China and Russia founded the security bloc in 2001 with the Central Asian republics of Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. India and Pakistan joined in 2017. Iran joined this year and Belarus, another country under Western sanctions, is expected to join next year.
Member states are also able to invite “dialogue partners” to take part in specialised discussions. More than a dozen countries have been given this status so far, with the latest being Bahrain, Kuwait, the United Arab Emirates, the Maldives and Myanmar.
Raffaello Pantucci, a senior fellow at the S Rajaratnam School of International Studies in Singapore, said Russia’s call last week for deeper cooperation among the bloc was “demonstrating to the world once again, that they have alternative options and that the West can close it out of whatever structures it wants”.
He added: “What’s interesting is the [countries] that aren’t usually hostile to the West but are still involved, India being the most obvious one, and increasingly, actually the central Asians as well.”
Zoon Ahmed Khan, a research fellow at the Belt and Road Strategy Institute at Tsinghua University in Beijing, said: “[Member countries] all have this common understanding that SCO countries, or the global south at large even, have been affected by many coercive policies by developed countries. So they see common ground to work together.”
Khan added: “I think [since] the Russia-Ukraine crisis [began], many countries in the SCO have felt that they were quite vulnerable to the global economic challenges. Energy security and food security are major challenges.”
Members are looking to deepen the bloc’s economic role, with Uzbekistan calling for a “unified transport connectivity map” while Kazakhstan called for a joint investment fund and more energy cooperation.
Vladimir Putin is turning to the SCO following his invasion of Ukraine after being frozen out of Western-led institutions. Photo: EPA-EFE
The members also backed a call by Chinese President Xi Jinping and Putin to increase the use of national currencies, rather than the US dollar, in trade and showed “strong support” for digital integration.
Xi also renewed calls for the establishment of the SCO Development Bank, a long-standing policy of Beijing’s which has made little progress so far.
Pantucci said China had wanted the SCO to focus on the economy at the time of its establishment, but the development bank proposal had won little support from other members.
“The fact that he’s raising it again suggests that they think there is still an opportune moment for this,” he said.
Russia, in particular, has shifted its attitude significantly. Speaking to its neighbouring countries, Putin called on the SCO to set up “necessary payment infrastructures” to strengthen regional economic integration and build an “independent financial structure”.
Pantucci said Russia “basically dismissed” the group in the early days but joined because of concerns about Chinese influence in its “backyard”.
But now it increasingly sees SCO as a bulwark to the West as it steps up security cooperation through mechanisms such as the Regional Anti-Terrorist Structure.
The move has taken on even more significance after Russia’s invasion of Ukraine because numerous markets that are exposed to sanctions are now looking for new banking and investment opportunities, she said.
