India and Pakistan Join the Shanghai Club

June 8, 2017

It reads like a scene from Henry Kissinger’s worst nightmare. China, Russia, and four Central Asian states gather today in Astana, the capital of Kazakhstan, to welcome India and Pakistan into the Shanghai Cooperation Organization (SCO), a security and economic club that excludes the United States. But what might have alarmed U.S. strategists during the Cold War could be cause for relief. The expansion signals a potential shift away from military coordination and toward economic cooperation.

On paper, the SCO has a formidable footprint. With India and Pakistan’s inclusion, the organization can boast that its members include 40 percent of the world’s population, generate 20 percent of global gross domestic product, and spend over $300 billion annually on their militaries. Geographically, it is central to the region’s massive infrastructure contest and overland trade routes emerging between Europe and Asia. Counting Afghanistan, Belarus, Iran, and Mongolia as observers, it could expand further in the future.

Along with its membership, the SCO’s mission has expanded over the years. Formed in 1996 as the Shanghai Five, the group’s security focus has grown from settling border disputes to fighting the “three evils” of terrorism, separatism, and extremism. In addition to traditional military exercises, counterterrorism efforts have extended to cyberspace. But these activities have been relatively limited in scope and intensity. Members’ divergent interests, and their shared aversion to devolving state power to a regional organization, have prevented deeper cooperation.

In recent years, the SCO has increasingly focused on economic issues. In 2015, the organization released a development strategy with a long list of objectives, including “developing common approaches to the Silk Road Economic Belt Initiative.” Chinese and Russian officials have publicly endorsed “linking” China’s Belt and Road Initiative with Russia’s Eurasian Economic Union. But there have been few examples of tangible cooperation, and several infrastructure projects in the Far East remain stalled.

The SCO is one mechanism that could translate Chinese and Russian rhetoric about cooperation into changes on the ground. In his remarks at the Belt and Road forum in Beijing last month, President Vladimir Putin of Russia said that linking the SCO with the Eurasian Economic Union, the Belt and Road, and the Association of Southeast Asian Nations could “build the foundation for a larger Eurasian partnership.” The details matter, however, and it far from clear how these regional organizations could be folded into a something bigger.

By adding India and Pakistan, the SCO continues this shift toward economic issues. To be sure, the organization’s impact is likely to remain modest. The SCO operates on consensus and lacks a robust secretariat. Historically, it has defended the individual actions of its members rather than constrain their decisions and compel the group toward collective action. The inclusion of India and Pakistan does not address these limitations, and introducing more friction within the organization could very well exacerbate them.

But the SCO does have an opportunity to help address one of Eurasia’s critical challenges: friction at the borders. Onerous customs requirements, outdated technology, and other challenges all result in long waits to cross borders. One study of a road journey from Almaty, Kazakhstan, to Berlin, Germany, found that roughly half of the transit time was spent at border crossing points. The SCO has expressed a strong interest in addressing these issues, and its members signed an international road transportation agreement in 2014.

As I learned last month, effectively implementing that agreement will require more work. Driving from Kashgar, in Western China to Osh, in southern Kyrgyzstan, I passed through 10 checkpoints despite crossing only one border. At one checkpoint, having arrived a few minutes into the security team’s lunch break, I waited for three hours until the outpost was open for business again. The same route was chosen for a transportation pilot project by the SCO years ago. The road conditions were commendable, but the border procedures seemed not simply slow, but slow by design.

The experience carried two reminders. First, it is a classic example of how “hard” infrastructure is only as good as the “soft” infrastructure underpinning it. Building new roads and railways might win headlines, but long-term economic gains also require doing the tough, often technical work to improve border and customs procedures. Second, despite rhetoric about linking the Eurasian Economic Union (of which Kyrgyzstan is a part) and the Belt and Road, plenty of challenges remain.

Organizations evolve, and for that reason, the United States should continue monitoring the SCO. But the SCO’s decision to include India and Pakistan is nothing Washington should lose sleep over. On the contrary, there is plenty of room for enhanced economic cooperation across Eurasia, and the United States should welcome efforts by the SCO and other regional organizations to address long-standing economic issues. Indeed, the SCO now has another set of border issues to address—perhaps its most challenging yet.

Jonathan E. Hillman is director of the Reconnecting Asia Project at the Center for Strategic and International Studies in Washington, D.C.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).