The Shanghai Cooperation Organisation: A Non-Western G10 in the Making?

Joseph Dobbs

By Joseph Dobbs

Research Fellow

Friday 12 September 2014

A week after NATO leaders met in Wales, Tajikistan has played host to the summit of the lesser-known Shanghai Cooperation Organisation (SCO). Despite the attendance of Vladimir Putin and Xi Jinping, and August’s largest SCO exercises to date, Western commentaries in the run up to the 14th SCO Summit in Dushanbe have been sparse. This is understandable, as the SCO, which was founded in 2001, has so-far maintained a low profile. However, the organisation looks set to soon open its doors to new members after recent comments by the Russian President gave the clearest indication to date. India, Iran, Pakistan and Mongolia have all expressed interest in joining. If these four members join as expected it would be a significant expansion, which when considered in the context of the on-going tensions between Russia and the West, ISAF withdrawal from Afghanistan, the Iranian nuclear talks and the spectre of a rising China, requires the West to take a fresh look at the SCO. The potential geopolitical implications resulting from an SCO expansion into the Persian Gulf and South Asia, and the accession of two nuclear-armed states, should help focus attention in Brussels and Washington. Furthermore, the very fact that Russia and China have reportedly been able to agree on large new members signals the increasing importance of the SCO, and Asia, to the Kremlin.

Even without enlargement, Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan represent a significant grouping on a number of key metrics. With almost a quarter of the world’s population, two members of the UN Security Council, not to mention nearly 20% of proven gas reserves, the six member SCO already has strategic significance. Since its establishment however, the SCO has suffered from an existential malaise. It was originally meant to maintain stability in Central Asia and counter against the presence of the United States in the region, but there has long been appetite in China to expand the economic and political dimension of the SCO. The roadblock to this Chinese goal has been Russian scepticism about both increasing Chinese influence in Central Asia and China’s growing military power. Expansion will increase the economic and political legitimacy of the SCO, and ease Moscow’s concerns regarding Chinese dominance. The statistics on a 10 member SCO speak for themselves, a huge jump to 43% of the world’s population, a significant increase in proven oil and gas reserves from 7% and 19% to 17% and 37% of global totals respectively. An expanded grouping will also bring together four of the world’s nuclear powers.

Strengthening the SCO will likely impact on the relationship between Russia and the West, as the Dushanbe Summit is a clear indication of Russia’s growing realisation that it must look east for political and economic partners. Debate in Russia regarding its position between Europe and Asia predates the current tensions between Moscow and the West. Some have called for a ‘pivot east’, while others have continued to warn of a dominant China. The US$400bn gas deal with China agreed in May, bilateral deals announced in response to Western sanctions, and increasing military-military cooperation, suggest that Moscow may well have begun to overcome its concerns vis-à-vis China. With the development of its eastern gas fields, diplomatic outreach towards Asia, and the potential stalemate in Ukraine, expect Russia’s eastern pivot to become even more of a reality.

Looking through the prism of the Dushanbe Summit, it is becoming clear that Moscow is perhaps not as isolated as some leaders in Europe would hope. The SCO is one of a growing number of international groupings where not only does the West not have a voice, but a non-Western global order is promoted. While an Indian voice may well moderate the anti-Western sentiments of the SCO, the growing influence of both Russia and China in New Delhi points to a potential diminishing influence of the West in South Asia. The main powers in the SCO, Russia and China, espouse their commitment to non-interference in the domestic affairs of national governments, albeit a commitment that may well have slipped Russia’s mind of late. Still, what is better characterised as a ‘non-interference as long as you maintain strong ties with us’ policy, arguably makes the SCO very attractive to new members.

The future strategic implications of the SCO’s rise for Euro-Atlantic security and western interests are potentially numerous, but not wholly negative. For example, Iran’s membership is likely to be conditioned on the resolution of the nuclear issue, which could offer increased incentive for Tehran to negotiate. NATO’s interests in Afghanistan, namely establishing a stable state, will also be aided by a stronger SCO, with its own goals similar in this respect. However, Western influence in the region looks set to be weakened. Kabul will see ISAF troops withdrawn by the end of 2014, and with five of its six neighbours part of the SCO, it is difficult to see how Afghanistan will not eventually upgrade its current observer status to full membership.

The combined geopolitical clout of the SCO is already impressive. From the South and East China seas, up to the Arctic and across to the Caspian Sea and Eastern Europe, the SCO has huge geographic reach. The newly enlarged SCO will see its interests extended to the Indian Ocean, Persian Gulf and potentially to the Levant through Iran. The combined economic power of the SCO will expand significantly, and the inclusion of Iran and its energy resources will add to the already substantial reserves in the SCO. The military cooperation between SCO states will further secure both Moscow and Beijing’s interests in Asia, with India and Pakistan representing Russia and China’s biggest arms markets respectively.

The size of an expanded SCO, could give it big influence if the members can work together, although given the substantial differences of opinions between them on many issues, that is a big if. The tensions between India and Pakistan, India and China, and to a certain extent between Russia and China, as well as competition on energy, will make for big hurdles for the SCO cooperation. Improving cohesion between the existing members, and between new members will have to be the main focus following any enlargement. This is of course a huge and difficult task, but the fact that Russia is more open to acting jointly with China, and the increased cooperation seen this year between the BRICS, offers signs of hope to SCO leaders.

Regardless of how we interpret the events in Dushanbe, the SCO deserves far more attention in the West. The Ukraine crisis appears to have crystallised the view in Moscow that it must look east, where the West’s liberal democratic values have less and less sway. In the short to medium-term however, the SCO is unlikely to be able to insulate Russia from the economic and political sanctions of the West. Russia’s pivot east, in which the SCO will play an important role, is not about its short-term security, but rather its long-term position in the world. Looking at economic growth rates globally, at demographic trends; both show that Asia will be where the bulk of the world’s people live and most of its wealth lies. The strategic importance of the Dushanbe Summit is not just that Russia has strengthened its relationship with nine countries that represent 41% of the world’s people and 16.5% of global GDP, but rather that Moscow has begun to secure its place in what will be an Asian 21st century. The potential of the SCO prompts more questions about just how isolated Russia really is, a question first asked by the ELN as early as April. Whether or not the SCO will threaten Euro-Atlantic security and interests remains to be seen, but we must wake up to its potential. New members could join within the next year, meaning we have to start talking now about the SCO and what it represents.

The SCO in numbers: 

% of World Total (2013)

Current SCO 6          Potential SC0 10        
Population 22% 43.3%
Nuclear Armed States 2 4
Defence Spending* 16.4% 19.6%
GDP 16% 19.3%
Oil Production 14.6% 18.7%
Proven Oil Reserves 7.3% 16.6%
Gas Production 20.1% 25.1%
Proven Gas Reserves 19.2% 37.4%
Land Mass** 22.1% 27.5%

 
* Excluding figures for Uzbekistan, Tajikistan, Iran and Mongolia due to lack of reliable data – The International Institute for Strategic Studies’ estimate for the Iranian defence budget in 2013 would make Iran the 4th largest spender in the potential SCO 10, and add to the organisation’s share of global budgets

** Excluding Antarctica

Figures compiled by the European Leadership Network, with data from the World Bank, SIPRI, BP and the CIA World Factbook. Both the Current SCO 6 and Potential SCO 10 figures are based on 2013 data.

The opinions articulated above represent the views of the author(s), and do not necessarily reflect the position of the European Leadership Network or any of its members. The ELN’s aim is to encourage debates that will help develop Europe’s capacity to address the pressing foreign, defence, and security challenges of our time.