Eurasian leaders seek to boost regional trade at SCO summit

Eurasian leaders seek to boost regional trade at SCO summit
The latest SCO summit was hosted by India as the current holder of the SCO’s rotating chair. /
By bne IntelliNews July 4, 2023

Iran became the ninth country to join the Shanghai Cooperation Organisation (SCO) at a virtual summit of the regional alliance on July 4 that emphasised regional stability and developing trade links. The SCO is set to expand further, as Belarus too is currently preparing to become a member.

At the summit of the SCO which includes regional heavyweights China, India and Russia as well as Pakistan and several Central Asian republics leaders talked of strengthening bonds and enhancing co-operation within the alliance. 

The event, hosted by India as the current holder of the SCO’s rotating chair, comes as key members of the alliance seek to expand its scope and counter Western influence in Eurasia. 

Iran’s accession to the SCO was formally announced by India's Prime Minister Narendra Modi. Iran, which is under Western sanctions, has been gradually emerging from international isolation and building ties with Russia and China.

Modi told the event that new countries joining the SCO underlines its importance. Kazakhstan’s President Kassym-Jomart Tokayev also commented on the expansion of the organisation. “The SCO’s step-by-step expansion proves its growing role and attractiveness of our multifaceted mutually beneficial co-operation,” he said, according to the Kazakh presidential website.

Putin back on the world stage 

The virtual event was notable for being Russian President Vladimir Putin’s first appearance at an international forum since the failed mutiny led by Yevgeny Prigozhin, the head of the Wagner mercenary group. 

Addressing the summit, Putin emphasised Russia’s stability and unity, and also stated Moscow's intention to strengthen ties with the SCO. 

He asserted Russia's determination to counter Western pressure and sanctions, and doubled down on his rhetoric to justify the invasion of Ukraine last year. 

The SCO is important for Russia, which considers China, India and Iran as some of its most important partners in its strategy of building alliances with the Global South and challenging the Western-centred world order. 

He referenced this in his address to the conference, commenting: “[O]ur organisation is strongly committed to creating a truly just and multipolar world order, an order based on international law and common principles of mutually respectful co-operation between sovereign states with the central, co-ordinating role of the United Nations.” 

China's Xi calls for regional peace 

Chinese President Xi Jinping, meanwhile, stressed the need to protect "regional peace”. Xi called for joint efforts to ensure common security, highlighting the shared responsibility to achieve long-term stability.

He pledged to promote political solutions for pressing international and regional issues, contributing to the establishment of a strong regional security framework.

“Achieving long-term regional peace and stability is our common responsibility,” Xi said, according to Chinese state broadcaster CCTV. 

Many of his comments were focused on global trade and investment. He stated China's opposition to protectionism, and reaffirmed its commitment to economic globalisation. 

Regional economic cooperation 

The subject of trade and regional security were also raised by SCO secretary-general Zhang Ming, who addressed the meeting by video-conference

“Despite the unfavourable global economic circumstances, trade and economic interaction and practical co-operation within the SCO have been making strides; co-operation in trade, investment, the manufacturing industry, agriculture, research and technology, energy, transport, connectivity, digital technologies and other fields continued to pick up pace,” he said, according to a SCO statement. 

“Today's world is undergoing changes that have not been seen in a century, and the human community is facing serious risks and challenges. Unilateralism and protectionism are on the rise, conventional and non-conventional threats to security are getting intertwined, and international instability and uncertainty are exacerbating,” the secretary-general added. 

Among the package of documents adopted during the meeting was the SCO Economic Development Strategy to 2030. 

Putin welcomed adoption of the strategy and said Russia intends to continue to deepen ties with members of the SCO. 

“Russia’s trade with SCO member states has increased by over one third, or 37%, reaching a record high of $263bn last year. From January to April this year, it went up by another 35%,” the Russian president said.

He also commented on the increased use of national currencies for mutual settlements, with over 80% of commercial transactions between Russia and China now being made in rubles and yuan.

Tokayev suggested setting up a joint investment fund for SCO members, pointing out that no economic projects under the SCO's auspices have been realised in over 20 years due to the lack of mechanisms for financial support. 

He called for the SCO's economic agenda to be prioritised with a focus on facilitating favourable conditions for increased mutual trade, removing trade barriers and promoting joint ventures.

Modi, meanwhile, called for collective action among SCO members to combat terrorism and assist Afghanistan, which was also raised by Central Asian leaders from Afghanistan’s near neighbourhood.