Economic Cooperation Organization (ECO)
1. Introduction and Historical Development
The Economic Cooperation Organization (ECO) is a regional intergovernmental body
established to improve cooperation among member states in areas such as trade,
transport, energy, agriculture, education, and culture. ECO was founded in 1985 by
Iran, Pakistan, and Turkey, based on the spirit of regional collaboration previously
seen in the Regional Cooperation for Development (RCD), which operated from 1964
to 1979.
After the fall of the Soviet Union, seven newly independent Central Asian and
Caucasus countries joined ECO in 1992, expanding its membership to ten. This made
ECO a bridge between South Asia, Central Asia, the Middle East, and parts of Eastern
Europe, enhancing its strategic and economic relevance in the region.
2. Member Countries
ECO now has 10 member states, including both founding and newly joined countries:
1. Afghanistan
2. Azerbaijan
3. Iran
4. Kazakhstan
5. Kyrgyzstan
6. Pakistan
7. Tajikistan
8. Turkey
9. Turkmenistan
10. Uzbekistan
These countries share geographical proximity, historical ties, and many common
interests, particularly in trade, energy, and connectivity.
3. Functions of ECO
The ECO serves as a platform for:
Promoting regional economic growth by increasing trade and investment
among member states
Improving transport and communication links, such as regional road and
railway networks
Strengthening energy cooperation, including electricity sharing and pipeline
development
Developing agriculture and ensuring food security
Protecting the environment and managing shared natural resources
Advancing education and human resource development
Encouraging cultural exchanges and tourism among the member countries
ECO’s work is guided by the principles of mutual benefit, sovereign equality,
and regional integration.
4. Structure of ECO
ECO’s decision-making and coordination structure includes:
Council of Ministers (COM): Composed of foreign ministers from all member
states; it sets policies and oversees progress.
Council of Permanent Representatives (CPR): Based in Tehran at the ECO
Secretariat, it monitors day-to-day operations.
Regional Planning Council (RPC): Includes senior officials and experts who
design and review regional programs.
ECO Secretariat: Located in Tehran, Iran, it acts as the main administrative
and coordination body of the organization.
Specialized Agencies: Include institutions like the ECO Trade and
Development Bank, ECO Science Foundation, and ECO Cultural Institute,
which handle specific areas of regional cooperation.
5. Latest Meeting Held and Key Takeaways
The 16th ECO Summit took place in Tashkent, Uzbekistan, in November 2023. The
heads of state and government of all member countries attended.
Key Takeaways:
Agreement to accelerate regional trade through the ECO Trade Agreement
(ECOTA)
Commitment to expand connectivity projects, such as regional rail and road
corridors
Increased focus on energy cooperation and digital economy
Reaffirmed support for the implementation of ECO Vision 2025, which outlines
long-term goals for sustainable development in the region
Recognition of the need for stronger institutional mechanisms to implement ECO
decisions effectively
6. Significance for Pakistan (Political, Economic, Strategic)
Political: ECO provides Pakistan with a neutral regional platform to engage
constructively with neighboring and Central Asian countries. It allows Pakistan to
promote regional peace, connectivity, and diplomacy.
Economic: Through ECO, Pakistan can benefit from increased trade and transit
opportunities, especially with landlocked Central Asian countries. Infrastructure
projects like the Istanbul-Tehran-Islamabad freight train and potential linkages
with CPEC boost Pakistan’s economic outlook.
Strategic: ECO supports Pakistan’s broader vision of regional integration, energy
connectivity, and south-south cooperation. It aligns with Pakistan’s foreign policy
goals of strengthening ties with Muslim and Central Asian states.
7. Future Prospects of ECO
Trade Expansion: With the gradual implementation of ECOTA and simplified
customs procedures, ECO can help boost intra-regional trade.
Regional Corridors: Infrastructure development, such as road, rail, and energy
pipelines, will enhance connectivity and reduce trade costs.
Climate and Energy Cooperation: ECO countries can collaborate on renewable
energy, climate resilience, and disaster risk reduction.
Tourism and Cultural Integration: There is growing potential to promote the
region’s shared cultural heritage and tourism.
Digital Transformation: Future cooperation may include digital trade platforms, e-
commerce, and information technology development.
Challenges to the ECO
Despite its wide scope and strategic relevance, the ECO has struggled to achieve its full
potential due to a range of political, institutional, economic, and structural challenges. Some
of the key obstacles are explained below:
1. Political Tensions Among Member States
One of the most significant challenges is the lack of political cohesion among ECO members.
While the organization is meant to promote regional cooperation, bilateral tensions—such as
those between Azerbaijan and Armenia (a close ally of Iran), or between Afghanistan and
some neighboring states—have at times led to distrust and limited collaboration.
Example: Iran and Azerbaijan have experienced strained relations over border security
and trade routes, which can affect broader ECO cooperation on transport corridors.
These tensions often overshadow collective agendas, slowing progress on joint
initiatives and reducing political will.
2. Low Volume of Intra-Regional Trade
While the ECO covers a vast region with over 400 million people and immense resource
potential, intra-regional trade remains less than 8% of total trade volume—very low
compared to blocs like the EU or ASEAN.
Reasons include:
o Non-tariff barriers (NTBs)
o Lack of harmonized customs procedures
o Poor banking and insurance linkages
o Limited trust in cross-border commercial systems
Example: The ECO Trade Agreement (ECOTA), signed in 2003, aimed to reduce
tariffs among member states but has yet to be fully implemented by most members,
limiting its impact on regional trade.
3. Weak Implementation of Agreements
The ECO has adopted numerous framework agreements, action plans, and declarations, but
implementation on the ground has been slow and inconsistent. This is due to:
Limited administrative follow-up
Absence of enforcement mechanisms
Overlapping priorities among member states
Example: The ECO Vision 2025, adopted in 2017, outlines goals for transport, trade,
energy, and SDGs, but progress reports show significant delays in measurable
implementation, especially in transport connectivity.
4. Infrastructure and Connectivity Gaps
While ECO places strong emphasis on regional connectivity, many member states lack
adequate infrastructure to support trade, energy transit, and mobility.
Examples:
o Railway linkages between Pakistan and Central Asia remain underdeveloped.
o The Istanbul-Tehran-Islamabad (ITI) freight train resumed operations in 2021
after a decade-long pause, but still faces logistical and security constraints.
o Landlocked states like Tajikistan and Kyrgyzstan face challenges accessing
international markets without transit cooperation.
5. Limited Financial and Institutional Capacity
The ECO Secretariat operates with a modest budget and limited staff, which constrains its
ability to:
Monitor project implementation
Conduct high-level research
Provide technical assistance or financing
Coordinate effectively among diverse ministries across member states
Example: Unlike the EU, ECO lacks a central funding mechanism or development
bank with deep capital. Although the ECO Trade and Development Bank exists, its
reach is limited to a few members and specific projects.
6. Overlapping Regional Organizations and Priorities
Many ECO members are also part of other regional platforms such as the Shanghai
Cooperation Organization (SCO), South Asian Association for Regional Cooperation
(SAARC), or Central Asia Regional Economic Cooperation (CAREC).
This creates a fragmented policy space, where resources and attention are divided.
Example: Pakistan’s growing involvement in CPEC (China-Pakistan Economic
Corridor), which connects with CAREC and BRI, may at times receive more focus
than ECO-linked initiatives.
7. Visa, Trade, and Movement Barriers
Despite repeated declarations, visa liberalization and freedom of movement remain limited
across ECO. Businesspeople, students, and even government officials often face bureaucratic
delays in obtaining visas for travel within the region.
Example: Lack of mutual visa facilitation has been cited as a reason for low business
interaction and cultural exchange among ECO states, particularly for SMEs.
8. Security Concerns and Regional Instability
The region covered by ECO includes several conflict-prone areas (e.g., Afghanistan) and
regions with cross-border security concerns, which negatively impact trade, investment, and
regional trust.
Example: Instability in Afghanistan has long delayed cross-border projects like TAPI
(Turkmenistan-Afghanistan-Pakistan-India pipeline) and road links through the
Wakhan Corridor.)
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