Engaging the Shanghai Cooperation Organization (SCO): Implications for ASEAN

Interview with Dato’ M. Redzuan Kushairi Ambassador (R), Senior Advisor at AEI, who has been monitoring the Shanghai Cooperation Organization (SCO), and attended the Shanghai Cooperation Civil Society Organization (SCO) Network Meeting in April 2016. Recognizing the importance of the SCO for the future geo-political dynamics of Asia, he shares his first-hand insights with us.



Timotheus Krahl (TK): Dear Dato’ Redzuan, we are glad to be able to sit down and talk to you today. As a long-time follower of global politics and a former ambassador you have probably a thought or two on the current changes of world politics. Let us however only zoom in on one of the latest developments in our region, the Shanghai Cooperation Organization (SCO). To get started, can you share with us some of the basics we need to know about the SCO, please.

Dato’ Redzuan (DR): The SCO was established in 2001 and founded by China (PRC), Kazakhstan, Kirgizstan, Russian Federation, Republic of Tadzhikistan and Uzbekistan. It started as an organization to build confidence and trust, as all these countries share common borders. Furthermore, it addresses the common threats among all countries of Islamic extremism, terrorism, drug trafficking and other trans-border crimes.

TK: Why should we pay attention to it and how would you evaluate its geo-strategic role?

DR: As an organization it has not attracted much attention in this part of the world, but I think there is need now to look at the SCO in the bigger picture of the region’s geopolitics – and the power shifts away from a bipolar world. This bigger picture includes a shift from the West to Asia, the rise of China, the rise of India, the role of the US in the future and the more assertive Russia under Putin. With China and Russia being the major players I see the SCO as part of a geopolitical move to establish their own hub in an emerging multi-hub & multi-partnership structure in the international system. In a way, this is to counter-balance the US – within a new strategic environment with China and Russia working together.

TK: Looking into the history of bi-lateral relations between China and Russia this seems to me to be a big step forward

DR: Yes, this is a big step and exemplified in the strategic rapprochement between the two countries. Their relationship was uneasy in the past as we all know. The major break during the Soviet-era was when Khrushchev denounced Stalin at the 20th Congress of the Communist Party of the Soviet Union in 1956. Mao Zedong was against this move, which lead to the break. But even ideological differences aside – and they are in any case not of importance today anymore – the countries regularly clashed along their common borders and disagree on territories.

TK: Apart from a multi-hub & multi-partnership structure emerging out of the SCO, how does the strategic rapprochement materialize in other areas?

DR: There are a few other complementary interests which are strategic in nature. Both, China and Russia see a common interest in Central Asia in preventing US expansion in the region – in pushing back the American presence which materializes in military bases. Beyond this there are economic interests which I will highlight later on. There is also the attempt to link the SCO to the Russia-led Eurasian Economic Union and ASEAN. This attempt was very evident at the Shanghai Cooperation Civil Society Organization Network Meeting which I attended in Sochi in April 2016.

TK: If you had to evaluate the SCO and the commitment of China and Russia, is it a pragmatic cooperation mechanism or the cornerstone of their foreign policy to engage with this part of the world?

DR: It’s a classic situation of cooperation and competition for influence happening simultaneously. It is based on the common goal and the realization they have to strike this strategic partnership to push forward their narrative of building a counterbalance to the US and West. In doing so they follow their vision of a shift away from a unipolar to a multipolar world – but in my view it is more a multi-hub & multi-partnership configuration.

TK: Let us turn our attention to the specific actors involved, what are in-particular the benefits for Russia?

DR: First and foremost they are of geo-strategic value, looking at the region and the influence one can exercise through such a cooperation mechanism. Secondly, Russia tries to use the SCO as an instrument to protect its interest in Central Asia. The region was always considered as Russia’s sphere of interest, best summarized in the term “Russia’s Soft Underbelly” – and if one needs any evidence of its importance to Moscow the history of “The Great Game” with Britain is a reminder. Practically, this has resulted in the fact that Russia cannot afford a weak and divided Central Asia. And as the threats are plenty, including Islamic extremism and the flow of illicit goods such as drugs, arms etc., Moscow has to maintain its sphere of interest in order to protect Central Asia from conflict and to establish an Arc of Stability.

TK: And what about China?

DR: Some of the interests coincide – such as the Arc of Stability, and the concern about terrorism and extremism. The idea of a multi-hub & multi-partnership structure is also in the interest of China. An important point is that China does not want to come into Central Asia as an open competitor. It wants to avoid being perceived as the preeminent and predominant power in the region. The SCO is a meaningful soft approach to enter Central Asia without upsetting the Russians. Beijing normally calls such settings a win-win situation – as both parties, China and Russia, benefit from it. It is a clever move, not perfect, but the main thrust is there.

TK: And finally we should not forget the countries of Central Asia

DR: Yes, there are interesting dynamics at play, both China and Russia are aware that the Central Asian countries ride on the comfort of being their partners. At the same time these Central Asian countries still have the space to build relationships with America and Europe. In fact, the association with the SCO and thus the big powers of China and Russia, is a bargaining chip for the Central Asian countries, helping them to leverage more out of the US and the West. The SCO is also an opportunity for the Central Asian countries because they have been quarreling with each other – and within the SCO, Russia and China can act as a bridge and moderator among them. The two big powers certainly see themselves in this moderating role.

TK: Adding all those interactions together what is the practical outcome?

DR: There are several points to make. First, the establishing of the Arc of Stability, which is a Russian interest, is done in relationship with China. Russia realizes that it is no longer like the past when it was able to control the whole region on its own. Russia recognizes China’s growing power and influence, both in the region and globally. Russia cannot prevent Chinese influence in the region, this is especially the case when it comes to infrastructure investments. But by working with China in the SCO, Russia can moderate China’s activities and keep a watchful eye on China – and make sure that the Central Asian countries are not overwhelmed by the Chinese. Another factor is that Putin says the SCO is a new and successful model of cooperation. It is not defined as creating an Alliance but it is a multi-partnership strategy – it is part of creating an expanding multi-hub & multi-partnership network. To this end, the SCO has signed partnership agreements/MOUs with ASEAN, the EU and other regional bodies.

TK: Looking ahead towards the future, is the SCO only limited to Central Asia and its adjunct big powers?

DR: No not at all: when it comes to expansion however, both China and Russia are cautious. There are four observer nations, six dialogue partners and recently India and Pakistan have been brought in as member states. This is a very important strategic move, but it faces various problems. It surprises me how both China and Russia as the co-leaders of the SCO could agree to bring in India and Pakistan.

How does the admission of India and Pakistan define the future of the SCO?

DR: There is still a need to figure out what are the substantive contributions that India and Pakistan can bring to the SCO, apart from the important geo-political picture. The challenge for the SCO right now is to bring in substance to economic cooperation. Russian trade with Central Asia is falling and Chinese trade is increasing, and this is a major challenge to the power balance. In terms of strategy, there are various issues along the borders between China and India – and we are all aware of the Indian-Pakistan disagreement. The countries have to figure out how to resolve these issues. The expectations are that bringing in India and Pakistan will enable all partners to moderate the differences between the two of them. And this would strengthen peace and stability in the region.

TK: Will they actually work on their issues or avoid them?

DR: I expect that we will see something similar to the ASEAN Way, avoiding the hot topics and concentrating in the first place on building confidence and trust.

TK: Any further or additional steps to foresee in terms of extending the SCO?

DR: Let me say first that adding countries such as India and Pakistan contributes to the building of  a new multi-hub and multi-partnership organization. Both Iran and Turkey are contemplating joining the SCO. They have floated the idea to get a reaction from China and Russia. As a result this brings the SCO one step closer to becoming that ambitious multi-hub & multi-partnership structure.

TK: With adding new member there might also be demand for a stronger institution. What is the current state of the SCO in terms of institutionalization – does it have a clear strategy to develop its processes and functions?

DR: The institution is still weak. It has its secretariat in Beijing. It has 30 people on staff and a very small budget. At the conference I attended in April 2016 they discussed strengthening the institutional structures, as it is currently mainly intergovernmental. But it seems they need more time, confidence-building and trust.

TK: How does the current form of the SCO institution play out in practice?

DR: It is still a dialogue forum – this is the main thrust of the SCO. But it wants to increase its economic dimension, the cultural and educational dimension as well as the military dimension. There have been small-scale joint military exercises but they were focused on non-traditional security issues along the borders. I think both China and Russia are careful about expanding the military partnership. I do not see the military aspect expanding. In the economic area, China pushes for a free trade agreement between the SCO member countries. But Russia sees the disparity between the Chinese and Russian economy, best exemplified if one visits the open markets in the region, and sees how they are flooded with Chinese goods. Sooner or later the countries of the SCO have to address the question of a trade regime among themselves. Another major reason for developing the SCO is energy and infrastructure collaboration – this is certainly substance for the SCO.

TK: Energy and infrastructure seems to be of importance in and for the region, how does cooperation take place in that particular area?

DR: Calling it cooperation might be a bit far-fetched. Russia wants to avoid competition among the resource rich countries in exporting to China. And the same time Russia want to bring about order in the establishing of pipelines or similarly important investments in the area. When it comes to infrastructure Russia wants the Chinese to utilize part of the existing Soviet trading routes for its Belt and Road Initiative (BRI, also known as One Belt, One Road or Silk Road project) – as China seeks fairways from the Pacific to Europe. Now the intention is to extend this substance of cooperation to India and Pakistan – and to streamline it so it benefits all the countries this touches upon, e.g. through linking the BRI with the China-Pakistan Economic Corridor and the overall goals of the SCO. This is also the reason why I would urge ASEAN and the EU to be involved – e.g. in BRI – and to seek to get more clarity about what BRI can mean for the countries along those routes.

TK: You attended a Shanghai Cooperation Civil Society Organization Network Meeting in early 2016 – can you share your experiences, please

DR: I was surprised that they have a Civil Society-related meeting under the SCO. One often reads that there is no space and scope for civil society within the Chinese and Russian setting. At this particular meeting there were not only representatives from SCO countries invited, but also representatives from those countries/regional bodies that cooperate and have a partnership with the SCO. I was surprised about the quality of attendance and the breath of representation: e.g. India, Pakistan and Indonesia were represented by parliamentarians, think tanks, ministries of foreign affairs, academics and business. The meeting was not limited to government representatives. That was a real surprise to me. Also, we are all aware of the difference between Pakistan and India – and China and India – but overall it was a friendly gathering concentrating on improving relations among the members of the SCO.

TK: Who were those that are not part of SCO but attended the meeting?

DR: There was big representation from Indonesia – and also from the “old friends of Russia”, such as Cambodia, Laos, Vietnam and Myanmar. Indonesia was a surprise. But the explanation is very simple to me: both China and Russia want to bring in ASEAN. And instead of having a direct relationship with ASEAN it seems they decided that it is best to woe individual ASEAN members that they deem important within the association. This strategy is expected to allow a bridge to be built between the SCO and ASEAN, and also with the Eurasian Economic Union – and lead to the building up of multi-hub & multi-partnership structures.

TK: Why do you think the SCO is important for Malaysia? How can it benefit and what role should Malaysia play?

DR: I think Malaysia ought to pay more attention to what is happening within the SCO and to be better represented at future SCO meetings. In addition we should start talking within ASEAN about the future development of the SCO vis-à-vis ASEAN. We should also be aware and discuss the impact of the SCO on the region’s emerging multi-hub & multi-partnership structures – and how it affects the changing power dynamics in East Asia itself. As I see it, there is indeed a serious move by Russia and China to link the SCO to ASEAN and ASEAN-led structures – such as the East Asian Summit.

TK: Is there a risk that Malaysia won’t have a say in the ASEAN-SCO relationship if Malaysia does not participate now?

DR: This is my own personal concern – we are already left behind, and we ought to pay more attention. There are two things we need to do: first, exchange views within ASEAN, based on the knowledge of ASEAN members which engage with the SCO and are participating in the process; and secondly, it is time to look at the bigger picture of the SCO – the role of the SCO and ASEAN in terms of the broader geo-political situation, as well as the SCO’s links to BRI. The latter impacts on both ASEAN and the SCO – because in the Maritime Silk Road ASEAN will be the first hub, and ASEAN ought not to be disadvantaged vis-à-vis the Central Asia states along the Silk Road Economic Belt.

TK: Do you think it is possible that ASEAN is being challenged by the SCO? Does it affect ASEAN Centrality – and also, for instance, frustrate current attempts to strengthen the still weak ASEAN-India relationship?

DR: I’m more optimistic. I believe that the SCO will be complementary. ASEAN itself has got its own hub, its own multi-partnership structure. To me the two processes are not in a zero-sum game. It’s similar in a way to the Indian situation: their ‘Look East’ policy differs from but does not contradict their interest in the SCO.

TK: Looking to the future, how do you imagine the ASEAN-SCO relationship in about 10 years?

DR: I still believe the relationship will be complementary. We have two Arcs of Stability, the Central Asian Arc and the ASEAN Arc. The two processes can be seen in partnership rather than alliance. And thirdly, both sub-systems will emphasize collaboration over competition and military confrontation. Both seek to build a web of economic cooperation, confidence building and trust.

TK: Do you think that any ASEAN members will become members of the SCO or will the current ASEAN-SCO partnership be strengthened?

DR: Very interesting question. China and Russia will try to make membership look attractive to individual countries. It is also important whether ASEAN has the ability to maintain its centrality and its substance – which is the ASEAN Community. If ASEAN fails to strengthen the ASEAN Community and to bring value to the ASEAN Community, particularly for its people, then there is the danger of individual ASEAN countries doing things beyond ASEAN. There has already been talk among commentators in Indonesia of “Indonesia post-ASEAN”.

TK: Thanks a lot, Dato’, for the insights you have shared with us. We’ll finish on this note – but I too will be excited to see what the future holds for both ASEAN and the SCO.

DR: Most welcome

Timotheus Krahl is a PhD Candidate at Monash University Malaysia and a Research Assistant at the Asia-Europe Institute (AEI) at the University of Malaya (UM). The interview was edited in consultation with the interviewee.