Shanghai Cooperation Organization: A New Stage, New Challenges, and A New Journey

Zhao Mingwen

After 17 years of development, Shanghai Cooperation Organization (SCO), a regional cooperative organization, has become of a large scale and across multiple fields, yielding influence far beyond the region. With India and Pakistan’s formal induction, the SCO has ushered in a new stage of development. A larger membership has resulted in more diverse interests, a broader range of concerns, and more coordination efforts to reach consensus, yet the SCO remains a key venue where members get to develop themselves through mutual support, and thus stands out as a new model of international relations featuring cooperation and win-win outcome.

I. I. Security, economic and people-to-people cooperation have become pillars in the SCO’s development

Having emerged from severe tests posed by international turbulences, particularly the global financial crisis since its founding in 2001, the SCO witnesses deeper political mutual trust, stronger awareness of solidarity and self-reliance, and closer cooperation on issues relating to key interests such as security and development. Security, economic and trade, and people-to-people cooperation have become the cornerstones of the SCO’s continued development.

1. Continuous expansion in security cooperation

The SCO was the first of its kind oriented towards crackdown on terrorism, separatism and extremism, and has built up over time a well-established legal system and long-acting mechanism for security cooperation. Upon the SCO’s establishment, the six heads of state signed the Shanghai Convention on Combating Terrorism, Separatism and Extremism, which is to be followed by the Agreement
 on Regional Anti-Terrorist Structure between the Member States of the Shanghai Cooperation Organization, Agreement on RATS Databank , Concept of Cooperation among the SCO Member States in the Fight against Terrorism, Separatism and Extremism, Agreement on Cooperation in Combating Illicit Traffic of Narcotic Drugs Psychotropic Substances and Precursors between the Member States of the SCO, Convention of the Shanghai Cooperation Organization against Terrorism, Agreement between the Governments of SCO Member States on Cooperation in Ensuring IIS, Agreement on Cooperation in Combating Crime between the Governments of the Member States of the SCO, Agreement on Cooperation in Combating Crime between the Governments of the Member States of the SCO, Agreement on the Procedure for Organizing and Conducting Joint Anti-Terrorist Exercises within Territories of Member States of the Shanghai Cooperation Organization, Agreement between SCO Member States on Holding Joint Military Drills, Cooperation Agreement in the sphere of identifying and cutting off the channels used by the individuals involved in terrorist, separatist and extremist activities to enter the SCO member states, Regulation on Political and Diplomatic Measures and Mechanisms of SCO Response to Situations Threatening Peace, Security and Stability in the Region, Agreement on Cooperation and Interaction of the SCO Member States on Border Matters, SCO Convention on Countering Extremism. These documents have laid a solid legal basis for combating the “three evils” of terrorism, separatism, and extremism.

At the same time, the SCO has successively set up a mechanism for National Security Council Secretaries, Prosecutors-General, Chief Justices of the Supreme Courts, Defense Ministers, and Interior Ministers to meet regularly, an anti-terrorism platform for emergency consultation between public security, judicial departments and other law enforcement authorities, and has identified safeguarding the transportation safety of oil and gas pipelines as a new field for cooperation. Since the first joint anti-terrorist military drill between China and Kyrgyzstan, bilateral and multilateral anti-terrorist military drills, such as “Coalition”, “Coordination”, and “Peace Mission”, and regular anti-terrorist joint military exercises for law enforcement authorities, including “East-2014”, “Norak Anti-terror”, “Solidarity” and “Tianshan”, have become an important part of the security cooperation among member states.

By 2018, 13 bilateral and multilateral anti-terrorism military drills and 15 such law enforcement drills and crackdown actions have been held under the SCO framework. As a result, member states are better equipped for maneuver warfare, coordination, joint command and joint crackdown on violent terrorist activities while dealing with non-conventional security challenges; the rampant “three evils” have been deterred; drug trafficking and transnational organized crimes have been effectively contained; and social security and stability of the region and member states have been safeguarded.

The SCO has continuously delivered new outcomes in jointly combating terrorism, extraditing criminals, and exchanging information. Member states have enjoyed more smooth law enforcement cooperation on border control, information-sharing, and the security of civil aviation, faster repatriation of criminals, improved security measures for all sorts of events, and a more efficient multilateral mechanism for law enforcement and security cooperation. This has helped guarantee the success of large-scale international conferences and competitions, including the SCO Summits for Heads of State and Heads of Government, Almaty Conference on Interaction and Confidence-Building Measures in Asia(CICA), Beijing Olympics, Moscow celebrations of the 65th Anniversary of the victory in the Great Patriotic War, Shanghai World Expo, Guangzhou Asia Games, Astana & Almaty Asian Winter Games, Vladivostok APEC Summit, Sochi Winter Olympics, and the Almaty Winter Universiade. The SCO’s objective of maintaining and safeguarding the security and stability of the region and member states is thus met.

2. Steady advances in economic cooperation

Right after the SCO’s founding, member states signed the Memorandum between the Governments of Members of the Shanghai Cooperation Organization on Basic Goals and Directions of Regional Economic Cooperation and Launching the Trade and Investment Facilitation Process, and the Program of Multilateral Trade and Economic Cooperation of the Member States of the Shanghai Cooperation Organization, which identified basic objectives and directions for near-term, mid- and long-term economic cooperation.

In 2004, at the Economic and Trade Ministers’ Meeting of the SCO Member States, the Action Plan for the Implementation of the Program of Multilateral Trade and Economic Cooperation among the SCO Member States, which covers as many as 127 projects in 11 areas was formulated, which paved the way for economic cooperation among the SCO countries. Since then, multiple documents were signed and adopted by the SCO member states, including the Agreement on Interbank Cooperation (Association), Minutes of the First Meeting of the Board of the SCO Business Council, Resolution of the Conference for the Establishment of the SCO Business Council, Agreement between the SCO Governments on Cooperation and Mutual Assistance in Customs Affairs, and the Agreement on Cooperation in Agriculture between the Governments of the Member States of the SCO.

Since 2010, most SCO member states were among the first to have overcome the Financial Crisis when the world was troubled by economic downturn and Europe and the U.S. were confronted with sluggish economic recovery. Up until the end of 2011, the gold and foreign exchange reserve of the six SCO member states had exceeded 3.6 trillion USD; their trade volume reached 4.7 trillion USD, up by 25.1 % year-on-year; collectively, SCO states made up over 13% of the world economy. In the post-crisis era, the SCO Economic Circle became the most active region with the fastest growth.

In 2016, the SCO Heads of Government Council approved the 2017-2021 List of Measures to Continue Developing SCO Project Activities, a guiding document for the SCO’s economic cooperation in the five years, which further identified 38 measures and projects for cooperation in seven areas including trade and investment, finance, customs, agriculture, science, technology and information, environment protection, and transportation infrastructure. The document is a major landmark in the SCO’s multilateral economic cooperation.

3. Cultural cooperation rolled out 

Confucianism, Taoism, Buddhism, Orthodox, Christianity, Islam and Hinduism coexist within the SCO, which offers a platform of equal exchange and cooperation for the peaceful coexistence and mutual-learning of different ethnicities, faiths, civilizations and cultures of the member states. Cultural cooperation has also become a key pillar of the SCO’s sustainable development. 

Since 2005, member states have signed documents including Agreement between the Governments of the SCO Member States on Cooperation in Disaster-relief and Mutual Assistance, Agreement on Cooperation in Education between the Governments of the SCO Member States, Agreement between the Governments of the SCO Member States on Cooperation in Health, SCO scientific and technological partnership program, and Program of Tourism Cooperation of the SCO Member States. Meeting mechanisms for ministers of culture, health, education, transportation, emergency disaster-relief (civil affairs) and technology have been set up. 

Since the official launching of the SCO Network University in 2010, over 60 top-notch universities have become its members. In 2011, delegates of Kazakhstan, China, Kyrgyzstan, Russia and Tajikistan signed the Charter of the SCO University, and 70 partner universities were later identified  in those five countries, with an aim to turn out competent talents in the priority cooperation areas (regional studies, ecology, energy science, nanotechnology, information technology) of economics, science, culture and education. Member states also had in-depth discussion on potential cooperation in global warming, eco-environment protection, disaster relief, science and technology, innovation, information, telecommunications industry and the rational use of natural resources.

In 2012, the SCO Meeting of the Council of Heads of State reiterated that, attention should be directed towards strengthening cooperation in culture, science and technology, innovation, tourism, and health, notably ensuring sound health and epidemic situation in the SCO region. In the past 17 years, member states, under the framework of the SCO, have conducted cultural exchange activities of various forms, including over 100 bilateral and multilateral art festivals, music festivals, youth festivals, education weeks, film weeks, TV cooperation fora, exhibitions, sports games, marathon competitions, “friendship years”, winter (summer) camps, and training sessions. The cultural festivals, week of education “Education without Borders” and Kunming Marathon have become regular events, and have greatly enhanced the mutual understanding and traditional friendship among people of the SCO region. The SCO member states are also looking forward to cooperation regarding the preservation of intangible cultural heritages and traditional ethnic cultures, so as to cement the public support and social basis for the development of the SCO.

II. Challenges for the SCO’s future development

During the past 17 years, the SCO has grown into an influential regional organization of various sectors at an unexpected rate, and it enjoys larger potential for further growth. However, the SCO is indeed a young regional organization. Aside from existing bottlenecks, some new problems and challenges have emerged along with an increased membership.

Firstly, the conservative forces of the West will barely change its prejudices against the SCO. The moment after its establishment, the SCO declared that it is not a military group but an open-ended regional cooperative organization that doesn’t target any country and group. But undeniably, the multipolar, equitable and reasonable world order that the SCO pursues, is opposite to the U.S. strategy of maintaining the original world order that it will dominate chronically. The new security concept based on “mutual trust, mutual benefit, equality and cooperation” and the concept of “an indivisible security space with due regard to the interests of all states without exception” that the SCO adheres to in international relations are incompatible with the cold-war mindset of the conservative forces of the West. The SCO’s advocacy of the UN’s leading and coordinative role in addressing international hotspot issues runs counter to the U.S. and NATO’s practice of bypassing the UN. The spirit of peace, friendship, and mutually-beneficial cooperation that the SCO upholds is also opposite to the “Groupthink” and power politics of the U.S. and other countries in the West. Besides, the SCO calls on the international community to respect countries’ sovereignty, independence and the diversity in their political and social systems—another challenge to Western values.

The SCO’s 2005 declaration that urged the U.S. to establish a timetable for withdrawing troops from Central Asia convinced the West that the SCO is not an organization they would like to see. After the 2012 SCO Summit, some Western media again hyped up the antagonism between the SCO and the West, and branded the SCO as a forum no longer limited to resolving border disputes. Some Western politicians deem that, the SCO is keen to build up a multilateral mechanism against the U.S., thus the West, notably the U.S. would have to get ready for across-the-board challenges including political, economic and security challenges launched by the SCO, considering that the Declaration of the SCO Heads of State backs Tehran and is clearly against interfering with Syria’s internal affairs, forcing regime changes in any state, and resorting to the use of force on the Iran nuclear issue.

Secondly, the U.S. and Europe spare no effort in dividing and driving wedges between SCO members. After taking office, President Obama waived sanctions  on Uzbekistan that started from 2005, and planned to allocate to Tashkent a portion of the suspended $800 million aid to Pakistan in the hope that President Karimov could be won back to accept U.S. troops again. In 2012, prompted by the U.S., NATO, for the first time ever, invited the presidents of Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan to its summit in Chicago, so as to foster relations with Central Asian states. 

The U.S. and Europe also attempt to turn India into a key “defense partner” and a pawn to counterbalance China. In the past decade, the U.S. has sold India $15 billion’ worth of arms. In 2016, defense ministries of the U.S. and India signed a Memorandum of Agreement on Logistics Support, which allows sharing military bases for military logistics operations. The U.S. also sold India P-8I maritime patrol aircrafts. The deal would be the first such purchase by a non-NATO country. In 2017, bipartisan consensus in the U.S. approved sales of 22 Guardian drones to India at a worth of $2 billion for strengthened surveillance of the Indian Ocean waters. While giving a speech titled “Defining Our Relationship with India for the Next Century” at the Center for Strategic and International Studies, Rex Tillerson, the then Secretary of State of the U.S., projected India as a “pivotal state” in the U.S.’ future regional strategies and expressed the hope that India could play a bigger role in the security of the Indo-Pacific region. In 2018, France and India inked an agreement on reciprocal logistics support, which will enable their naval ships to use each other’s navy bases.

Thirdly, other regional and international organizations exert influences on the SCO’s Central Asian members. After the Cold War ended, although the Western Bloc and the Eastern Bloc that were respectively led by the U.S. and the Soviet Union dissolved, a range of geopolitical forces have staged increasingly intense games in Central Asia. Organizations and mechanisms at play include the NATO, the EU, the Organization for Security and Cooperation in Europe, the “Central Asia plus Japan” Dialogue of foreign ministers, the Korea-Central Asia Cooperation Forum, the Commonwealth of Independent States, the Collective Security Treaty Organization, the Eurasian Economic Community, the Eurasian Economic Union, the Greater Eurasian Partnership, the Conference on Interaction and Confidence Building Measures in Asia, the Four Central Asian States , the Economic Cooperation Organization, and the Turkic Council. They are intertwined and have different geopolitical roles to play. 

Shortly after the collapse of the Soviet Union, Kazakhstan, Uzbekistan, and Kyrgyzstan joined NATO’s Partnership for Peace programme; in 2002, Tajikistan followed suit. Since 2007, the EU has fully involved in Central Asian affairs by launching the EU Strategy for a New Partnership with Central Asia and a Multiannual Indicative Programme for 2014-2020 , and infiltrating the Central Asia through the European Union-Central Asia Foreign Ministers' Meeting. At the same time, Japan leverages the “Central Asia plus Japan” Dialogue to expand channels for cooperation with Central Asian states, notably energy cooperation.

In view of such developments, Putin indicated right after the 2006 SCO Summit that, Russia is against establishing other organizations with similar mandates in the SCO region, or replicating and setting up any “exclusive club” to create barriers and demarcation lines. The U.S., together with some NATO countries, financed the establishment of the Central Asian Regional Information Coordination Center in Kazakhstan in 2009, and proposed the Central Asia Counter-narcotics Initiative in 2012. The moves represent an attempt to build a “Central Asian Anti-Narcotics Force”, and turn the Center into a new channel whereby the U.S. could get around the SCO security cooperation mechanism and infiltrate Central Asia’s law enforcement authorities, thus the existing counter-terrorism and counter-narcotics mechanism of the SCO risks being split and neutralized. To split and disintegrate the SCO, some external forces have been extending the Turkic Council’s influence in Central Asia in recent years, providing a wider range of options and more flexible diplomatic orientation for Central Asian members.

Needless to say, apart from those external challenges, there are some complex factors within the SCO that need to be worked on. For example, some elites of the SCO members are concerned that, the SCO might result in Central Asia’s further dependence on China and Russia hasn’t benefited as much as China has, thus a sense of loss. That explains why the enthusiasm of some Russian government authorities towards multilateral economic and trade cooperation under the SCO has been to some extent affected. Moreover, the historical disputes and ongoing tension between India and China, and India and Pakistan may bring along complex influences to the previously harmonious atmosphere within the SCO. Looking ahead, giving full play to the Shanghai Spirit that features mutual trust, mutual benefit, equality, consultation, respect for diverse civilizations and pursuit of common development, cementing the strategic mutual trust between the SCO members, and actively resolving or reducing disruptions resulting from internal and external negative factors would be critical to the SCO if it is to have more solidarity, higher level of cooperation, and a larger role in international and regional affairs.

III. Prospects of the SCO

In the past 17 years, the SCO has made great headway guided by the Shanghai Spirit of “mutual trust, mutual benefit, equality, consultation, respect for diverse civilizations and pursuit of common development”. The accession of India and Pakistan have brought new opportunities: more diverse political systems, economic models, and cultural elements, higher international standing, and predictably a bigger role in regional and international affairs.
1. The SCO’s strategic position and influence will be on the rise.

After expansion, the SCO has extended from China, Russia and Central Asia to South Asia, right to the core area that is conveniently connected to both the Indian Ocean and the Eurasian Continent. The expansion also brings about a larger share of the world’s population, up from 25% to 44%, and a combined GDP of over $14.5 trillion, nearly 1/3 of the world’s total, thus the birth of the most populous regional organization with the largest area. More importantly, the SCO’s circle of friends has enlarged and the Shanghai Spirit it upholds has gained wider recognition. With two permanent members of the UN Security Council, three BRICS countries, and four “nuclear-armed states”, the SCO will have a much greater say and stronger influence on major issues such as improving the global governance system and promoting the reform of the international economic order. 

The entry of India and Pakistan enables the SCO to join forces in combating the “three evils” in Central Asia, and terrorist organizations in South Asia and the Middle East, and has enlarged the SCO’s security cooperation zone. The SCO has become a multilateral regional organization unseen on the Eurasian Continent since World War II, an organization that even some European countries are keen to join and a force not to be neglected on the international arena.

2. The multilateral economic and trade cooperation of the SCO is to enjoy steady growth.

Through over 10 years of joint efforts, the SCO Members, in 2014, signed the Agreement between the Governments of the SCO Member States on International Road Transportation Facilitation and its annexes, which removed enduring barriers to further integration of regional economy. In 2016, Members approved documents on cooperation in trade, investment, and finance, etc, such as the 2017-2021 SCO List of Measures to Further Project Cooperation and Next Steps for Establishing the SCO Development Bank and the SCO Development Fund (Special Account), and underlined that more efforts on establishing the SCO Development Bank and the SCO Development Fund will be critical to promoting regional economic, trade and investment cooperation.

In 2017, the Meeting of the SCO Council of Heads of Government reiterated that, a primary task of the SCO is to improve people’s well-being and livelihood, so the Parties should step up cooperation in trade, production capacity, energy, transport (including railway), investment, finance, agriculture, customs, telecommunications and other sectors of mutual interest; deepen multilateral cooperation in transportation, including building new international road and railway transportation corridors and updating existing ones, planning high-speed artery routes, building multi-function logistics centers and implementing other infrastructure cooperation projects; advocate for consistent strengthening of an open, inclusive, transparent, non-discriminating and rule-based multilateral trade system, guard against the fragmentation of international trade relations and oppose all forms of trade protectionism; continue consultations and develop common approaches at the expert level on the establishment of the SCO Development Bank and the SCO Development Fund, and promote economic cooperation in priority areas including investment, so as to strengthen the bond of interests between member states. Within such a context, the long-delayed China-Kyrgyzstan-Uzbekistan railway project has had progress following the completion and putting into operation of the China-Kyrgyzstan-Uzbekistan road.

3. The effects of the “SCO Economic Circle” will be clearer

In 2012, the SCO accounted for 13% of the world’s trade volume and GDP, up from 8% and 4.8% in 2001. In 2016, China’s trade volume with other SCO members reached $93.7 billion, up from $12 billion in 2001. Ever since India and Pakistan were granted full membership, South Asia has been included in the “SCO Economic Circle”, offering a larger room for multilateral economic cooperation between member states. In 2017, China’s trade with other members scored a record high of $217.6 billion, up by 19% year-on-year. Bilateral trade between China and India also hit an all-time high of $84.4 billion, up by 20.3% compared with that of last year. China’s actual investment in India has reached an accumulative total of $8 billion, cementing China’s position as India’s largest trading partner. As major emerging economies, China, Russia and India have added up the momentum of regional economic cooperation, and will surely drive fast economic and trade growth of the “SCO Economic Circle”, thereby making a bigger contribution to regional and world economy.

4. Conditions will allow for further communication on China-India relations and India-Pakistan disputes

By joining the SCO, India intends to leverage the SCO’s influence to improve its own status, and to seize opportunities for a number of business projects of the “SCO Economic Circle” and for stepping up counter-terrorism and trade cooperation with SCO member states, particularly Central Asian states. Despite differences and disputes with China on some issues, there are many examples of successful cooperation between India and China on multilateral stages. Be it the Bali Climate Change Conference, or the Copenhagen Climate Change Conference, India has been working closely with China and BASIC countries, demonstrating that developing countries are firmly determined to safeguard common interests by “voicing concerns as a group” and “uniting with each other”. India has been cooperating smoothly with China, Russia and Central Asian states under multilateral mechanisms, including the Conference on Interaction and Confidence Building Measures in Asia, BRICS, and the Asian Infrastructure Investment Bank.

Besides, India has a strong desire to improve relations with China. Ajai Malhotra, India’s former ambassador to Russia, once made it clear that, India joined the SCO with an open mind and a positive attitude, and without prejudice, and will “constructively” engage in all cooperation realms within the SCO framework. In March 2018, Prime Minister Modi made a congratulatory phone call to Xi Jinping right after his re-election as President of China, and expressed India’s readiness to have closer high-level ties, deepen bilateral relations, strengthen coordination and collaboration on international affairs, and promote further progress in India-China relations. During his visit to China, India’s foreign minister Swaraj said that, India will fully support China in hosting a successful SCO Summit in Qingdao, and together with other members, help the SCO to play a more constructive role in achieving regional security, stability, growth and prosperity.

From April 27-28, 2018, President Xi Jinping and Prime Minister Modi had an informal meeting in Wuhan, which enhanced their mutual understanding on the two countries’ development path and reform measures. Prime Minister Modi reaffirmed that, frequent high-level engagement and communication on strategies will help promote mutual understanding and in-depth cooperation, and serves the common interests of both countries and the region in their pursuit for development and prosperity. He also said that, India is ready to join hands with China and make efforts to address international and regional issues and challenges.

On the other hand, full membership is better than observer status for India and Pakistan in that the latter only allows for limited participation in relevant cooperation endeavors. Accession into the SCO provides another key platform to address or control the differences and disputes between India and Pakistan, and collaboration within the SCO will help the two countries identify new convergence of interests.

In a word, the SCO has become an example of peace and development. Its influence has gone far beyond the scope of the region, and the SCO has become a prestigious multilateral organization with comprehensive mandates. The SCO’s concept of “Peace and Cooperation” has become a guideline for member states when they carry out long-term mutually-beneficial cooperation through tapping their respective advantages, and has won recognition from an increasing number of countries. Such an influential regional organization may have existed or are still existing on the Eurasian Continent, but few of them are favored by countries with different ideologies and systems. Looking into the future, the SCO will be as vigorous as before and embrace better prospects.

Zhao Mingwen is Senior Research Fellow in China Institute of International Studies; Member of China National Research Center on Shanghai Cooperation Organization.