SCO (Shanghai Cooperation Organisation)

• After the end of Cold War, China sought to establish security cooperation with Central Asian states to prevent Uighurs of Central Asia & Xinjiang province in China to create unrest together.
• Hence, a group called ‘Shanghai–5’ (China, Kazakhstan, Kyrgyzstan, Russia & Tajikistan) was established in 1996 to undertake confidence building measures & demilitarize borders.
• In 2001, Uzbekistan joined the grouping & it was renamed as Shanghai Cooperation Organization (SCO). India and Pakistan became members in 2017
• SCO is a Eurasian political, economic, and military Organisation.
• Along with BRICS, SCO is seen as an attempt by China & Russia to challenge the Western dominated global order and counterbalance the activities of United States and NATO in Central Asia.
• Currently, SCO has 8 Member States - China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Uzbekistan, India and Pakistan; (Turkmenistan is not a member)
• 4 Observer States
• Afghanistan, Belarus, Iran and Mongolia
• 6 Dialogue Partners
• Azerbaijan, Armenia, Cambodia, Nepal, Turkey and Sri Lanka.
• It has two permanent bodies — the SCO Secretariat based in Beijing and the Executive Committee of the Regional Anti-Terrorist Structure (RATS) based in Tashkent. (India join first reason is RATS to counter terrorism).
• The SCO Secretariat is the main permanent executive body of the SCO, while the Council of Heads of State is the top decision-making body in the SCO.
• Its driving philosophy is known as the “Shanghai Spirit” which emphasizes harmony, working by consensus, respect for other cultures, non-interference in the internal affairs of others, and non-alignment.
• Culture has become an important element of the SCO, attuned to the group’s search for an inclusive Eurasian identity.
• The Prime Minister of India, in his address to SCO in Bishkek Summit, presented his vision for the organization in the form of HEALTH (healthcare cooperation, economic cooperation, alternate energy, literature and culture, terrorism-free society and humanitarian cooperation), which closely tied with the declaration.

Structure of the Shanghai Cooperation Organisation

• Heads of State Council – The supreme SCO body which decides its internal functioning and its interaction with other States & international organisations, and considers international issues.
• Heads of Government Council – Approves the budget, considers and decides upon issues related economic spheres of interaction within SCO.
• Council of Ministers of Foreign Affairs – Considers issues related to day-to-day activities.
• Regional Anti-Terrorist Structure (RATS) – Established to combat terrorism, separatism and extremism.
• SCO Secretariat – Based in Beijing to provide informational, analytical & organisational support.

Significance of SCO’s membership to India

Security

• SCO’s main objective of working cooperatively against “three evils” of terrorism, separatism, and extremism is in consonance with India’s interests.
• Regular participation in Regional Anti- Terrorist Structure (RATS) and joint military exercises (India participated in 2018) will help enhance combat capabilities and intelligence sharing.
• It could be a platform for bilateral negotiations with Pakistan on issues of mutual interest without bringing in bilateral disputes. It can also help India counter Pakistan propaganda on other multi-national forums like Organization of Islamic Cooperation (OIC).
• Both Central Asian Region countries & India face serious threat from illegal drug trade emanating from ‘Golden Crescent’ of opium production (Iran-Pak-Afghan) and are also victims of illegal arms trade. SCO provides a platform for multilateral cooperation

Connectivity

• SCO is also a potential platform to advance India’s Connect Central Asia policy – through trade, people to people contact and cultural connect. This is much in line with India’s focus on connectivity as evident India’s efforts - International North South Transport Corridor & Ashgabat Agreement, construction of Chabahar Port and setting up an air freight corridor between Kabul, Kandahar and New Delhi.

Economic Significance

• With SCO countries contributing almost 42% of the world population and 20% of the GDP, thep roposed FTA with Eurasian Economic Union can provide India with a wider market base for its IT, telecommunications, banking, finance and pharmaceutical industries.
• With cultural connect and shared history, it also has potential to boost tourism sector of the country (presently SCO countries constituted only 6% of India’s total tourists).
• Energy & Minerals: Being closer to India geographically, mineral trade with Central Asia can entail significant cost savings. Being an energy deficient country with increasing demands, India provides an assured market for Central Asian countries and Russia.
• SCO countries along with Iran, Azerbaijan &Turkmenistan hold some of the largest oil (~25%) and natural gas reserves (~50%) of the world.
• Kazakhstan is the largest producer of Uranium.
• Uzbekistan & Kyrgyzstan are important regional producers of Gold.
• SCO Energy Club can facilitate deeper interactions between producers (Russia, Kazakhstan, Uzbekistan and Iran) and consumers (China, Tajikistan, Kyrgyzstan, India, Pakistan and Mongolia)
• SCO membership could help advance talks on construction of stalled pipelines like TAPI & IPI

How India’s inclusion will help SCO and Eurasian region?

• Inclusion of India makes SCO one of the most powerful organizations with membership of global powers from Eurasian region – China, India and Russia.
• Initially seen as a manifestation of China’s regional ambitions and politically motivated axis, democratic India’s inclusion will give SCO a greater global acceptance.
• India’s experience of working in multicultural groups and technical & managerial expertise will greatly enhance the effectiveness of the organization.

Challenges for India at SCO

• Trust Deficit between members like India & Pakistan and India & China can be major drag on the effectiveness of the organization.
• China’s Belt and Road initiative: India’s position on BRI is contrary to other members, all of which have supported the initiative. Funds are being allocated for BRI projects by AIIB and NDB of which India is an active member. This could be a potential friction point.
• Global geopolitics: The growing proximity of Russia and China and India’s attempts towards better relations with the US makes the organization vulnerable to competitive geopolitics.

For instance,

• Iran, who is an observer at SCO and a major trade partner of India, is engaged in a major conflict with US. The US sanctions has forced India to stop buying oil from Iran.
• India’s position on Syria is at variance with the US and its regional allies like Saudi Arabia and Israel.
• It has supported the current regime during the ongoing conflict, while agreeing to get further involved in the reconstruction process.
• Definition of terrorism: India’s definition of terrorism is different from the definition of SCO under RATS. For SCO, terrorism coincides with regime destabilization; whereas for India it is related to state sponsored cross border terrorism.
• SCO’s targets are groups like East-Turkestan Islamic Movement (ETIM) and Al-Qaeda, whereas groups like Lashkar-e-Taiba, Jaish-e-Mohammad and Harkat-ul-Mujahideen, operational in India, do not come under the ambit of the SCO anti-terror structure.
• Limited existing economic footprint: India’s bilateral trade with Central Asia stands at about $2 bn and with Russia about $10 bn in 2017. In contrast, China’s trade with Russia has crossed $100 bn in 2018 and stands at over $50 billion with Central Asia.
• Other regional organizations: Proliferation of other regional undertakings – Eurasian Economic Union (EAEU), Belt and Road Initiative (BRI), Greater Eurasian Partnership, Collective Security Treaty Organization (CSTO), Conference on Interaction and Confidence-Building Measures in Asia (CICA) etc. - may also pose a challenge for SCO