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What does the SCO Summit offer us?

Dr Abid Qaiyum Suleri
Tuesday, Oct 15, 2024

The Shanghai Cooperation Organisation (SCO) has become a powerful regional forum, bringing together countries with significant geopolitical and economic influence.

Founded in 2001, the SCO initially aimed to address security concerns, particularly in Central Asia. Over time, it has broadened its focus to include economic collaboration, energy cooperation, and infrastructure development, enhancing its potential to influence the Eurasian geopolitics as well as geoeconomics.

The organisation spans about 60 per cent of the Eurasian landmass and includes over 40 per cent of the global population. With major economic powers like China and Russia; four nuclear powers (China, Russia, Pakistan, and India); and energy-rich Russia, Iran, and Central Asian Countries, the SCO offers an alternative to Western-dominated platforms.

Starting today, Pakistan is hosting the SCO Council of Heads of Government Meeting, bringing together seven prime ministers, a vice president, and a foreign minister. This is a clear demonstration of Pakistan's strong regional standing and diplomatic influence. Hosting the summit allows Pakistan to demonstrate its stability and security capabilities, sending a strong message that the country remains a crucial regional player, despite some complicated external and internal challenges.

Economically, hosting the SCO summit holds great promise for Pakistan. The SCO has been actively promoting regional trade and investment among its member states. Trade within the bloc has surged from $336 billion in 2019 to $490 billion in 2023, signaling the growing interdependence among members. Mindful that it has not fully explored the potential for intra-SCO trade, Pakistan aims to benefit significantly from this, especially through the China-Pakistan Economic Corridor (CPEC) which positions Pakistan as a strategic trade hub, connecting it to China and Central Asia.

The summit allows Pakistan to push forward connectivity projects that could help mitigate its economic challenges. Specifically, Pakistan could seek greater investment in infrastructure, deepen trade partnerships, and negotiate cooperation on energy (including renewables) and technology transfer with SCO members.

This year’s SCO summit is particularly significant given the wider geopolitical context. The Ukraine war, the escalating conflict in the Middle East, and the ongoing tensions around Iran have shifted global priorities. The summit will offer an alternative platform for dialogue on these issues, distinct from many Western-dominated forums.

So why is the timing of the Islamabad Summit important? The answer is quite straightforward: China’s, as well as India’s, booming trade with Russia has been its lifeline so far and now it is looking to further strengthen its ties within the SCO as Western sanctions continue to strain its economy. Meanwhile, China, facing tariffs and trade restrictions from the US and its allies, is increasingly seeking to enhance regional cooperation with SCO partners as part of its broader strategy to diversify its global economic partnerships.

Iran, another SCO member under heavy Western sanctions, will also look to deepen its economic ties with neighbouring countries, particularly given the ongoing US pressure on its oil exports. Iran is also negotiating a strategic partnership with Russia, especially Su-35 fighter jets, to strengthen its defence against Israel.

Western tariffs on Chinese products and sanctions on Russia and Iran have opened up opportunities for the SCO to develop its own economic mechanisms, including exploring the options to gradually de-dollarise its economies.

Against this backdrop, the SCO’s potential as an indigenous forum for discussing this region's issues and challenges becomes even more important. Pakistan can position itself as a key transit hub for trade between these major economies, further boosting its role as a bridge between South Asia, Central Asia, and beyond. For example, Russian energy resources and Chinese investments in infrastructure, especially through the Belt and Road Initiative (BRI) and CPEC, can play a critical role in stabilising Pakistan’s energy sector and boosting its economic growth.

The previous SCO summit, held in India in 2023, addressed key areas such as counterterrorism, economic cooperation, and climate change. A major outcome was the enhancement of the Regional Anti-Terrorism Structure (RATS), which facilitates intelligence sharing and coordinated efforts to combat terrorism, extremism, and separatism. For Pakistan, this aligns with its own security concerns, particularly with ongoing threats from groups like the Tehreek-e-Taliban Pakistan (TTP).

On the economic front, the India summit discussed reducing trade barriers and boosting investment among member states, but India’s ‘Make in India’ initiative and cautious approach to SCO integration limited progress. Geopolitical tensions, particularly between India and China, and India and Pakistan overshadowed efforts to enhance regional cooperation and undercut the summit's effectiveness.

In Islamabad, Pakistan will have an opportunity to build on these discussions, particularly in areas where progress stalled. Counterterrorism will remain a priority, with RATS likely to be further strengthened. As a frontline state in the fight against terrorism, Pakistan is expected to push for deeper cooperation in intelligence sharing against militancy. Economically, Pakistan can use the summit to advocate for trade liberalisation and investment promotion within the SCO. Infrastructure projects, particularly those linked to CPEC, will likely dominate the agenda.

To capitalise upon the recent rise in trade among SCO members, Pakistan could push for reduced tariffs, simplified customs procedures, and enhanced connectivity through joint infrastructure financing. Joint ventures in renewable energy could also be on the table, particularly in light of global concerns over climate change.

Despite the opportunities, one must remain realistic about the summit’s potential outcomes. While collaboration is possible, the SCO has often struggled to implement its decisions, largely due to competing interests among its member states. The rivalry between China and India, and India and Pakistan, may once again limit progress.

The verbal duel between India and Pakistan’s foreign ministers at the 2023 SCO summit significantly impacted the event's overall atmosphere, and effectively dashed hopes for any thaw in India-Pakistan relations. In Islamabad, expectations remain similarly low for any breakthrough, as the SCO is a multilateral forum not focused on bilateral disputes between member states. However, it remains to be seen whether the encounter between the two foreign ministers this time will further strain their relationship or simply maintain the status quo.

Western countries, particularly the US, view the SCO with caution. Deepening partnership among Russia, China, and Iran further intensifies their concerns about the organisation’s geopolitical influence and direction. Nonetheless, Western opposition is not absolute. The US and its allies monitor the SCO, particularly in areas of military cooperation and regional security.

Pakistan will need to carefully balance its SCO membership with its relationships with Western powers, particularly the US, which remains an important economic and security partner. However, beyond external dynamics, internal political tensions could also undermine Pakistan’s ability to fully capitalise on the summit’s opportunities.

At this crucial moment, both the government and opposition parties should recognise the significance of hosting key regional powers and refrain from actions or rhetoric that could cast a negative light on Pakistan in front of visiting dignitaries. This is a time for unity and responsibility, not for political point-scoring, to ensure that Pakistan’s standing on the global stage is enhanced rather than tarnished.

Although many decisions from previous SCO summits have yet to be fully implemented, the forum plays a vital role in ensuring the world remains multipolar. Its presence may not always deliver immediate or tangible results, but its absence would significantly undermine efforts to maintain a balance of power on the global stage. The SCO's role in fostering cooperation among major regional powers is crucial in countering unilateral dominance and promoting a more balanced international order.

Let us cherish and celebrate the SCO summit in this context, as it offers a rare platform for collective wisdom from the leadership of 40 per cent of the world's population. The question now is: can this collective wisdom turn into a shared vision to steer the future of global cooperation and balance of power?

The writer heads the Sustainable Development Policy Institute. He tweets/posts @abidsuleri