Council on Foreign Relations, "CFR Backgrounders: The Shanghai Cooperation Organization," October 14, 2015

Introduction

What is the SCO?

Originally organized as the Shanghai Five in 1996, the organization added Uzbekistan in 2001 and renamed itself the Shanghai Cooperation Organization. The six member states occupy territory that accounts for three-fifths of the Eurasian continent and have a population of 1.5 billion, a quarter of the world's population. In addition to the six member states, the SCO has two new acceding members, Indian and Pakistan, four observer nations , and six dialogue partners.

As laid out in its charter, the organization functions as a forum to strengthen confidence and neighborly relations among member countries and promote cooperation in politics, trade, economy, and culture to education, energy, and transportation. The SCO has two permanent headquarters, the secretariat in Beijing and the Regional Anti-Terrorist Structure (RATS) in Tashkent, the Uzbek capital. One of the organization's primary objectives is promoting cooperation on security-related issues, namely to combat the "three evils" of terrorism, separatism, and extremism. The organization adopts decisions made by consensus, and all member states must uphold the core principle of non-aggression and non-interference in internal affairs.

As a young organization, the SCO’s regional influence remains limited. Richard Weitz, senior fellow and director of the Center for Political-Military Analysis at the Hudson Institute, writes that the SCO and its main organizational bodies are "chronically underfunded and have limited powers to take decisions independently of their member governments." Member states' penchant for pursuing "micro-agendas" also undermines group cohesion and sows mistrust, says Matthew Crosston, professor and director of the International Security and Intelligence Studies Program at Bellevue University.

Despite these challenges, the SCO has nevertheless broadened its mandate in recent years to include joint security and economic development programs. In 2014, China hosted the bloc's Peace Mission, its largest military exercise in terms of the number troops involved, more than seven thousand, and advanced weaponry deployed. Other organizational priorities are initiatives to deepen economic and energy cooperation, including establishng a bloc-wide development bank.

What role does the SCO play in Afghanistan?

The SCO as a group does not have much sway in Afghanistan, though the organization considers religious extremism, terrorism, and drug trafficking in the country as potential serious threats to the region. Its neighbors share the fear that instability in Afghanistan will spread beyond its borders. For  Kabul to participate in SCO counterterrorism initiatives, Afghanistan was elevated from an SCO contact group to full observer status at the 2012 SCO summit in Beijing. With the presence of the Taliban and local militants aligned with the self-proclaimed Islamic State and al-Qaeda in Afghanistan, and the drawdown of NATO forces, the landlocked country's security situation remains a top priority at SCO meetings. New Afghan leaders President Ashraf Ghani and Chief Executive Abdullah Abdullah have backed greater SCO participation in rebuilding efforts, but the organization has had little involvement to date.

However, some SCO member nations have intensified bilateral engagement with the country. China, in particular, has sought to play a larger role in stabilizing Afghanistan to protect its substantial investments. Currently, China is the largest SCO investor in Afghanistan, with projects including the $3 billion contract to develop the Aynak copper mine (though its completion has faced numerous delays). Leaders in Beijing hope that a stable Afghanistan will have a "spillover" effect on China's own restive autonomous region of Xinjiang. Russia, too, participates in a variety of bilateral efforts with Afghanistan, including the provision of weapons to its army, counternarcotics initiatives, and its own investment projects. From 1979 to 1989 the Soviet Union and Afghanistan were at war, but today, Russia has a vested interest in the country's security. Moscow views the SCO's Central Asian members as a buffer zone between Russia and Afghanistan, says Raffaello Pantucci of the London-based Royal United Services Institute (RUSI), and therefore chooses to strengthen broader regional security to prevent instability in Afghanistan from spreading to Russian borders. Central Asian partners, including Kazakhstan and Uzbekistan, have also made significant investments in Afghanistan.

Despite these bilateral initiatives, it is unclear if the SCO will play a larger role in Afghanistan. The organization's narrow action is in part due to the obstructivism by members who prefer to tackle security issues at the bilateral level, and friction and distrust between members prevent the SCO from forming a unified policy on security issues in Afghanistan. Experts cite the absence of not only political will, but also a limited economic capacity (PDF) for the bloc to take on a military role. However, Weitz writes that if SCO members could make an effective contribution to Afghan prosperity and security, Western powers may come to appreciate the Eurasian body.

Does the SCO foster economic cooperation among member states?

How have Sino-Russian relations shaped the SCO?

China and Russia are the twin engines of the SCO, despite offering differing visions for the organization. Decades of rapid economic growth have propelled China onto the world's stage, whereas Russia has found itself beset with economic turmoil and geopolitical isolation following its 2014 annexation of Crimea, subsequent ejection from the G8, and continuing involvement in the Ukraine conflict. In the past year, the Russian economy has faltered amid currency and oil price volatility, as well as an onslaught of sanctions imposed by the West.

Moscow had long blocked Beijing’s efforts to advance economic initiatives within the SCO. However, much like its Central Asian neighbors, Moscow is now looking to benefit from Chinese investments, including from energy and manufacturing deals. Since the fallout between Russia and the West, Russia has made its own "pivot" to the East to improve ties with its Asian neighbors, opening the door for greater cooperation between Beijing and Moscow in shaping the SCO agenda. Of late, China's slowing growth has injected a degree of uncertainty about the future momentum of its economy, but analysts say that due to Russia's own economy volatility, China will remain crucial partner for an increasingly isolated Russia.

Some experts believe that recent moves by Beijing and Moscow, including the agreement to harmonize China's Silk Road Economic Belt and Russia's Eurasian Economic Union and bilateral military exercises in the Mediterranean Sea, signal  an entente between the two regional powers. Greg Shtraks, a fellow at the East China Normal University in Shanghai, writes that the improvement in Sino-Russian relations seems to be a "genuine, lasting phenomenon." Pantucci adds that Moscow's overtures to Beijing not only indicate a willingness, but also an eagerness to have a close bilateral relationship, in both appearance and practice.

However, others like University of Tasmania's Matthew Sussex believe that Russia's relationship with China has "deepened by necessity rather than a sense of mutual trust.” Anita Inder Singh of the New Delhi-based Centre for Peace and Conflict Resolution doubts the durability of Beijing and Moscow's cooperation, claiming that the "'has-been superpower' and the 'wannabe great power' are engaged in a contest for primacy in Eurasia."

How will membership expansion affect the SCO?