Iran’s President Ebrahim Raisi addressed the Shanghai Cooperation Organization Heads of State Council (SCO) summit yesterday, hosted by India, and featured a central call for the U.S. dollar to be abandoned in global trade to reduce reliance on the Western financial system. Raisi stated: “The hegemony of the Western world has contributed to the hegemony of the dollar. It is necessary to remove this instrument of hegemony in the global practice and use national currencies for settlements between countries in order to create a new world order.” Raisi also emphasized that Iran’s now active, full membership in the SCO would help boost economic development in his country.
Importantly, Raisi rooted his discussion of the use of national currencies in the context of the massive railway project involving Russia and Iran. He said that Tehran wants to expand cooperation with Russia in building new transport routes in the Islamic Republic. This followed the May 2023 signing by Presidents Putin and Raisi of the agreement to construct a railway between the Iranian cities of Rasht and Astara. It is part of the International North South Transport Corridor (INSTC), a 7,200-km multi-mode transit system, connecting ship, rail and road routes among India, Iran, Azerbaijan, Russia, Central Asia, and Europe.
Raisi’s speech hit on what were apparently two elements of the deliberations at the SCO summit—the importance of reforming the architecture of global economic governance and also increasing the share of national currencies in mutual settlements.
