Asian Affairs, vol. XXXIX, no.

II, July 2008

THE SHANGHAI CO-OPERATION ORGANISATION

FLEMMING SPLIDSBOEL HANSEN
Flemming Splidsboel Hansen is the Research Director of the Royal Danish
Defence College. Before joining the Defence College, he served as an analyst
with the Danish Defence Intelligence Service and, before that, as an Assistant
Professor at the Central European University in Budapest.

Introduction
Since the founding members of the Shanghai Co-operation Organisation (SCO)
first came together in 1996, their activities have gone from relative obscurity to
attracting the intense attention of the world media. Some outside observers have
even suggested that a new and powerful regional bloc is rapidly consolidating
itself on the Eurasian landmass.
This study takes a rather closer look at the SCO. It argues that while
the organisation has been quite successful in reducing tension among the
member states, it has achieved little beyond that. For the development of
the SCO has been hampered by a fundamental lack of trust among some of
the member states, in particular China and Russia, and by the absence of a
shared idea about the organisation’s purpose. This in turn suggests that the
SCO will find it hard to move beyond the present lowest common denominator.
The conclusion is that while the member states are good at talking about the
importance of the SCO, they are much less good at delivering real policy
achievements.
The article is in three sections. The first offers a brief introduction to the
establishment in 1996 of the Shanghai Five, the relatively loose framework
for co-operation which in 2001 was turned into the SCO; the second examines
the three main areas of co-operation within the SCO – political, economic and
military – and assesses the successes and failures of the organisation; the third
part focuses on the future development of the SCO.

1. The Shanghai Five and the founding of the SCO

In April 1996, the heads of state of China, Russia, Kazakhstan, Kyrgyzstan and
Tajikistan met in Shanghai for the founding summit of the “Shanghai Five”.
The Chinese authorities had initiated the process and the main focus of the
agenda was on the introduction of confidence-building measures in the border
regions between China and its four neighbours in the Commonwealth of
Independent States (CIS). These measures included the development of a 100 km
ISSN 0306-8374 print/ISSN 1477-1500 online/08/020217-16 # 2008 The Royal Society for Asian Affairs
http://www.informaworld.com DOI: 10.1080/03068370802027474
218 THE SHANGHAI CO-OPERATION ORGANISATION

demilitarised zone along China’s northern and north-western borders and an

agreement not to conduct military exercises directed against each other, as
well as renewed talks to finally settle the status of a number of disputed areas
along the former Soviet-Chinese border.1
Following prolonged talks and a series of interim agreements, all of which
really began in earnest in 1996, China was able to reach final border settlements
with Kazakhstan and Tajikistan in 2002, with Kyrgyzstan in 2004 and with
Russia in 2005. China gained the smaller part of the disputed territory in
most of the demarcation cases, but in return for these concessions it was able
to advance some of its greater interests elsewhere.2
A major immediate concern for China was developments in the Xinjiang
Uighur Autonomous Region (XUAR) which borders on all the other original
Shanghai Five members. Earlier policy towards the region, including a mix
of economic modernisation and a renewed strategy of Han Chinese colonisa-
tion, had failed to curb the Uighur secessionist movement, which had grown
stronger after the Central Asian states had all won independence in 1991.3
While the XUAR issue was totally absent from the agenda of the April 1996
summit, it was still central to the creation of the Shanghai Five.4 By offering
to normalise relations with Russia and the neighbours in Central Asia,
Beijing could hope to win their active support as it continued its struggle to
impose full control over XUAR.5 This support included the repression by the
Central Asian regimes of their respective Uighur minority groups (estimated
at more than 500,000 in the region as a whole), making it harder for XUAR
secessionists to operate from these countries.6
At the more general level, China was concerned about the policies of the
United States of America. Not only was the USA announcing its intentions to
preserve its strategic lead, thereby suggesting that potential challengers
should give up the hope of closing the power gap, in the first half of the
1990s the country also seemed to be in a process of revising its policy on
Taiwan.7 This development caused a dramatic change in relations between
China and the USA, culminating in the March 1996 firing by the People’s Lib-
eration Army of missiles across the Taiwan Strait and the deployment by the
United States Navy of two carrier battle groups to protect the island.8 The
March 1996 stand-off was arguably the closest the two sides had come to a
conventional military conflict in more than three decades.9
Yet the inaugural Shanghai Five summit held just the following month did
not focus on these issues. In a way this is surprising as Russia also had its con-
flict with the USA – and, in a wider sense, with the West – over the enlarge-
ment of the North Atlantic Treaty Organization. At a bilateral Chinese-Russian
meeting held before the summit, Moscow won support for its opposition to
NATO enlargement while Beijing won support for its “One China” policy.
The two states also agreed to criticise countries that try to “monopolize inter-
national affairs”, clearly a reference to the USA.10 However, little was achieved
beyond that, as representatives of the two states repeatedly made clear that the
Shanghai Five did not represent a new alliance and that the co-operation was not
“directed at any third country”.11 The main reason for this cautious approach
 THE SHANGHAI CO-OPERATION ORGANISATION 219

seems to have been a fear in both capitals of suddenly becoming involved in

someone else’s conflict as well as recognition that “balancing” that was too
aggressive could backfire by provoking a stronger US response.12 But even in
the absence of common action, by normalising relations with Russia and the
other Shanghai Five members China could afford to decrease the attention
paid to this part of its external environment and instead focus on more urgent
issues elsewhere, especially the conflict over Taiwan.13
Finally, China was growing still more concerned about its future energy
security. These concerns were fuelled not only by a dramatic increase in con-
sumption; they were also caused by the perception that in the case of serious
conflict the USA could relatively easily deny China access to Middle Eastern
and African oil supplies.14 Co-operation within the Shanghai Five setting
could play a central role in the search for new import markets and diversified
supplies.
Russia hoped that, by following the Chinese lead, it could add weight to its
demands that NATO enlargement be stopped. But since the challenge for both
Moscow and Beijing was to win support without really extending any commit-
ments to the other side, the almost inevitable result of this was foreign policy
co-operation rich in declarations but poor in content. Yet, as Russia searched
for allies that would help it oppose NATO enlargement, even verbal support
offered in the margins of the Shanghai Five summit was warmly welcomed.
For the three Central Asian states, an almost immediate reward brought by
the creation of the Shanghai Five was the settling of the border disputes with
China. In a more long-term perspective, increased co-operation with China
promised to bring substantial economic benefits as a result not only of
China’s overall growth but also of its modernisation drive in XUAR and the
spill-over effect this would have across the border. In the mid-1990s, as the
Central Asian states struggled to produce positive growth rates, XUAR consist-
ently recorded annual growth rates of more than 10 percent and the region easily
rivalled its western neighbours in terms of income levels.15 Moreover, for these
three landlocked states, access to the sea was mainly through Russia. Through
this new co-operation framework, China could offer an interesting alternative
that held the prospects of reducing their dependence on Russia as well as
opening up new markets in Asia.
Thus, when established in 1996, the Shanghai Five was mainly an inward-
looking grouping. Its immediate focus was on issues of concern within the
group – border disputes, demilitarisation, cross-border activities of minority
groups as well as economic development. Foreign policy co-ordination was
only peripheral. Subsequent Shanghai Five summits did little to change that
until the fourth summit meeting, held in Bishkek in August 1999, when a note-
worthy development occurred; the member states passed a declaration on
co-operation against a number of threats, including terrorism, separatism and
religious extremism.16 These three threats – now collectively referred to as
“the three evils” – were later incorporated into the founding document of the
SCO where they constitute a central pillar.17 The signing of the Bishkek
declaration was followed by a decision by the member states in 2000 to
220 THE SHANGHAI CO-OPERATION ORGANISATION

establish a regional anti-terrorism centre (RATS); interestingly, while Kyrgyzstan

was originally given the right to host the centre, when Uzbekistan joined the
organisation in 2001 Tashkent was chosen instead as a new location for the
RATS.18
Agreement on “the three evils” indicated that the member states were ready
to move beyond the initial phase of merely removing obstacles to peaceful
co-existence and to work instead to develop new areas of co-operation (or, to
put it differently, to move from negative to positive security co-operation).

The creation of the SCO

When the summit returned to Shanghai in June 2001, the member states decided
to institutionalise their co-operation through the establishment of the SCO. In
2004, this new structure was given a permanent secretariat which was set up
in Shanghai.
The institutionalisation of co-operation clearly seemed to mark a step
forward in terms of both ambitions and commitment. However, it is interesting
to note both that the 2000 Russian foreign policy doctrine has only a very brief
reference to the Shanghai Five – and that it is mentioned after the Association
of South East Asian Nations, an organisation with which Russia obviously has
much looser ties.19 This fact strongly suggests that while the Russian adminis-
tration accepted the establishment of the SCO, it was uncertain about what the
organisation should actually achieve.
A possible reason for this hesitancy could be a concern that closer co-
operation with China within the SCO would jeopardise the more pragmatic
foreign policy line which President Vladimir Putin had introduced when
taking over the presidency in 2000. As he worked to undo some of the
damage which had been done to Russia’s relationship with the USA in the
later years of the presidency of Boris Yeltsin, he could not allow Russia to
appear too aggressive. And the “balancing” policy which the SCO could so
easily have signalled therefore had to be kept well into the background.20
Additionally, there seemed to be a fear that still closer co-operation within
the SCO framework could lead to a creeping Chinese takeover of Central Asia.
Critics within Russia at least raised these concerns, arguing that Beijing was
hoping to “drive out Russian influence” and warning that Russia could end
up as “the vassal of China”.21 It was argued that since China generally
prefers flexible ad-hoc frameworks to heavily institutionalised co-operation,
its push for the SCO was a clear sign that it felt “confident in the knowledge
of its own superiority” within this group of states.22
What the SCO did seem to offer Russia was an opportunity to relieve some
political pressure. Moscow was struggling not only with “the three evils”, which
it claimed summed up the character of the Chechen conflict, it was also strug-
gling with the consequences of its handling of the conflict; as the relationship
with the West slowly but surely deteriorated because of the Chechen conflict,
the SCO seemed to offer a new and much-needed source of legitimacy. The
1999 Bishkek summit, after all, had made clear that member states had a
 THE SHANGHAI CO-OPERATION ORGANISATION 221

legitimate right to deal quite resolutely with terrorist, secessionist and religious
extremist challenges.
Originally the need for political protection seemed of little importance to
Uzbekistan when it joined the SCO at the founding meeting. While the
Uzbek regime was being routinely criticised by Western governments at the
time for its poor human rights record,23 it still enjoyed a working relationship
with the West based on common interests, including the undermining of
Russia’s dominant position within the CIS; by failing to renew the Tashkent
Treaty on military co-operation when it expired in 1999, and by joining
the rival group GUAM (Georgia-Ukraine-Azerbaidzhan-Moldova) instead,
Uzbekistan had done its part to facilitate this process.24
A more important issue for Uzbek President Karimov instead was the fight
against the domestic opposition. The February 1999 bombings in Tashkent had
shaken his regime by showing the presence of a strong and determined opposi-
tion. By bringing his country into the SCO, Karimov could further support his
claim that the opposition, led by the Islamic Movement of Uzbekistan (IMU),
represented “the two evils” of terrorism and religious extremism and that com-
promises could therefore not be made.25 Moreover, membership could improve
the actual prospects of dealing with the IMU fighters and activists who have
often managed to escape the Uzbek authorities by simply crossing into Kyrgyzstan
and Tajikistan; the transnational challenge seemed to require a transnational
reply, and this the SCO promised to offer.

2. Areas of co-operation within the SCO

SCO co-operation falls into three broad categories – political, economic and
military.

Political co-operation
A useful initial approach to political co-operation is to consider what the
member states are looking to achieve overall. All seem to be, in varying
degrees, supportive of the status quo in post-Soviet Central Asia. A brief
look at the political situation in the SCO member states will show that all six
suffer from an acute lack of freedom (see Table 1). While there are important
differences between the two extremes marked by Kyrgyzstan and Uzbekistan,
almost all the SCO countries are considered “Not Free” by Freedom House;
only Kyrgyzstan, with a score of 5/4, escapes this category (defined by anything
higher than 5/5) and instead is labelled “Partly Free”.
For the leadership of the four Central Asian states, the status quo offers con-
tinued rule. While the SCO (and, in a broader sense, the CIS) can be seen as a
tool with which Russia can extend its influence in the region, alternatives are
hard to find – and possibly even harder to accept. Thus, all the other 11 CIS
member states will find it hard to break away from Russia without receiving
Western support to compensate for their losses (mainly economic). And this
222 THE SHANGHAI CO-OPERATION ORGANISATION
Table 1 Political freedom, 2007

Members PR CL

1996 China 7 6
Kazakhstan 6 5
Kyrgyzstan 5 4
Russia 6 5
Tajikistan 6 5
2001 Uzbekistan 7 7

Observers
2004 Mongolia 2 2
2005 India 2 3
Iran 6 6
Pakistan 6 5

PR ¼ Political Rights (1: most free, 7: least free).

CL ¼ Civil Liberties (1: most free, 7: least free).
Source: http://www.freedomhouse.org.

support seems likely to come with political strings attached, possibly causing a
weakening of the current leaders’ hold on power.
Uzbekistan illustrates this dilemma well. Western criticism of the Uzbek
regime intensified following the post-2001 removal from power by US-led
forces of the Taliban and Karimov responded by moving away from the West
and closer to Russia and the CIS structures; a sign of this was Uzbekistan’s
2006 exit from GUUAM.26 Democratisation clearly is an unacceptable price
to pay for co-operation with the West – better to return to the Russian sphere
of influence and to pay the price for that than to surrender political power to
the domestic opposition.27
Of the two main members, China is arguably stronger in its support of the
status quo than Russia. One of the reasons for this is found in the possible link
between domestic rule and foreign reforms. Whatever the justification
for strong rule at home, the Chinese and Russian authorities can hardly
support – let alone insist on – changes which will make the Central Asian
states (even) more democratic than they are. This could undermine their
bases of legitimacy at home, making it hard to preserve one-party rule and
“managed democracy”, respectively. As indicated by the data in Table 2, the
lack of democracy is even more pronounced in China than in Russia, suggesting
that the former will be even more reluctant than the latter to support reforms in
any of the Central Asian states.
The general support for the status quo suggests that the SCO states will
resist changes and that the SCO framework can prove a useful instrument for
this. By working together, the SCO members can hope to increase their political
and normative power (the ability to define “normalcy” or acceptable standards
of behaviour), thereby deflating Western criticism. Ever since the creation of
the Shanghai Five, the member states have stood shoulder-to-shoulder in
defence of the principle of non-interference in the domestic affairs of other
states.28 An example of this was seen following the Andijon uprising in
 THE SHANGHAI CO-OPERATION ORGANISATION 223

Uzbekistan in May 2005. While Western governments condemned the brutality

of the Uzbek authorities and demanded an international investigation into the
affair, Putin promptly rejected this, explaining that this was “an internal
Uzbek affair”. And just a few days after the uprising, Karimov received a
warm welcome in Beijing, where Chinese officials even expressed praise for
his handling of the conflict.29
In the future, the SCO is likely to serve still more as a forum for the rejection
of Western criticism and for the justification of current domestic rule. The latest
half-decade or so has seen a move from a predominantly defensive posture to
one that is much more offensive. This strategy usually takes one of the follow-
ing two forms: a “minimalist” version where Western democracy is rejected as
an alien cultural concept and instead the existence and equal legitimacy of
different types of democracy is emphasised;30 and a “maximalist” version of
finger-pointing where the West is criticised for its alleged use of double stan-
dards. This strategy is now well illustrated by the annual publication by the
Chinese State Council of a report on the human rights situation in the USA,
clearly a response to the annual publication by the US State Department of
similar reports on China.31
The handling by the SCO members of separatist challenges is
another example of the benefits of a common position whereby political
support is offered to individual member states from the organisation as a
whole. As one of “the three evils”, the right to secede is rejected by the
SCO and the member states which struggle with secessionist movements
(still mainly China and Russia) will continue to curb these; they will do so pol-
itically (by denying them the right to secede and by warning other states not to
extend recognition to them) and militarily (by suppressing them with the use of
force).
By working together in this way, the SCO members can hope to deny the
West any increased influence in the region. For the smaller member states,
this improves the prospects of regime survival; for Russia and China, it
improves their position vis-à-vis the USA (and in a wider sense, the West) in
what is still often considered a zero-sum game. For these two leading states,
and in particular for Russia, which used to enjoy a position of overwhelming
influence in Central Asia, this consideration has become more pressing after
11 September 2001 and the increased US involvement in the region.

Economic co-operation
Economic co-operation within the SCO has to a large extent been dominated by
growing Chinese concerns about future energy supplies. Other issues on the
agenda are infrastructure projects (both road and rail) linking China and the
Central Asian states32 and the removal of trade barriers and foreign direct
investment in non-energy sectors.
In 1993, China became a net oil importer.33 Since then, the country has only
been able to increase domestic oil production by some 2 percent per year,
thereby clearly failing to meet the average annual increases in oil consumption
224 THE SHANGHAI CO-OPERATION ORGANISATION

of nearly 8 percent.34 In absolute terms, this development has caused a situation

where in 2006 China produced 3.8 million barrels per day (bbl/d), yet con-
sumed 7.4 million bbl/d; there was, in other words, a deficit of 3.6 million
bbl/d or 1.3 billion bbl in 2006 as a whole.35
What is worse for China, this development will continue unabated. The
2006 demand of 7.4 million bbl/d represented an increase of almost 0.5
million bbl/d from 2005 or 38 percent of total world increase in oil consump-
tion since 2005.36 Demand is projected to reach 14.2 million bbl/d in 2025. This
development means that China will be consuming a still greater part of the
world’s oil production; whereas in 1996 the country consumed 5.2 percent of
total world oil production, in 2006 this figure had risen to 8.9 percent.37
The consequences of this development for China were absolutely clear,
even as the country led the formation of the Shanghai Five in 1996; to secure
access to oil, it had to look for new supplies and new suppliers in a climate
of increasing international competition. While oil represents only 22 percent
of China’s energy consumption, far below coal which stands at a staggering
69 percent, failure to secure increasing oil imports could prove highly damaging
for the Chinese economy and for the country’s security.38 The problem is well
illustrated by China’s import patterns. In 2006, 13 years after the country
recorded its first oil deficit and a full decade after the creation of the Shanghai
Five, China received only 5 percent of its oil from the neighbouring Asia-Pacific
region. In terms of regional distribution, the Middle East is the main provider of
oil to China (46 percent), followed by Africa (32 percent); as far as individual
countries are concerned, Angola leads the table with a 10 percent share
(750,000 bbl/d), and it is followed (in order of importance) by Saudi Arabia,
Iran, Russia and Oman.39
These import patterns suggest that China will be relatively vulnerable in
case of an economic blockade. It is therefore little surprise that China has
tried to secure oil imports from some of the other SCO members, principally
Russia, Kazakhstan and Uzbekistan. These deals include regular imports
(including via rail) as well as minor acquisitions and joint explorations and
infrastructure projects in all of the three countries.40
As part of this new development, in May 2006 China started receiving oil
from its first transnational pipeline, which runs 1000 km from northern
Kazakhstan to the XUAR. Currently, it has a capacity of 200,000 bbl/d, but
by 2010 this will double as the pipeline is linked to existing pipelines within
Kazakhstan; it will then reach a total length of nearly 3000 km.41 This pipeline
is a 50:50 joint venture between Chinese and Kazakh companies but imports
will come from Chinese-owned oilfields in Kazakhstan.42 Other oil projects
include the construction of a 4000 km pipeline from the Russian north to the
Pacific coast; this pipeline is scheduled to reach the Chinese border by the
end of 2008.43
A similar development can be observed in the natural gas market. Gas rep-
resents a mere 3 percent of China’s energy consumption, but that share is
increasing and gas consumption almost doubled in the years 2000– 2004.44
The country still has an annual gas surplus of 3 billion m3 and import needs
 THE SHANGHAI CO-OPERATION ORGANISATION 225

therefore are not very urgent.45 However, anticipating a gas deficit in the near
future, the country is looking for new suppliers in what is a highly competitive
sellers’ market. Projects underway include pipelines from both Russia and
Kazakhstan (the latter also bringing Uzbek and Turkmen gas).46
When viewed against this background there is little doubt that intra-SCO
trade will increase dramatically in coming years. To illustrate the trend, in
the years 2001 – 2004 alone, Chinese trade with the four Central Asian
member states grew by 290 percent.47 We should be careful, however, not to
be misled by these figures and to exaggerate the potential of the organisation.
The impressive growth of the previous years notwithstanding, in 2006 intra-
SCO trade still totalled only US$66 billion or a mere 2.7 percent of the total
trade of the six member states.48 Behind these figures are great disparities in
terms of the importance which the SCO market holds for the individual
member states: from Kyrgyzstan (77 percent) through Tajikistan (50 percent),
Uzbekistan (47 percent) and Kazakhstan (41 percent) to Russia (10 percent)
and China (a mere 2.5 percent).49 And despite the rapid growth in trade
between China and the Central Asian members, even Kazakhstan still holds a
very modest 0.5 percent share of total Chinese trade. In fact, with a 2 percent
share, Russia only occupies the eighth spot on the list of China’s most important
trading partners (between Malaysia and Australia).50
Studies also show that, despite attempts to break down barriers to trade,
obstacles still remain. Some of these are simply of a geographical nature as
mountain ranges and deserts impede the development of trade relations even
between neighbouring states.51 Others, however, are caused by mistrust, protec-
tionist tariffs, transit charges, lack of enforcement of contracts as well as red
tape which increases transaction costs for foreign exporters and therefore essen-
tially protects domestic producers.52
The main obstacle to successful economic co-operation, as the prominent
Russian scholar Alexander Lukin complained in 2007, is “the aggressive and
selfish manner of China to uphold its trade interests, not always taking its part-
ners’ interests into account”; the economic co-operation would benefit, as Lukin
continued, only if “Beijing displayed a more balanced approach and a better
understanding that, apart from direct economic benefits, there are also long-
term benefits based not only on economic but also on political, civilizational
and other interests”.53
This complaint undoubtedly resonates well with the four smaller CIS
member but the reverse argument is also found; that China, the economic
giant of the organisation, is being discriminated against by the other
members who fear losing out to the highly competitive Chinese producers.54
It seems clear that none of the member states are really willing to make uni-
lateral sacrifices to further the common project, for instance so that distribu-
tional differences may be ironed out and fears about relative gains and “who
gets more” may be calmed.55 Continued failure to deal with both politically
motivated obstacles and poor local governance will serve as a brake on the
future development of trade. And with a staff of only around 30 and an
annual budget of approximately US$2.5 million, the SCO secretariat can
226 THE SHANGHAI CO-OPERATION ORGANISATION

do only very little in terms of third party monitoring, arbitration and

enforcement.56

Military co-operation
While military co-operation has attracted the most international attention, it is in
fact the least developed area of co-operation.57 The reasons for the lack of pro-
gress seem to be the same as those mentioned above, that is, fear of ending up
in a conflict where no core interests are at stake as well as a concern about the
possible US response to the establishment of a more institutionalised military
co-operation. The problem was seen very clearly during the planning of the bilat-
eral (that is, non-SCO) Chinese-Russian military exercise “Peace Mission 2005”.
While the Chinese hosts wanted the exercise to be held off the coast of Zhejiang
province, that is, close to Taiwan, Russia instead insisted on a less dramatic and
less controversial Central Asian focus and an exercise theatre in XUAR. In the
end, the compromise solution was the north-eastern province of Shandong.58
The disagreement over where to stage the military exercise illustrated the
concern in Moscow that a still more powerful and emboldened China is hoping
to get Russia, and possibly other SCO members, involved in its dispute over
Taiwan. Even if held off the coast of the Zhejiang province, the exercise would
still have been symbolic; yet it was still unacceptable to Moscow because of the
possible damage which it could have done to the Russian-US relationship.
The fight against terrorism has been high on the agenda since the 1999
Bishkek summit and it is the field in which most progress has been made.
Even here, however, only four antiterrorist exercises (Kazakhstan 2003,
Uzbekistan 2006, and Kyrgyzstan and Russia 2007) have been held since the
inception of the SCO.59 This clearly must be a disappointing figure for those
member states which are eager to see closer military co-operation within the
SCO. In addition, following the 2003 antiterrorist exercise in Kazakhstan, the
host government urged restraint, arguing that the fight against terrorist networks
is the responsibility of law enforcement agencies and warning that military-led
exercises “create a mistaken impression of SCO goals in the world commu-
nity”.60 The type of weapons used in the larger exercises, for instance strategic
bombers, tanks and early warning systems, strongly suggest that these are in
fact more like traditional military exercises; only it seems that some of the
member states are concerned that by sending a more direct message of military
prowess and resolve they risk undermining their relationship with the USA.
Commenting on the 2007 exercise in Russia, a Western observer noted that
the SCO is “not quite the Pact that was”.61 The obvious reference is to the
Warsaw Pact and it is true that the SCO is not – and most likely never will
be – like the Pact. The most important reason for this is simply that a majority
of SCO members seem opposed to the idea that the organisation should turn into
a new Warsaw Pact built on direct military confrontation with the West.
Indications are that Russia, Kazakhstan, Kyrgyzstan and Tajikistan all support
the more cautious line, while China appears to be bolder; the potential
tension between the member states is illustrated by the refusal by Kazakhstan
 THE SHANGHAI CO-OPERATION ORGANISATION 227

to even allow Chinese troops to transfer across Kazakh territory while en route
to the 2007 exercise in Russia.62
Uzbekistan, which failed to take an active part in the 2003 and 2007 exer-
cises in Kazakhstan and Russia, respectively, apparently is concerned that it will
get too heavily involved in Russian-led structures and therefore seems to be
observing the same safe distance to Moscow as it did before entering the
SCO.63 This suggests that Uzbekistan’s involvement in SCO military
co-operation will be as sporadic as its engagement with the CIS allies.
When in 2006 Uzbekistan announced its return to CIS military co-operation
by joining the Collective Security Treaty Organisation (CSTO), which it had
left in 1999, the latter was brought a step closer to the SCO. Presently, five
of the seven CSTO members (Belarus and Armenia are excluded) are now
also in the SCO and here of course they are joined by China. The two organis-
ations have, in other words, largely overlapping membership. This fact has led
to speculations as to whether the two groups may eventually merge, for instance
by an absorption by the SCO of the CSTO.64
This development, however, seems highly unlikely. The CSTO has a
common defence clause (art. 3) and by assuming formal responsibility for the
defence of each other, Russia and China risk being dragged into unwanted con-
flicts. To this should be added the fact that the contributions and sacrifices to be
made by Russia and China seem unevenly distributed. As the dominant CSTO
state, Russia would be making a greater contribution to the common cause as it
would bring the weight of the entire alliance into the SCO; this would give
China not only added military value but also access to the Central Asian
states which are more or less closed to Chinese military influence today.65
Yet, as the less influential state, Russia would also seem to be making a
greater sacrifice.66 Simply put, Russia would have to pay a higher cost than
China for closer co-operation between the SCO and the CSTO.

3. Prospects for the future of the SCO

There is obviously a very strong internal variable which will help to define the
future development of the SCO, namely, the extent to which member states will
be willing to surrender autonomy in policy-making; this variable, to use a pol-
itical science term, will measure the supply of integration.67 As indicated
earlier, however, there is also an important external variable, namely,
Western policy towards the SCO members and especially towards the Central
Asian states. Thus, it seems reasonable to hypothesise that increased Western
pressure for democratisation will bring the Central Asian states closer to the
SCO (and the CIS) core; conversely, a relaxation of the pressure would make
it possible for them to move towards the fringes of the SCO (and the CIS).
The power trajectory of the key states strongly suggests that the influence of
the SCO will increase. It should be expected that this will be accompanied by
attempts to both broaden and deepen co-operation. However, considering that
the CIS has failed completely in its attempts to move decision-making to the
228 THE SHANGHAI CO-OPERATION ORGANISATION

supranational level, the SCO seems unlikely to do any better.68 Nothing

suggests that any of the member states will be willing to pool any part of
their sovereignty. There may still be a widening of co-operation, however, as
member states find that additional gains can be won through this.69
Economic co-operation surely will develop – and quite fast, if only for the
reason that the SCO region as a whole is enjoying high growth rates, possibly
translating into still wider co-operation of a still higher value. However, there is
a limit to this development. Economic protectionism is still strong among some
of the member states and it also seems that, in general, all value political auton-
omy over economic development and prosperity. The idea that mutual vulner-
ability promotes stability may be accepted within the European Union but it will
not (yet) work among the SCO member states. As noted, there is still a good
deal of mutual suspicion and zero-sum thinking among current and potential
rivals in the SCO.
The move from the Shanghai Five to the SCO and from negative to positive
security co-operation suggested that a much more externally directed agenda
would be introduced and hence that the member states would focus much
more on the international environment. It now seems clear, however, that
the SCO member states as a whole are still reluctant to really confront the
West – and in particular the USA. Little indicates that this will change and
therefore political co-operation will remain relatively weak. And the accession
of some of the more controversial observer states to the SCO, not presently on
the cards, will only make it even harder to agree on joint positions.
The record of military co-operation also strongly indicates that the SCO will
not be turned into a military alliance – either formal or informal. The present
focus on the fight against terrorism will therefore remain central as the organ-
isation is unlikely to set more ambitious and externally-oriented military aims
for itself. In the present condition of disagreement between Russia and China
about the exact purpose of SCO military co-operation, the more reluctant
state will decide how far that co-operation will extend.
Despite the enthusiasm with which the member states have embraced
co-operation, the SCO clearly is not free from conflict.70 The Shanghai Five
was successful in defusing tension among its members, but when Uzbekistan
joined the group, it brought with it a number of serious disputes, mainly with
Kyrgyzstan and Tajikistan. Uzbekistan lays claim to smaller strips of territory
within both states and it accuses them of failing to deal adequately with the
terrorist threat. To demonstrate its point, even after its accession to the SCO,
Uzbekistan has mined numerous sections along the borders, leading to
dozens of civilian Kyrgyz and Tajik casualties, and it has routinely ordered
its troops to cross into both countries in search of militants.71
While these are very real disputes, the organisation holds the potential for a
much more damaging conflict as the member states debate the future member-
ship composition of the organisation. In 2006 the member states introduced a
moratorium on enlargement, thereby clearly indicating that none of the four
observer states will be accepted any time soon. There is no doubt that the mor-
atorium exists because of strong internal disagreement over the issue. Thus,
 THE SHANGHAI CO-OPERATION ORGANISATION 229

before the 2006 Shanghai summit, then SCO secretary-general Zhang Deguang
explained that the organisation remains open to any would-be member, adding
however that presently “there are as many supporters as opponents of the SCO
expansion”.72
Put simply, the division within the SCO sets the enlargement “drivers”
China and Uzbekistan against the “brakemen” Russia, Kazakhstan, Kyrgyzstan
and Tajikistan. As the dominant state, China clearly tries to set the pace and to
bring the co-operation beyond the lowest-common-denominator seen so far.
While enlargement, especially into the CIS, could actually reduce the influence
of China vis-à-vis Russia, overall, it would add to the weight of the SCO,
thereby possibly giving China a greater say on the world stage.
As before, Russia seems far more uncertain about what it wants. On the one
hand, it seems committed to the SCO, possibly seeing it as a more vibrant future
alternative to the slowly disintegrating CIS.73 Additionally, given China’s pro-
jected growth rates, estimated at an average of more than 8 percent in the years
2008 –2012, and its proximity to the Central Asian region, Moscow may see the
SCO as a tool with which to prolong its hold over its CIS partners in Central
Asia.74 Since these will almost inevitably be pulled closer to China, partici-
pation in a common forum may be a way for Russia to keep a check on
China and to delay its entry into Central Asia.75 On the other hand, there
seems to be a growing recognition in Russia that by helping to facilitate
China’s fast rise, it is actually preparing its own exit from the region.76 For
an energy-starved China with a population of 1.3 billion, the territories to the
north and north-west surely must be attractive.
The enlargement issue obviously is also related to considerations of what the
applicant states are likely to bring to the organisation. At the 2006 Shanghai
summit, the issue of Iranian membership was brought up, only to be promptly
rejected. Iran undoubtedly would have used membership to resist Western
pressure as it continues its programme of uranium enrichment. This is a conflict
in which none of the SCO members wants to get involved. In fact, at the summit,
Iranian President Mahmoud Ahmadinejad reportedly was asked to speak less
about the USA and more about the SCO.77 An additional concern may be the
risk that Tehran would want to use the SCO to increase its political and religious
influence in Central Asia, especially in Persian-speaking Tajikistan.
The same is true for Pakistan. While Uzbekistan supports Pakistani mem-
bership, the other CIS members clearly are concerned about the ideological
influence which this Sunni-dominated country could have on CIS Muslims.78
This is notwithstanding the fact that Pakistan may primarily be interested in
energy supplies and in the SCO market.79 Thus when the question of member-
ship was brought up in 2001, it failed to win support; Moscow explained that it
will not support Pakistan as long as the country supports the Taliban.80 The
latter have since been removed from power in Afghanistan, but they continue
to enjoy high levels of support among ordinary Pakistanis and reportedly
even among members of the army and security forces.81
The main interest of both Mongolia and India is to benefit from SCO trade –
and for this they do not have to join the organisation. In fact, as suggested by the
230 THE SHANGHAI CO-OPERATION ORGANISATION

data in Table 1, in terms of their political set-up, both states are quite different
from the other SCO countries (members as well as observers) and there is a risk
that they could actually suffer reputational damage by joining what critics have
labelled the “club of dictators”.82 Against this background, both Mongolia and
India should be expected to remain observers only.

NOTES

1. Shanghai Five Declaration, 26 April 1996, http://www.sectsco.org.

2. M. Taylor Fravel, ‘Regime Insecurity and International Co-operation’, International Security,
30, 2 (2005): 79– 80.
3. M. Spechler, ‘Crouching Dragon, Hungry Tigers: China and Central Asia’, Contemporary
Economic Policy, 21, 2 (2003): 271.
4. B. Rumer, ‘The Powers in Central Asia’, Survival, 44, 3 (2002): 61 and Xinjiang Daily, cited
by Radio Free Europe/Radio Liberty [RFE/RL] Newsline, 18 June 1996.
5. E.g. Fravel, ‘Regime Insecurity and International Co-operation’, pp. 78–80.
6. C.-P. Chung, ‘The Defense of Xinjiang: Politics, Economics, and Security in Central Asia’,
Harvard International Review, 25, 2 (2003); available at http://hir.harvard.edu.
7. R. Ross, ‘The 1995–1996 Taiwan Strait Confrontation: Coercion, Credibility, and Use of
Force’, International Security, 25, 2 (2000): 87 –123.
8. Ibid.; and J. Pollack, ‘Chinese Insecurity and International Co-operation’, Asia-Pacific Review,
9, 2 (2002): 12–30.
9. Ross, ‘The 1995–1996 Taiwan Strait Confrontation’, p. 87.
10. RFE/RL, 26 April 1996.
11. RFE/RL, 26 April 1996 and 7 May 1996.
12. On balancing, see S. Walt, The Origins of Alliances. Ithaca, NY: Cornell University Press,
1987, chapter 2.
13. Fravel, ‘Regime Insecurity and International Co-operation’, p. 83.
14. British Petroleum [BP], Statistical Review of World Energy 2007, pp. 8 and 11; http://
www.bp.com.
15. Spechler, ‘Crouching Dragon, Hungry Tigers’, p. 271.
16. RFE/RL, 26 August 1999.
17. Shanghai Convention on Combating Terrorism, Separatism and Extremism, 15 June 2001,
http://www.sectsco.org.
18. RFE/RL, 3 September 2003 and China Daily, 16 January 2004. The centre was established in
2004 only.
19. Russian Foreign Policy Doctrine, 28 June 2000, section iv, http://www.mid.ru.
20. See, e.g., O. Antonenko, ‘Putin’s Gamble’, Survival, 43, 4 (2001–02): 49–60; D. Herspring &
P. Rutland, ‘Putin and Russian Foreign Policy’, in D. Herspring (ed.), Putin’s Russia. Lanham,
MD: Rowman & Littlefield, 2003, pp. 229–242.
21. Kommersant Vlast 25 (2001) cited by RFE/RL, 29 June 2001; D. Trenin, Kitaiskaya problema
Rossii. Moscow: Carnegie, 1998, p. 54.
22. Rumer, ‘The Powers in Central Asia’, p. 63.
23. E.g. US State Department, Annual Human Rights Report, various issues, http://
www.state.gov.
24. See, e.g., F. Hansen, ‘GUUAM and the Future of CIS Military Cooperation’, European Secur-
ity, 9, 4 (2000): 92 –110. When Uzbekistan joined GUAM, the organisation was renamed
“GUUAM”.
25. See, e.g., E. McGlinchey, ‘Autocrats, Islamists, and the Rise of Radicalism in Central Asia’,
Current History (October 2005): 336– 342.
26. RFE/RL, 13 March 2006.
27. E.g. comments in Kommersant, 12 May 2006.
28. E.g. RFE/RL, 26 August 1999.
 THE SHANGHAI CO-OPERATION ORGANISATION 231

29. RFE/RL, 12 May 2006.

30. E.g. then Russian foreign minister Sergey Lavrov in Izvestiya, 17 May 2005.
31. State Council of the People’s Republic of China, The Human Rights Record of the United
States in 2006, 8 March 2007, http://www.china-embassy.org/eng/zt/zgrq/t302225.htm;
last accessed 1 January 2008.
32. E.g. Factiva, 11 June 2006, 22 August 2006 and 1 September 2006.
33. US Energy Information Agency [EIA], Country Analysis Brief China (2006): 3, http://
www.eia.doe.gov.
34. BP, Statistical Review of World Energy 2007, pp. 8 and 11.
35. EIA, Country Analysis Brief China, p. 2.
36. Ibid., p. 2.
37. BP, Statistical Review of World Energy 2007, p. 11.
38. EIA, Country Analysis Brief China, p. 15.
39. Ibid., p. 5.
40. Ibid., p. 4, and EIA, Country Analysis Brief Central Asia (2005), p. 2 and Kazakhstan (2006),
p. 4, both at http://www.eia.doe.gov.
41. EIA, Country Analysis Brief China, p. 4; Country Analysis Brief Central Asia, p. 5; BBC News,
28 August 2006.
42. EIA, Country Analysis Brief Central Asia, pp. 5–6.
43. EIA, Country Analysis Brief China, pp. 4 and 6.
44. Ibid., p. 8.
45. BP, Statistical Review of World Energy 2007, pp. 24 and 27.
46. EIA, Country Analysis Brief China, 9 and RFE/RL, 22 March and 10 April 2006.
47. G. Raballand & A. Andresy, ‘Why should Trade between Central Asia and China continue to
Expand?’, Asia Europe Journal, 5, 2 (2007), Appendix 1, 250.
48. European Commission, Kyrgyzstan, Tajikistan, Uzbekistan, Kazakhstan, Russia and China -
Trade Statistics, all 9 August 2007, p. 4.
49. Ibid.
50. Ibid.
51. Raballand & Andresy, ‘Why should Trade between Central Asia and China continue to
Expand?’, p. 236.
52. Ibid., pp. 237–238.
53. A. Lukin, ‘The Shanghai Cooperation Organization: What Next?’, Russia in Global Affairs, 5,
3 (2007): 145.
54. Raballand & Andresy, ‘Why should Trade between Central Asia and China continue to
Expand?’, pp. 237–238.
55. W. Mattli, The Logic of Regional Integration. Cambridge: CUP, 1999, pp. 50–57.
56. The 2007 budget was USD four million; according to Lukin, ‘The Shanghai Cooperation
Organization’, p. 146. Traditionally, the secretariat has received approximately 60 percent
of the budget, while the remaining 40 percent has been given to the RATS.
57. TASS, 12 June 2006.
58. E.g. ‘Russia and China Play Army’, Forbes, 18 August 2005.
59. Chinese President Hu Jintao in Factiva, 31 May 2006; see also RFE/RL, 31 May 2007;
A. Krickovic, ‘Is SCO New Warsaw Pact or Modern-Day Holy Alliance?’, RFE/RL
Endnote, 22 August 2007. This figure does not include the 2002 Chinese-Kyrgyz exercise.
60. Central Asia – Caucasus Institute Analyst, 6 September 2003, http://www.cacianalyst.org.
61. ‘Not Quite the Pact that Was’, The Economist, 23 August 2007, http://www.economist.com.
62. RFE/RL Newline, 16 August 2007.
63. Jane’s Sentinel Security Assessment – Russia and the CIS, 6 September 2007.
64. E.g. Jane’s Intelligence Review, 1 September 2007.
65. Jane’s Intelligence Review, 1 August 2006.
66. Kommersant, 15 June 2006.
67. Mattli, The Logic of Regional Integration, pp. 41–67.
68. R. Sakwa & M. Webber, ‘The Commonwealth of Independent States, 1991–1998: Stagnation
and Survival’, Europe-Asia Studies, 51, 3 (1999): 379–415.
69. Mattli, The Logic of Regional Integration, pp. 46–50.
232 THE SHANGHAI CO-OPERATION ORGANISATION

70. E.g. comments in TASS, 30 May 2006 and Factiva, 31 May 2006.
71. RFE/RL, 14 May 2001 and 13 June 2006.
72. TASS, 30 May 2006.
73. Ren TV, 30 May 2006 in Factiva, 30 May 2006.
74. The Economist, Country Briefing China; in www.economist.com.
75. RFE/RL Endnote, 22 August 2007.
76. Kommersant, 10 April 2006 and 15 June 2006; Ren TV, 30 May 2006 in Factiva, 30 May 2006.
77. E.g. Russian TV, 19 June 2006, in Factiva, 19 June 2006; also Factiva, 14 June 2006.
78. According to the website of the 2006 SCO summit, http://english.scosummit2006.org/
en_zxbb/2006-05/03/content_371.htm; last accessed 1 January 2008.
79. J. Turner, ‘What is Driving India’s and Pakistan’s Interest in Joining the Shanghai
Co-operation Organization?’, Strategic Insights, 4, 8 (2005): 7–9.
80. RFE/RL, 25 April 2001.
81. ‘Who is Hunting Whom?’, The Economist, 16 August 2007, http://www.economist.com.
82. E.g. RFE/RL, 12 December 2005.