THE SHANGHAI COOPERATION ORGANISAtion (SCO), a grouping pillared by Russia and China, with resource-rich Central Asian republics in between, has taken one more step to impart economic dynamism to and ensure security along the Eurasian land corridor. During the two-day prime ministerial conference in Zhengzhou in central China, which ended on December 15, the six-nation union paid equal attention to its twin engines—preparedness to ensure regional peace as well as plans to advance another wave of industrialisation along the Eurasian landmass.
The grouping is now set to add more muscle by incorporating India and Pakistan within its ranks as full members. South Asia’s presence, as part of a stronger Eurasian political architecture, is also being beefed up with the entry of Nepal as an observer state of the SCO. Along the Russian flank, Belarus and Armenia were included as observers during the SCO summit held in July 2015 at Ufa, Russia. Yet, despite its focus on Eurasian collective security, the SCO is neither structurally nor in terms of political culture emerging as another North Atlantic Treaty Organisation (NATO), the Western security alliance. Unlike NATO, which has, since its inception, been dominated by the United States, the SCO is not under the overwhelming influence of any single state. Military power within the SCO is better distributed, with Russia and China, two formidable nuclear powers, at its core. The diversification of its military clout will become better established once India and Pakistan join the organisation after the paper work for their formal inclusion is complete.
The SCO has set more modest military goals compared with NATO. The grouping’s focus is primarily defensive, with counter-terrorism as its signature goal. Its members share a high volume of information on counter-terrorism through the SCO Regional Anti-Terrorist Structure (SCO RATS) based in Tashkent, which gathers and disseminates intelligence on extremism.
The SCO’s focus on counter-terrorism is evident in its annual military exercises, which involve a dynamic flow of thousands of ground troops and armoured vehicles, backed by aerospace surveillance, fighter jets and drones. The SCO has added the dimension of cyber threat to its manoeuvres, following the first online exercises to disrupt hostile terror networks on the Internet in the autumn of 2015. The organisation also nurtures a more inclusive, consensus-based political culture, which is evident in the avoidance of a hierarchical, top-down, organisational structure among its six constituents. The strict adherence to the principle of consensus, though making decision-making more tedious, is a mechanism that ensures that even smaller Central Asians republics, such as Kyrgyzstan and Tajikistan, can avoid marginalisation, while enjoying the benefits on account of their status as full members.
A force for stability
At Zhengzhou, where the prime ministerial meeting was held in the backdrop of the Paris terror attacks and the downing of a Russian airliner in Egypt, Chinese Prime Minister Li Keqiang underscored the importance of the SCO as a force for regional and global stability. “The SCO member-states sit at the crossroads of civilisations and cultures of the east and the west. Peace, stability and prosperity of the region not only concerns peace and well-being of the people of the region but also mean so much for the peace, prosperity and stability of the world,” observed Li during his keynote address.
The audience included Li’s Russian counterpart Dmitry Medvedev, Pakistan’s Prime Minister Nawaz Sharif, and Afghanistan’s Chief Executive Abdullah Abdullah. India, another observer state, was represented by Gen. (retd.) V.K. Singh, the Minister of State for External Affairs.
Li pointed out that the SCO countries occupied two-thirds of the total area of the Eurasian region and had a quarter of the world’s population, making it imperative to safeguard peace and security along this critical geographical space. He advocated that SCO members take concrete steps, including better strategic communication, enforcement of an agreement on border controls, and an early conclusion of the convention against extremism, to counter the looming threat, which has been accentuated by the cancerous rise of the Islamic State (IS).
The Zhengzhou conference was also notable for its extensive focus on reigniting the second wave of industrialisation along the Eurasian corridor—a pet project of Chinese President Xi Jinping, under his Belt–and-Road connectivity initiative.
Li explained China’s view of inter-linking the SCO with the financial institutions of the Brazil-Russia-India-China-South Africa (BRICS) formation and the Asian Infrastructure Investment Bank (AIIB). These new financial entities are meant to power the establishment of industrial parks, smart cities, cyber connectivity, railways and highways along the trans-Eurasia Silk Road Economic Belt (SREB).
“Funding is the blood of practical cooperation,” Li observed. He pointed out that China would encourage the AIIB, the BRICS’ New Development Bank and other institutions to back SCO projects. The Prime Minister observed that China had pledged equity funds that the European Bank for Reconstruction and Development (EBRD) planned to establish. “China is ready to harness the platform to finance projects for SCO members,” he said.
However, it became apparent during the conference that the formation of the SCO Development Bank was still far away. The Chinese side urged Finance Ministers and governors of the central banks of the member countries to study the proposal speedily.
The Chinese side appeared to turn to Kazakhstan as the bridgehead to fire the economies of Central Asia under the SCO framework in cooperation with Russia.
Beijing-Astana ties Ahead of the SCO heads of government conference, Li covered extensive ground with his Kazakh counterpart, Karim Massimov.
On December 14, a joint communique signed by Li and Massimov covered joint forays into industry, agriculture, energy and regional connectivity, elevating their countries’ ties to a new level.
Li pointed out that among the 52 bilateral “early-harvest projects”, those relating to the automobile assembly and polypropylene had already been launched, while construction of a light railway transportation system in Astana, Kazakhstan’s capital, would start by the year end. A dozen more projects in steel, smelting and cement were expected to kick off in 2016, China’s state-run Xinhua news agency reported.
The China railway group will assist in constructing a 22.4 kilometre-long light railway in Astana. It will have 18 stations and one depot, according to a Sino-Kazakh deal signed in May. A China-Kazakhstan capacity cooperation fund, linked to the $40-billion Silk Road Fund, is expected to finance some of the proposed mega projects.
Analysts say that Kazakhstan is on course to becoming a new “growth engine” that will help absorb China’s excess capacity in cement, steel, glass and other construction materials, badly hit by the domestic economic slowdown.
Massimov, on his part, hailed the “remarkable” progress in Beijing-Astana ties and said Kazakhstan looked forward to the opportunities that would result from China’s Belt-and-Road projects, the “Made in China 2025” initiative and “Internet Plus” strategies—all geared to substantiate China’s transition to a “new normal” economy.
He also advocated stronger ties in gas exploration, nuclear power, infrastructure, finance, agriculture, aviation and environmental protection. The two sides are also expected to strengthen financial ties, which will include the establishment of an international financial centre in Astana, the joint communique said. Regarding the rest of Central Asia, the Chinese side is keen to begin work on the proposed China-Uzbekistan-Kyrgyzstan railway project. “Being at a crucial stage of industrialisation and industrial upgrading, the SCO members face the pressing task of infrastructure development and improving industrial systems,” Li said.
India’s emphasis Despite significant common ground, SCO members and observers share differences both on the fine print of a counter-terrorism strategy and the pace of an economic turnaround. In Zhengzhou, differences between India and Pakistan over an Afghan peace process were apparent during the addresses at the conference by Sharif and V.K. Singh.
Unlike Pakistan, India shied away from a total endorsement of China’s Belt-and-Road initiative. “We are about to become full members and the SCO countries must know our positions transparently,” an Indian diplomatic source told Frontline .
In his opening remarks at the conference, V.K. Singh pointed to “zero tolerance towards terrorism” as the recipe to counter the menace. Without naming Pakistan, he said: “Political convenience can no longer provide an alibi for backing terrorist groups ideologically, financially or through material support. Today, the world has realised that there are no good terrorists.”
Analysts point out that V.K. Singh’s emphasis against an engagement with extremist groups feeds into the larger debate on a dialogue between a faction of supposedly de-radicalised Taliban and the Afghan government within a framework of talks that include China, Pakistan and the United States. The sources said “there is now greater resonance in China and elsewhere on India’s approach” towards non-engagement with radical groups, following the terror attacks in Paris and the downing of the Russian airliner in Egypt. V.K. Singh stressed that a stable and peaceful Afghanistan “free of external interference” was “absolutely essential” to advance regional peace, stability and prosperity.
Without getting into specifics, Sharif acknowledged that the regional security situation “remains precarious”. He added: “We are seeing the threat to state sovereignty and territorial integrity. Armed conflicts continue to rage in several parts of the world unleashing forces which are beyond the control of anyone.”
Sharif unambiguously backed China’s Belt-and-Road initiative. He said that Pakistan remained committed to making the China-Pakistan Economic Corridor Project—a joint undertaking of the two countries under the Belt-and-Road framework—a resounding success. He highlighted the fact that Pakistan’s unique geo-strategic location at the confluence of South, West and Central Asia would allow it, as a full-member of the SCO, to fully develop these linkages.
Without stating India’s backing for the Belt-and-Road initiative, V.K. Singh acknowledged that SCO member-countries and their affiliates “should invest in improving regional transportation and communication networks through mutual consultation and sharing of benefits”. The Minister proposed the establishment of “new networks of physical and digital connectivity that extends from Russia’s northern regions to the shores of Indian Ocean”. He stressed that the International North South Transportation Corridor was an important step in that direction.
Informed sources explained that India was not opposed to China’s Belt-and-Road initiative and that there were “several points of intersection” between India’s connectivity initiatives and the Chinese blueprint. “However, India has opposed the China-Pakistan economic corridor as it involved certain sovereignty issues.” Observers said India had opposed the Gwadar to Kashgar economic corridor because it passed through Pakistan-occupied Kashmir.
V.K. Singh pointed out that the relatively smaller economies of Central Asia could take advantage of India’s rapidly growing market, while the SCO could become a major source of India’s energy security. The SCO countries could also draw on India’s strengths in financial management, especially microfinance, pharmaceuticals, services, food security and agriculture as well as training and capacity building.
Some Chinese scholars are of the view that the SCO is a part of a larger undertaking for building a new international order. In a write-up that appeared on the website of the China Central Television (CCTV), the official broadcaster underscored the fact that society informatisation, economic globalisation and power diversification had occurred after the Cold War. The old international order cannot adapt itself to the development trends of our times. “It is a new problem and choice for the world to build a new order featuring peace, stability, fairness and justice. The SCO took the lead in exploring that subject matter.”
Despite the bonding, significant differences do remain among member countries, which are yet to be bridged. For instance, China’s inclination to form an SCO free trade area by 2020 has been seen by several members, including scholars within Russia, as over-ambitious.
Yet, the SCO has already done well to chart out the ground rules that will carry forward as a collective all the member-countries, irrespective of their geographical size, political clout and economic strength.
Li’s message of synergising the SCO with BRICS and the AIIB initiatives has also caught the imagination of SCO supporters. It is seen as having the potential of pooling in and creating a critical mass that can cause a structural breach in the existing geopolitical power configuration that has become synonymous with the U.S., following the collapse of the Soviet Union. Challenging the unipolar world, the Zhengzhou conference marks yet another incremental step leading to the diffusion of global power along channels of multipolarity, with Eurasia as one of the principal hubs.
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