The new Eastern Bloc: China, Russia and India are joining forces

This month, as Newsweek goes to print, an international organisation all but unknown in
the West is set to announce that its membership will soon include countries representing half
the world's population. If the hopes of its leading backers – particularly Russia – are realised, the 15th annual summit of the Shanghai Cooperation Organisation (SCO) in the Russian city of Ufa will mark the moment when this previously obscure body starts to demand much closer attention from the West.

The SCO's plan is to invite India and Pakistan to apply formally to take their place alongside Russia, China, Kazakhstan, Uzbekistan, Tajikistan and Kyrgyzstan as full members.

The idea behind these invitations is to extend the SCO's reach south across the Asian landmass, bolstering its claim that it is a counterbalance to the Western-dominated international institutions that have held sway since the end of the Second World War. But if the imminent expansion of the SCO signals a major step on the road to a "multi-polar" world order, then it is a journey that promises to be long and arduous, with ample opportunity for fellow travellers to go their separate ways.

Over the past few years, the Turkish president Recep Tayyip Erdoğan has repeatedly vented his frustration at Turkey's lack of progress in joining the European Union by raising the prospect of joining the SCO instead. During a visit to Russia in 2013, Erdoğan is reported to have said: "If we get into the SCO, we will say goodbye to the European Union. [The SCO] is better – much more powerful. Pakistan wants in. India wants in as well. If the SCO wants us, all of us will become members of this organisation." To date, no invitation has been forthcoming for Turkey, in spite of warm words in public between Erdoğan and Russian president Vladimir Putin. At a time of instability on Turkey's southern border and growing uncertainty about Putin's intentions, however, Erdoğan's threats bolster the apparent credibility of the SCO even if they are yet to be taken seriously at the highest levels.

The SCO started life, in 1996, as the "Shanghai Five", formed in the aftermath of the Soviet Union's break-up to enable Russia, China and the three former Soviet states in Central Asia that share a border with China (Kazakhstan, Kyrgyzstan and Tajikistan) to resolve their various territorial disputes. Having succeeded in this effort to ensure stability in Central Asia, the "Five" became six in 2001, with the addition of Uzbekistan, and changed their name to the Shanghai Cooperation Organisation. The job of secretary-general to the organisation is shared between the members in rotating three-year terms – the Russian governor of Irkutsk Oblast, Dmitry Mezentsev, who did not respond to Newsweek's requests for an interview, is the present incumbent – although the SCO's permanent headquarters are in Beijing.

The focus during the organisation's early years was on regional security, conceived of in the Chinese formulation of countering "terrorism, separatism and extremism" – for example, the threat Beijing identified from its Uighur population in the western province of Xinjiang, which borders the former Soviet states. Since 2004, SCO members have run a "Regional Anti-Terrorist Structure", based in the Uzbek capital of Tashkent, which assembles security and intelligence staff from its members and promotes closer co-operation through shared blacklists and enhanced extradition procedures for terror suspects.

If the SCO had remained as primarily a vehicle to further China's efforts to suppress Uighur separatism on its western flank, the chances are the organisation would have remained relatively obscure. However, its agenda has steadily crept beyond those beginnings and the SCO's gradually rising profile reflects the range of political and economic influences driving its major members, including the economic ambitions of China in Central Asia, Russia's determination to retain its influence in the region, Moscow's growing estrangement from the West, and the potential void that will be left behind when Nato finally pulls out of Afghanistan.

Each of these factors is likely to push the SCO further into the spotlight, but each also brings the growing prospect of disagreement and paralysis for the organisation thanks to the central issue that will ultimately decide its fate: the competition and mutual suspicion that persists between Beijing and Moscow.

Shifting towards Beijing

How likely is it that the organisation Erdoğan appears to rank alongside the European Union, and that could soon include three of the four Brics, will emerge as a major new player in international relations?

"The main thing to recognise about the SCO is that there are fundamental disagreements between Russia and China over the organisation's purpose and scope," says Alexander Cooley, author of Great Games, Local Rules: The New Great Power Contest for Central Asia and Professor of Political Science at Barnard College, New York. "The Russians basically see the SCO as one of a number of institutions that they hope will develop a revisionist agenda against the West and against US influence." The Chinese, by contrast, are focused far more on regional development and infrastructure investment both to help stabilise Xinjiang, the western province that has seen serious unrest among its Muslim Uighur population, most recently in 2009, and to create new markets for Chinese companies. These two visions do not sit perfectly together. Russia has never wanted the SCO to form a central part of its security planning in Central Asia, preferring instead the Collective Security Treaty Organisation, which it formed in 2002 with its Central Asian neighbours, says Alexander Gabuev, chair of the Russia in the Asia-Pacific Programme at the Carnegie Moscow Centre.

Neither Russia nor China, Gabuev says, would want to join an organisation that implied any sort of military alliance between them. So the SCO is highly unlikely to develop into any sort of alternative to Nato, especially not one that replicates Nato's Article V, enshrining the principle that an attack on one member is an attack on all. At the same time, China's long-running efforts to extend the SCO's work into areas of economic development have largely failed to gain traction, with proposals including an SCO development bank and a free trade zone taking a long time to go nowhere. "Every economic proposal that the Chinese have offered, the Russians have considered, delayed and then mostly rejected," says Cooley. "The Russians are uncomfortable with institutionalising China's growing economic dominance of the region and instead they want to promote their own economic architecture, the Eurasian Economic Union."

The proposal for an SCO development bank became stuck on the question of on what basis members would contribute capital, given that any formula linked to GDP would give China 80%-plus or the organisation and de facto control. Despite the SCO's failure to live up to China's hopes as a vehicle for economic development, the balance in economic diplomacy is shifting in favour of Beijing, enabling it to make progress outside the framework of the SCO and achieve many of its goals. In September 2013, having seen its proposal for an SCO development bank stall, China's president, Xi Jinping, conducted a 10-day official tour of Central Asia, signing a string of bilateral economic and business deals and using his visit to Kazakhstan to announce the "Silk Road Economic Belt", a bold proposal to finance and build roads, rail links, pipelines and other infrastructure across Central Asia and to create direct routes for Chinese exports to Europe.

The following month, Xi proposed a "Maritime Silk Road" focused on south Asia that is likely also to include major investments in ports. In April this year, China signalled another step in its "New Silk Road" plans with the announcement that it will invest $62bn of its vast foreign exchange reserves in the project via two state-controlled banks. Coming alongside China's notable diplomatic coup this year in launching its Asian Infrastructure Investment Bank with the support of around 50 nations including close US allies in Europe and elsewhere, the signs are that Beijing is not going to allow its inability to move its economic agenda forward via the SCO to stall its progress indefinitely.

Alexander Gabuev at the Carnegie Moscow Centre suggests that China's Silk Road plan does not necessarily reflect simple frustration with the SCO's paralysis. Another important factor is China's slowing economy, which is creating major over-capacity among Chinese infrastructure companies. In response, China is seeking to relocate industry to its western regions and create export markets for them through Central Asia. "China definitely wanted a free trade zone in the SCO," says Gabuev. "But Russia and other countries are afraid they will be flooded with cheap Chinese goods and won't be able to impose tariff barriers, which is why they opted instead for the Eurasian Economic Union and are not letting China in. But the Silk Road may have this free trade zone component. Nobody knows whether it has or not, so everybody is waiting."

No choice for Russia

China's renewed efforts to advance its economic development plans coincide with the worst breakdown in relations between Russia and the West since the Berlin Wall fell in 1989. This leaves Russia, like Turkey's President Erdoğan, needing to demonstrate that it has other international options apart from its fractured relationships with the US and Europe.

"There is no way back to business as usual for the foreseeable future," says Gabuev, "so people have started to realise that you have to do a pivot to Asia. And as Japan and South Korea are under pressure because they're US allies, your pivot to Asia turns out to be a pivot to China." This combination of factors, observers suggest, helps to explain the situation now unfolding. On one hand, the rising profile of the SCO in large part reflects Russia's desire to put itself at the heart of an alternative international framework that is free of Western influence: a US application for observer status at the SCO was rejected in 2005.

The Russian Secretary-General of the SCO, Dmitry Mezentsev, spoke in February of the numerous countries that wanted to engage with the SCO, noting that Syria, Belarus, Armenia, Azerbaijan and Bangladesh had all applied for observer status, the level below full membership. "We value and appreciate these applications and the interest in the organisation," Mezentsev told the SCO Press Club. "This shows that the SCO has gained credibility and influence in the region."

On the other hand, Russia's efforts to talk up the influence and reach of the SCO as part of its post-Ukraine international positioning are also forcing it at accept more or less reluctantly that China's growing economic dominance cannot be effectively constrained. Prof Cooley suggests that Russia, under pressure from Western sanctions, will acquiesce in the Chinese Silk Road plan "because they have no choice in the matter". He points out that Russia's $400bn gas deal with China, signed late last year and portrayed as a sign of the growing co-operation between the two major non-Western powers, marked the end of a hard-fought negotiation in which China's existing bilateral relationships in Central Asia gave it an important edge.

"The Chinese used the cheap natural gas prices that they get from Turkmenistan to play off Gazprom during the negotiations over the East Siberian pipeline," he says. "That's a clear case where China's economic engagement in Central Asia really did impact Russia's core national interest." Moscow, however, had to put a brave face on the deal because of the need to signal it has options other than the West. Despite the clear gaps between the Russian and Chinese agendas, however, the two countries undoubtedly share a desire to create an alternative world order that gives greater weight to emerging non-Western powers. The practical difficulties of achieving this, however, even in the security sphere where the SCO counts most of its success to date are all too clear – as evidenced by a country that sits at the heart of the region the SCO aspires to unite: Afghanistan.

At the SCO's summit in July 2005 in the Kazakh capital, Astana, the leaders issued a joint statement that put the organisation properly on the radar in Western capitals for the first time. Their communiqué called openly for coalition forces engaged in Afghanistan to set a deadline for dismantling their bases in the neighbouring SCO member states. That same month, Uzbekistan gave the US six months to leave its soil. A decade on, the prospect of Nato's forces finally departing is not met with any great relish, particularly given the emergence of Isis and reports that people with links to the jihadi organisation are turning up in Afghanistan. "Of all the members of the SCO you're seeing real concern over Afghanistan coming out," says Sarah Lain, research fellow at the Royal United Services Institute in London. "Even China is starting to do a tiny bit more in security support – not in the way that Russia would but for example they're helping to rebuild barracks for soldiers and police and supplying some limited training."

Alexander Gabuev says that during conversations with security officials in Moscow, Beijing and Central Asian capitals, he has encountered senior figures who believe that Isis is a creation of the CIA in partnership with Saudi intelligence, in the same way that the Afghan mujahideen movement that fought the Russians in the 1980s was heavily sponsored by the West. "[They think Isis] is just there to spread instability and to weaken Iran, China and Russia, and that it's going to spread to Central Asia and create an arc of instability," he says. "I'm not sure that's what Putin or Xi Jinping thinks but there are people in official positions in our intelligence bureaucracy who have these views."

Filling Nato's boots

The question of how the countries surrounding Afghanistan come together to address any security vacuum left by the departure of coalition forces is likely to loom large for the SCO's members in the near future and could easily expose the organisation's difficulties in turning statements into action. "There's lots of dialogue and dialogue is great," says Sarah Lain. "But at some point with Afghanistan there needs to be action and no one really wants to fill Nato's boots in any way, so you wonder..." The default Chinese view that investment and economic stability will lead eventually to political stability could prove unequal to the task facing the SCO in this case.

Where does all this leave the SCO, a largely unknown and to date relatively ineffectual organisation that may be on the brink of a rather higher profile around the world? The move to expand its membership can be interpreted in several ways. Starting the process of admitting India and Pakistan to full membership will allow the SCO to claim that it is an international organisation of growing importance, representing a major slice of the world population and economic output. This is largely the Russian agenda – with an unspoken dimension, as Lain puts it, to counteract the "increasing gap between Russia and China's position in the world" by bringing more countries to the table and so diluting China's influence. This is particularly true of India, which has traditionally been much closer to Moscow than Beijing.

From the Chinese perspective, the moment at which the SCO starts to expand and appear more significant internationally might in fact signal the opposite – that Beijing is finally giving up on the idea of the SCO as an organisation that will play a major role in its international diplomacy. "My sense is that the new signalling that they're ready to admit India is in some ways an acknowledgment that they're not going to be able to do anything serious economically through this organisation," says Prof Cooley, "so they might as well increase its symbolic value by letting in India and Pakistan – which you have to do as a package deal – whereas before the Chinese had resisted India's application."

Whichever interpretation of the likely events at the summit in Ufa gains acceptance, however, this organisation and others like it will continue to fascinate observers in the West because of our abiding suspicion that the world order is slowly changing. "You sense both in academic and outside circles that there is this curiosity: what would a powerful, non-Western international organisation look like?" says Prof Cooley. "How would it be different? How would it be effective?"

Anyone seeking answers to these questions at the headquarters of the Shanghai Co-operation Organization on Ri Tan Lu in Beijing is unlikely to come away much the wiser. Its home turns out to be a small and rather decrepit building opposite the Polish embassy that resembles a down-at-heel budget hotel with grey Mitsubishi air conditioning units on the wall outside every window and cheap floral-pattern blinds, all of which were pulled. In front, the flags of the member states fly in the courtyard from highly-polished flagpoles and there are spaces for around 20 cars to park. All of them were empty on the day Newsweek visited.

Additional reporting by Peter Leggatt