World Economy

SCO-BRICS Summit to Reveal Russian Dreams

SCO-BRICS Summit  to Reveal  Russian Dreams
SCO-BRICS Summit  to Reveal  Russian Dreams

Since the beginning of the Ukraine crisis there has been a clear shift in the tectonic plates of global geopolitics. An increasingly assertive Russia and China are challenging the US-dominated order in a myriad of ways, but the actual contours of the emerging multipolar world are still hazy.

On the one hand, as columnist Huiyun Feng describes in her recent article for The Diplomat, the two opposing sides seem to be set. The Russia-China Entente and its coterie of Eurasian autocracies seems to be a genuine, lasting phenomenon.

Meanwhile, the G-7 is unified in its opposition to Moscow, while the United States has reinforced its Pacific alliances with Japan, Korea, the Philippines, and Australia.

On the other hand, the path of middle powers such as India, Iran, Brazil, Turkey, and Indonesia remains uncertain. Despite prodding from the United States none of these countries joined Washington in imposing sanctions against Russia and all are interested in profiting from China’s evolving “One Belt, One Road” initiative.

The allegiances of these middle powers may well become clearer during the upcoming BRICS/Shanghai Cooperation Organization (SCO) Heads of State Council meeting in Ufa, set to take place from July 8 – 10.

  Unbent, Unbowed

First and foremost the Ufa summit is an opportunity for Russia, which in 2014-2015 holds the rotating presidency of both the Shanghai Cooperation Organization (SCO) and BRICS, to showcase its resilience. Almost exactly a year after the downing of Malaysia Airlines Flight 17 over Ukraine led the United States, Germany, and other western European states to impose harsh economic sanctions, the Russian economy remains fragile. With oil prices mired in the $50-60 range since January, the Kremlin is quickly eating through its international reserves.

Still, although Russia is certainly in recession, the Russian economy is not exactly “in tatters” as US President Barack Obama famously put it in his State of the Union speech last February.

  SCO Expands

The SCO has not accepted any new members since its initial formation in 2001. Nonetheless, the organization has managed to expand rapidly by granting states “observer” and “dialogue partner” status – a sort of “Cursus Honorum” on the way to a full membership.

Currently, five states – Afghanistan, Mongolia, Iran, India, and Pakistan – have observer status and two appear to be on the precipice of becoming full members. In fact, it is widely expected that India and Pakistan will be elevated to full membership during the Ufa Summit.

Pakistan has had a close partnership with China since the 1960s, whereas India has traditionally been considered a friend of Russia (although Narendra Modi’s recent manic diplomacy has made it seem that India, the traditional leader of the Non-Aligned movement, is actually aligned with everyone).

Iran, which applied for membership years ago but has thus far been denied due to the UN Security Council sanctions on its nuclear program, may also be on the verge of being accepted.

The SCO was initially developed exclusively for security purposes but, as a recently released report by the Russian International Affairs Council indicates, the organization has slowly taken on economic dimensions as well. Next to SCO expansion, the biggest question to be resolved at the Ufa summit is whether a formal integration between China’s Silk Road Economic Belt (SREB) and Russia’s Eurasian Economic Union (EEU) can be formed under the auspices of the SCO.

Both China and Russia seem to support this integration, but the actual mechanism for the institutionalization of the nascent project remains elusive. Still, work on the development of such a framework has already begun.

Another elusive economic goal is the formation of the long-debated SCO Development Bank, a project that was initially proposed by China but stymied by Russia.