical interconnectedness of Iraq with other key ECO member states, ECO would serve as a natural setting for the regional economic integration of Iraq . Iraq’s integration within a non-Arab regional bloc may ring the alarm bell for conservative Arab sheikdoms in the Persian Gulf region as it highlights further alienation of Iraq from these countries due to their antagonistic policies toward the post-conflict democratic Iraq and their reluctance to accept Iraq in the (Persian) Gulf Cooperation Council.

Regardless of regional reactions , by seeking membership in ECO, Iraq has taken a major step in using regional capacities to promote its national interests.

The second major development highlighting the latest ECO summit in Istanbul, is the continued lukewarm attitude of most Central Asian republics toward deeper economic integration within ECO, as demonstrated by their low-level presence at this meeting. Apart from Azerbaijan and Tajikistan, none of the remaining Central Asian members of ECO participated at the head of state level in this meeting.

This fact just further highlights these countries’ uncertainties about potential economic gains from deeper economic integration in the ECO region. Their lukewarm attitude is driven by their fear that deeper economic integration, promoted as the main objective of ECO, would leave their domestic markets at the mercy of the more competitive producers of key ECO member states, primarily those of Turkey and to a lesser extent Iran and Pakistan.