By the yardstick of Jacques, the melancholy philosopher-clown in William Shakespeare's play As You Like It, the Shanghai Cooperation Organization (SCO) has indisputably passed the stage of "Mewing and pucking in the nurse's arms".
Nor is SCO anymore the "whining schoolboy, with his satchel/And shining morning face, creeping like snail/Unwillingly to school". The SCO more and more resembles Jacques' lover, "Sighing like a furnace, with a woeful ballad/Made to his mistress' eyebrow." Indeed, if all the world's a stage and the regional organizations are players who make their exits and entrances, the SCO is doing remarkably well playing many parts. That it has finally reached adulthood is beyond dispute.
But growing up is never easy, especially adolescence, and the past year since the SCO summit in Dushanbe, Tajikistan, has been particularly transformational. What stands out when the SCO's ninth summit meeting begins in the Urals city of Yekaterinburg in Russia on Monday is that the setting in which the regional organization - comprising China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan - is called on to perform has itself unrecognizably shifted since last August's gathering of leaders in Dushanbe. First, the big picture.
The locus shifts east
The world economic crisis has descended on the SCO space like a Siberian blast that brings frost and ice and leaves behind a white winter, sparking mild hysteria. The landscape seems uniformly attired, but that can be a highly deceptive appearance. Russia and China, which make up the sum total of the SCO experience, are responding to the economic crisis in vastly different terms.
For Russia, as former prime minister and well-known scholar academician Yevgeniy Primakov observed ruefully in a recent Izvestia interview, "Russia will not come out of the crisis anytime soon ... Russia will most likely come out of the recession in the second echelon - after the developed countries ... The trap of the present crisis is that it is not localized but is worldwide. Russia is dependent on other countries. That lessens the opportunity to get out of the recession in a short period of time." 
Primakov should know. It was he as president Boris Yeltsin's prime minister who steered Russia out of its near-terminal financial crisis 10 years ago that brought the whole post-Soviet edifice in Moscow all but tumbling down.
Russia's economic structure is such that 40% of its gross domestic product (GDP) is created through raw material exports, which engenders a highly vulnerable threshold when the world economy as a whole gets caught up in the grip of recession. But what about China?
This was how Primakov compared the Chinese and Russian economic scenario:
In China too, as in Russia, exports make up a significant part of the GDP. The crisis smacked them and us. The difference is that China exports ready-made products, while on our country [Russia] a strong raw material flow was traditional. What are the Chinese doing?
They are moving a large part of the ready-made goods to the domestic market. At the same time, they are trying to raise the population's solvent demand. On this basis, the plants and factories will continue to operate and the economy will work.
We [Russia] cannot do that. If raw materials are moved to the domestic market, consumers of such vast volumes will not be found. Raise the population's solvent demand? That merely steps up imports.
Last week, in yet another breathtaking move, China offered a loan of $3 billion to Turkmenistan. The loan for Russia is a vital lifeline for its number one oil major Rosneft and its monopoly pipeline builder Transneft. The loan for Kazakhstan, which goes partly towards acquiring a 50% stake in MangistauMunaiGaz, increases China's share of oil production in Kazakhstan to 22%. Again, the loan for Turkmenistan ensures that China has the inside track on the fabulous Yolotan-Osman, which is reputed to be one of the biggest gas fields in the world.
No heartburn in Moscow
In short, if the law of nature is such that gravitation in life is inevitably towards where the money comes from, the locus of the SCO has shifted to Beijing more than ever before. In any other context, this would have straightaway introduced a high state of disequilibrium within the SCO. It took decades for France and Germany to figure out cohabitation within the European Economic Community. The China-Russia equilibrium within the SCO has always been delicate, but it may have prima facie become more so than ever before. But in actuality, it isn't so.
It goes to the credit of the leaderships in Moscow and Beijing that they have steered their relationship in a positive direction by rationally analyzing the imperatives of their strategic partnership in the overall international situation rather than in a limited sphere of who gains access to which gas fields first in the Caspian or who is a lender and who is a borrower in these extraordinary times.
Thus, the frequent tempo of Russia-China high-level exchanges has been kept up. Both sides are sensitive to each other's core concerns and vital interests. Russia's conflict in the Caucasus last August was a litmus test and Beijing passed the test. The Russia-China mutual understanding survived intact without bruises.
Despite China's highly principled position on the issue of political separatism and secessionism, and despite all efforts by Western propaganda, China kept a watchful position on Georgia's breakaway republics of Abkhazia and South Ossetia and silently took note of Moscow's recognition of their unilateral declaration of independence, but on balance remained broadly sympathetic to Russia's concerns and predicaments, which Moscow duly appreciated.
Again, belying all Western expectations that Russian and Chinese priorities in energy security diverge, the two countries have finally begun taking big strides on the ground in energy cooperation. A variety of factors went into it - the fall in demand for energy in the recession-struck European markets; strains in Russia-European Union energy relations; Russia's own search for diversification of its Asian market; Russia's energy rivalries with the European Union and the United States in the Caspian and so on - but the fact remains that Moscow is increasingly overcoming its hesitancy that it might get hooked to the massive Chinese energy market as an "appendage", as a mere provider of raw materials for China's economy.
The 25-year $25 billion China-Russia "loan-for-oil" deal signed in April alone amounts to Russian oil supplies equivalent of 4% of China's current daily needs. Not bad at all. But it is in the sphere of natural gas that we may expect big news in the coming period. This is virgin soil. Russia at present does not figure as a gas exporter to the Chinese market. And natural gas is where the world's - and especially China's - focus is turning in the coming decades.
Powerful Kremlin politician Deputy Prime Minister Igor Sechin is on record that the Russian leadership will be making some major proposals to Chinese President Hu Jintao during his visit to Russia to attend the SCO summit. ("Whatever amount they [China] ask for, we [Russia] have the gas," Sechin reportedly said.) It cannot be lost on observers that the Kremlin has earmarked the SCO summit event for taking such a strategic step in energy cooperation with China.
Thus, it has become a moot point whether Moscow has or has not yet realized the then president Vladimir Putin's four-year-old idea of forming an "energy club" within the SCO framework. Effectively, a matrix is developing among the SCO countries (involving member countries as well as "observers") in the field of energy cooperation. It has several templates - China on the one hand and Kazakhstan, Uzbekistan and Turkmenistan on the other; Russia-China; China-Iran; Russia-Iran; Iran-Pakistan; and, of course Russia's traditional ties with the Central Asian states. (If the current Iranian plan for an oil pipeline linking the Caspian Sea and the Gulf of Oman materializes soon, yet another template may be formed involving Iran, Russia, Kazakhstan and Turkmenistan.)
Arguably, so far these vectors have not collided with each other, despite the prognosis of Western experts that Russian and Chinese interests in the Central Asian and the Caspian region will inevitably collide . Moscow seems to be quite comfortable with the idea that the Chinese are accessing the region's surplus energy reserves rather than the US or EU countries. As a commentator put it, "Russia is also doing its damnedest to keep Europe out of Central Asia ... In Central Asia, it's starting to look as if Moscow and, to a lesser extent, Beijing ... may have already outmaneuvered Europe." 
SCO gatecrashes the Hindu Kush
Less than three years ago, a leading American expert on the Central Asian region, Dr Martha Brill Olcott of the Carnegie Endowment for International Peace, described the SCO as "little more than a discussion forum". Olcott said, "Today, the Shanghai Cooperation Organization does not pose any direct threat to US interests in Central Asia or in the region more generally." 
That was a debatable point even three years ago, more so now. What seems to have happened is that the US simply has had no choice but to learn to live with a unique regional organization that insists on keeping it excluded. Any regional body that includes Russia and China cannot but be of interest to Washington. No doubt, SCO has been an object of intense curiosity for US regional policies through the past decade. American diplomats did all they could to debunk it in its formative years. Finally, Washington reconciled. This was evident from the fact that eventually the US began making efforts of its own, vainly though, to gain observer status in the SCO.
The list of participants at the SCO summit in Yekaterinburg testifies to the SCO's steady evolution as an influential regional and international body. Curiously, the list of participants includes Mahinda Rajapaksa, president of Sri Lanka, as a "dialogue partner". In terms of realpolitik, SCO has broadened its reach to the Indian Ocean region. Clearly, it is a matter of time before Nepal, Myanmar Bangladesh and Sri Lanka are associated with the SCO processes one way or another. The SCO already has institutionalized links with the 10-member Association of Southeast Asian Nations.
A stage has come when the SCO's common stances on regional and international issues are widely noted by the international community and discussed threadbare by regional experts. Quite likely, this year's statement will reflect a common SCO position strongly endorsing the Sri Lankan government's policy of rebuffing the Western intrusive approach in terms of humanitarian intervention in the island's current problem affecting displaced Tamils.
For Colombo, the SCO support will come as a much-needed shot in the arm in warding off Western pressure in the period ahead. Already in the United Nations Security Council, Colombo depends on the robust support of Russia and China, both veto-holding powers from the SCO.
Again, the SCO's formulations this year on the North Korean and Iran nuclear problems will be read with interest. Last year's statement on the conflict in the Caucasus was widely discussed by regional experts.
During the past year, the SCO has virtually gatecrashed into the Afghanistan problem, so much so that it is going to be counter-productive for Washington to shut out the regional body altogether from the Hindu Kush. The SCO has rapidly built on its nascent
idea of a "contact group" with Kabul. It has maintained a smooth working relationship with the government led by President Hamid Karzai. If anything, Karzai's recent difficulties with North Atlantic Treaty Organization (NATO) capitals have prompted him to reach out to Moscow.
United States pressure on Karzai to keep him away from the SCO is unlikely to work again. Karzai will be present at the Yekaterinburg summit meeting. His vice presidential running mate, Karim Khalili, recently visited Moscow. Karzai's other running mate, Mohammed Fahim, has old links with Russia's security agencies.
The SCO conference on Afghanistan held in Moscow on March 27,
Finally, the US was compelled to attend the Moscow conference lest Russia and China dissociate from similar American-sponsored forums on Afghanistan. The conference has opened a window of opportunity for regional powers to get involved with Afghanistan's stabilization, independent of US strategy. Countries like India, which are being left out of the loop, will find the SCO as a useful framework to work with. (India will be represented at the SCO summit for the first time ever at the level of the prime minister.)
The SCO conference also assumes significance in the context of the Barack Obama administration's AfPak strategy, which envisages "grand bargains" with regional powers. The SCO sized up that Washington's game plan would be to strike "grand bargains" individually and separately with each of the countries in the region, which would effectively ensure that the US retained the monopoly of conflict resolution and enabled the US to give new underpinnings to its regional policies aimed at broadening and deepening its influence in Central Asian and Southwest Asian geopolitics.
Bush's policies continue under Obushma...
NATO has officially invited Kazakhstan, a major SCO member country, to take part in its Afghan operations.  This is despite Kazakhstan being an active promoter and a prominent member of the Collective Treaty Organization (CSTO) and the SCO, both of which have repeatedly offered partnerships to the Western alliance for its Afghan mission. 
Robert Simmons, the NATO secretary general's special representative for the Caucasus and Central Asia, is on record as saying that the Kazakh army has already achieved "interoperability" with NATO forces and could make a good showing in the Afghan mission. Clearly, NATO is sidestepping the CSTO and the SCO and would prefer to deal with Central Asian capitals individually. The US is striking similar "grand bargains" with other Central Asian capitals in terms of gaining access to new military base facilities.
Russian President Dmitry Medvedev stated in April that Russia and China would strengthen their military cooperation through the SCO and engage in several joint military maneuvers. He implied that these plans were aimed at limiting the US's presence in Central Asia. From the Russian and Chinese point of view, it is obvious that the erosion of the US's economic foundations is not preventing Washington from pursuing with renewed vigor its project aimed at regaining lost influence in Central Asia.
The Obama administration's proposed budget for the State Department allocates aid of $41.5 million for Kyrgyzstan and $46.5 million for Tajikistan, whereas the corresponding figures for the current fiscal year are $24.4 million and $25.2 million, respectively. US military aid to the two countries will also similarly be increased under the new budget.
The justification given is that Central Asia's strategic importance has risen of late for US regional policies. According to budget justification documents released by the State Department in Washington on May 7:
Central Asia remains alarmingly fragile: a lack of economic opportunity and weak democratic institutions foster conditions where corruption is endemic and Islamic extremism and drug trafficking can thrive. For this region, where good relations play an important role in supporting our [US] military and civilian efforts to stabilize Afghanistan, the [budget] request prioritizes assistance for the Kyrgyz Republic and Tajikistan.
Curiously, Washington has lately made it clear that it has no intentions of vacating the Manas air base in Kyrgyzstan in August without a last-ditch effort to get Bishkek to reconsider its decision. Apart from sustained US diplomatic efforts to persuade a rethink in Bishkek, Washington has also sought the good offices of Karzai to raise the issue with his Kyrgyz counterpart President Kurmanbek Bakiyev - interestingly enough, on the sidelines of the SCO summit in Yekaterinburg.
Therefore, it is against the backdrop of the deteriorating security situation in Afghanistan, which causes concern among the SCO member countries, as well as the robust US diplomacy in the Central Asian region to expand American influence that the Chinese and Russian decision to step up SCO military cooperation will be viewed. The SCO defense ministers' meeting held on April 29 in Moscow confirmed reports that China and Russia would hold 25 joint maneuvers this year. (In the entire period since 2002, China has held only 21 military exercises with foreign countries.)
Interestingly, all these proposed maneuvers will be focused on the "war on terror". The SCO war games for 2009 began with a joint "anti-terror" exercise in Tajikistan near the Afghan border. The main exercise, codenamed Peace Mission 2009, is planned for July-August. This year's exercises assume the nature of a conventional drill operation insofar as they will involve more than 2,000 Russian and Chinese troops with heavy weapons such as tanks, transport planes, self-propelled artillery and possibly including strategic bombers.
The exercises will be held in three stages inside Russia and in northeastern China. Unmistakably, closer Chinese-Russian military cooperation within the SCO framework has been prompted by their perception that the US is pressing ahead with its strategic plans to bring the energy-rich Eurasian region under its influence.
Can Obama become a heretic?
In a remarkably candid interview recently, well-known Russia scholar Professor Stephen Cohen at New York University said he didn't believe "anything substantially or enduringly good" is about to happen in US-Russia relations in the foreseeable future. Nor is a "real partnership" possible between the two countries.
More ominously, he warned that the US-Russia relationship was fast getting "militarized", as it used to be during the Cold War. He said, "NATO expansion has militarized the relationship between the US and Russia, between the United States and the former Soviet republics, and between Russia and the former Soviet republics. Remove NATO expansion, remove the military aspect, and let them compete otherwise." 
More startlingly, Cohen assesses that despite the Obama administration's call to "reset" ties with Russia, the "old thinking" prevails in Washington - "that Russia is a defeated power, it's not a legitimate great power with equal rights to the US, that Russia should make concessions ... that the US can go back on its promises because Russia is imperialistic and evil."
Cohen said Russia hands in the Obama administration - Vice President Joe Biden, Secretary of State Hillary Clinton, National Security Advisor General James Jones, National Security Council member Michael McFaul - are all in one way or another associated with the "old thinking" toward Russia. "So there are no new thinkers in Obama's foreign policy okruzhenie [circles]. There is enormous support in the US for the old thinking. It's the majority view. The American media, the political class, the American bureaucracy - they all support it. Therefore, all hope rides with Obama himself, who is not tied to these old policies. He has to become a heretic and break with orthodoxy."
Now you and I might say that's impossible, but there is a precedent. Just over twenty years ago, out of the Soviet orthodoxy, the much more rigid Communist Party nomenklatura, came a heretic, Mikhail Sergeyevich Gorbachev. It's not a question of whether we like Gorbachev's leadership or we don't. The point is that he came forward with something he called "new thinking", breaking with the old Soviet thinking, and the result was that he and [president Ronald] Reagan ended the Cold War, or came very close to doing so. So the question is whether Obama can break with the old thinking.
In an extremely meaningful political gesture on April 28, Chinese Defense Minister Liang Guangalle, heading a military delegation and visiting Moscow in connection with the SCO defense ministers' meeting, traveled to Russia's North Caucasus Military District to discuss regional security with Medvedev. This happened just two days ahead of the formalization of the Russian decision to deploy troops for the defense of Abkhazia and South Ossetia.
What emerges is that both Russia and China remain skeptical on Afghanistan, Izvestia wrote recently, "Today, despite their hypocritical talk of 'cooperation' (by which they mean the shipment of NATO military freight across Russia), the [US-led] coalition is keeping Russia away from Afghanistan as much as
Izvestia continued the tirade:
Mass killings of the civilian population by the American army such as bombing wedding and funeral processions, extending the fighting to Pakistan and dragging it into Afghanistan's internal ethnic and political feud - all these and similar actions, which have been without any social or commercial investment in Afghanistan, threaten the whole world, Russia included.
The Afghans, sick and tired of the pointless presence of foreign military forces, have asked Russia to restore its clear-cut peaceful Afghan policy. A delegation of influential Afghan politicians will arrive in Moscow to attend the May 14 Russian-Afghan forum. The group mainly includes Pashtun leaders, who have shaped the country's political and state backbone for centuries. They are convinced that the way to peace and settlement in Afghanistan will depend on Russia's policy.
Does all this add up to the SCO becoming a military alliance? This is a question that has come up frequently during the past decade. It still refuses to go away. There has been even some degree of characterization of the SCO at times as an "Asian NATO". But the answer is a firm "no'. The plain truth is that neither China nor Russia would be comfortable for the foreseeable future with the idea of a military alliance between them, although both have shared concerns over the US agenda for NATO's eastward expansion.
Besides, we should not overlook that Central Asian countries also have their own so-called "multi-vector" foreign policy, which places primacy on national autonomy and independence that precludes the possibility of their becoming part of a military bloc as such.
At any rate, Uzbekistan, the maverick of them all but a key country all the same in regional security, will forever keep everyone guessing whether its mind is on the same thing that it speaks about at any given time, or whether its actions are going to be in conformity with its own words. Tashkent stayed out of the SCO exercises in April in Tajikistan. It is right now having a slinging match with Kyrgyz border guards about recent incidents of violence in the Ferghana Valley.
However, Moscow has been steadily working on another option. The CSTO - Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia Uzbekistan and Tajikistan - is transforming into a full-blooded military alliance. "The National Security Strategy of the Russian Federation Until 2020", which was recently approved by Medvedev, says that Moscow views the CSTO as the key instrument to counter regional challenges, and political and military threats. The document says pointedly that the struggle for energy resources in the Caspian and Central Asia may conceivably lead to armed conflicts.
The special summit meeting of the CSTO held in February in Moscow decided to set up a collective rapid-response force to help bloc members to repulse aggression or to meet any emergency. Moscow has been focusing for some time on the strengthening of the CSTO and recent strides in this direction are a major foreign-policy success for the Kremlin. No doubt, the impetus is to keep "third countries" out of Central Asia. Medvedev has said that the rapid-reaction force "will be just as good or comparable to NATO forces". The CSTO's joint rapid-reaction force will hold military exercises in August-September in Kazakhstan, Russia and Belarus.
The force will comprise an airborne division and an air assault brigade from Russia, and an air assault brigade from Kazakhstan. The other CSTO members (except Uzbekistan) will contribute a battalion-size force each. To quote a Russian expert, "A collective rapid-reaction force will give CSTO a quick tool, leaving no time for third parties to intervene." 
"The rapid-response force is a major but so far only one of the first steps toward creating a powerful military political organization," he added. Indeed, Kommersant newspaper broke the news on May 29 that Russia was planning to build a strong military contingent in Central Asia within the framework of the CSTO, which will be comparable to NATO forces in Europe. "Work is being conducted in all areas, and a number of documents have been adopted," the report said, quoting Russian Foreign Ministry sources.
The unnamed Russian official said, "It will be a purely military structure, built to ensure security in Central Asia in case of an act of aggression." It will include armored and artillery units and a naval flotilla in the Caspian Sea, according to the CSTO spokesman. The Russian news agency Novosti reported that the new force would comprise large military units from five countries - Kazakhstan, Kyrgyzstan, Russia, Uzbekistan and Tajikistan. It commented, "The creation of a powerful military contingent in Central Asia reflects Moscow's drive to make the CSTO a pro-Russian military bloc, rivaling NATO forces in Europe."
Interestingly, a summit meeting of the CSTO is scheduled for Moscow on Sunday on the eve of the SCO summit in Yekaterinburg. The million-dollar question is the co-relation, if any, between the CSTO and the SCO summits in the scheme of things in Moscow and Beijing. The political and diplomatic symbolism in the timing of the two summits on successive days cannot be lost on observers. There has been some talk that the CSTO and the SCO would eventually have an institutionalized back-to-back relationship of sorts. (All the SCO member countries except China are also CSTO members.)
Conceivably, Moscow and Beijing have been exchanging views on the CSTO's emergence as a coherent military bloc in Central Asia, with which China shares thousands of kilometers of border. What seems to be happening is that China tacitly welcomes the Russian initiative to build up the CSTO's capabilities as a military setup. At the very least, Beijing isn't doing anything to dampen Russia's enthusiasm, let alone counter the Russian move through countervailing steps. There could be several factors at work here.
One, any strengthening of security in Central Asia also benefits China. Two, to the extent that the CSTO becomes a bulwark against any NATO expansion into Central Asia, it also works to China's advantage. Three, Moscow's determination to stand up to the US's containment strategy serves Beijing's purpose. Four, the CSTO's build-up means the consolidation of Central Asian countries, which precludes opportunities for the US to expand its influence in the region, let alone roll back Russian and Chinese influence.
Five, the emergence of the CSTO in Central Asia virtually forecloses any future US attempts to place elements of its missile defense system in the border regions of China close to the Xinjiang autonomous region, where China has located important missile sites. Finally, the CSTO harbors no animus against China insofar as all the CSTO members except Armenia and Belarus are in any case SCO members. China's rapidly expanding influence in Central Asia ensures that the bulk of the CSTO countries will have high stakes in friendly relations with Beijing.
Thus, an intriguing security paradigm is developing in Central Asia. Quintessentially, the SCO will keep shying away from becoming a military bloc. This is not feigned posturing. It is real. At the same time, in political terms, the SCO is the facilitator of a regional security understanding that is leading to the full-blooded evolution of the CSTO as an anti-NATO military bloc.
Arguably, in the absence of the SCO, Moscow and Beijing would have to invent such a body. For, without the SCO, any such formation under Moscow's leadership of a NATO-like military bloc shaping up right on China's sensitive border regions would have been simply unthinkable.
1. Marina Zavada and Yuriy Kulikov, "Yevgeniy Primakov", Autopilot Does Not Work in a Crisis, Izvestia, May, 8, 2009.
2. According to the data from the US Energy Information Administration, the three “Stans” of Central Asia - Kazakhstan, Uzbekistan and Turkmenistan - have more than 7 trillion cbm of proven gas reserves, or around 4% of the global share, and much of the has hasn’t yet been harvested. The "Stans" have committed much of their harvestable gas to Russia and China through the next decade.
3. S Adam Cardais, "Central Asian Gas Not a Panacea for Europe", Business Week, February 3, 2009.
4. Dr Martha Brill Olcott, "The Shanghai Cooperation Organization: Changing the Playing Field in Central Asia", testimony before the Helsinki Commission, September 26, 2006.
5. "NATO invites Kazakhstan to join Afghan peacekeeping operation", Nezavisimaya Gazeta, May, 14, 2009.
6. Significantly, the next round of the SCO joint military exercises will be held in 2010 in southern Kazakhstan.
7. "Interview with Stephen F Cohen on US-Russia Relations", Washington Profile, April 2009.
8. "Afghanistan: Russia’s chance to influence global politics again", Izvestia, May 13, 2009. 9. Ilya Kramnik, "CSTO: joining forces in a crisis", RIA Novosti, February 5, 2009.