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The Shanghai Cooperation Organization (SCO) has rapidly become one of Eurasia's most influential multinational institutions since its emergence on the international scene in 2001. Nonetheless, nearly a decade on, many questions remain about the SCO-questions that its leaders will need to answer if their bloc is to maintain its current geopolitical momentum.

A bit of background is in order here. The SCO emerged from a series of border security negotiations that began in November 1992 between China and the former Soviet republics of Kazakhstan, Kyrgyzstan, Russia, and Tajikistan when the latter became newly independent countries along China's northern and western borders. In 1996 and 1997, this "Shanghai Five" group signed a confidence-building agreement and a force reduction agreement. These measures restricted conventional military deployments and activities within a 100-kilometer-wide demilitarized zone along their shared boundaries. The five countries soon expanded the partnership to encompass diplomatic, economic, and other non-military issues.

In June 2001, the group members decided to institutionalize their interactions and allow Uzbekistan, which does not border China, to join the new Shanghai Cooperation Organization. Since then, the SCO has sponsored extensive, senior-level consultations on several issues, including organized crime, narcotics trafficking, economic development, transportation, communication, energy, the war in Afghanistan, and above all terrorism, which has become the SCO's most important area of concern. The parties also established concrete institutions to facilitate such cooperation-including annual meetings of their defense, foreign, and prime ministers-as well as mechanisms to interact with nonmember governments and other international institutions. Formal observer rights were subsequently granted to other countries. By 2005, the SCO's full members (China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan) had been joined by four formal observers (India, Iran, Pakistan, and Mongolia).

The size and resources at the disposal of these countries gives the SCO inherent geopolitical heft. Combined, the organization's full members and observers encompass much of the world's habitable landmass and almost half its population. So what, exactly, does Eurasia's most dynamic bloc plan to do with this leverage?

The security agenda

Over the past half-decade, security cooperation has emerged as a key principle for the organization. Member states have pledged not to join alliances or otherwise take actions that would "allow their territories to be used to undermine the sovereignty, security or territorial integrity of the other member states." They have also committed to immediate consultations during "emergencies that threaten regional peace, stability, and security."1

Since 2003, the SCO has organized a number of "anti-terrorist exercises" that have involved paramilitary and conventional forces as well as intelligence and law enforcement personnel. The largest SCO "anti-terrorist" exercise to date, "Peace Mission 2007," occurred from August 8-17 of that year in Urumqi, the capital of China's Xinjiang-Uighur Autonomous Area, and ended on August 17, with a live-fire exercise at the Russian military training range near Chelyabinsk, in Russia's Volga-Urals Military District. The drills in Xinjiang led some observers to speculate that the exercise aimed "to intimidate the Uighur population in East Turkestan and to warn the democratic forces in Central Asia not to challenge the authoritarian regimes."2 In addition, the scenario for Peace Mission 2007-as well as the thousands of troops involved with accompanying warplanes and other heavy military equipment-seemed designed to enhance the ability of the participating armed forces to suppress another attempt at a popular rebellion such as the one that occurred in Andijan, Uzbekistan, in 2005. At the time of this incident, the SCO was not capable of organizing a military intervention to repress the uprising. Since then, the SCO has tried to develop such a capacity.

The 2007 Bishkek summit participants further extended the SCO's international security role by explicitly backing the Russian and Chinese positions on several important arms control issues.3 In particular, they criticized U.S. plans to deploy ballistic missile defenses in Poland and the Czech Republic, endorsed measures to avert the weaponization of space, and urged the three Western nuclear weapons states (Britain, France, and the United States) to support the treaty establishing the Central Asia Nuclear-Weapon-Free Zone (CANWFZ). (Western nuclear powers have refused to back the treaty because as written it would appear to grant Russia special privileges.) These commitments have been reaffirmed in subsequent years.

At its core, however, the SCO remains a security organization-one focused on countering transnational threats from non-state actors, rather than a collective defense structure with capabilities for waging conventional wars (like NATO). The SCO lacks dedicated military forces, an integrated command structure, or even a combined planning staff. SCO activities focus on confidence-building measures, strengthening border controls, developing collective emergency response mechanisms for natural and man-made disasters, and facilitating law enforcement and intelligence cooperation against terrorism, narcotics trafficking, and other transnational challenges. SCO leaders consistently deny any intention to create a Eurasian version of NATO. Even so, the SCO might evolve into a revived Warsaw Pact-like institution (an "authoritarian international") whose goal would be to guarantee its non-democratic member governments against both external and internal political challenges.

Much depends on the modus vivendi struck between the SCO and its cousin and sometime competitor in the post-Soviet space, the Collective Security Treaty Organization (CSTO). Russian officials repeatedly have sought to link the SCO with the Moscow-dominated CSTO, which includes all SCO countries except China, in order to extend Russian influence over the national militaries of other SCO members. But China and perhaps some Central Asian states have resisted transforming the SCO into a quasi-military alliance, either directly or through deep SCO-CSTO collaboration. China's exclusion from the CSTO has caused Beijing to throw its weight behind the SCO as the most influential regional security institution.4 The diverging perspectives of China and Russia regarding the appropriate relationship between the SCO and the CSTO reflect the latent competition for influence between the two countries for primacy in Eurasia.

Central Asian governments also generally appear to favor the SCO, which is not dominated by a single country like the CSTO. In the words of one of their top diplomats, "With the Chinese in the room, the Russians can't resort to their usual tricks."5 In any case, Russia and China both benefit from having the SCO as a form of reassurance to Beijing as the CSTO continues to expand its military role. Moscow's support for the SCO demonstrates to Chinese policy makers that Moscow recognizes China's legitimate security role in Central Asia, even while both countries understand that, if China proves excessively uncooperative regarding the SCO, Moscow could bypass China and rely on the CSTO as an alternative Eurasian institution.

Afghanistan is perhaps the most important area of immediate collective interest for the organization. SCO members are eager to assist the Afghan government in countering regional narcotics trafficking and terrorism. The lax border regimes between Russia and the former Soviet republics of Central Asia facilitate the smuggling of narcotics and other contraband through Eurasia. The Taliban and al-Qaeda have also used their positions in Afghanistan to support other Eurasian terrorist movements, especially the Islamic Movement of Uzbekistan and its various offshoots. In November 2005, the members established a SCO-Afghan Working Group to provide a coordinating mechanism for the large number of SCO initiatives that concern that country. The convening of a special conference under SCO auspices this past March further confirms the unique status Afghanistan has obtained within the organization. Russian President Dmitry Medvedev related that, at the SCO's June 2009 leadership summit in Yekaterinburg, "There was not a single speech at our summit that did not mention Afghanistan."6

Economics and energy

Over the years, SCO members have gravitated to the view that their individual economic activities are part of a larger, collective whole. This has become particularly true in light of the global economic crisis, as Russian President Dmitry Medvedev pointed out in June 2009 when he observed that "the SCO was created as a security organisation, but ‘security' can be broadly defined. This is particularly true when we all went from a normal economic state of affairs to an active, difficult economic crisis."7

This synergy did not occur overnight. The way was paved in September 2003, when SCO prime ministers adopted a Multilateral Economic and Trade Cooperation Program that established several general economic objectives. The participants pledged to facilitate mutual trade and investment while working toward the free movement of goods, services, capital, and technology by 2020. Subsequently, in 2005 and 2006, the SCO governments established a series of institutions to help implement the program and related cooperative projects. The Development Fund, Business Council, and Inter-Bank Consortium seek to encourage investment in regional projects by promoting collaboration among members' state enterprises, private businesses, and government agencies responsible for foreign economic ties. And other initiatives are afoot; at their 2009 Yekaterinburg summit, member nations reportedly discussed drafting a SCO convention on protecting capital investments and "the possibility of having a unit of account within the SCO," which would not be a supernational currency, but could be used to make payments between countries. Medvedev speculated that "perhaps such [a] unit of account can subsequently be used for other, more serious purposes."8

Nonetheless, SCO members thus far have allocated limited resources to these collective multilateral economic initiatives. By world standards, none of the other SCO economic mechanisms could be considered "serious" instruments. SCO governments have preferred to offer financial and development assistance on a bilateral basis, which grants them greater influence.

Russian-Chinese commercial competition in Central Asia further impedes SCO-wide economic initiatives. In September 2004, Chinese Prime Minster Wen Jiabao proposed establishing a comprehensive common market within the SCO that would affect members' trade, customs, tax, immigration and other policies. Russian officials, fearful that an inflow of cheap Chinese goods and services would drive Russian enterprises out of the region, argued that economic integration among SCO nations should occur gradually, over the course of decades-conveniently preserving Russian economic domination over Central Asia in the interim.9 Although Russia still enjoys clear military primacy in Central Asia, the explosive growth of the Chinese economy is forcing Moscow to yield predominance in this area to Beijing. At the June 2009 SCO leadership summit, Russia did not attempt to match China's offer of $10 billion in credits to assist SCO members suffering the regional effects of the global financial crisis.

Energy issues likewise consistently figure on the SCO agenda. Several member governments have proposed establishing an energy bloc within the institution. The organization's current roster of full members and observers includes some of the world's leading energy suppliers (Russia, Kazakhstan, and Iran) and consumers (China and India). The present lack of strong international energy institutions linking the major energy supplier and consumer countries in Eurasia could provide an opening for the SCO to assume this role.

Nevertheless, cross-cutting interests seem likely to impede rapid progress in this area. The SCO's two most influential members have fundamentally different goals when it comes to energy. Although both Russia and China desire to increase Central Asian oil and gas production, Moscow wants to maintain its control over these assets as well as the region's energy transportation infrastructure. Energy-hungry China, by contrast, desires direct control over regional energy assets-preferably by purchasing them outright-and seeks to maximize production in order to drive down world energy prices. While the Russian government advocates a unified multilateral SCO energy bloc, which Moscow could dominate through its powerful state-run energy companies, Beijing persists in pursuing bilateral deals that would redirect Central Asian oil and gas eastward. The two countries are now engaged in direct competition for Turkmenistan's large, but inherently limited, gas supplies. The SCO's two largest observers also differ on this issue, with Iran favoring and India opposing high energy prices.

The expansion dilemma

In the declaration announcing the SCO's creation in June 2001, the six founding governments stated the bloc's willingness to "admit as its new members those countries which recognize the cooperation purposes and tasks within the framework of the organization... and whose joining will facilitate the realization of cooperation."10 The reality, however, has been quite different; since its creation, the SCO has not invited another country to become a full member. Indeed, it has studiously avoided doing so, as the decision by existing SCO governments to yet again decline new entrants at their June 2009 summit amply demonstrated.

Why the hesitance? Rhetorically, at least, SCO members say that the reason has to do with a lack of formal legal mechanisms governing institutional expansion. In truth, however, the hesitance might have to do with more concrete underlying problems. Enormous disparities in populations, geographic size, economic resources, military power, and geopolitical orientation have already complicated the negotiation, approval, and implementation of SCO initiatives. Adding new members could only exacerbate these differences.

Furthermore, none of the existing observer countries is an obvious choice for full membership. The most enthusiastic aspirants for full membership, Iran and Pakistan, are the least desirable entrants. (Although all the SCO governments accepted Mahmoud Ahmadinejad's contested reelection, the disorder in Iran may make it easier to resist Tehran's membership campaign, at least for a while.) Meanwhile, the potentially most valuable new members, India and Turkmenistan, remain ambivalent about their ties with the SCO.

The current roster of full members includes only those six states that joined the organization at its founding in 2001. At present, the SCO has a complex organizational structure with affiliated countries arranged according to the four general categories of full members, formal observers, "guests" of the rotating hosting government of the annual SCO leadership summit, and most recently "dialogue partners." The existing SCO governments have resorted to proliferating new categories of external association because they have been unable to resolve their differences over which if any additional countries should be eligible for membership.

Nevertheless, the SCO is working to keep its observer nations engaged. In recent years, as a sort of consolation prize, member governments have sought to offer observers greater opportunities to participate in SCO activities. At the 2009 Yeka- terinburg summit, for example, the heads of the organization's member states for the first time held a separate meeting with the representatives of the four observer countries to discuss regional security issues, the day after their traditional members-only meeting. They then convened a larger plenary session that included President Karzai and representatives from the United Nations and other international organizations.11

Cooperation, or competition?

When it was founded in 2001, the SCO stressed its adherence to the principles of non-alignment, not targeting any other country or region, and openness to cooperating with other countries as well as international and regional organizations.12 Five years later, the fifth anniversary declaration stresses that the SCO "welcomes participation by relevant partners in specific projects in priority areas like energy, transportation, information and communications and agriculture."13 On August 16, 2007, SCO governments signed a treaty of friendship and cooperation in which they reaffirmed "their readiness to expand mutually beneficial cooperation between them and with all interested States and international organizations to promote a just and rational world."14

Indeed, since its establishment, the SCO has developed contacts with other important multilateral organizations, even designating some as formal "dialogue partners." It enjoys observer status in the UN General Assembly and has established formal ties with several UN agencies as well as the Commonwealth of Independent States, the CSTO, the Eurasian Economic Community, the Association of Southeast Asian Nations, and other multinational groups. A few weeks before the June 2006 Shanghai summit, Executive Secretary Zhang Deguang explicitly declared that the SCO was "open for cooperation" with NATO on issues of mutual interest.15

Thus far, however, neither NATO nor the United States has been especially eager for such interaction. The Bush Administration did not consider the organization so much a direct threat as yet another factor complicating the realization of U.S. security objectives in Eurasia. As Evan Feigenbaum, who served as the Bush Administration's Deputy Assistant Secretary of State for South and Central Asia, has explained, the Bush Administration did not fully understand the SCO "in part because SCO members themselves don't know what the SCO is" due to the different visions of the organization held by the various member governments.16

The Obama Administration has made a greater effort to engage the SCO, though the outreach thus far has been focused on Afghanistan, the administration's priority concern in the region. That is logical; if NATO and the United States want to collaborate further with the SCO, cooperating more deeply regarding Afghanistan is an obvious option given the near-term interests of all involved in preventing a Taliban resurgence. And, although NATO-Russian ties regarding Afghanistan are well-developed, if not always harmonious, the same cannot be said for relations between the People's Republic of China and the Atlantic Alliance. Working through the SCO might provide a supplementary mechanism for engaging China along with any further development in direct ties between NATO and Beijing. Another area for possible interaction between NATO and the SCO could be disaster management, a sphere that NATO has already pursued extensively with many of the former Soviet republics, especially within its Partnership for Peace framework.

But NATO members will need to make clear that such cooperation with the SCO is conditional, and can be derailed by further unfriendly acts in the vein of the organization's 2005 statement calling on NATO to announce a timetable for its withdrawal from the region. SCO leaders have not repeated this demand, or taken the provocative step of offering Iran full SCO membership. But it is still unclear whether this restraint reflects a new recognition of the legitimacy of the Western military presence in the heart of Eurasia or a simple fear that asking Western forces to withdraw from Afghanistan now could leave the SCO with a regional security threat whose dimensions exceed the members' capacity to manage on their own.