9.25.07

Shanghai Cooperation Organization

The "Shanghai Cooperation Organization" (SCO) is an international organization designed to increase trust-building and cooperation in political, financial and security spheres among its Asian member-states.

Definition

The "Shanghai Cooperation Organization" (SCO) is an international organization designed to increase trust-building and cooperation in political, financial and security spheres among its Asian member-states: China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.

Background

The SCO was originally founded in 1996 as the "Shanghai Five". Its mission was to resolve border disputes between China and Russia, control arms transfers across their borders and to establish neighborly and trusting relationships among its member countries. In 2001, Uzbekistan joined the organization which then became the "Shanghai Cooperation Organization". Today, the SCO consists of its six original members and four additional "observer" countries - Iran, India, Pakistan and Mongolia.

The organization's scope of action is focused on maintaining regional stability and encouraging peace and security through regional cooperation on issues of economy, culture, tourism, environment, etc.

In recent years, the SCO has increased its emphasis on security related issues, focusing on terrorism, extremism and separatism.1

Scope of Action

SCO member-states currently focus in particular on the issues of energy, security and policy2:

  • Growing collaboration on energy issues - SCO member-states control large energy reserves (mainly oil and gas)3. The member and observing countries share million-dollar energy contracts and consistently explore ways to expand cooperation in that field4. Expansion of SCO states' collaboration in these issues beyond its member and observing countries, may lead to its potential control over the majority of oil and gas reserves in the world.

  • Expanding Security Vision - While the SCO member-states have yet to conclude a joint security agreement, they jointly decided in 2006 on a policy of cooperation and military assistance in any event that may pose threat on peace and stability in the region5. In an effort to expand military and intelligence cooperation, the SCO member-states also held a joint military exercise in August 2007, their largest in the past six years, which included 6,500 armed forces and 80 aircraft (08/8-17/07)6.

  • Political Status - The SCO is gaining increasing political prominence. SCO's influence in the energy, security and economic fields is translating into political prominence. The organization and in particular its two leading members - China and Russia - are increasingly perceived as constituting an alternative to US world power7.



1 Following the large military exercise this summer (8/07) and in light of the rising power of Russia and China, a growing assumption is emerging that the SCO could become an alternative to NATO (see Melman "on the way to a tri-polar world", Ha'aretz, 8/19/07 and AP, Ha'aretz, 8/19/07).

2 The SCO's growing activity in the energy, security and political fields, indicate the organization's regional and international ambitions. Some see the expanding role of the SCO also as an attempt to create a new power-balance to counter the US (CFR, 6/12/06).

3 Combined, the SCO member and observing countries hold 23 percent of the global oil reserves and govern the two largest natural gas deposits in the world. Iran, for instance, an observing country of the SCO, holds by itself 12 percent of the global oil reserves and governs the second largest natural gas field in the world behind Russia (JINSA Online, 12/3/06).

For further detail on global oil and gas reserves, see also the US Energy Information Administration official website.

4 See for example the China-Kazakhstan pipeline deal ($700 million), signed in 1997 and completed this year. On 8/19/07 following the SCO's annual summit and during an official visit of the PM of China in Kazakhstan, the sides signed a second phase agreement for an oil pipeline connecting China and Kazakhstan (UPI Asia Online, 8/23/07)

5 Some see the SCO's call to end US presence in Uzbekistan as an event which marked change in the character of the SCO and increased the military nature of the organization (CFR, 6/12/06).

6 See AP, Ha'aretz, 8/19/07.

7 The SCO's relations with Iran are an example of its leading position in the political sphere. Iran is currently an observing member of the SCO. For Iran, the SCO constitutes a prominent international institution where its political, economic and security aspirations may be realized, particularly in light of US pressure applied against Iran. Through upgrading its status in the SCO, Iran hopes to solidify a leading regional and international status; tighten its relations to rising powers such as Russia, China and India; gain economic and political immunity from international sanctions; and perhaps become a transit for Arab countries which aspire to closer relations with central Asian states.