Shanghai Cooperation Organization (SCO)

Pakistan in sco and prospects and challenges

The Shanghai Cooperation Organization’s (SCO) Council of Heads of Government (C

HG) held its 16th meeting on November 30-December 1, 2017. Pakistan’s PM Shahid
Khaqan Abbasi highlighted the pivotal role that Islamabad can play in achieving the S
CO’s objectives by serving as a bridge between Central and South Asia. However, in o
rder to realize the potential benefits of Pakistan’s SCO membership, Islamabad needs t
o intensify its public diplomacy and improve its standing among the other member stat
es by aligning its policy with other regional powers. Is Islamabad ready to do this?

BACKGROUND: As Pakistan became an SCO member on June 9, 2017, Islamabad describ

ed this as an opportunity to improve its relations with the regional countries by facilitating tra
de through the Gwadar port, contributing to a regional solution to the Afghanistan issue, addr
essing its worsening energy crisis, as well as learning from and contributing to the SCO’s Re
gional Anti-Terrorist Structure (RATS).
The SCO has emerged as a major player in regional and global affairs. A number of Western,
and especially U.S. scholars, view the SCO as a challenge to U.S. interests. Some have descri
bed it as the beginning of a new organization resembling the Warsaw Pact (or a “NATO of th
e East”). The SCO emerged out of the Shanghai Five, created in 1996 with China, Russia, Ky
rgyzstan, Kazakhstan and Tajikistan as founding members. In 2001, the Shanghai Five was e
xpanded and renamed SCO with the inclusion of Uzbekistan. In 2005, Pakistan, India, Iran an
d Mongolia joined as observers.
In the past, both China and Russia have repeatedly stated that the organization would not inco
rporate new members despite Pakistan and India’s active campaign for SCO membership. Ho
wever, this attitude changed in recent years; while Moscow supported New Delhi’s bid for m
embership, Beijing, arguably the main player in the SCO, supported Islamabad’s bid. At the 2
015 summit at Ufa, Russia, the SCO reached and announced its decision to include Pakistan a
nd India as members. In 2016, India and Pakistan signed a memorandum of obligation. Durin
g the 17th SCO summit in Kazakhstan’s capital Astana, President Nursultan Nazarbayev for
mally welcomed Pakistan and India as SCO members.
This development in the SCO’s history raises several important questions, including how it w
ill affect the SCO’s ability to function as a regional alliance; to what extent the inclusion of n
ew members indicates a power struggle between Moscow and Beijing; how deep rooted this s
truggle is and how it will affect the SCO. Yet from Islamabad’s perspective, the main questio
n is what it can offer the SCO and what it can gain from its membership in the organization. 
IMPLICATIONS: Islamabad faces a number of challenges at the regional and international l
evels and its SCO membership can be of help in addressing these challenges. Recently, Islam
abad’s relations with Moscow have improved. After the meeting between PM Abbasi and Ru
ssian PM Medvedev on the sidelines of the SCO meeting, both expressed satisfaction with th
e evolution of bilateral relations including in defense cooperation. Other cases in point includ
e Russia’s recent support for Islamabad’s positions on membership in the Nuclear Suppliers
Group and terrorist sanctuaries on the Afghan side of the Durand line. Islamabad’s SCO mem
bership will provide an opportunity to expand this bilateral relationship through the SCO plat
form, especially in the defense sector.
Islamabad, Moscow, Tehran and Beijing are all seriously concerned over the emergence of th
e terrorist organization known as the Islamic State in Iraq and Syria (ISIS) and the future of A
fghanistan. Both these issues impede positive development across the region. Since all SCO
member states have interests in Afghanistan and support different groups in the country, it is i
mperative that using the SCO platform, these states develop a joint strategy to address the Af
ghanistan problem and ISIS threat. 
Pakistan provides natural link and route for other SCO members to access the Indian Ocean.
As Pakistan’s former Prime Minister Nawaz Sharif aptly pointed out: “Pakistan provides the
natural link between the SCO states to connect the Eurasian heartland with the Arabian Sea a
nd South Asia … We offer the critical overland routes and connectivity for mutually benefici
al trade and energy transactions intra-regionally and inter-regionally.” While this prospect pro
vides immense opportunities for all SCO members, it also indicates a challenge for Islamabad.
Despite immense potential, Islamabad’s trade and economic relations with most SCO memb
ers, aside from China, are minimal. The SCO membership will provide Islamabad with an op
portunity to initiate and revive a number of projects using the SCO platform.
Gwadar port stands to become an important and effective trade outlet for the Central Asian St
ates. Under the SCO banner Islamabad can provide SCO member states with preferential acce
ss to Gwadar.
Pakistan’s mounting energy crisis needs immediate attention. Islamabad has so far failed to ta
ckle it, but is developing an energy policy to address the problem. SCO membership provides
Islamabad with an avenue to explore opportunities for importing oil and gas from the Central
Asian states, primarily Uzbekistan, Tajikistan and Kazakhstan.
An important question is whether Indo-Pak rivalry will find another venue in the SCO. Will
New Delhi and Islamabad be able to act maturely and adopt the SCO’s spirit of regionalism?
At the SCO summit in June 2017, Pakistan’s former PM Sharif agreed with and welcomed a
proposal made by Bottom of FormChinese President Xi Jinping on a five-year treaty for good
neighborliness among SCO members. Conversely, India’s PM Narendra Modi used this foru
m to continue his policy of isolating Pakistan in his first speech as an SCO member. It has be
en pointed out that importing this conflict into the SCO risks impeding the functioning of the
organization, as has been the case with the South Asian Association for Regional Cooperation.
Yet contrary to general perception, India may not be able to use the SCO platform effectively
against Pakistan. China is the SCO’s key member, and India-China relations are defined by st
rategic competition and security concerns. After the Doklam crisis, another military confronta
tion between the two cannot be entirely ruled out. It is well-documented that China was reluct
ant to grant India SCO membership. On its part, India is extremely critical of the China Pakist
an Economic Corridor (CPEC) as well as China’s Belt and Road Initiative. While India can u
se the SCO to voice its concerns over Islamabad’s alleged support for terrorism in India, Chin
a has so far supported Pakistan on this issue, including through its recent veto to a UN resolut
ion designating Masood Azhar of Jaish-e-Muhammad a wanted terrorist. It is unlikely that Ch
ina would act otherwise in the SCO. India also needs to exercise caution in using the SCO to
highlight the Kashmir problem, as China can raise the Tibet issue and India’s sheltering of th
e Dalai Lama in response.
For these reasons, India’s SCO membership will not increase its ability to put pressure on Pak
istan. Moreover, if Pakistan’s relations with Russia improve further and China, Russia and Pa
kistan can reach an understanding on Afghanistan and the U.S. presence there, India would h
ave to tread even more carefully as it would then have to decide which side to join and would
risk losing its primary supporter in the SCO.
CONCLUSIONS: The SCO is an important regional alliance. The inclusion of Islamabad pr
ovides the SCO with a link and route to South Asia and to the Indian Ocean. China, along wit
h its SCO partners, is developing and implementing the Silk World order. The One Belt One
Road Initiative, of which CPEC is an integral part, is a manifestation of this order. As a pivot
al South Asian state, Pakistan can contribute positively to the SCO as well as learn from it. Y
et before such a contribution is possible, Islamabad needs to reach out to the other SCO mem
ber states, with which it shares historical and cultural ties, to improve relations and then devel
op a regional understanding on issues vital for all SCO members including on Afghanistan, Is
lamic radicalization and drugs. Whether Islamabad will be able to meaningfully integrate into
this regional block largely depends on overcoming this final obstacle. 
 Significance of SCO for Pakistan

Introduction: Pakistan became a permanent member of Shanghai Cooperation

Organization (SCO) on 9th June 2017 that opened an opportunity for her to reap
maximum benefits by engaging in partnership with its members__ Central Asia
n Republics (CARs), Russia, China and India. These all countries hold the great
est economic, military and strategic significance for Pakistan. The organization i
s widely known for its defense cooperation and some largest joint military exerc
ises. For this reason, it is also called “NATO of the East.”

Security benefits for Pakistan:

 The members of SCO have established Regional Anti-terrorist Structure (RA

Ts) with headquarters in Tashkent. The RATs involve the sharing of intellige
nce information by the member countries to defeat extremism and terrorism
from the region. It also gathers information regarding different terrorist grou
ps operating in the neighborhood.

 in order to defeat terrorism and extremism from a particular region, it is imp

erative for the countries to cooperate in sharing intelligence. Pakistan is faci
ng the issue of cross border terrorist attacks It is therefore, the sharing of int
elligence under RATs will help Islamabad to eliminate terrorism completely
from its land.
 Besides, SCO countries are known for conducting the largest military exerci
ses in the world. The membership, therefore, will ensure the participation in
these joint exercises. Pakistan will also get a chance to modernize its militar
y equipment using these drifts.

Energy benefits for Pakistan:

 Pakistan has been facing energy shortages since 2007 and its estimated requi
rement of power in 2030 will be 50,000 MW. The membership will open a
window for her to get energy requirement fulfilled without installing expens
ive infrastructure because CARs are rich in energy resources. Moreover, SC
O has formed “Energy Club” as a platform to make energy deals with the m
ember countries in a transparent and effective way.

 After the fall of Soviet, the US officials estimated that in Turkmenistan, Kaz
akhstan, Azerbaijan, and Uzbekistan lay between 50 billion and 100 billion
barrels of oil, plus nearly 250 trillion cubic feet of gas. It was the reason that
in 1995, some oil giant like Argentinian based Bridas Corporation and the U.
S. based Unocal showed interest in signing Turkmenistan-Pakistan-Afghanis
tan-India Pipeline popularly known as TAPI.

 Pakistan signed Memorandum of Understanding (MoU) with Bridas Corpor

ation instead of American based oil giant in 1995 under the government of B
enazir Bhutto. Steve Coll, in his book,  “Ghost Wars” has written details abo
ut the MoU.However, the project could not be succeeded owing to instabilit
y in Afghanistan. Once this project is completed, Pakistan will not only recei
ve adequate energy supply direct from Turkmenistan, but also get transit fee
s for allowing the pipeline to pass through its territory to India. The member
ship in SCO will help Pakistan to bring peace in Afghanistan and give a prac
tical shape to TAPI.

Economic development of Pakistan:

 The blessed geo-strategic location of Pakistan will help it to gain maximum

economic benefits from the membership of SCO. Pakistan provides the shor
test transit route to CARs, China and Russia to reach Arabian Sea (Warm W
ater) for trade activities. As a result, CARs will move their energy resources
to the Sea by exploiting Pakistan’s territory. Consequently, Islamabad will g
et millions of dollars as transit fees. Same is the case with China, which is th
e largest trading nation of the world with an estimated trade of around $4 tril
lion. At present, around 80 per cent of Chinese trade pass from its traditional
route through South China Sea that is not only time consuming by also risky
as surrounded by American allies. Pakistan provides China with the shortest
transit route to reach Arabian Sea. The diversion of this huge trade will take
the economic position of Pakistan to the certain new height of glory.
A platform to solve Pak-India issues:

 India and Pakistan are facing numerous daunting challenges including Kash
mir. All the bilateral attempts to solve their crisis have hit to the brick wall.
Without the meditation of some great powers, the issues, between two count
ries, could not be addressed.

 Since, India is also a member of SCO, the organization will act as a platform
to solve the differences of the two countries with the mediation of China and
Russia. China wants peace in the region and economic cooperation among t
he regional countries. It will surely, in future, mediate and engage them in tr
ade activities. It is also in the best interest of Beijing. Thus, the membership
provides Pakistan and India a much needed platform to solve their daunting
challenges, before they turn into a wider conflagration.

Image building for Pakistan:

 The membership of SCO will act as an image builder for Pakistan. In Intern
ational Relations, being a part of the largest and important organization is co
nsidered as a source of prestige for the countries. The SCO was formed in 2
001, but Pakistan has gained membership in 2017. It means, the old member
s thought Pakistan as a responsible country to be included as member. It is, i
n short, a license of responsibility for any country to become a part of presti
gious organization.

Controlling drug trafficking:

 The issue of drug trafficking was serious among the founding members of th
e SCO. However, by acting collectively, they framed policies and eradicated
the evil of drugs from their territory. Pakistan has been facing the same issue
of drugs that are entering from Afghanistan. By exploiting the experience of
SCO, it can also eliminate the evil from its pure land.

Regional peace:

 The members of SCO, particularly China and Russia, are interested in bringi
ng regional peace. Pakistan has been facing the cross border terrorist attack
s.By acting together, SCO has potential to solve regional issues like Afghani
stan and bring overall stability.Peace in Afghanistan is not possible without t
he support of regional countries like Pakistan, China, Iran and Russia.As far
as Iran is concerned, China has already improved its economic ties with Teh
ran by announcing the investment of around $400 billion in its oil and transp
 ort sector and promoting saudi iran relation for regional peace.Thus, the me
mbership of Pakistan will create an opportunity for the regional countries to
work together to achieve peace in neighborhood.

How China, Pakistan-Russia will find suitable support mechanism in SCO?

SCO will serve for Pakistan as negotiating platform to resolve regional conf
licts with India
Twin independent states Union of India and Dominion of Pakistan have celebrat
ed 75 years of independence but both enjoy chilling childish behavior for addres
sing their issues in which they have fought three wars so far. Under the umbrella
of SCO, they can learn from other members states such as China and Russia wh
o share more than 3000 kilo meters long border and have succeeded to curtail d
own their border skirmishes through peace and cooperation. Pakistan and India
blame each other for spreading cross-border terrorism. Members of SCO are exc
ited and hope that both countries will pay due attention to primary motive of SC
O which is to deepen military trust on borders and reduction of military on bord
ers.

SCO can play a vital role for resolving Pakistan and India's Kashmir issue
so called an unfinished agenda
Kashmir has become hotspot for contention between India and Pakistan. There i
s dire need of such platform which can bring both countries onto a negotiating t
able, so that both countries can come to an agreement and resolve Kashmir issue
throughout bilateral talks.

SCO can boost trade in the region

Member countries of SCO are world leading economies. Every country is strivi
ng for better economy specially through trade. SCO can be used as a major com
ponent to boost trade among member states as well as other countries by peace a
nd cooperation.

Border escalations between China and India

SCO can work as a mediate between India and China to resolve their escalations
over border.

China seeking cooperation over South China Sea Dispute

China is having conflicts over South China Sea with ASEAN countries backed b
y USA. SCO can play an immense role for backing China and have win-win sit
uation over sea territories and islands.

China Encroachment Policy

China is emerging as world's largest economic power. The west is trying to coun
ter China's economic influence by different strategies like QUAD and AUKUS
by US. Alliance is created alongside the China to reduce its growth. Hence, SC
O is very essential key player for China to maintain and stand up with same posi
tion and keep same pace of economic growth.

China-US trade war

Since Trump administration, US is trying to curtail China's economic power by i
ntroducing heaving tariffs on Chinese import in the country. So far, US has imp
osed 25 percent tariffs on more than 375 billion dollars worth Chinese imports,
while China has retaliated by imposing tariffs on 110 billion dollars US goods.
During this trade war era, companies are looking for other alternatives than the
US and China. SCO can play a major role for China to maintain its economy by
replacing US as trade partner with member states of SCO.

Trade in local currency by china, russia

Russia looking for new trade partners

US is reducing China's rise by China encroachment policy. Therefore, US is tryi
ng to attract neighbor states of China by providing some affectionate deals, Indi
a is one of them. Hence, it feels betrayal to Russia because Russia was one of m
ajor exporter to India. SCO can help Russia to increase trade with its member st
ates and find new trading partners in South Asia.

Cooperation between iran ans Saudi . russian can get benefits form it

SCO a lifeline to Russia and Pakistan relations

Soviet Union invasion in Afghanistan during 1979-89 has played major role in d
rawing shape of Russia and Pakistan relations. Both have remained in silent con
frontation. While both have learnt from their past mistakes. Both countries are e
xcited to warm welcome their relations. Under the shadow of SCO, both parties
can engage themselves in major energy projects. Currently, both countries are w
orking on North-South LNG project from Lahore-Karachi worth of 2.5 billion d
ollars and other project CASA-1000 in which Russia is investing 500 million do
llars in Pakistan for electricity supply from Uzbekistan to Pakistan.

Pakistan as a gateway to Middle East for SCO countries

While Pakistan has remained a security state but its geographic location also has
played immense role for shaping its foreign policy. Specially its Gwadar deep se
a port which lies in the mouth of gulf states. Eurasian countries are forthcoming
and world's emerging economies. Pakistan can gain benefit by providing them g
ateway to Middle East countries. It will increase economy for both Pakistan and
SCO member states using Gwadar Port.

Saudi and iran peace deal and pakistan as gate way for sco coutries

China-Pakistan Economic Corridor a flagship project

The most discussed and debated topic and multi-billion, and multi-purpose proj
ect having initial worth of 46 billion dollars is being initiated by collaboration o
f Pakistan and China. It is part of China's Belt and Road Initiative. CPEC is a ve
ry crucial project which can become a driving force for major Middle East, Sout
h Asian and Eurasian countries to reply their foreign policies on. CPEC itself ca
n be considered as a economy generator. It can also strengthen the ties between
member states of SCO. CPEC has capability to eliminate external aggression. W
hole world is silently and closely monitoring its progress. Hence, it can be rightl
y said that SCO member states such as Pakistan, China and Russia can find suit
able support mechanism through this flagship project named as China-Pakistan
Economic Corridor.

Phase 2 of CPEC

China’s investment in railway projects of pakistan 2023