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Information Journal Paper

Title

Regional Convergence of Iran and the Shanghai Cooperation Organization

Pages

  421-458

Abstract

 The Shanghai Cooperation Organization, centered around China, has a dynamic and growing position in the international economy in terms of economic, investment, and trade dimensions. With Iran's full membership in the organization, significant non-economic, economic, and commercial mutual benefits can be achieved. This study aims to answer the questions regarding the past performance and future outlook of intra-regional and extra-regional trade within the Shanghai Cooperation Organization and Iran's position. Has the trade transformation over two decades since the organization's formation and the accession of several countries been due to trade creation or trade diversion? The main objective of the article is to evaluate the effectiveness and success of the economic convergence of the members of the Shanghai Cooperation Organization and Iran. For this purpose, two major criteria of regional convergence—“homogeneity and similarity of economic indicators” and “degree of trade convergence”—have been examined and measured for the Shanghai Cooperation Organization and its members during the period of 2000-2020. The results indicate that during the studied period, the gap and range of per capita income for some countries have decreased, while for others, it has increased, and homogeneity and similarity of development indicators have not occurred for all members of the organization in the long term. Additionally, the increase in the share of intra-regional trade of the organization and Iran has not aligned with their international trade development, and the development and deepening of intra-regional trade have not only failed to lead to the development of Iran's international trade but have also resulted in trade diversion. The analysis of the results suggests that the lack of development in intra-regional trade is due to Iran's weak trade structure, and currently, the possibility of developing intra-regional trade and Iran's convergence with the organization seems weak. However, with the development and enhancement of Iran's economic-trade structure, the opportunity to benefit from convergence will be provided.

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