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03 Nov 2008

SCO addresses economic crisis

Shanghai Cooperation Organisation leaders

Shanghai Cooperation Organisation leaders

As the global economic crisis continues, the Shanghai Cooperation Organization looks to promote financial stability to fight regional insecurity.

By Joanna Lillis for EurasiaNet

Russia used Shanghai Cooperation Organization (SCO) talks in Astana on 30 October to urge a shake-up of the global economic and security order.

"Our meeting is taking place against an international background that is not simple," Russian Prime Minister Vladimir Putin said in remarks quoted by the Kazakhstan Today news agency. "The world has entered a very important transition phase of its development, whose main substance is forming a multi-polar architecture for international relations."

In a swipe at the United States, which Putin has accused of striving to create a unipolar world, he urged "the transformation of the global and regional security and development architecture through joint efforts, adapting it to the new realities of the 21st century."

Despite Russia’s own use of monopolistic practices, especially in the energy sphere, Putin attacked "the detrimental nature of monopoly in world finances and the policy of economic selfishness." He went on to suggest that governments should play a greater role in a new global economic order.

A joint communique issued after the talks urged measures to create stable conditions for regional trade and investment, boost energy security and improve border cooperation, underlining the changing nature of the SCO. It has long been viewed as a security bloc aimed at counterbalancing US and NATO influence in the region, but the economic focus of these talks indicates that its role is expanding as the global financial crisis exerts increasing force on the shaping of the regional security agenda.

As the SCO member states of Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan examined the impact of the global credit crunch on their economies, leaders warned that the crisis could fuel extremism in an already volatile region. "It is impossible to increase economic cooperation in isolation from assuring security in our region," Kazakhstani President Nursultan Nazarbayev said, adding that "serious risks, threats to the security of sustainable development" were present in the region.

Deteriorating standards of living, Nazarbayev added, can fuel extremism: "The phenomenon of new forms of activity among terrorist, extremist and criminal structures professing radical ideology is observed. When a crisis starts and the lives of people deteriorate, certain groups of criminals become more active, creating difficulties for business as a whole."

Participants urged the SCO to become more involved in assisting Afghanistan, a key source of regional instability. "Only a healthy economy is capable of resolving and eliminating the reasons giving birth to the problems of terrorism and the narcotics trade emanating from the territory of that country," Kazakhstani Prime Minister Karim Masimov said.

Mulling the financial woes that pose a threat to security, the SCO cast around for practical ways to promote financial stability. Masimov called for a meeting of central bank heads and finance ministers in Almaty in the near future to analyse the coordinate stabilization measures. China, meanwhile, backed closer economic cooperation within the SCO, with Premier Wen Jiabao urging closer contacts among the financial sectors of member states, and the coordination of analysis and forecasting of international macroeconomic processes. In addition, he urged stimulus measures to boost trade and investment, Xinhua news agency reported, singling out the need for more special economic zones in border regions along the lines of the one at the Korgas frontier between Kazakhstan and China.

Both countries continue to lobby for faster progress on the Western Europe-Western China transport corridor, which will provide smoother access to European markets for Chinese goods and transit revenue for Kazakhstan. Masimov called for a single SCO energy market, which he said could be based on the existing pipeline system linking Russia, Central Asia and China, an "energy community within which it would be possible to harmonize the interests of producers, transporters and consumers of energy resources."


Joanna Lillis is a freelance writer who specializes in Central Asia.

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