Investigating the role of Shangai Cooperation Organization (SCO) as leader organization for the new world infrastructure

At GlobalSouth we have posted up many informational essays, data analysis and process descriptions regarding BRICS. We have been very excited and sometimes our hearts dropped down into our knees. The expectation for BRICS to function as exected, is sky high.

We have not looked in any of this detail at SCO, a part of the puzzle of where our world is moving towards. What are they? What do they do? How do they interact with BRICS? How do they interact with the United Nations, and what can we expect from SCO into the future?

This analysis as part of the new world structures, intends to fill in that gap but partially.  As I soon found out, SCO is huge.

The next SCO Meeting

The next Shanghai Cooperation Organisation (SCO) Summit meeting will take place in Astana, Kazakhstan, on July 3-4 and this will be a summit for the SCO Heads of State.  President Xi Jinping as well as President Putin will be in attendance.

The meeting agenda (and most documents have been approved via previous work) is:

• the draft Astana Declaration,
• the SCO Initiative оn World Unity for a Just Peace and Harmony,
• the roadmap for the development of interaction with SCO dialogue partners.

Any aggravation of the Israeli-Palestinian conflict and recent terrorist attacks in some SCO member states form part of the agenda.

Since Kazakhstan took over the SCO chairmanship in 2023, over 180 events have been organized focusing on economic, investment, transport, cultural and humanitarian topics, and environmental aspects within the Year of Environment 2024.   SCO is working year-round, as we see with BRICS as well.

Prime Minister Narendra Modi will skip the SCO Summit, and External Affairs Minister S. Jaishankar is expected to officiate in his place.

Founding

SCO considers that they are a permanent intergovernmental international organization.  Under the Shangai Five, the founder members in 2001 were the Republic of Kazakhstan, the People’s Republic of China, the Kyrgyz Republic, the Russian Federation, the Republic of Tajikistan and the Republic of Uzbekistan – the Stans plus Russia and China.  They completed their charter in 2002 and this was signed at a meeting of the Council of Heads of States in St. Petersburg.  This charter entered into force on September 19, 2003. It is a statute that stipulates the goals, principles, structure and major areas of activities of the organization.

The goals of the SCO are:

• to strengthen mutual trust, friendship and good-neighbourliness between the Member States;
• to encourage the effective cooperation between the Member States in such spheres as politics, trade, economy, science and technology, culture, education, energy, transport, tourism, environmental protection, etc;
• to jointly ensure and maintain peace, security and stability in the region; and the most important…
• to promote a new democratic, fair and rational international political and economic international order.

Internally, the SCO adheres to the “Shanghai spirit”, namely, mutual trust, mutual benefit, equality, consultation, respect for diversity of civilizations and pursuit of common development; and externally, it upholds non-alignment, non-targeting at other countries or regions and the principle of openness.

I would consider that the SCO structure and organization first designed the principles of multipolarity in a written and formal form and we see similar objectives from BRICS.  A major difference is that SCO has a secretariat and a formal organization.  BRICS currently does not deem it necessary to have a secretariat and feels less organized than the SCO, but much more exciting.

SCO Structure

The supreme decision-making body of the SCO is the Council of Heads of States (CHS). It meets once a year and decides upon all the important issues of the organization.  The discussion is around the strategy of multilateral cooperation and priority areas within the Organization and determination and topical issues in economic and other spheres.  They approve the budget.

In addition to the meetings of the CHS and the Council of the Heads of Government (CHG), there are also mechanisms for meetings on foreign affairs, national defense, security, economy and trade, culture, health, education, transport,  emergency prevention and relief, science and technology, agriculture, the judiciary, tourism, industry, energy, poverty alleviation, sports, etc. The Council of National Coordinators is the SCO coordination mechanism.  Since then, I’ve seen added structures on the topics of terrorism (RATS) and information technology.

The Organization has 2 standing bodies — the Secretariat in Beijing and the Executive Committee of the Regional Anti-Terrorist Structure (RATS) in Tashkent. The SCO Secretary General and the Director of the RATS Executive Committee are appointed by the CHS for a three-year term. On January 1, 2022, Zhang Ming (China) and R. E. Mirzaev (Uzbekistan) took office as the SCO Secretary General and Director of the RATS Executive Committee respectively.

The SCO has established many partnerships:

• Commonwealth of Independent States (CIS),
• the Association of Southeast Asian Nations (ASEAN),
• the Collective Security Treaty Organization (CSTO),
• the Economic Cooperation Organization (ECO),
• the UN Economic and Social Commission for Asia and the Pacific (ESCAP),
• the UN Office on Drugs and Crime (UNODC),
• the Conference on Interaction and Confidence Building Measures in Asia (CICA),
• the International Committee of the Red Cross (IRC),
• the UN Educational, Scientific and Cultural Organization (UNESCO),  the UN Office for the Coordination of Humanitarian Affairs (UNOCHA),
• the Food and Agriculture Organization of the United Nations (FAO),
• the World Tourism Organization (WTO),
• the Eurasian Economic Commission (EEC),
• the League of Arab States (LAS), etc.

The official languages of the SCO are Russian and Chinese.

Currently, the SCO countries include:

9 Member States — the Republic of India, the Islamic Republic of Iran, the Republic of Kazakhstan, the People’s Republic of China, the Kyrgyz Republic, the Islamic Republic of Pakistan, the Russian Federation, the Republic of Tajikistan, the Republic of Uzbekistan;

• 3 Observer states  – the Islamic Republic of Afghanistan, the Republic of Belarus, Mongolia.
• In 2022, at the Samarkand SCO Summit, the process of raising the status of the Republic of Belarus within the Organization to the level of a member state has begun;
• 14  Dialogue Partners – the Republic of Azerbaijan, the Republic of Armenia, the Kingdom of Bahrain, the Arab Republic of Egypt, the Kingdom of Cambodia, the State of Qatar, the State of Kuwait, the Republic of Maldives, the Republic of the Union of Myanmar, the Federal Democratic Republic of Nepal, the United Arab Emirates, the Kingdom of Saudi Arabia, the Republic of Turkey, the Democratic Socialist Republic of Sri Lanka.

SCO alliances

SCO talks to and cooperates with many organizations, international and regional, and these are organized with Memorandums of Understanding:

The current legal framework of the SCO’s foreign relations consists of the following documents (in chronological order):

1. Memorandum of Understanding between the Secretariat of the Shanghai Cooperation Organisation and the Executive Committee of the Commonwealth of Independent States (Beijing, 12 April 2005);

2. Memorandum of Understanding between the Secretariat of the Shanghai Cooperation Organisation and the Secretariat of the Association of Southeast Asian Nations (Jakarta, 21 April 2005);

3. Memorandum of Understanding between the Secretariat of the Shanghai Cooperation Organisation and the Secretariat of the Collective Security Treaty Organisation (Dushanbe, 5 October 2007);

4. Memorandum of Understanding between the Secretariat of the Shanghai Cooperation Organisation and the Secretariat of the Economic Cooperation Organisation (Ashgabat, 11 December 2007);

5. Joint Declaration on Cooperation between the Secretariat of the Shanghai Cooperation Organisation and the United Nations Organisation (Tashkent, 5 April 2010);

6. Memorandum of Understanding between the Secretariat of the Shanghai Cooperation Organisation and the UN Office on Drugs and Crime (Astana, 14 June 2011);

7. Memorandum of Understanding between the Secretariat of the Shanghai Cooperation Organisation and the Secretariat of the UN Economic and Social Commission for Asia and the Pacific (Zhengzhou, 15 December 2015);

8. Memorandum of Understanding between the Secretariat of the Shanghai Cooperation Organisation and the Secretariat of the Conference on Interaction and Confidence-Building Measures in Asia (Shanghai, 20 May 2014);

9. Memorandum of Understanding between the Secretariat of the Shanghai Cooperation Organisation (SCO) and the International Committee of the Red Cross (ICRC) (Astana, 9 June 2017).

They cooperate with the United Nations.

Note that Mr.Lavrov always says we need the UN.  Judging by the SCO footprint, SCO and BRICS may well be forming a new UN in a type of takeover bid, or simply outcompete the rest.

UNSC July

Russia is again in the Chair of the UNSC for July.  Take a look and compare with the discussions planned in the upcoming SCO meeting and you will see the interaction and cooperation of the various levers in the new world.

🗓 July 16 – open ministerial-level debate on multilateral cooperation for a more just, democratic and sustainable world order.

Exactly one of the objectives of SCO:
• to promote a new democratic, fair and rational international political and economic international order.

🗓 July 17 – open ministerial-level debate on the situation in the Middle East, including the Palestinian issue.

• the SCO Initiative оn World Unity for a Just Peace and Harmony, and in the SCO agenda:  Any aggravation of the Israeli-Palestinian conflict and recent terrorist attacks in some SCO member states form part of the agenda.

🗓 July 19 – debate in the Security Council on UN cooperation with the #CSTO, the #CIS and the #SCO.

This may well be the black swan event.  Note it is the topic of UN cooperation with the most important two partners of SCO.

What can we expect from SCO

I expect BRICS to continue and SCO to continue, but I expect that their interaction will be similar to the Russia/China relationship, yet, in terms of banks and financial and economic infrastructure, there will be smooth cooperation.

First, the objectives will be clarified so that there is not too much overlap in functions.

Second, they will either take over the UN, or the UN will be made over in the image of BRICS and SCO.  Note the partnerships in this planned UNSC meeting.  It is the Commonwealth of Independent States (CIS), and the the Collective Security Treaty Organization (CSTO).  We can then consider these the two most important partners of SCO.

Third, they will change the world.

Size of SCO, GDP, Trade, Economics

And right here things became very interesting in a generally basic analysis and educational.

SCO is the world’s largest regional organization in terms of geographic scope and population, covering approximately 80% of the area of Eurasia and 40% of the world population. As of 2021, its combined GDP was around 20% of global GDP.  That is four years ago and the number will be different now, however, it is hard to find.  Currently it is estimated at 25% of global GDP.  (China is of course bigger and will skew that number but it does not matter as we are in a multilateral and multipolar and multinodal world).

SCO Interbank Consortium advocated to their members to take full advantage of the opportunities of interbank cooperation in order to create favourable conditions for trade and investment. They noted initiatives to create a SCO Association of Investors and a joint SCO Investment Fund.

At the previous SCO Finance Ministers and Governors of Central (National) Banks meeting, the goal was set to develop further in digital financial accessibility with the SCO Development Bank and the SCO Development Fund (Special Account).  The heads of delegations of the concerned SCO member states confirmed the importance of consistent implementation of the Roadmap to Gradually Increase the Share of National Currencies in Mutual Settlements, and also called on other SCO member states to join in its implementation.

BRICS – In 2015, the five countries established their lender, the New Development Bank (NDB), based in China’s economic hub of Shanghai and envisioned as an alternative to the Washington-based World Bank.  Additionally, the BRICS group is more than just an economic or trading bloc, and its New Development Bank was established in 2014 to invest in sustainable infrastructure and renewable energy across the globe.

According to estimates, BRICS+, now accounts for 37.3 % of world GDP.  Combined, the BRICS members encompass about 30% of the world’s land surface and 45% of the global population.  SCO covers  40% of the world population.

In terms of size of GDP or PPP or any of those measures, the landscape has changed materially.

There may be other numbers but I said previously that with the trading in local currencies and other trading mechanisms, there will be a period where the statistics are not accurate.  I find great and voluble articles written about the rich in SCO and BRICS and how the investing companies should go after the investors.  Take a look at one of the most well known western financial statistics groups about BRICS, but there is nary a number in sight:

“The inclusion of MENA countries is not just a political realignment but a recognition of their growing economic stature. The region, historically pivotal due to its energy resources, is now asserting a more diversified economic role. For investors worldwide, MENA’s growing participation in BRICS opens a realm of possibilities beyond the region, offering access to fast-growing consumer markets, strategic geographic positioning, and unique cultural and business environments.”

The hard numbers are western skewed to the extent that one knows not to trust the numbers.

So I have to tell you that SCO and BRICS combined ARE THE WORLD currently, but I cannot with confidence present trade and economics numbers.

What surprised me in starting to investigate SCO was the sheer size and variety of their initiatives.

Accurate statistics: In one of the meetings last year, this was discussed and at least these two organizations are on the way to creating their own statistics organizations reporting what they would like to see reported.  Currently, don’t believe anything in terms of trade and economics.   The SCO stance: The heads of delegations noted the importance of building multilateral cooperation through official statistics to introduce the best statistical practices and methodological developments to timely provide member states with official statistical information under the framework of the implementation of priority areas of trade and economic cooperation.

Science: In addition to what has been mentioned, we have initiatives for young scientists.  At the meeting of the SCO Young Scientists Forum (Bangalore, 6-10 February 2023) and the Meeting of SCO Science & Technology Ministers (16 May 2023), they emphasised the importance of utilising the available potential of partnering science and technology to facilitate sustainable development in the SCO region, including the implementation of the Programme for cooperation in AI development Between Authorised Agencies of the SCO Member States (Samarkand, 16 September 2023).

Food Security:  The heads of delegations welcomed the outcome of the Meeting of the Agriculture Ministers of the SCO Member States (12 May 2023, by videoconference), and the discussion involving the provision of food security in the SCO space as part of the International Conference on Food Security (Samarkand, 7-8 September 2023).  There is initatives for a SCO Demonstration Base for Agricultural Technology Exchange and Training in promoting agricultural cooperation in the SCO space.

Emergency Provision: The heads of delegations welcomed the results of the Meeting of the SCO Heads of Emergency Prevention and Relief Agencies (New Delhi, 20 April 2023), seminars on aftermath relief of floodings (23 February 2023, by videoconference) and earthquakes (24 February 2023, by videoconference), as well as the conference on humanitarian aid and disaster risk reduction (New Delhi, 20 March 2023). Cooperation in Disaster Relief is high on the agenda. (Moscow, 26 October 2005).

Information Technology: The heads of delegations noted the results of the Meeting of the Heads of Agencies of the SCO Member States Responsible for Development of Information Technology (13 May 2023, by videoconference).  The heads of delegations emphasised the importance of further developing cooperation in digital transformation and ICT in accordance with the concept adopted by the decision of the SCO Heads of State Council (Bishkek, 14 June 2019).

Cooperation:  The heads of delegations spoke in favour of further expanding mutually beneficial cooperation with the SCO observer states and dialogue partners in order to increase the potential for joint activities within the SCO, as well as to further strengthen cooperation with international organisations, interstate, and regional integration associations, such as the UN, CIS, CSTO, EAEU, ASEAN, ECO, CICA, BRICS, etc.

Special SCO Economic Zones:  The heads of delegations, speaking for the further development of cooperation in the industrial sector, noted the initiative to create an Alliance of Special Economic Zones of the SCO countries

Supply Chains:  The heads of delegations noted the measures taken by the SCO member states to promote cooperation in trade in services, including in order to stabilise supply chains, while also emphasising the importance of continuing to implement the Framework for Cooperation in Trade in Services Between the Authorised Bodies of the SCO Member States (Samarkand, 16 September 2022).

This is a partial of a very long list, and includes long-term cooperation between the SCO member states in the sphere of culture, education, science and technology, environmental protection, healthcare, sport, tourism, and youth policy.

SCO and BRICS are the world and the west is its own gravedigger.

UPDATE:

Russia is accelerating its transition to trade in national currencies. Latest figures show the ruble’s share in foreign trade settlements has climbed to nearly 45%.

One of the most important tasks for the near future is the alignment of jurisdictions within the BRICS group, according to Anton Kobyakov, Advisor to the Russian President. This will allow for further development of economic relations and strengthening of mutual integration, which have already reached high levels.