Conference on Inter-Asian Connections

February 21-23, 2008

Shanghai Cooperation Organization:

China, Russia, and Regionalism in Central Asia

Ishtiaq Ahmad

Social Sciences Research Council, Dubai School of Government,

University of Dubai, UAE

Introduction
In a relatively short period since its creation in June 2001, the Shanghai Cooperation
Organization (SCO) has emerged as a viable regional integration initiative in Central
Asia. It has six members, including Russia and China, Kazakhstan, Tajikistan,
Kyrgyzstan and Uzbekistan, besides four observers India, Pakistan, Iran and Mongolia
and a contact group with Afghanistan. Its regional agenda covers cooperation in a whole
range of economic, political and security fields, with emphasis on enhancing Central
Asian security by combating terrorism and other threats to the region and fostering
regional trade, investment and economic development. In the post-Cold War period,
regionalism in Central Asia has also involved other initiatives such as the Economic
Cooperation Organization (ECO) and Commonwealth of Independent States (CIS).
However, SCO seems to have proven its comparative distinctiveness by serving, in
however limited a way, its member-states objective national needs and interests in an era
of globalization and terrorism. Together, SCO members and observers govern 44 percent
of the worlds population, control 18 percent of the worlds military forces, include the
surging Chinese and Indian economies and control 23 percent of worlds known
petroleum reserves and the two largest proven natural gas deposits.
This paper discusses the origin and evolution of SCO, the content and scope of its
cooperative activities in security, economic and political domains, and their future
outcome in view of the challenges still confronting the organization. It attempts to answer
several questions, such as: How has SCO made a difference in Central Asian
regionalism? What more it needs to do structurally and practically to overcome the
remaining challenges? What role China and Russia as great powers have played in setting
its agenda? How much importance do Central Asian member-states attach with SCO?
How far has the organization succeeded in assuaging US/Western perceptions about its
potentially confrontation capacity? And, which theoretical framework is more appropriate
to understand SCO-led regionalism in Central Asia, its past progress and future
prospects.1
Historical Background
SCO is a successor to the Shanghai Five, which was established on 26 April 1996, when
the leaders of China, Russia and three Central Asian statesKazakhstan, Kyrgyzstan and
Tajikistansigned an Agreement on Strengthening Military Confidence in Border
Areas. The agreement aimed at achieving demilitarization and delimitation of
international borders in Central Asia, and included a number of Confidence-Building
Measures (CBMs) to avoid conflict among the five countries. At their Moscow summit
held in 1997, Shangahi Five leaders agreed to place their troops deployed in border areas
in defensive positions, not to use forces or threaten to use force when disputes occurred,
and not to seek unilateral military superiority over each other.2 Bolstered by the initial
success of border settlement, the Shanghai Five agenda was broadened in the next three
summits to cover issues of regional security and stability, such as the fight against
international terrorism, organized crime, arms smuggling, trafficking in drugs and other
trans-national activities.3

It was at the June 2001 Shanghai summit that Shanghai Five was renamed as Shanghai
Cooperation Organization, with the inclusion of Uzbekistan as its sixth member. The
Shanghai Convention laid out a much broader agenda for SCO. The Shanghai
Declaration4 identified a number of its founding goals, including efforts to strengthen
mutual trust, friendship and good-neighborliness between the member States; to
encourage effective cooperation between them in the political, trade and economic,
scientific and technical, cultural, educational, energy, transport, environmental and other
spheres; and to undertake joint efforts for the maintenance of peace, security and stability
in the region. The Declaration obliged member-states to ensure the implementation of
the Shanghai Convention on combating terrorism, separatism and extremism, including
the establishment of a regional anti-terrorist structure of the Shanghai Cooperation
Organizationand draw appropriate multilateral documents on cooperation in
curbing illicit trafficking in arms and narcotic drugs, illegal migration and other types of
criminal activity. Recognizing that the SCO has enormous potential and broad
possibilities for mutually advantageous cooperation of the member-states in trade and
economic spheres, the Shanghai Declaration required member-states to undertake a
negotiating process on the establishment of favorable conditions for trade and
investments, and draw up a long-term program of multilateral trade and economic
cooperation.
Areas of Accomplishment
The past over six-and-a-half years have seen SCO attempting to realize the goals set in
the Shanghai Declaration by creating appropriate institutional mechanisms and
undertaking various cooperative steps. Its original agenda has not fundamentally
changed; rather, its focus has expanded overtime. SCO has so far achieved progress
mainly in four areas: establishing mechanisms to deal with security issues, particularly
terrorism, achieving preliminary progress in the economic sector, harmonizing ties
between its member-states, and enhancing its international standing.
Security Success
Terrorism has been a high priority issue in the SCO agenda since the beginning, as the
perceived potential danger of Islamist militants is the main threat that binds regional
security strategies of the SCO countries together.5 China has been concerned about
Uygur extremism in Xinjiang, Chechen terrorism has long worried the Russians, the
Uzbeks have been concerned about security threat posed by the Islamic Movement of
Uzbekistan (IMU), Tajikistan has confronted years of Islamist militancy. Hizb-ut-Tahrir
has posed a common danger to Central Asian security. Since the emergence of Taliban in
mid-1990s, Afghanistan has been perceived by all SCO countries to be principal exporter
of religious extremism and terrorism in the region. Even amid the ongoing war against
terrorism, the possible spillover of Taliban-led militarism from Afghanistan remains a
matter of deep concern for SCO members.
SCO has proved them a regional platform to counter the threat of terrorism jointly. Its
main institution for the purpose is Regional Anti-Terrorist Structure (RATS), which is

located in Tashkent, Uzbekistan, and was established during the June 2004 SCO summit
there. Its functions include collection and analysis of information about terrorist
organizations, exchange of relevant information and experience among the SCO
members, study of different forms of terrorism, monitoring the anti-terrorist struggle of
the SCO members, searching for new approaches and methods of anti-terrorism
campaign, development of cooperation with similar centers and organizations,
encouraging successful implementation of the Shanghai Convention on combating
terrorism, separatism and extremism and publication and dissemination of relevant
materials.6 Despite its limited capacity, RATS has helped prevent 250 terrorist attacks in
SCO member-states.7
SCO has also held several anti-terrorism exercises to enhance its capability to tackle the
terrorist threat. For instance, in October 2002, China and Kyrgyzstan held counterterrorism maneuvers. The following year, a joint SCO command-post exercise called
Cooperation 2003 was held.8 In March 2006, the security forces of SCO members
conducted another such exercise called East-Anti-Terror-2006 in Uzbekistan.9 These
exercises were an outcome of some 10 agreements signed at the June 2006 SCO summit
in Shanghai, including an agreement on the procedure of organizing and holding joint
anti-terrorism actions in the territories of SCO member Republics, an agreement on
identifying and severing infiltrating channels of people engaged in terrorism, separatism
and extremism in the territories of SCO member Republics.10
Insofar as managing non-traditional threats like smuggling of arms, narcotics and illegal
migration is concerned, SCO has established a Contact Group with Afghanistan, which is
the main source of such threats.11 Central Asia is a major drug trafficking route in Eurasia
due to weak border control and insufficient anti-trafficking coordination. Since 2003,
SCO has held annual joint anti-drug trafficking exercises to help its Central Asian
members overcome these problems. A number of joint anti-drug trafficking operations
have also been held. One such operation code-named Kanal 2006 intercepted and
destroyed 19,285 kg of narcotics.12
SCO has also attempted to foster military cooperation among its member-states by
organizing several joint military exercises, holding regular meetings of defense ministers,
and offering training to security forces of its Central Asian members. The first SCO
military exercise was held consecutively in China and Kazakhstan in 2003.13 In 2005,
Russia and China held war games called Peace Mission 2005. In August 2007, Peace
Mission 2007 was held in Russia and participated by troops from all SCO states. Military
cooperation under SCO has caused concern among US/Western officials. However, SCO
leaders have argued that the increased threats of terrorism, extremism and separatism
make it necessary to have a full-scale involvement of armed forces.14
Economic Progress
While the security aspect of SCO is generally exaggerated particularly by Western
scholars and officials to make it appear as an emerging anti-Western bloc in Central Asia
led by China and Russia, a closer look at the organizations agenda preferences suggests

that, like other regionalism setups, the organization is attempting to harness the collective
economic potential of its member-states, promoting their economic development and
trade, and developing communication links between them. Its stated developmental goals
are to identify mutual economic compatibility among the member-states, the extensive
development of their economies, expanding trade and investment, facilitating joint
ventures and trade activity, and creating suitable conditions for gradual free movement of
goods, capital, services and technologies.15
For the purpose, SCO has adopted different strategies and undertaken several initiatives.
In September 2001, SCO leaders signed a Memorandum of Regional Economic
Cooperation,16 which emphasized the need for creating favorable conditions for
economic cooperation among the members, including development of communication
corridors and reduction of tariffs. In May 2002, SCO leaders announced the start of
negotiations for establishing an SCO free trade zone. At the September 2003 Prime
Ministerial Council meeting of SCO, a Framework Agreement for multilateral economic
and trade cooperation was signed, formulating a macro program for promotion of
regional economic integration and free flow of commodities, capital, skills and services
among member-states in the next 20 years.17 The organization also aims to curtail
uranium pollution in water supply, prevent desertification and effective management of
dams construction.18
At the 2004 SCO summit, China offered $900 million in credit at preferential rates to
other SCO members. The following year, China offered an addition development fund of
$10 million for training 1,500 people from other SCO countries in the areas of economic,
scientific-technical and humanitarian cooperation.19 At the October 2005 SCO summit in
Moscow, a decision was made to prioritize joint energy projects in oil and gas sector, the
exploration of new hydrocarbon reserves, and joint use of water resources. In order to
fund these joint projects, the summit agreed to create of an Inter-bank SCO Council,
which held its first meeting in Beijing in February 2006.20
At the 2006 SCO summit, 10 agreements were signed, and on the sidelines of the summit,
business worth US $2 billion was transacted. 21 The agreements included intergovernmental educational cooperation initiative, the decision to set up Business Council
of SCO countries and an Action Plan of SCO Inter-Bank Association for supporting
economic cooperation.22 An Entrepreneurs Committee of SCO was established as a
forum for enterprises of the member states to directly collaborate with each other. The
summit identified 127 cooperative projects for SCO pertaining to quality identification,
customhouse, investment, tele-commerce, telecommunication, traffic and transport,
energy and other fields.23
Russia is keen on developing plans for an SCO Energy Club,24 which, in its view, will
possess half of the worlds natural gas reserves and almost a quarter of its oil reserves, if
Iran is included in the initiative.25 No other organization member has yet responded to the
Russian idea. China, on the other hand, is interested in fostering communication and
transportation linkages with Central Asian states. It has already signed a bilateral
agreement with Tajikistan for the construction of a 410 km motorway along the Tajik

border to enhance transport and communication links and maintain effective control of
border zones in Central Asia.26
SCO has facilitated bilateral economic cooperation between the member-states. For
instance, China has signed an energy agreement with Uzbekistan worth $600 million. At
the 2006 SCO summit, Kazakhstan and Russia announced their decision to establish
Eurasian Bank to help financial enterprises in the region.27 Economic cooperation under
SCO has also resulted in higher level of bilateral trade. The intra-SCO trade volume grew
from merely $1.82 billion in 2000 to $8.7 billion in 2005. In 2006, it exceeded $10
billion.28
Inter-state Harmony
SCO has helped harmonise political ties among its member-states. It has become a
principal platform where their leaders interact regularly, and try to build a consensus on
issues of competing or conflicting interest. Consequently, even major players such as
Russia and China, which had serious issues of mutual conflict during the Cold War, have
become regional partners. While Sino-Russian ties had been imporving since late 1980s,
a breakthrough was made in October 2004 when the two countries resolved their main
border disput through a comprehensive agreement. Each year has seen their bilateral
trade volume grow significantly. Russia is now Chinas third largest trading partner.
Bilateral trade volume increased from $6.83 billion in 1996 to US$30 billion in 2005, a
37% increase from 2004, It stood at $33.4 billion in 2006, and was expected to reach $40
billion in 2007. It may reach $ 60 billion by 2009. 29 Russia has also become a key arms
supplier to China.30 SCO has also helped China and Russia to consolidate their ties with
Central Asia. For instance, China had a virtually negligible volume of trade with Central
Asia in 1991, but now has a level of trade comparable with that of Russia. In 2006, the
trade volume between Russia and Central Asia was $14.9 billion, while that between
China and Central Asia was $10.8 billion.31
SCO has helped create a mechanism for foreign policy coordination among the memberstates. The SCO Charter envisaged common viewpoints on foreign policy issues of
mutual interest. The 2002 St. Petersburg Declaration and April 2006 Moscow Declaration
reinforced the need to coordinate the member-states foreign policies on problem areas in
Central Asia.32 SCO-level cooperation has generated a spirit of dialogue among Central
Asian states. Annual summits of SCO leaders and regular ministerial level interaction
between its member-states have built confidence among them and brought stability to the
region. No surprise that a number of border tensions, such as over Uzbek-Kyrgyz and
Uzbek-Tajik borders, have resolved amicably.33
Central Asian states seem to attach increasing importance to SCO, since no other extraregional player or regional initiative has been so prompt in tackling the regions security
and economic problems. Being landlocked, resource-rich Central Asian states need an
outlet for economic development. This outlet is being provided by China and Russia,
which have their respective realistic interests in benefiting from the regions hydrocarbon

resource potential. It is, therefore, the mutual compatibility of economic interests that has
paved the way for greater harmonization of ties among SCO member-states.
Image Building
In the past over six-and-a-half years, the international standing and image of SCO has
gradually improved. The initial US/Western criticism and mistrust associated with the
organization was mainly because at the time of the creation of Shanghai Five in 1996 US
relations with China and Russia were strained and the organization was perceived as a
Sino-Russian alliance to curb US influence in Central Asia.34 Such concerns have
subsided to a considerable degree, because of the improvement in Sino-Russian ties with
the United States, and emergence of SCO as an important regional organisation whose
security and economic agendas do not contradict US/Western interests in Central Asia.
Similar concerns do arise from time to time, but only in response to individual instances
such as the 2005 Uzbek decision to close US air base in Karshi-Khanabad or SCOs
statement of concern issued earlier in the year about the prolonged presence of foreign
troops in the region, as a proof of its potentially confrontational stand vis--vis the
US/West.35 However, the fact is that the said Uzbek decision was a reaction to US
criticism of its governments alleged May 2005 massacre in Andijan province. As for the
SCO statement, it was only reflective of a regional organization concerned with the
prolonged presence of foreign troops in the region. At a broader level, however, SCO has
supported the US-led War on Terror in Afghanistan and the region.
For their part, SCO leaders have consistently attempted to highlight the cooperative,
multilateral sprit of the organization, with no ambition to be hostile to the US/West.36
SCO is keen on cooperating with other international organizations and countries. In
December 2004, it obtained observer status in the UN General Assembly. In April 2005,
it signed a Memorandum of Understanding (MOU) with the CIS to cooperate in areas of
trade, anti-terrorism and social contacts, and an agreement with the Association of South
East Asian Nations (ASEAN) for cooperation in economic, finance, tourism,
environmental protection, use of natural resources, social development, energy and fight
against transnational crime.37 Besides establishing a Contact Group with Afghanistan, the
organization has admitted India, Iran Pakistan and Mongolia as observers. Observers
such as Pakistan desire full membership. The US request for observer status was,
however, refused, perhaps because of its being an extra-regional power.
Another factor enhancing the international standing of SCO is the establishment of its
permanent structures such as the Secretariat and RATS, which are a key basis of any
formal regional integration initiative. Its highest decision making body is the Council of
Heads of State, followed respectively by Councils of Heads of Government, Foreign
Ministers, and National Coordinators. There are other formal setups, including
Ministerial Meetings, Commission of Senior Officials, Working Groups, Business
Council, and Inter-Bank Consortium. The Shanghai-based Secretariat of SCO manages
its administrative and functional matters. Headed by a Secretary General, it has four
Deputy Secretary Generals who respectively head the Political Section, Economic and
Cultural Section, Information and Analysis Section, and Administrative Section. Each

section is assigned several relevant tasks. As for RATS, it has a Council, an Executive
Committee, and Permanent Representatives.38
Comparative Distinction
Russia and/or Central Asian states, with the exception of China, have been members of
several regional initiatives other than SCO. However, these initiatives have failed to be as
effective as SCO. Three of them, the Commonwealth of Independent States (CIS),
Central Asian Cooperation Organization (CACO), and Economic Cooperation
Organization (ECO), are worth considering for comparison with SCO.
Commonwealth of Independent States
CIS was established in the immediate aftermath of Soviet disintegration primarily on
Russian initiative. It consisted of all of the former Soviet republics, excluding the Baltic
States. The security aspect of CIS was derived from the 1992 Tashkent Collective
Security Treaty (CST). 39 In April 2003, CST was expanded and renamed as Collective
Security Treaty Organization (CSTO). It aimed to foster greater defense cooperation
among the members by acting as a rapid reaction force for Central Asia, a common air
defense system and coordinated foreign, security and defense policy.40 Russia has offered
many incentives for CSTO members, such as subsidization of costs of training officers
from CSTO militaries by the Russian Ministry of Defense. It has also offered CSTO
members to purchase Russian defense equipments at the same price as paid by the
Russian military.41
However, the interests and priorities of the members have frequently differed. Moreover,
overlapping membership of CSTO and SCO has resulted in fluctuating priority that the
members place in one or the other organization at different times. Cooperation among the
members has varied and the level of rapport among the members of the CIS Collective
Security Treaty often depends on Moscows willingness to open its wallet.
Consequently, CSTO has failed to emerge as a viable regional security mechanism in
Central Asia.42 The Russian bid to promote economic cooperation among CIS members,
such as the establishment of Eurasian Economic Community (EEC), have likewise failed
to transform CIS as an effective regional body. The Russian-led regionalism in Central
Asia has not worked, since the Central Asian states are weary of Russias dominant
attitude and did not wish to be relegated to a client-state status,43 in addition to a
limited Russian potential to offer any substantial economic support.
Central Asian Cooperation Organization
Insofar as CACO is concerned, it was created by Central Asian states themselves
essentially to reduce Russian influence in the region. In 1994, Uzbekistan, Kazakhstan
and Kyrgyzstan established Central Asian Union (CAU) to address their common
problems and to prevent marginalization in new post-Soviet order.44 CAU aimed to
create a single economic region with reduction in tariffs among member states. In 1998, it
was renamed as Central Asian Economic Union (CAEU), and a Central Asian Bank for

Cooperation and Development was created. In 1999, Tajikistan also joined the Union. In
2001, it was again renamed as the Central Asian Cooperation Organization (CACO).
However, like EEC, CACO has achieved little more than issuing resolutions of
declaratory nature.45
Economic Cooperation Organization
ECO is the third major regional initiative in Central Asia, which has not proved as
effective as SCO. Since 1992, Azerbaijan, Kazakhstan, Kyrgyzstan, Tajikistan,
Turkmenistan and Uzbekistan have been members of ECO, which also includes Turkey,
Iran, Pakistan and Afghanistan. ECO aims to develop economic and technical
infrastructure and transportation system in the region, along with improving cultural ties
among the members. It evolved out of a previous regional alliance between Iran, Pakistan
and Turkey called Regional Cooperation for Development (RCD) and was revived in
present form in 1985 by Iran. ECO has finalized several developmental projects, none of
which has been implemented yet due to the shortage of funds, the regions security
predicament, and other bureaucratic and political hindrances. It has, however, succeeded
in facilitating bilateral contacts between the member states.
SCOs Distinction
Some of the problems facing SCO such as tension among its Central Asian memberstates, overlapping membership and shortage of funds46 are the same as confronted by
CIS, CACO and ECO. However, SCO has made a difference in accomplishing what these
regional initiatives have not, as clear from its past accomplishments mentioned above.
Unlike SCO, other initiatives of regionalism in Central Asia have not been truly
comprehensive in approach. The relative success of SCO can also be attributed to its
membership, primarily that of China and Russia. SCO provides China with a security
protection mechanism, and a platform for China to cooperate with Central Asia
comprehensively.47
China can contribute more to Central Asias development than any other external actor
due to its geographical proximity with the region and also because of its fast economic
and technological capacity, which is not matched by other regional actors. As for Russia,
its influence in Central Asia may have eroded in the post-Soviet period, but it is still an
important power in Central Asia, with profound political, economic, military and cultural
ties with its countries. In the post-Soviet era, Russia has shifted to a more placatory
policy towards Central Asia. Hence, Russian and Chinese interests, along with Central
Asian states interests, can be achieved within the diversified agenda and unique
membership of SCO. Even otherwise, SCO does not perceive other regionalism
initiatives in Central Asia to be hostile to its interests. Besides signing an MOU with CIS
in April 2006, it concluded an agreement with CSTO to broaden cooperation on issues
such as security, crime, and drug trafficking. Joint action plans between the two
organizations are to be concluded early this year.48

Remaining Challenges
The above descrition about past accomplishemts of SCO and its comparative distiction
with other regional intiatives in Central Asia aside, the organization is still confronting
several challenges which it has to overcome to gain greater regional and international
creibility. These challenges include the lack of cohesion among member-states,
continuing economic woes, lingering institutional issues and the never-ending image
problem.
Lacking Cohesion
SCO has succeeded in harmonisig ties among its member-statesbut only to an extent.
These ties have not become cohesive enough to trigger full-scale state-to-state
cooperation, or to allow civil society of the member-states to make the required inupt in
the regionalism process. China and Russia being overwhelmingly stronger members and
the unstable Central Asian members represent a situation of unequal membership.
Moreover, the interests of SCO member states continue to conflict with each other in
some areas. Kazakhstan and Kyrgyzstan have serious reservations about the policies of
Uzbekistan.49 The conflict of interests among SCO members is more pronounced in the
energy sector. For instance, the Russians are interested in promoting the Trans-Siberian
railway as a main connecting link between Asia and Europe. The Chinese are said to
prefer the southern route to Europe across Central Asia-Transcaucasus-Turkey to the
Mediterranean coast. This route is said to provide Chinas western region a new geostrategic importance.50 Among two important areas of SCO agenda, security and
development, Russia emphasizes security, while the Chinese focus has been on
development. Hence, a consensus on the future shape of SCO is lacking due to difference
in the interests of the members.
Central Asian states also perceive their interests and role of the SCO differently.
Uzbekistan and Kazakhstan want to play an important role in the region and consider
SCOs prestige as helpful in enhancing their own prestige. Kyrgyzstan and Tajikistan, on
the other hand, consider their participation in the SCO as tool for resolving domestic
issues of economy and stability. Kyrgyzstan particularly co-relates its domestic stability
with security cooperation within the SCO framework. 51 Such perceptual differences do
influence the level of participation and interest of members-states in the organization.
Then there is considerable difference in the internal organization and economic
development of each member state, and mutual benefits of economic cooperation among
these countries are not obvious. Different mechanisms have been agreed upon but not yet
finalized. Central Asian states also need to find a balance between their foreign policies
and the process of regional cooperationas the tilt towards either of them can affect
cohesion of the organization. Until recent past, Central Asian states short-term security
priorities did not match with SCOs long-term developmental strategy. Gradually,
however, they have started to express greater interest in the latter.
In addition, the membership of almost all of the organizations working in Central Asia
overlaps, which results in differing priorities that member states place on any of the

10

organizations. Central Asian states internal politics also has had serious implications for
SCO-led regionalism in Central Asia, which has so far been a state-centric process
without the involvement of civil society. Regional dynamics are being defined by
interactions between highly personalized regimes rather than civil societies. Central
Asian leaders do not seem to be fully committed to the agendas of any regional
organization that may affect their ability to act unilaterally. 52 Consequently, the rulers
have been reluctant to create mechanisms making agreements binding upon their regimes,
a factor that has hindered implementation and failure of several of the SCO agreements.
Economic Woes
Despite being resource-rich, all of the Central Asian states are economically underdeveloped. Consequently, they expect China and Russia to provide for their economic
development.53 However, China and Russia can spare limited financial and economic
resources, which means SCO has to operate within budgetary constraints. Realizing a free
trade zone in the region is also challenging task, since SCO countries differ greatly in
their respective domestic economic and political realities.54 It is China that has pressed
SCO to move towards the establishment of a free trade zone in the regiona move
Russia has not supported. The intra-regional trade in Central Asia is low and external
trade dependence is high. Exports are mainly in agricultural and mineral products, while
informal trade has gained importance with large distortions in the market system. There is
limited scope for trade expansion within the region as all of the five Central Asian states
export similar range of products. Therefore, their economies are competitive rather than
complementary.55 In the energy sector, Central Asian states have focused on importsubstitution rather then regional trade. Limited land, rail and air links within Central Asia
are also a major constraint on intra-regional trade. Protectionist trade policies have
aggravated the existing heavy dependence on fewer export commodities.56
Institutional Issues
SCO has, indeed, progressively institutionalized, but several mechanisms dealing with
issues like dispute settlement and membership still need to be established. There is no
permanent body to settle disputes among the SCO member states. Article 22 of the SCO
Charter stipulates no alternatives for dispute settlement other than negotiations and
consultations.57 Likewise, SCO does not have any institutional mechanism for crisis
management. While the democratic upsurge of 2005 affected its Central Asian members,
the organization could not do play any role in managing the ensuing crisis due to its
principle of non-interference in the domestic affairs of its members.
Moreover, the SCO Charter does not have any provision for accepting new members.58
The organization does have observer states, which were admitted under the Regulations
for SCO Observers approved at the 2004 Tashkent summit. As for RATS, it may have
emerged as an important counter-terrorism institution within SCO, but it lacks
intelligence and security resources to sufficiently meet the gigantic requirement of
counter-terrorism in Central Asia.59

11

Image Problem
Repeated assurances by SCO leaders that their organization is not an anti-US/West
security alliance may have assuaged US/Western fears about its future role in Central
Asiabut not fully. This is despite the fact that such fears, as articulated be proponents
of the New Great Game idea, are exaggerated or misplaced.60 This means the SCO
leadership has to continue reassuring the international community that the organization is
geared only towards achieving greater security and economic development of Central
Asia. In other words, SCOs image needs to evolve more closely with the organizations
political principles and agenda.
This should not be difficult task because the era of globalization and terrorism has seen
growing compatibility in the interests of great powers. For both Russia and China,
maintaining friendly ties with the United States are economically quite crucial. The same
goes for the United States, which has credible stakes in its investment in China and does
not strategically aspire for a confrontational approach with Russia. China and Russia
attach as much importance to countering terrorism as does the United States. So do the
Central Asian states, which are free to foster bilateral ties with extra-regional powers
such as the United States and NATO. All of the Central Asian members of SCO, for
instance, have for years participated in military activities of NATO-sponsored
Partnership for Peace program. They are also free to interact with the Organization for
Security and Cooperation in Europe (OSCE). If SCO-level cooperation leads to regional
trade liberalisation, why should it bother the United States or the European Union?
Concluding Remarks
SCO provides member-states, especially Central Asian states, a collective platform to
effectively deal with issues of common concern. It has reinforced an increasing level of
understanding among the member-states that a multitude of problems they face can only
be solved through mutually beneficial regional cooperation. It is no surprise, therefore,
that in a relatively short period of time, SCO has succeeded in creating basic structural
and legal foundations for regional cooperation, enhancing security and defense ties,
especially to counter terrorism, strengthening economic, trade, communication and
transportation links, harmonizing ties between the member-states and enhancing the
organizations international image and standing. These are no small achievements, a track
record perhaps similar to ASEAN, Asias most reputed formal integration setup, in its
budding stage. Central Asia has all the ingredients for a formal regional integration
process to succeed. Its economically impoverished but resource-rich countries need to
develop. China and Russia as two great powers have strategic reasons for Central Asian
development and integration, as it ensures the growth of their own global economic and
security potential.
SCO needs to settle institutional issues pertaining to membership, dispute settlement and
crisis management. SCO members have to comprimise on the remaining areas of conflict
between them, and give more priority to the organisations collective developmental
goals over their specific national interests. Perhaps the greatest challenge facing SCO

12

concerns the economic sector. Several economic cooperative projects have been
identified, but without a follow-up agreement. Many agreements remain to be
implemented. SCO has to tackle all of these challenges in order to enhance its
international standing as a more credible and viable setup of formal regional integration
in Cenrtal Asia.
Notes and References
1

Some of the discussion in this paper about the challenges SCO faces and prospects of tacking them is
inspired by an extraordinary work Sadia Nasir did in an M Phil thesis under my supervision. Please see
Sadia Nasir, SCOs Shifting Agenda: Challenges and Response, M Phil Thesis (Islamabad: Department of
International Relations, Qaudi-iAzam University, 2007), 94p.
2
Khalid Mahmud, Shanghai Cooperation Organization (SCO): Beginning of a New Partnership,
Regional Studies, Vol. 20, No. 1 (Winter 2001-02), p. 6.
3
Alma Ata Declaration, Xinhua News Agency, 3 July 1998; Bishkek Declaration, Xinhua News
Agency, 4 August 1999.
4
See the Declaration at official website of SCO <http://www.sectsco.org/html/00088.html>
5
Sean L. Yom, Power Politics in Central Asia, Harvard Asia Quarterly, Vol. 6, No. 4 (Autumn 2002)
<http://www.asiaquarterly.com/index.php?option=com_content&task=view&id=129&Itemid=99999999>
6
Farkhod Tolipov, On the Role of the Central Asian Cooperation Organization Within the SCO, Central
Asia and Caucasus (2004) <http://cagateway.org/downloads/SCO-04-1.pdf>
7
Marc Lanteigne, The Development of the Shanghai Cooperation Organization as a Security
Community, Pacific Affairs, Vol. 79, No 4 (2006), p. 619.
8
Roy Allison, Regionalism, Regional Structures and Security Management in Central Asia, International
Affairs, Vol. 80, No. 3 (May 2004), p. 479.
9
Ruslan Maksutov, The Shanghai Cooperation Organization: A Central Asian Perspective, A SIPRI
Project Paper, Stockholm International Peace Research Institute (August 2006), p. 11.
10
Ramakant Dwivedi, Shanghai Cooperation Organization: A Cr itical Analysis, Dialogue, Vol. 8, No. 1
(July-September 2006) <http://www.mosnews.com/news/2006russiachinasco >
11
SCO to Take Further Anti-Terrorism Steps Xinhua News Agency, 29 March 2007.
12
Maksutov, op cit, p. 17.
13
SCO to Stage Joint Anti-Terror Military Exercise in 2007, Xinhua News Agency, 26 April 2006.
14
SCO's Anti-Terrorism Military Drill to Be Transparent, Open: Russian Defense Minister, Xinhua News
Agency, 26 April 2006.
15
Gregory Logvinov, The Shanghai Cooperation Organization: A New Qualitative Step Forward, Far
Eastern Affairs, Vol. 30, No 3 (2002), p. 22.
16
Sun Zhuangzhi, New and Old Regionalism: The Shanghai Cooperation Organization and Sino-Central
Asian Relations, The Review of International Affairs, Vol. 3, No. 4 (Summer 2004), p. 603.
17
Xu Tao, Regional Cooperation in Central Asia and Shanghai Cooperation Organization, Contemporary
International Relations, Vol. 15, No. 11 (November 2005), p. 21.
18
Li Lifan and Liu Jingqin, Central As ian Water Resources and the Future of the SCO, CEF Quarterly
(July 2005), pp. 34-35.
19
Chien-Peng Chung, China and Institutionalization of the Shanghai Cooperation Organization,
Problems of Post-Communism, Vol. 53, No 5 (September-October 2006), p. 12.
20
See official website of SCO <http://www.sectsco.org/html/00648.html>
21
Dwivedi, op. cit.
22
Ibid.
23
SCO Grows as a Major Force for World Peace, China Daily, 13 June 2006
<http://www.chinadaily.com.cn/china/2006-06/13/content_615649.htm>
24
Russia's Foreign Ministry Develops Concept of SCO Energy Club, Kazakhstan Today, 1 December
2006 <http://eng.gazeta.kz/art.asp?aid=84086>
25
Sergei Blagov, Russia Urges Formation of Central Asian Energy Club, Eurasia Insight, 11 July 2007
<http://eurasianet.net/departments/insight/articles/eav110707a.shtml>

13

26

Maksutov, op cit,p. 20.

Ibid.
28
Sun Zhuangzhi, From Neighbors to Partners, Beijing Review, 1 February 2007
<http://www.bjreview.com/expert/txt/2007-02/01/content_54423_3.htm>
29
Dong Bei, China-Russia Trade to Top $40b, China Daily, 18 June 2007.
<http://www.chinadaily.com.cn/bizchina/2007-06/18/content_896308.htm; Russia-China Trade May
Reach $60 bln by 2009, Interfax, 6 November 2006
<http://www.accessmylibrary.com/coms2/summary_0286-24258462_ITM>
30
Rian Jensen and Erich Marquardt, The Sino-Russian Romance, Asia Times, 21 March 2006
<http://www.atimes.com/atimes/Central_Asia/HC21Ag02.html>
31
Vladimir Paramonov and Dr Aleksey Strokov, Economic Involvement of Russia and China in Central
Asia, A Conflict Studies Research Centre Paper, Defence Academy of the United Kingdom, 2007).
<http://www.defac.ac.uk/colleges/csrc/document-listings/ca/07%2812%29VPEnglish.pdf>
32
Moscow Declaration of Heads of Member States of SCO, Xinhua News Agency, 20 April 2006.
33
Maksutov, op cit, p. 18.
34
Zhao Huasheng, The Shanghai Cooperation Organization at 5: Achievements and Challenges Ahead,
China and Eurasia Forum Quarterly, Vol. 4, No. 3 (2006), pp. 107-108.
35
Howland, op cit.
36
SCO's Anti-terrorism Military Drill to be Transparent, Open: Russian Defense Minister, Xinhua News
Agency, 26 April 2006; Security Alliances Led by Russia, China Link up, Reuters, 6 October 2007.
37
Tao, op. cit., p. 24.
38
See official website of SCO http://www.sectsco.org/html/00027.html
39
Allison, op cit, p. 469.
40
Alexander I. Nikitin, Post-Soviet Military-Political Integration: The Collective Security Treaty
Organization and Its Relations with the EU and NATO, China and Eurasia Forum Quarterly, Vol. 5, No.
1 (2007), p. 35.
41
Richard Weitz, Averting a New Great Game in Central Asia, The Washington Quarterly, Vol. 29, No. 3
(Summer 2006), p. 163.
42
Peter Rutland, Russias Response to US Regional Influence, NBR Analysis, Vol. 14, No.4 (November
2003), p. 48.
43
Mahmud, op. cit., p. 11.
44
Annette Bohr, Regionalism in Central Asia: New Geopolitics, Old Regional Order, International
Affairs, Vol. 80, No. 3 (May 2004), p. 485.
45
Ibid, p. 486.
46
US Congress, House of Representatives, House Armed Services Committee, The Eurasian Security
Environment, Testimony of Fiona Hill, Senior Fellow, Brookings Institution, 22 September 2005
<http://www.brookings.edu/views/testimony/hill/20050922.pdf>
47
Michael A Weinstein, Shanghai Cooperation Organization, Intelligence Brief, 12 July 2005
<http://www.pinr.com/report.php?ac=view_report&report_id=325&language_id=1 >
48
See the MOU at official website of SCO
<http://www.sectsco.org/news_detail.asp?id=1786&LanguageID=2>
49
Stephen Blank, The Shanghai Cooperative Organization: Post-Mortem or Prophecy, CEF Quarterly,
(July 2005), p. 14.
50
Jyotsna Bakshi, Shanghai Cooperation Organization (SCO) Before and After September 11, Strategic
Analysis, Vol. 26, No. 2 (April-June 2002) <www.ciaonet.org/olj/sa/sa_apr02baj01.html>
51
Zhuangzhi, op. cit., p. 607.
52
Bohr, op. cit., p. 498.
53
Zhuangzhi, op. cit., p. 607.
54
Tolipov, op cit.
55
Ibid.
56
Gennady Chufrin, The SCO: Changing Priorities, International Affairs, Vol. 53, No. 1 (2007), p. 60.
57
Mutlaq Al-Qahtani, The Shanghai Cooperation Organization and the Law of International
Organizations, Chinese Journal of International Law, Vol. 5, No.1 (March 2006), p. 139.
58
Dwivedi, op cit.
59
Allison, op. cit., p. 479.
27

14

60

See Kathleen A. Collins and William C. Wohlforth, Defying Great Game Expectation, in Richard J.
Ellings, et al, eds, Strategic Asia 2003-04: Fragility and Crisis (Washington, DC: The National Bureau of
Asian Research, 2003).

15