SCO: reflecting achievements

Pakistan hopes SCO can help settle disputes with India, open new trade routes

ISLAMABAD:

Six days, 10 world leaders and around 900 delegates; the Shanghai Cooperation Organisation (SCO) conference in Islamabad was attended by countries that represented 40% of the world's population and over 30% of its gross domestic product (GDP).

Over the past 27 years, the bloc has evolved significantly from the Shanghai Five group to the Shanghai Cooperation Organisation. Through its commitment to regional cooperation, the organisation has created a legacy that will inspire future leaders in improving stability, security cooperation and socio-economic development.

So, as Islamabad rolls out the red carpet for the summit guests, it is a good idea to look back and reflect on what the bloc has achieved over the past two decades.

Originally established for military and security cooperation, the organisation served to resolve regional border disputes, coordinate military deployments and demonstrate a united position for the non-Western, so-called multipolar world order.

Post 9/11, its mandate now includes terrorism, extremism and separatism, besides intelligence sharing and military cooperation.

SCO member states have conducted numerous joint military exercises since 2003 and in 2018, Pakistan and India participated in their first SCO war games to eliminate simulated terrorist threats.

However, since the Russian invasion of Ukraine, we see that the SCO has not provided any formal support to Moscow – though China has helped Moscow's defence industrial base and has increased its purchases of cheap Russian crude oil to support Moscow's economy.

But this has not gone well with former Soviet states and in July 2024, the Central Asian members of the SCO conducted their first war games (Birlestik-2024) without Russia or China in the Caspian Sea region.

With the military role of the bloc now rather limited, it is worthwhile exploring economic cooperation among SCO countries. While the United States has been pursuing Trans-Paci?c Partnership (TPP) for long that would include Australia and several Asian countries, but excludes China and Russia, the SCO has been trying to reach its own free trade agreement (FTA) at the same time but without much success.

What is interesting to note is that Russia in 2014 led original members of the Shanghai Five excluding China to create its own Eurasian Economic Union (EAEU). Later, EAEU brought another SCO member Iran into a free trade agreement, although it has not concluded an FTA with China yet, neither under the SCO framework nor under the EAEU framework.

The main reason why Russia and China could not work out an FTA is that Russia sees FTAs as a tool to establish economic and political blocs and in the presence of China, it could never dominate that bloc. This explains that despite extensive military cooperation with Moscow, Chinese economy is more tightly coupled with the US and Australia than Russia.

This led China to launch its own One Belt, One Road, later called Belt and Road Initiative (BRI), that involved Central Asian as well as African countries as part of its new Silk Route and to date, around 147 countries have signed or indicated their interest in China's mega projects.

Though Russian President Vladimir Putin has pledged to link his Eurasian vision with China's BRI, the pending FTA between the two countries speaks otherwise. Thanks to the BRI, Pakistan is the only full member of the SCO that has an FTA with China.

In a nutshell, the SCO has had limited success in institutionalising cooperation in key areas like energy and free trade and could not achieve the level of success that the consensus-seeking Association of Southeast Asian Nations (Asean) bloc did for its member countries.

This is where the SCO could take a page out of the Asean playbook, eg, the Asean bloc has communist Vietnam among all West-aligned capitalist economies, so regional harmony and integration plays a greater role than the ideology.

Similarly, the Asean bloc has an FTA with China despite ideological and geopolitical differences with Beijing and a geopolitical leaning towards the US and Australia.

One low-hanging fruit for the SCO in future could be an FTA with the Asean group itself. Asean-Russia consultations progressed by 2020 and it is only due to the Ukraine war that talks are on the back burner now. But China and India could still get this done for the SCO bloc if they take ownership of this project.

SCO is important for Pakistan as it is now the only forum available to us for multilateral talks between regional powers. India, China and Russia share many other forums such as BRICS and G20, and for them, the SCO is just a Beijing-sponsored alternative.

With the South Asian Association for Regional Cooperation (Saarc) grouping already defunct, Pakistan has hopes that the SCO could help it settle military and water disputes with India, and hence open possibilities of new trade routes through the sub-continent.

China and Russia, who are large trading partners of India, could help the SCO gain geopolitical weight by facilitating dialogue between the two nuclear states. The TAPI (Turkmenistan-Afghanistan-Pakistan-India) gas pipeline project alone, for instance, has the potential to meet regional energy demand and unlock trade worth billions of dollars.

The writer is a Cambridge graduate and is working as a strategy consultant