What Is the Shanghai Cooperation Organization?:
The Shanghai Cooperation Organization (SCO) was created by China in 2001 to increase free trade, and reduce the threat of terrorism and drug trafficking along its borders. Its members include Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, and Russia. SCO members have a total population of 1.5 billion, 1/4 of the world's total, and have 11% of the world’s proven oil reserves. India, Mongolia and Pakistan are observer countries, and Iran attended for the first time.
What Happens at SCO Meetings?:
Iran is China’s third largest supplier of oil. Iran has talked to Pakistan about building a gas pipeline through Pakistan to India. Trade agreements worth as much as $2 billion were signed between member nations. Member countries established the Entrepreneurs Committee to promote economic cooperation of enterprises between these countries. They made a formal statement that the United Nations, being the most authoritative international organization, is entrusted with primary responsibility in international affairs and law.
Why Is the SCO Important?:
SCO countries have huge untapped reserves of oil, coal and natural gas, and are wedged between Europe and Asia, two of the world’s largest markets. They are landlocked and in mountainous infertile terrain, making exporting and even development arduous. In addition, they are sparsely populated and low-income, making development of a domestic market difficult. Finally, most of these countries are former members of the Soviet Union, and are only now building market-based economies.
Without development, these countries are susceptible to drug trade, corrupt governments and terrorism. China is particularly concerned, since they border its westernmost and least developed regions, Mongolia and Xinjiang Uygur.
As an alliance, these neighboring countries are forming a powerful bloc based on mutual advantage in trade and security. Reading between the lines, they are fairly unified against the U.S. intervention in the Middle East, if only because it could pose a threat to the uninterrupted flow of oil to China. It is another way that China is building a stable economic base that will advance its continued growth.
