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The Shanghai Cooperation Organization

Author: Andrew Scheineson
Updated: March 24, 2009
This publication is now archived.

Introduction

The Shanghai Cooperation Organization (SCO)--composed of China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan--was formed as a confidence-building mechanism to resolve border disputes. It has risen in stature since then, making headlines in 2005 when it called for Washington to set a timeline for withdrawing from military bases in Central Asia. Over the past few years, the organization's activities have expanded to include increased military cooperation, intelligence sharing, and counterterrorism drills. The SCO has also intensified its focus on Afghanistan, and may play a greater role in international efforts there in the near future. While some experts say the organization has emerged as a powerful anti-U.S. bulwark in Central Asia, others believe frictions between its two largest members, Russia and China, effectively preclude a strong, unified SCO.

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Regional Role and History of the SCO

The organization, originally called the Shanghai Five, formed in 1996 largely to demilitarize the border between China and the former Soviet Union. In 2001, the organization added Uzbekistan and renamed itself the Shanghai Cooperation Organization. Mongolia received observer status in 2004; Iran, Pakistan, and India became observers the following year. The SCO signed memoranda of understanding with ASEAN and the Commonwealth of Independent States in 2005.

Though the SCO's presence in the region is growing, it is still not very strong, most experts say. As opposed to a fully developed counterpoint to the North Atlantic Treaty Organization (NATO), the SCO serves more as a forum to discuss trade and security issues, including counterterrorism and drug trafficking. The range of goals listed in the SCO charter is "ambitious," said former Deputy Assistant Secretary of State Evan A. Feigenbaum in a September 2007 speech at the Nixon Center. But Feigenbaum, now a CFR senior fellow, said: "it is hard to point to concrete achievements in many of these areas-except on the basis of bilateral or non-SCO agreements and understandings." Experts also suggest that the SCO, held back by internal divisions, is not as cohesive as some believe.  S. Frederick Starr, Chairman of the Central Asia-Caucasus Institute and a professor at Johns Hopkins University, says the "fundamental asymmetry" of the SCO is that "China recognizes the right of Central Asian states to make their own decisions ... Russia does not." This dynamic was highlighted in August 2008, when Central Asian members and China refused to unconditionally support Moscow during Russia's conflict with Georgia.

Despite differences among members, the SCO has pursued joint security programs more actively in recent years, including a number of military exercises, such as a 2007 exercise near Russia's Ural Mountains. That exercise was described by defense consultant Gene Germanovich as a simulation of a mission (PDF) to "[defeat] a terrorist organization or [reverse] a Color Revolution-style mass uprising." Both situations persist as primary concerns for all member states, and will probably continue to be a major focus of SCO collaboration.

Energy Cooperation

Central Asia is one of the world's most energy-rich regions. According to a 2008 BP energy survey, the five nations bordering the Caspian Sea--Azerbaijan, Iran, Kazakhstan, Turkmenistan, and Russia--plus Uzbekistan hold roughly 21.4 percent of the world's proven oil reserves and 45 percent of the world's proven natural gas reserves.

In recent years, SCO member states have sought greater energy cooperation. At a 2007 summit, former Russian president and current Prime Minister Vladimir Putin called for an "energy dialogue, integration of our national energy concepts, and the creation of an energy club" (Eurasianet). During that meeting, member states agreed to establish a "unified energy market" for oil and gas exports, while also promoting regional development through preferential energy agreements. Some experts are concerned that a potential SCO gas cartel would pose a significant threat, especially if Iran attained full membership. "It would essentially be an OPEC with bombs," David Wall, a regional expert at the University of Cambridge's East Asia Institute, told the Washington Times in 2006.

Yet the SCO agreement has thus far failed to produce a substantive regional energy body. Michael Raith and Patrick Weldon of EurasiaNet.org say the SCO "currently lacks the ability to forge an energy or natural gas cartel." Central Asian energy cooperation is mostly occurring outside of SCO auspices. For example, Russia recently secured agreements with several of its Central Asian neighbors to build two gas pipelines. China's energy diplomacy also has followed a bilateral course. According to the Congressional Research Service, China is currently constructing (PDF) an oil pipeline from the Caspian Sea to western China through Kazakhstan, and in 2006 another pipeline started sending oil between the two countries. The competing efforts of Russia and China to secure influence in the region are a potential obstacle to extensive SCO energy cooperation.

Iran’s Petition for Membership

Iran is seeking membership in the SCO, which is consistent with Tehran's "looking East" foreign policy, says Mohsen Sazegara, a Washington-based Iranian dissident and founding member of Iran's Revolutionary Guards. Experts say Iran wants to forge closer relationships with states vital to its interests in Central Asia, including Russia, India, and China, and views the SCO as a potential guarantor of future security.

The potential foreign policy implications of Iranian membership in the SCO are wide-ranging. Sergey Karaganov, chairman of the Russia-based Foreign and Defense Policy Council, says eventual membership could (PDF) be "one of the carrots that [is] part of a larger deal" to resolve the current nuclear crisis with Iran. Russia and China would also hold greater influence on Iranian foreign policy, Iran expert Kaveh Afrasiabi wrote in the Asia Times. Despite these potential advantages, Martha Brill Olcott, a senior associate with the Carnegie Endowment for International Peace, believes that approving Iranian membership would be tantamount to SCO members "cutting off their noses to spite their faces," because Iran would not improve SCO functioning, and "nobody will trust the Iranians."

There is no clear mechanism to expand the SCO and offer Iran--or any other country--formal membership. While some SCO leaders have expressed interest in greater Iranian participation, they have stopped short of endorsing full membership. When meeting with Iranian President Mahmoud Ahmadinejad at the summer 2008 Beijing Olympics, Chinese President Hu Jintao simply "welcomed Iran's interest," the Tehran Times reported. Full membership still appears to be beyond the horizon for Iran, but not impossible, experts say. "I think the current fears [of Iran joining] are overblown but that doesn't mean the capacity isn't there," says Olcott.

SCO and Afghanistan

Religious extremism, terrorism, and drug trafficking in Afghanistan have continued to pose threats to the region, giving SCO member nations a vested interest in the country's stability. While Central Asian involvement in the NATO-led peacekeeping mission has been limited, Afghan President Hamid Karzai has backed greater SCO participation in rebuilding efforts. Some SCO member nations are actively engaged in Afghanistan. China has become the largest investor in Afghanistan; a $3 billion contract to develop the Aynak copper mine, which the state-owned China Metallurgical Group won in 2007, is one of the largest foreign investments in the country to date. Kazakhstan has made significant investments there as well. Afghanistan was also expected to be the focus of a March 2009 SCO summit in Moscow, which will also be the first SCO meeting attended by a U.S. diplomat (Eurasianet).

Despite these developments, a heightened SCO role in Afghanistan may be unlikely, in large part due to Russia's obstructionism, according to some experts. "Russia emphatically includes Afghanistan within the zone it proposes as an exclusive sphere of influence. Its main interest is getting the United States out," Starr says. In Starr's eyes, even the Moscow summit is little more than "a cynical effort to get [Russia's] nose under the tent, and to do so on the cheap." Russia's aversion to a U.S. military presence in Central Asia is generally believed to have influenced the 2009 decision by Kyrgyz President Kurmanbek Bakiyev to close the U.S. base in Manas, which was allegedly quid pro quo for Russian financial assistance. Russia is trying to gain a "source of leverage" by closing this major supply point into Afghanistan and making itself more essential to the success of the Afghan conflict, writes CFR Adjunct Fellow Jeffrey Mankoff.

Nevertheless, some experts believe that several Central Asian states are eager to assist in Afghan reconstruction efforts. To facilitate their participation, Starr believes the United States needs to directly engage with these countries, rather than through the SCO or Russia. To do so, he says, "would be working through great powers and treating the countries of the region as objects rather than sovereign subjects," running the risk of alienating them. Furthermore, Starr notes that hiring Central Asian workers for reconstruction efforts in Afghanistan would be far cheaper than America's current use of Turkish, European, and North American firms.

SCO and U.S. Interests

Stephen J. Blank, an expert on the former Soviet region at the U.S. Army War College, writes that beyond strategic security matters, U.S. interests in Central Asia include energy and "the effort to support liberalizing and democratizing reforms." The increased prominence of the SCO has led policymakers and scholars to question if the organization might complicate the United States' ability to secure those interests. Some experts believe that Russia and China want to use the SCO to curb U.S. access to the region's vast energy supplies. Similarly, the SCO's call for the United States to withdraw military forces (USA Today) from the region was seen as an explicit challenge to the U.S. military presence in Central Asia. Lastly, SCO members are uneasy about certain U.S. policies, particularly its support for democratic reforms. "Frankly, none of the [SCO] countries shares our enthusiasm," about political reform, said CFR's Feigenbaum in his Nixon Center speech. The "color revolutions" in Ukraine, Georgia, and Kyrgyzstan, which unseated leaders loyal to the Kremlin, have also led Russia to view the U.S. presence in post-Soviet states with suspicion, while Beijing sees U.S. forces along its western border as part of Washington's strategy to contain China.

According to some experts, however, previous SCO opposition is not evidence of general anti-American sentiment in the organization, and the potential still exists for constructive relations with individual member states. While U.S. bases in the region, established during the invasion and occupation of Afghanistan have been a major flashpoint, some Central Asian nations welcome a U.S. presence. Starr says "all the governments of former Soviet Central Asia seek to have balance among all the great powers. They do not want to be ... controlled by any ... of them." Russia has declared the post-Soviet space an area of "privileged interest" and seeks complete dominance there, says F. Stephen Larrabee at the RAND Corporation. Starr believes Central Asian nations would prefer to avoid such Russian dominance. For the United States to build stronger partnerships in Central Asia, he says, it needs to adopt a more engaging and active diplomatic strategy.

Lionel Beehner and Preeti Bhattacharji contributed to this Backgrounder.

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