By Süreyya Yiğit
The recent summit of the Shanghai Co-operation Organization (SCO) held in the Russian city of Ufa agreed to enlarge the organization. President Putin declared “For the first time since its establishment, we have launched a procedure for admitting new members – India and Pakistan”. Documents were signed to begin the accession of both countries. Alongside enlargement, a new ten-year strategy has been finalized which includes measures on border security as well as a program of co-operation in combating terrorism, separatism and extremism from 2016 to 2018. Taken as a whole, these developments intend to make the SCO an increasingly powerful international organization by 2025.
When looking at the origins of this particular brand of Eurasian co-operation it must be recognized that from the outset security and mutual respect with regard to territorial integrity have been the paramount driving principles of the organization. When it started out as the Shanghai Five in 1996 the main hurdle before the organization at the time was building confidence between the neighbouring states, ensuring that military maneuvers would not take place in or along the borders. Since that time the multilateral relationships were incorporated under the umbrella of an international organization which came to bear the title of the Shanghai Co-operation Organization.
Since the inception of the SCO, the organization has not disguised the fact that two states would dominate. Quite naturally these two countries have been Russia and China. Given the ending of the Cold War and the disappearance of the Soviet Union, Russia was eager to regain its prestige and influence. China was regarded as an important regional player, but Russia, after all, was the successor to a vital superpower. With each passing year, as the Chinese economy has continued to grow – one should recall the fact that China has maintained annual double-digit economic growth for three continuous decades starting from 1980 – it’s political and economic influence has became significant, verging on domination.
The Turkic members of the SCO have at times tried to pursue a path that kept both of these important regional actors at arm’s length. Nevertheless, Chinese commercial ventures and related investments have been welcome throughout the SCO region, whilst Russian political advice has also rarely been rejected. Nonetheless, it has been clear for a long time that it is China which is making the most serious progress in economic growth; hence it is the economic locomotive of the organization. Yet one can certainly assert that in terms of military power and projection Russia continues to lead from the front.
Russia has been able to maintain its military presence in the region and beyond though its economy has suffered greatly since the annexation of Crimea and the ongoing Ukraine crisis. According to the World Bank, the Russian economy was only able to grow 0.6% last year. Low oil prices coupled with the Ukrainian political crisis has led to a structural slowdown.
The observed freefall of the Russian ruble, which lost more than 75% of its value against the US dollar throughout 2014, led to Russian products becoming more attractive in international markets. However, this development coupled with increasing public spending and industrial production as well as revenues from exports, therefore has led to a diminishment of the huge downfall in the economy as a whole. In this vein, perhaps the most important effect of the Ukrainian crisis on Russia has been the inability of Russian banks to access international capital markets. This effect has also spilled over into the Central Asian region. Here, the ripples of repercussions stemming from the flight of foreign capital from Russia have been felt in the Turkic Republics.
Whilst the Central Asian region experienced a 3.7% growth rate in 2013, this had fallen to 1.8% last year. The sluggishness of the Russian economy is predicted to bring the overall growth figures for the whole region to almost zero. The World Bank predicts that Central Asian growth – excluding Russia – should reach 2.8%. Given the fact that the Russian economy is predicted to contract by 3.8% this year and continue along this negative path in 2016, diminishing by a further 0.3%, the economic malaise of central Asia cannot be expected to end any time soon.
It is in this context that the expansion of the SCO to include India and Pakistan is a development that bodes well for the organization as a whole and for some of the Turkic Republics in particular. Of these five countries, it is likely that Turkmenistan has most to be satisfied with. For many years it has pursued an ambitious energy project called the “Turkmenistan, Afghanistan, Pakistan, India Pipeline” (TAPI), the basic idea of which is to transport Turkmen natural gas all the way to India whilst selling part of the haul to the two transit countries on the way. Given the fact that India and Pakistan have become members of the SCO, Turkmenistan probably regards the prospects of TAPI being finalized to have increased considerably.
Of the two new entrants to the SCO, India is much more important in terms of economics. Being the ninth largest economy in the world, it is a vast market which in time should provide greater opportunities for the smaller member states such as Tajikistan and Kyrgyzstan in terms of trade. Furthermore, if the Indian economy continues to grow rapidly, its energy demand will also rise accordingly. That will result in more opportunities for Turkmenistan as well as potentially for Kazakhstan and Russia. In such a scenario, however, it will be likely that Turkmenistan supplies the lion’s share of extra demand as Russia is already committed to providing a massive amount of natural gas to China under to a contract signed last year on the construction and establishment of the “Power of Siberia” pipeline.
The enlargement of the SCO is important in terms of greater markets as well as energy needs and population. This new development is also a significant one because it will finally put to rest accusations made by several notable Western analysts and observers who considered the SCO to be NATO’s rival. It will be difficult to ascertain an SCO which includes India as a full member to be recognized as an ideological and military alliance on par with NATO.
The recent summit in Ufa also agreed to changes in the organization in terms of adding new members as dialogue states. These consist of Azerbaijan, Armenia, Cambodia and Nepal, joining the ranks of the already established dialogue states of Sri Lanka and Turkey. Therefore, the attractiveness of the SCO has reached both the banks of the Black Sea as well as the Gulf of Thailand. Finally, a qualitative change in relationships with Belarus was also unanimously agreed to, changing that country’s status from a dialogue partner to that of Observer – thus joining Iran, Afghanistan and Mongolia as a part of a concentric circle closer to the core of the organization.
Mongolia was not forgotten in Ufa either, as further discussions focused on both the construction of transit power lines from Russia to China crossing Mongolia’s territory as well as the creation of a trilateral transport and logistics company involving the country. Relevant companies were also looking into the possibility of forming a transport corridor based on the Ulaan Bataar railway. Within such developments, Mongolia’s contribution will consist of coordinating its Steppe Route project with the Silk Road Economic Belt, a project usually referred to as the Sino-Mongolian-Russian economic corridor. Ulaan Bataar also expressed its interest in cooperation within the framework of the Trans-Eurasian corridor.
The changing composition agreed to at the summit has heralded questions relating to a strategic rebalancing in Eurasia. This was self-evident from the statement released by the SCO: “The evolution of the SCO is taking place at a complicated stage in the development of international relations and amidst the emergence of a multi-polar world”. The stress laid on ‘multipolarity’ was particularly apt given the fact that, for more than a decade and a half, Russian foreign policy has insisted that the world would be better off in a multipolar system rather than one dominated by a unipole, namely the United States. Yet only time will tell whether the SCO can develop into a significant new unified actor which can oppose the U.S. or provide alternative paths to global issues and create alliances or significant spheres of influence which would appear to effectively counterbalance Washington.
However, such a scenario is highly unlikely, not only in the short-term but also in the medium-term, given the fact that there are such diverging influences between the SCO member states. It is a truism to state that all the member states of the SCO desire a multipolar world; to expect all the member states to sing from the same hymn sheet is improbable. Finally, whilst Moscow, Beijing and Delhi all sing the praises of global competition and of a powerful state possessing the massive resources to oppose Washington, none can agree on who the leader ought to be in such an endeavour.
In this sense, the Chinese cannot be expected to defer to states with weaker and slow-growing economies and abandon their Silk Road Economic Belt. Similarly, the Russians would be hard-pressed to accept that their military wherewithal is insignificant and have their ‘near abroad’ policy be thwarted. Finally, India also cannot be forced to forego its soft power that is closely related to its spiritual history and culture, thus being coerced to dispose of its ‘Look North’ strategy. Ultimately, what this enlargement will entail is Washington paying even greater attention to its ‘Asian Pivot’ strategy.
Süreyya Yiğit, PhD is a faculty member at Istanbul Aydın University.
