BRICS and SCO. From Central Asia to Asia, And Beyond

The summits of BRICS and SCO in Ufa can represent a landmark in international affairs.

The summits are attended by representatives and leaders of countries with a total population of more than three billion; and they take place in Russia, despite Western sanctions. Leaders in Europe, America, East Asia, and other world regions have to follow attentively and “take note”.

Notwithstanding their late economic slowdown (particularly in Russia and Brazil), the BRICS are moving ahead, and a $ 100 billion New Development Bank will become operational by the end of the year. This might pose a challenge to the IMF and the World Bank, although in principle the two systems could coexist and co-operate. Will the BRICS introduce an altogether different international banking system to replace the SWIFT mechanism of money transfer? Will they gradually replace the Dollar as a trade and reserve currency? At the moment, these are remote possibilities, but in the medium-long term things could change. Much will depend on the evolution of the relations between China and Russia, and on the choices of new powers such as India, which will likely and soon join the SCO.

Pakistan will probably be admitted into the SCO as well. This is an interesting and fascinating challenge. Islamabad’s accession is particularly important for China. China has in fact invested $ 46 billion, mainly in energy and infrastructure, in the frame of the “China-Pakistan Economic Corridor” (CPEC) program. Pakistan is crucial to connect Beijing to the Gulf region and can become China’s main energy transit avenue. Beijing is actively boosting its “soft power” in the country and has launched an E-magazine (Nihao-salaam), Chinese learning opportunities, scholarships, and even a think tank on the project aimed at providing an “Information Corridor”. At the same time, Pakistan will deploy a 10,000-strong security force to guard Chinese workers throughout the country. Yet one might wonder whether the project will succeed in a country with persistent issues such as Islamist radical militancy, regional separatism (especially in Baluchistan), and the unresolved Kashmir dispute with India? Pakistan’s SCO accession will make sense if it is complemented by a deepening of the security dimension within the SCO itself. Otherwise, the challenges risk outweighing the opportunities. Interestingly, over the last years Pakistan has also improved its relations with Russia. After a key defence deal reached last November, Pakistan and Russia have agreed to hold joint military exercises; Islamabad’s Army Chief Raheel Sharif visited Moscow (17-18 June) and President Putin will probably visit Pakistan in 2015. Russia is looking for new opportunities in trade and new geostrategic partners, particularly among those – like Pakistan – which have been disappointed by their relations with the USA. Of course New Delhi is not much comfortable with China’s friendship and Russia’s thaw with Islamabad. With a population approaching 1.3 billion, India, too, poses great challenges, but also enormous opportunities, if one considers its economy is now growing again at an annual rate exceeding 7-8%. India is a traditionally important partner of Russia, and Moscow is certainly poised to see New Delhi in the SCO as a counterbalance to China and a source of economic co-operation. Defence, energy, telecom, electronics, infrastructure, are all areas in which the two countries cooperate and SCO membership could boost a potential which has to some extent been untapped. India, like China, is energy-hungry and can certainly benefit from increasing import from Russia as well as Central Asian countries.

In the days before and after the summits, Prime Minister Modi is in fact visiting all five formerly Soviet “Stans”. India has a limited regional presence, and can now enjoy the opportunity to enhance it. Kazakhstan’s oil and uranium, Uzbekistan’s and Turkmenistan’s gas (External Affairs Minister Swaraj visited Ashgabat on 9 April), and Tajikistan’s strategic location are all on Modi’s agenda; let alone the fight against fundamentalism, which requires co-ordination with Uzbekistan and Tajikistan among others, and the necessity to stabilise Afghanistan. India also intends to revive grander plans such as the TAPI (Turkmenistan-Afghanistan-Pakistan-India) gas pipeline and the possibility to link Indian-developed Chabahar port in Iran with Central Asia and Russia. Such mega projects might be looked at positively by the USA and Russia; less so by China. In addition, despite some improvement, Afghanistan and Northern Pakistan remain a source of instability. SCO enlargement will work if there is a “deepening” of its functions and powers. The SCO will have to effectively promote security and economic cooperation; otherwise, frictions between India, China and Russia (which are creeping under the surface) might come to the fore and rise. In this sense, the agenda of Russia’s Presidency (2014-2015) is ambitious. Moscow expects a “Development Strategy towards 2025” to be adopted in Ufa, together with the establishment of a centre dealing with security threats and the promotion of youth, educational, and media programmes (a SCO TV Channel and a SCO University network are already in place). Asian integration seems to be under way. How is the “West” reacting to these developments?

The EU is sadly out of the game. Supposedly large countries like Britain or Germany have relatively underdeveloped trade relations with an emerging giant like India. Unless the EU becomes a truly political union, it will keep being dragged down by rather “circumscribed” domestic issues (such as Greece’s embarrassing crisis) and will not be of any help to the USA. Washington, for its part, is showing little resolve, has left strategically located Central Asia to Chinese and Russian initiatives, and finds it hard to accommodate the rising powers within the existing international financial institutions. The Ufa summits should ring a bell in Western capitals. China, India, and Russia are getting closer and proposing a range of initiatives to integrate large parts of Eurasia. The West risks once again being marginalised.