For the first time in many years the SCO held a summit that actually mattered. The attendees at the June 6-7 annual meeting of the heads of state of the SCO member states admitted Afghanistan as a formal observer country and designated Turkey a dialogue partner. Perhaps the reality of NATO’s impending military withdrawal from the region has finally spurred the SCO to assume a more forthcoming role in securing Afghanistan’s security. Nonetheless, the SCO still has a number of important issues to address before it can become a truly effective regional organization.

BACKGROUND: In previous years, the SCO summit attendees deferred acting on Afghanistan’s application to become a formal SCO observer, despite acknowledging the need to increase their engagement with that country given the impending NATO military withdrawal from Afghanistan. In fact, the SCO governments seemed uncertain over what type of security structure they would like to construct after NATO reduces its military presence in Central Asia. This uncertainty even extended to ambiguity regarding when they wanted NATO combat forces to withdraw, at various times urging NATO to leave the region as soon as possible but stay as long as necessary.

Deepening ties with Afghanistan by making it a formal SCO observer — along with Iran, India, Pakistan, and Mongolia — could help compensate for NATO’s military withdrawal, but the Chinese government is reluctant to embrace the Afghan government for fear of antagonizing the Taliban, which could retaliate against the PRC’s growing economic interests in Afghanistan.

Thus far, the SCO’s activities regarding Afghanistan have been limited essentially to issuing joint declarations and sharing information about narco-trafficking through the Central Asian Regional Information and Coordination Center and other mechanisms. Unlike the Moscow-led Collective Security Treaty Organization (CSTO), SCO members have not engaged in collective counternarcotics operations. Unlike NATO and the Organization for Security and Cooperation in Europe, the SCO has not provided joint training to Afghan counternarcotics and other law enforcement officers. The SCO members have done little to implement the action plan adopted at their March 2009 special conference on Afghanistan, which itself was quickly overshadowed by other conferences that actually raised money and launched collective projects regarding Afghanistan.

The SCO again deferred the question of admitting new full members, indicating that the organization has yet to escape its expansion dilemma. The current roster of full SCO members includes only those six states that joined the organization at its founding in 2001: China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan.

The tremendous disparities in existing members’ populations, geographic size, military strength, and economic resources have already made it difficult for SCO nations to negotiate and implement effective cooperative measures. The SCO lacks the internal cohesion and capabilities found in strong multilateral institutions such as NATO and the EU, whose members share a common positive ideology (a commitment to liberal democracy) as well as common security concerns (counterterrorism). The need to reconcile conflicting national laws, regulations, and standards has repeatedly delayed the implementation of many SCO agreements.

Given these growing pains, there is limited enthusiasm for admitting new members to the organization anytime soon. Current SCO members disagree over such important issues as the desirability of a Western military presence in Central Asia, the extent to which member governments should assist another member state to suppress domestic unrest, and the SCO’s desired role in defense matters. Further expansion risks exacerbating current divisions among SCO governments regarding these and other contentious questions. Giving India or Pakistan full membership, for instance, might require the SCO to address Kashmir and other divisive South Asian issues.

IMPLICATIONS: Membership enlargement is not the only challenge facing the SCO as it enters its second decade. Although denying any anti-Western intentions, the SCO seems magnetized by anti-West rhetoric. The leaders attending the SCO summit in Beijing issued their typical collective statement on the international situation. It again called for a multipolar world led by the United Nations and respect for the sovereignty and independence of countries as well as diversity of domestic political systems. These themes implicitly criticize Western efforts to promote political democracy as well as NATO decisions to employ force without the approval of the UN Security Council, in which Beijing and Moscow have the power to veto decisions.

Another issue the members need to address is the extent to which the SCO will develop military capabilities. The member governments claim that they are solely an anti-terrorist organization, and that they are not seeking to create a NATO-like alliance in Eurasia to balance the Western Alliance. The common refrain is that the SCO is not a military bloc nor directed against any country. But the robust multinational military exercises they hold every year or two involve thousands of soldiers, hundreds of combat vehicles, and dozens of combat planes. The commanders justify the need for such robust forces by citing the allegedly powerful capability of modern terrorist groups, but these exercises differ little from those of the CSTO, except for involving robust Chinese forces.

The SCO governments regularly express dissatisfaction with the slow pace of economic collaboration. Thus far, SCO members have allocated limited resources to these collective multilateral economic initiatives, constraining their potential. The SCO institutions lack independent sources of funding, and instead must rely on the money provided by the individual member states for each project. By world standards, none of the other SCO economic mechanisms could be considered “serious” instruments.

SCO governments have preferred to offer financial and development assistance on a bilateral basis, which gives them greater influence over their individual allocations. In recent years the Chinese government has repeatedly pledged billions of dollars of loans to fellow SCO members, but these funds are either not dispersed or tied to the members’ purchasing Chinese products, constructing infrastructure that helps exploit and transport energy and other natural resources to China, or otherwise promoting Chinese national interests under the rubric of the SCO.

Furthermore, excessive customs duties, the absence of a free trade zone or common membership in the World Trade Organization, and Eurasia’s undeveloped transportation, communication, and other essential commercial infrastructure further impede intra-SCO commerce. Another problem is that the Central Asian governments like to manage trade flows since it allows them to secure monopoly rents, distribute patronage, and other benefits even if it reduces their overall trade and distorts the international commerce that does occur.

The field of energy has long been seen as a possible area for increased cooperation among SCO members. Several SCO governments have proposed establishing some kind of energy bloc within the institution. The organization’s current roster of full members and observers includes some of the world’s leading national energy suppliers (Russia, Kazakhstan, and Iran) and consumers (China and India). Nevertheless, the cross-cutting interests among these countries have impeded rapid progress in this area. Regional energy cooperation has largely been occurring outside the SCO’s auspices.

This year’s gathering again saw a number of proposals made by the SCO governments that failed to secure concrete implementation plans at the summit. For example, Kazakhstani President Nursultan Nazarbayev proposed creating a SCO cyber police agency, an analytical forecasting center to anticipate and avert conflicts, and a consultative committee to resolve regional and territorial conflicts. Nazarbayev offered some of these same recommendations last year, when Kazakhstan held the rotating SCO presidency.

The Kyrgyz Republic, whose weak government is preoccupied with internal reconstruction following the disastrous 2010 riots, when the SCO ignored appeals to intervene to help suppress mass ethnic violence, has now assumed the one-year chairmanship until the next SCO heads-of-state summit, which typically occurs in the summer.                 

CONCLUSIONS: Differences between Beijing and Moscow also impede the SCO’s development. Whereas China would like the SCO to establish a free-trade zone, Russia has sought to sustain barriers that help preserve the privileged status many Russian businesses inherited from the Soviet era. This is especially true in the energy sector, where China is eager to expand its access to Central Asian oil and gas resources traditionally under Russia’s control. Differences between China and Russia contributed to the SCO’s not admitting any new full members to its ranks. Moscow strongly backs India’s entry, but Beijing considers India a rival for regional influence in Central and South Asia. NATO’s impending military withdrawal from Afghanistan could help unify Beijing and Russia behind the need to contain Islamist militarism within Afghanistan, but it could also prove divisive if the SCO members adopt diverging proposals for coping with the new challenge.

AUTHOR’S BIO: Dr. Richard Weitz is a Senior Fellow and Associate Director of the Center for Future Security Strategies at the Hudson Institute.