The New Geopolitics of Energy
The recent rise of the Shanghai Cooperation Organization (SCO) -- a mutual security assembly comprised of China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan -- has been met with skepticism in the West. Some fear that it has nefarious intentions to control Central Asia; others worry that the West will somehow be left behind in the region if it does not engage with the SCO. Since its founding in 1996 as a forum for negotiating lingering Soviet-Chinese border disputes, the SCO's mission has broadened to promote regional security and economic cooperation, and combat what its members call the "three evils": separatism, extremism, and terrorism. As its agenda has expanded, so, too, have Western concerns.
When the heads of the SCO countries called for a timetable for closing U.S. military bases in Central Asia at its annual summit in 2005, the SCO appeared to be positioning itself against U.S. influence in the region. Days later, Uzbekistan ousted American forces from a base in Karshi-Khanabad. And that same year, the SCO strongly condemned the Western-backed color revolutions that were sweeping across Eurasia, along with the Western NGOs that were supporting the movements.
Five years later, however, predictions that the SCO would develop into a full-blown anti-West alliance have proven exaggerated. Despite claims of widespread cooperation, the SCO has failed to translate its official announcements into actual regional cooperation. And although China has been able to use the organization to project its influence across Central Asia, Russia has remained reluctant to deepen its participation. Subtle but key differences in the regional security priorities of the two countries have started to play out.
Russia regards Central Asia as its "zone of privileged interests." For the past two decades, Moscow has sought to embed the states of Central Asia in a system of Russia-controlled institutions -- the Collective Security Treaty Organization (CSTO), a mutual defense alliance; the Eurasian Economic Community (EurAsEC), a customs union; and the Commonwealth of Independent States (CIS), a loose federation of former Soviet countries. At the same time, it has actively worked to block Western actors such as NATO. China, in contrast, has been focused not so much on countering the West as on stabilizing its own western territory: the autonomous province of Xinjiang, which borders the Central Asian states.
When the color revolutions erupted across Eurasia between 2000 and 2005, Moscow's and Beijing's security agendas were aligned. Both feared Western-backed democratization in Eurasia -- Moscow because its own influence over the regimes there would wane, and China because democratization could set a dangerous example for its hinterland.
However, the Russia-Georgia war in 2008 revealed the real gap between Russia's and China's security agendas. Just a few days after the EU-brokered cease-fire, Russian President Dmitry Medvedev arrived at the SCO's annual summit in Dushanbe to request support for Russia's recognition of the independence of Abkhazia and South Ossetia, the breakaway Georgian provinces. China and the Central Asian states stood firm against the request. Moscow's dealings with separatist entities did not square with China's security interests, nor with the principle of noninterference in countries' internal affairs. Similarly, Russia's efforts to grant passports to Russian-speaking residents in the disputed territories of Georgia just before the war alarmed the Central Asian states, most of which have substantial Russian populations. After this diplomatic rebuke, Moscow redoubled its efforts to promote the CSTO, an organization that includes the same Central Asian states but is safely in Russia's pocket.
Moscow's misadventure can be contrasted with China's success in winning SCO support during the outbreak of violence between the Uighur Muslims and Han Chinese in Urumqi, Xinjiang, last July. Within a few hours of the flare-up, the Chinese Ministry of Foreign Affairs circulated a statement to other SCO members describing events in Xinjiang as "China's internal matter" and the Chinese actions as designed to "restore order in the region." Since the statement aligned with the SCO's position on internal affairs, it was quickly endorsed by all SCO members and adopted as the assembly's official position.
As the SCO mission expands to include economic cooperation, the gap between Russian and Chinese interests has become even more apparent. Wary of Beijing's economic predominance, and thus its ability to use the SCO to its own economic ends, Russia has blocked many efforts to deepen integration. Moscow opposes Chinese Premier Wen Jiabao's proposal to create an SCO free-trade area. Instead, it champions the expansion of EurAsEC, which includes Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Belarus but notably excludes China.
The global financial crisis has magnified differences in Russian and Chinese economic potential and ambition. Moscow has been hard hit by the crisis; it has been forced to scale back many of its projects in Central Asia and to renegotiate the terms of unprofitable regional energy deals. Moreover, many of the projects that it has not abandoned -- such as the Kambarata hydroelectric power plants in Kyrgyzstan -- seem to be based more on political goals than commercial considerations and will likely be a drain on Russia's coffers.
By contrast, China, whose financial system was shielded from the crisis, has stepped up its economic activities in Central Asia, dispensing substantial bilateral financing under the guise of the SCO. Beijing has recently concluded massive loans-for-hydrocarbon deals with Kazakhstan and Turkmenistan and has increased its investments in infrastructure in SCO states along its border, connecting them evermore to western China. And Beijing has unilaterally created a $10 billion "anti-crisis" stabilization fund within the SCO, offering cheap, short-term financing for such priority sectors as energy and infrastructure, after Moscow refused multiple requests to co-finance the fund. Moscow prefers to create a EurAsEC-controlled fund or provide what bilateral assistance it can directly to weaker states.
Besides Russia-China tensions, the SCO faces another fundamental problem: its Central Asian members are unable -- and, in some cases, unwilling -- to fully accede to Russia's and China's plans. Moscow and Beijing remain concerned about the United States' presence in the area, but Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan have concluded commercial transit agreements with the U.S. military anyway, expanding northern U.S. supply routes to Afghanistan.
Further, the closed borders of Central Asia have important commercial value -- in the form of customs, tolls, and related jobs. The ruling elites of these countries often control border operations and other major sectors of the economy such as telecommunications and electricity. It is highly doubtful that they will willingly open them up to true external competition.
Thus, whatever the SCO's ambition for regional cooperation and influence, coordination among its members lags far behind. As a security collective, the SCO is weak and not the aggressively anti-Western bloc it appeared to be a few years ago. As such, it makes sense for the United States to work with the SCO to engage China and the Central Asian states on select Afghanistan issues, such as securing borders and combating the narcotics trade, as part of its broader efforts to involve more regional and multilateral partners. Additionally, any Western engagement with the SCO on security matters would be useful, in as much as it undercuts Moscow's efforts to dominate the region with the CSTO.
In nonsecurity matters, the SCO is even weaker. While it seeks international recognition for its role in integrating the region, it is unclear whether it has or ever will succeed. Ultimately, the SCO should deliver some tangible accomplishments before the West rushes to condemn or cooperate with it.