If used optimally, the presidency of SCO — an Asia-centric grouping — can help India smoothen its ties with China and reassert its unique position by revitalising the concept of non-alignment
This year, India will be playing host to two major Summits — G20 and the Shanghai Cooperation Organization (SCO). India’s presidency comes at a difficult time when the global economic outlook for the next year remains bleak. India has taken over the presidency of the G-20 for 2023 from Indonesia where the G20 summit was held in November 2022. After India, Brazil will take over the presidency of the G20, followed by South Africa in 2025. As per a report by ‘Reuters’, during its term, India will hold more than 200 meetings across some 50 cities, involving ministers, officials and civil society members, leading up to a summit in the capital New Delhi in September 2023.
In 2022, the rotational presidency of SCO was handed over to India. Delhi will hold the presidency of the grouping for a year until September 2023, and will host the SCO summit. Launched in Shanghai in June 2001, the SCO has eight full members, including its six founding members, China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan. India and Pakistan joined as full members in 2017, and at the Samarkand summit in 2022, Iran was admitted as a permanent member of the SCO. Over the years, SCO has emerged as one of the largest trans-regional international organisations. Unlike G20, which is a forum and not a legislative body, SCO is a multinational intergovernmental Institution.
Political analyst H Jacob fears that the geopolitical fault lines, set in motion in the previous year, is likely to further sharpen in 2023. But amidst all the tectonic shifts, what appears to be a certainty is the emergence of an Asia-centric century. However, according to him, the geopolitical and economic rise of Asia coincides with several regional and global developments which have the potential to undermine the stability and prosperity India had hoped an Asian century would bring. The withdrawal of the US from much of continental Asia and the aggressive rise of China and the Ukraine war appear to have ended the great power concert in Asia. Now, two major powers — Russia and China — are trying, though in varying degrees, to undermine the global balance of power, with several regional powers such as Iran, Turkey and Saudi Arabia in tow. Asia may be headed towards more global prominence, but instability will be its possessive partner, Jacob dreads.
On India’s role in G-20, Prime Minister Narendra Modi stated: “During our G20 Presidency, we shall present India’s experiences, learnings and models as possible templates for others, particularly the developing world. Our G20 priorities will be shaped in consultation with not just our G20 partners, but also our fellow-travellers in the Global South, whose voice often goes unheard. Our priorities will focus on healing our “One Earth”, creating harmony within our “One Family” and giving hope for our “One Future”. He also added that “India’s G20 agenda will be inclusive, decisive”.
India, the poorest country among other members of G20 where OECD usually formulates the agenda, has set a very ambitious target for itself. India’s success in G20 will depend on how BRICS (Brazil, Russia, India, China, and South Africa) and other Asian countries (Saudi Arabia, South Korea, Japan and Indonesia) will coordinate among themselves to bargain with the Western bloc led by the European Union (EU) and the USA. It may be mentioned that China, South Korea, Japan and Indonesia are members of the Regional Comprehensive Economic Partnership (RCEP) and, very recently, Saudi Arabia has entered into a long-term partnership programme with China.
The Shanghai Cooperation Organization (SCO) is the successor to the Shanghai Five, formed in 1996 following a mutual security agreement among China, Kazakhstan, Kyrgyzstan, Russia and Tajikistan. Later in June 2001, these nations and Uzbekistan met in Shanghai to announce a new organisation, in SCO, with deeper political and economic cooperation. The SCO charter was signed in July 2002 and came into effect in September 2003. Ever since then, the group has expanded to eight states, following the inclusion of India and Pakistan in a historic summit held in June 2017, and Iran joined in 2022. The organization has two permanent bodies, one of which is the General Secretariat in Beijing and the other is the Executive Committee of the Regional Anti-Terrorist Structure in Tashkent.
SCO is the world’s largest regional organization in terms of geographic scope and population, covering approximately 60 per cent of the area of Eurasia, 40 per cent of the global population, and more than 20 per cent of the global GDP.
Over the years, the SCO has established relations with a large number of multilateral organizations like the United Nations in 2004 (where it is an observer in the General Assembly), Commonwealth of Independent States in 2005, Association of Southeast Asian Nations (ASEAN) in 2005, the Collective Security Treaty Organization in 2007, the Economic Cooperation Organization in 2007, the United Nations Office on Drugs and Crime in 2011, the Conference on Interaction and Confidence-Building Measures in Asia (CICA) in 2014, and the United Nations Economic and Social Commission for Asia and the Pacific in 2015. SCO Regional Anti-Terrorist Structure (RATS) established relations with the African Union’s African Centre for the Study and Research on Terrorism (ACSRT) in 2018.
With assistance from the Asian Development Bank and the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), SCO members agreed to an intergovernmental agreement on facilitating international road transport in Dushanbe on September 12, 2014, which came into force on January 20, 2017. Its objective was to promote transport, trade, and tourism among the Shanghai Cooperation Organization (SCO) member countries to facilitate international road transport.
The main objectives of SCO are to: (i) strengthen relations among member states; (ii) promote cooperation in political affairs, economics and trade, scientific-technical, cultural, and educational spheres as well as in (iii) energy, transportation, tourism, and environmental protection; (iv) safeguard regional peace, security, and stability; and (v) create a democratic, equitable international political and economic order.
While the organization conducts its external policy in conformity with non-targeting and non-alignment, its internal policy is centered on the fundamentals of mutual advantage, building cooperation, mutual discussions, inclusivity, and consideration for cultural diversity and a desire for shared development.
India’s engagement with the SCO goes back to the year 2005 when India joined this organization as an observer state along with Pakistan and Iran. Between 2005 (in observer status) and 2010 (the year India showed the interest for joining the SCO as a full member for the first time), India’s engagement with SCO had been limited, mainly due to India’s limited access to the SCO platform, as “observers do not participate in formulating decisions of the SCO institutions and do not bear responsibility for such decisions as well.” Under such restricted access to the platform as an observer, India obviously had limited relations with SCO. However, since 2010, there has been a gradual rise in India’s engagement with SCO. The then External Affairs Minister, SM Krishna, said in the Lok Sabha on July 28, 2010 that “SCO has grown rapidly in importance and is playing an important role in promoting stability, economic development and in combating terrorism in the Central Asian region as well as in Afghanistan.” In 2017, India and Pakistan joined SCO as full members, and in 2022, the rotational presidency of SCO was handed over to India in Samarkand, Uzbekistan.
At the 2022 SCO Summit, Varanasi has been nominated as the first-ever SCO Tourism and Cultural Capital, with an objective of promoting cooperation between the SCO member states in the field of culture and tourism.
In November last year, India launched the official website of the Shanghai Cooperation Organisation (SCO), as it will host the next SCO summit as a chairman of the organisation in 2023. The theme of the event is “For a SECURE SCO”. It is reported that the Prime Minister of India, Narendra Modi, had floated the concept of SECURE at the Shanghai Cooperation Organisation (SCO) summit in China in 2018. Explaining the SECURE concept, the Prime Minister said ‘S’ stands for security of citizens, ‘E’ for economic development, ‘C’ for connectivity in the region, ‘U’ for unity, ‘R’ for respect of sovereignty and integrity, and ‘E’ for environment protection.
SCO 2023 has a special significance to India, as Iran will attend the SCO Summit as a full member. In addition to this, the SCO presidency is likely to assist India, which is now confined to the South Asian Region, to become a significant Pan-Asian player. Natural resources and essential minerals abound in the Central Asian region. SCO platform, if properly used, will help India develop strong economic ties with Iran, Saudi Arabia, Pakistan and other member countries, including China.
Sino-Saudi energy and investment deals
In December 2022, Chinese President Xi Jinping travelled to Saudi Arabia for a series of summits with countries from around the Middle East. That was the fifth time a Chinese president had been to the Kingdom — starting with Jiang Zemin in 1999. With each trip, the bilateral relationship has gotten deeper and broader. During Xi’s visit to the Middle East, China and Saudi Arabia signed 34 energy and investment deals. China has been Saudi Arabia’s largest trading partner since 2013 while Riyadh has been Beijing’s biggest oil provider for years. In the first three quarters of 2022, imports from Saudi Arabia accounted for 17.8 per cent of China’s total oil imports. As per a report by South China Morning Post, the Middle East was also the main beneficiary of belt and road investment in the first half of this year. Saudi, the world’s largest crude supplier, and China, the biggest energy consumer, are positioned to help each other reach their economic expansion goals. Xi’s visit came at a time when the US-Saudi ties had hit an all-time low and China’s influence in the kingdom was growing.
It is reported that the Chinese President Xi Jinping pushed for close security and energy ties with Gulf nations during summit meetings in Saudi Arabia. “China will continue to firmly support the GCC countries in maintaining their own security... and build a collective security framework for the Gulf,” Xi said at the China-GCC summit. “China will continue to import large quantities of crude oil from GCC countries on an ongoing basis,” he said, also vowing to expand other areas of energy cooperation including liquefied natural gas imports. In November 2022, Qatar announced a 27-year natural gas deal with China. The Gulf Cooperation Council (GCC) includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. Xi and King Salman also agreed to
hold meetings between the two countries’ leaders every two years. In a joint statement, Beijing and Riyadh pledged to enhance cooperation, and stressed on the principles of sovereignty and “non-interference” while affirming the importance of a peaceful solution to the Ukraine conflict, reported the Gulf News.
Analysts argue that Beijing has positioned itself to fill the shoes the United States appears to be leaving in the Arab world’s largest economy, as their 90-year relationship declines. While Saudi Arabia remains a strategic economic partner of the United States, it is seeking alternatives to avoid reliance on a single country, and China can play a role in this regard. Though all currencies of the Gulf Cooperation Council (GCG) are pegged to the dollar, Saudi Arabia has considered pricing some of its oil sales to China in yuan in a move that is seen as symbolic but reflects the direction Saudi Arabia and the region are turning towards, especially as dollar sanctions on Russia impact global supply chains. Saudi Arabia and the UAE are looking eastward to China and elsewhere in pursuit of foreign direct investments to
build new industries and diversify from oil without Western dependency.
Wang Huiyao, the founder of the Centre for China and Globalisation, a Beijing-based non-governmental think tank, in his article in the South China Morning Post, contended that Xi’s visit to Saudi Arabia has added extra impetus to China’s deepening ties with the kingdom. Leaders of the two countries will meet every two years under the new strategic partnership agreement. According to him, China’s tech and trade
offers dovetail nicely with Gulf ambitions to deepen ties with Asia in search of a cleaner, greener future. The shared interest in building partnerships outside America’s orbit could see the SCO expand, and lead to the birth of a China-GCC free trade pact.
Analysts are keenly watching the next milestones in this unfolding story. One could be an expansion of the Shanghai Cooperation Organisation (SCO) into the Middle East. Saudi Arabia, already an SCO dialogue partner, is interested in upgrading to observer status. Iran has passed a bill to join the group. Another item to watch is the negotiations on the China-GCC free trade agreement, reportedly in the final and critical stage. The relationship between China and the Gulf will be one to watch as both sides seek to diversify their economies and external relations in an increasingly uncertain world.
India, for years, has believed in maintaining a balance between superpowers ever since the cold war era of the previous century, and led the nonalignment movement of the G77 group of developing and least developed countries. The rise of the Asian century and the emergence of the People’s Republic of China as a new super power has put India in a dilemma about its role amid tectonic shifts in the global power centre towards Asia.
Recent Sino-Saudi energy and investment deals are the real gamechanger. These have tilted the global power balance in favour of China. This new development in the Middle East has the potential to destabilize the USD and dethrone it as the global reserve currency. Iran’s membership in SCO has strengthened this Eurasian alliance.
India should use the SCO platform to implement its ‘Look West’ policy and establish a mutually beneficial relationship with the SCO member states. Most importantly, SCO Summit offers a perfect opportunity to convey to the Western world and China that India still believes in the philosophy of non-alignment. And with China, India would like to retain a peaceful relation based on mutual trust and cooperation. These two clear messages should go to all members of the G-20 and SCO.
The Western countries, which are wary of China’s emergence as a new global power, may feel tempted to develop a strategic alliance with India to restrain China — the same way NATO has aligned with Ukraine to wage a proxy war against Russia. In this context, the Asia-centric SCO Summit is very important to India –especially after the Modi government’s decision to refrain from joining the China-led RCEP and Belt and Road Initiative (BRI). SCO may help bring these two big neighbours, with thousands of years of shared culture and ecological commons, closer.
Let’s hope the SCO Summit 2023 will frame a roadmap ‘For a SECURE SCO’ — the theme of the current year’s Summit.
Views expressed are personal