Embracing the East

The 24th Summit of the Council of Heads of State of the Shanghai Cooperation Organisation (SCO) ended on July 4 at Astana—the capital city of Kazakhstan. With the summit’s conclusion, the People’s Republic of China has assumed the SCO chairmanship for the next term, and Qingdao (China) will act as the SCO’s tourism and cultural capital for 2024-2025. Leaders from China, Russia and countries in the global south had gathered in Kazakhstan for the annual meeting of the SCO, a group that has been described as “anti-NATO”. Indian Prime Minister Narendra Modi had skipped the summit and the country was represented by the External Affairs Minister S Jaishankar.

It is viewed that SCO summits are part of China’s efforts to establish what it calls a “multilateral” world order that is not dominated by the US. Analysts argue that Xi and his Russian counterpart, Vladimir Putin, preach the importance of establishing a multipolar world order to countries in the global south that have felt let down by US-dominated geopolitics. The SCO is a suitable platform that sends a message to the Western world that there are many different voices from the emerging economies that need to be heard and represented.

SCO’s growing importance

Established as the “Shanghai Five” in 1996, the group was originally a forum for the founding members – China, Russia, Kazakhstan, Kyrgyzstan and Tajikistan – to thrash out border disputes. The Shanghai Cooperation Organisation (SCO) was formally established in 2001 by China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan to combat terrorism and promote border security. In recent years, in line with Beijing and Moscow’s shared ambition to counter what they see as US “hegemony” and reshape the international system in their favour, the SCO has grown into a ten member organisation.

In 2017, the bloc underwent its first expansion to welcome India and Pakistan. In 2023, Iran became its member, and in 2024, SCO added Belarus. The grouping now boasts of ten members, representing more than 40 per cent of the world’s population and roughly a quarter of the global economy. It also has two observer states, Afghanistan and Mongolia, and more than a dozen “dialogue partners” — from Myanmar to Turkey and the Arab states.

In the last two decades, the SCO has been able to establish itself as a club of Eurasian countries spearheaded by China and Russia to advance their leaders’ vision of an alternative world order. On the final day of the 24th SCO Summit at Astana, China's President Xi Jinping and Russia's Vladimir Putin pressed their case for closer security, along with political and economic cooperation among countries of the vast Eurasian region as a counterweight to Western alliances.

"SCO members should consolidate unity and jointly oppose external interference in the face of the real challenges of interference and division," Xinhua news agency quoted Xi as saying, warning against the West's "Cold War mentality”. President Putin, in his address to the SCO, reiterated Russia's call for "a new architecture of cooperation, indivisible security and development in Eurasia, designed to replace the out-dated Eurocentric and Euro-Atlantic models, which gave unilateral advantages only to certain states", reports Reuters.

It cannot be denied that for Central Asian states, the SCO is the most critical Eurasian organisation. Though there are other regional organisations, such as the Collective Security Treaty Organisation (CSTO) and the Eurasian Union, where Russia is the key player, the SCO remains the most important organisation. It has played a vital role in minimising border disputes, reassuring Central Asian states that their sovereignty will not be violated, maintaining a regional balance and curbing the influence of radicalism, drug trafficking and terrorism.

Astana Declaration

On July 4, the 24th summit of the Council of Heads of State of the Shanghai Cooperation Organisation (SCO) adopted the Astana Declaration and approved 25 strategic documents covering energy, security, trade, finance, and information security.

According to the Astana Declaration, member states underscored the SCO’s role in bolstering global peace, security, and stability, and shaping a new democratic, equitable international political and economic order, inviting the global community to join the initiative.

The members of the SCO have also adopted the SCO Development Strategy until 2035, outlining collective contributions in light of Belarus gaining membership status. Key resolutions included the cooperation programmes to combat terrorism, separatism, and extremism for 2025-2027, the Anti-Drug Strategy for the next five years and its corresponding Action Programme. Strategies for energy cooperation until 2030 and the Economic Development Strategy’s Action Plan until 2030 were also approved. Additionally, resolutions encompassed the Association of Investors, programmes for developing cooperation in protected areas and eco-tourism, and mechanisms for financing SCO project activities.

Further commitments included signing a memorandum of understanding between the SCO Secretariat and the Central Asian Regional Information Coordination Centre to combat illicit drug trafficking. The summit also saw the adoption of an interaction plan among member states on international information security issues.

The wide coverage of the Astana Declaration underscores the fact that the SCO has graduated from a Eurasian bloc with the limited objective of ‘combating terrorism and promoting border security’ to an influential economic and security bloc and one of the largest trans-regional international organisations.

Central Asian trade routes & China

Chinese President Xi Jinping arrived in Astana on July 2 for a five-day trip that included state visits to Kazakhstan and Tajikistan. Kazakhstan is strategically a very important country to China’s global trade network. In 2013, Xi visited Kazakhstan to launch the Belt and Road Initiative (BRI)—China’s expansive development project that has seen USD 9.55 billion invested in Kazakhstan alone since 2013. This investment is part of China’s pitch to central Asia that it can help countries to develop outside Russia’s shadow. Trade experts believe that the war in Ukraine has proven to the central Asian countries that the diversification of their ties with the world is the key to their successful existence in the region. Although the former Soviet republics have been trying to de-Russify their countries since the fall of the Soviet Union, the war in Ukraine has made the process of replacing Russia [with China] unfold more quickly, writes the Guardian. China is vying with Russia to strengthen its presence in Central Asia.

Even though the relations between China and Russia are very strong at present and the two nations have pledged to deepen it further as recently as in May, it is feared that the trust got strained last week by the shadow of Putin’s visit to North Korea. Putin signed a mutual security pact with Kim Jong-un, an agreement which China fears could create the perception of a cold war-style bloc and damage Beijing’s influence in east Asia.

It appears that India is trying to capitalise upon this tension between two superpowers of the SCO by fraternising with Russia and showing cold solder to China.

Indian PM’s absence at the SCO

The official reason given for the PM’s absence is that the dates clash with the on-going session of the parliament. However PM Modi is expected to visit Russia and Austria from July 8 to July 10.

A few experts believe that there has been a shift in India’s policy towards SCO during the last couple of years. India was expected to host the SCO Summit in 2023. Preparations were made for the physical Summit, but towards the end, New Delhi decided to have a virtual summit. According to them, India's approach demonstrates a pattern of caution and restraint. India is taking a measured and deliberate approach, keeping in mind its strategic calculations and geopolitical implications.

The above developments have sparked the speculation that New Delhi has downgraded its ties with the SCO due to two possible reasons: (i) the pressure from Washington to avoid an organisation that is viewed as anti-Western; and (ii) New Delhi’s deliberate attempt to exercise restraint in an organisation dominated by China. However, Prof Rajan Kumar of Jawaharlal Nehru University believes that the second factor explains the case better. In his opinion, central Asian states want India to be active in the SCO as it allows them to counterbalance both China and Russia. Therefore, India should remain active in the organisation, irrespective of its diplomatic disputes with China and Pakistan.

In June 2024, Russia announced a new shipping route to export coal to India via Iran, leveraging the International North-South Transport Corridor (INSTC). The development of the INSTC, which connects Russia to India through Iran's Chabahar port, means a lot for India's trade. Last month, India took over the management of Iran's Chabahar Port for an initial 10-year period. The deal is a boost for the INSTC as the port will serve as a key node in the INSTC. It will significantly change the face of regional connectivity, trade with landlocked countries of Central Asia and Afghanistan, and provide an alternative route that connects the region with Russia and then Europe.

It appears that India is planning to strengthen INSTC as an alternative to Trans-Caspian International Transport Route (TITR) – which is an integral component of the Belt and Road Initiative (BRI) of China. TITR was established to create a direct transportation link from Asia to Europe. It starts from Southeast Asia and China, and runs through Kazakhstan, the Caspian sea, Azerbaijan, Georgia and further to European countries.

Observations

It is difficult to gauge how much India would be successful in establishing a strong tie-up with Russia, circumventing China – Russia’s most trusted and principal friend at this stage.

It has been proved beyond doubt that anti-Chinese sentiments have been whipped during the last one decade and it has failed to cut Chinese imports. Rather, it increased steeply. China has emerged as the largest trading partner of India. Furthermore, one of the latest UNCTAD studies suggests that India’s trade dependence on the EU and China increased 1 per cent and 1.2 per cent, respectively, while that on Saudi Arabia fell 0.5 per cent in the 1st quarter of 2024.

During the last one decade, the much spoken ‘Look East Policy’ has been drowned in the Bay of Bengal by the Indian government and it has been replaced by ‘Look West Policy’. In place of Sittwe Port in Myanmar, Chabahar port in Iran has become more important to Indian policymakers. The Kolkata –Kunming road and railway network which could have connected the East and North East India with the countries of East Asia has been shelved. Thus, a huge opportunity for the development of the Eastern part of India is abandoned.

It is heartening to know that during the SCO Summit, the Indian External Affairs Minister (EAM) S Jaishankar met with his Chinese counterpart, Wang Yi, on July 4. The two discussed resolving the remaining border issues between India and China. After their meeting, Jaishankar said that both sides have agreed to intensify their efforts through diplomatic and military channels to address these issues. Meanwhile, on July 3, the first transaction of over Rs 1 crore for pulses exported to Myanmar was successfully executed under the Rupee-Kyat Trade Settlement Mechanism. This will open a huge trade potential between Indian Northeastern states and Myanmar in the near future. The stalled discussion on the establishment of the Bangladesh-China India-Myanmar (BCIM) Economic Corridor may be revived.

In a recent speech, the Chinese President Xi Jinping highlighted the relevance of the Five Principles of Peaceful Coexistence, which gained traction with the Non-Aligned Movement, to end the present-day conflicts and sought to expand influence in the Global South amid its tussle with the West. “The Five Principles of Peaceful Coexistence, namely, ‘mutual respect for sovereignty and territorial integrity', ‘mutual non-aggression', ‘mutual non-interference in each other's internal affairs', ‘equality and mutual benefit', and ‘peaceful coexistence', answered the call of the times, and its initiation was an inevitable historic development,” Xi said. “They included the Five Principles in the China-India and China-Myanmar joint statements which jointly called for making them basic norms for state-to-state relations,” Xi said at the conference where the invitees included former Sri Lankan President Mahinda Rajapaksa and several political leaders and officials from various countries closely associated with China over the years. It may be recalled that in the 1950s, the five principles — the Panchsheel — formed part of the legacy of the then Prime Minister Jawaharlal Nehru and his Chinese counterpart Zhou Enlai in their unsuccessful quest to find a solution to the vexed boundary issue. This is a strong signal from China to India for a peaceful co-existence.

A sign of resurgence of global trade led by China is visible again. It is high time that a long-term peace and cooperation treaty, based on the Principle of Panchsheel, is concluded for the benefit of both the nations.

For a balanced regional growth, the east coast and the eastern and north eastern states of India need an appropriate foreign policy, so that the ancient trade links with the East Asian countries could be revived. Importance of the Bay of Bengal as the gateway to east Asia should not be ignored for long.

Views expressed are personal