Sunday, November 06, 2005

The Shanghai Cooperation Organization

The Shanghai Cooperation Organization (SCO) is a nascent political alliance of Russia, China, Uzbekistan, Tajikistan, Kazakhstan, and Kyrgyzstan created in June 2001. When first established, the SCO had the original goal of fostering security ties across China and Eurasia. Now, the organization also visits trade and development issues in the region.

Given the goal of forming a pan-security-economic-political bloc, SCO holds meetings periodically to discuss issues of regional concern. On October 26, the Moscow summit was held, where all member states participated, and attendants from Mongolia, Pakistan, India and Iran observed. The Inter-bank SCO Council was created to fund future joint projects, and it is believed that the SCO would prioritize joint energy projects, including the expanding oil and gas sector, exploration of new hydrocarbon reserves, and joint use of water resources. More specifically, talks of economic development center around the construction of oil and gas pipelines, oil prospecting, development of production technologies to the use of water resources.

China has invested heavily in Central Asia to enhance its energy security. It is constructing a 1,000-kilometer pipeline from Kazakhstan's central Karaganda region to its own northwestern Xinjiang region. Expected to be ready by the end of 2005, the Karaganda pipeline will be a vital link in a 3,000-kilometer project that will link China to the Kenqiyaq oil field farther west and to the Caspian Sea.

China is also working with Uzbekistan to develop its oil fields in the Ferghana Valley and has invested in hydroelectric projects in Tajikistan and Kyrgyzstan. China also is interested in Central Asian markets. An unstable Central Asia could result in a spillover of conflicts into its already restive Xinjiang province. It has sought to secure its borders through firming up its relations with Central Asian governments. It has poured more resources into maintaining the SCO than any other member state. The American presence in Central Asia is seen in Beijing as posing a challenge to its energy security and stability.

With regard to trade, China's program of export loans to SCO states is estimated at $900 million currently.

Some observers have noted that the SCO is the new counterbalance to U.S. hegemony in Eurasia, with China and Russia being the future leaders in Central Asia. One can easily imagine that, as the SCO strengthens on the economic front, United States influence in Central Asia will have to move beyond the few military bases already established in Kyrgyzstan, and its continual presence in Afghanistan.

The Harvard Asia Quarterly
Shanghai Cooperation Organization Eyes Economic, Security Cooperation
The People's Daily
Asia Times Online

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