Economic Statecraft
SCO: New Borders - New Tasks

The expansion of the SCO towards the Rimland is of strategic importance, as since the Cold War, the American foreign policy strategy towards the Heartland has been to locate US military bases in the Rimland and foster the emergence of loyalist regimes there. Such a policy fits into the “anaconda” plan, which implies the control and strangulation of the Heartland territory. Accordingly, the integration of the Rimland countries into the SCO is the formation of a belt of friendly states, Daria Osinina writes.

On July 4, 2023, the 23rd Summit of the Shanghai Cooperation Organisation (SCO) was held virtually under Indian Prime Minister Narendra Modi’s chairmanship. The main topic of this summit was the official entry of Iran into the SCO, as well as the signing by the Republic of Belarus of a memorandum of commitment to join the Organisation, which actually launched the procedure for its entry into the SCO in the near future. At the same time, in 2022, memorandums were signed on granting the status of SCO dialogue partners to three Arab countries — the Arab Republic of Egypt, the Kingdom of Saudi Arabia and the State of Qatar. Five more countries were granted this status following the results of the Samarkand summit, including the Kingdom of Bahrain, the Republic of Maldives, the State of Kuwait, the United Arab Emirates and Myanmar. What does such an expansion testify to, and what status does the SCO hope to obtain in the system of the emerging multipolar world order?

New contours of the alliance

Analysing the new borders of the SCO, one involuntarily comes across the idea that they increasingly fit into the geopolitical map of the world conceptualised by the English scientist Halford Mackinder, as described in his works The Geographical Pivot of History (1904) Democratic Ideals and Reality (1919). Today’s contours of the alliance completely cover the territory of the so-called Heartland, which controls the river basins of the Arctic Ocean, as well as the Caspian Sea and the historical Silk trade corridor. However, the announced expansion of the SCO reaches the borders of the “Inner Crescent” — a territory capable of controlling the leading sea routes, including the Suez Canal and the New Suez Canal, which connect the Red and Mediterranean Seas. In other words, the contours of a new macro-region are being formed in the SCO space, with international “North-South” and “East-West” corridors, as well as key water arteries.

The importance of such an expansion from the point of view of classical geopolitics is connected with the combination of the power of land and sea powers; the control of land and sea. It is Mackinder who owns the famous formula of geopolitics, which became the basis for many subsequent concepts, including those of Henry Kissinger and Zbigniew Brzezinski: “Who rules the Heartland commands the World-Island; who rules the World-Island commands the world.” However, if Mackinder rather analysed the balance of the Heartland and the Outer Crescent on the geopolitical map of the world, then his follower, the American scientist Nicholas Spykman, derived an updated geopolitics formula, emphasising the special significance of the countries of the Inner Crescent, referred to in his concept as Rimland: “Who controls the Rimland rules Eurasia, who rules Eurasia controls the destinies of the world.” The expansion of the SCO towards the Rimland is of strategic importance, as since the Cold War, the American foreign policy strategy towards the Heartland has been to locate US military bases in the Rimland and foster the emergence of loyalist regimes there. Such a policy fits into the “anaconda” plan, which implies the control and strangulation of the Heartland territory. Accordingly, the integration of the Rimland countries into the SCO is the formation of a belt of friendly states.

Of course, the classical concepts of geopolitics can be treated differently: some international politics researchers consider them outdated. However, the history of the 20th and early 21st centuries proves that Eurasia continues to be the centre of global political processes, and that the geopolitical map of the world depends on the alignment of forces on the continent.

The road to a SECURE SCO

This is exactly the main theme of the past summit. Despite the fact that the New Delhi summit touched on economic issues more than the previous ones, security issues remain a priority for the member countries of the Organisation. This is evidenced by the New Delhi Declaration signed at the end of the summit.

As in the previous Samarkand Declaration, security issues boil down to five key aspects:
  • the joint fight against terrorism, separatism, extremism and drug trafficking; preventing external interference in the internal affairs of states under the pretext of countering terrorism and extremism;
  • keeping outer space free from weapons of any kind and the exclusively peaceful use of outer space;
  • a ban on the development, production and stockpiling of bacteriological (biological) and toxic weapons and their destruction as one of the pillars of the global security architecture;
  • a ban on the development, production, stockpiling and use of chemical weapons and their destruction as an effective tool in the field of disarmament and non-proliferation;
  • the settlement of the situation in Afghanistan as one of the most important factors in maintaining and strengthening security and stability in the SCO;
  • digital security and equal rights for all countries to regulate the Internet, the sovereign right of states to manage it in their national segment.

Despite the fact that most of the points of the Declaration on security issues duplicate the decisions of last year’s summit, in 2023 they have a new “fullness”. Over the past ten months, most of the SCO members have faced internal challenges that affect overall stability in the region. For example, Chinese leader Xi Jinping, in his speech on the side-lines of the summit, mentioned attempts to organise “colour revolutions” as being among the threats to regional security. Suffice it to recall that China faced “colour revolution” techniques in November 2022, when a major strike broke out at a factory in Zhengzhou, affiliated with the American company Apple, provoked by delayed wages. Quite quickly, socio-economic slogans were transformed into political ones, demanding the resignation of Xi Jinping, who was re-elected in October 2022 for a third term.

The economic vector of the SCO

The SCO economic programme in the signed Declaration emphasises the commitment to a gradual increase in the share of national currencies in mutual settlements. A similar de-dollarisation policy is also characteristic of the BRICS, which includes Russia, India and China among the SCO countries. Its primary results demonstrate an increase in the share of the Russian currency in export transactions with the SCO countries — as of 2023, more than 40% of transactions are carried out in rubles. The share of Russian external transactions in dollars and euros decreased from 90% to 48% in 2022.

At the last summit, the need to form financial institutions represented by the Development Bank and the SCO Development Fund was also addressed. Despite the fact that this initiative is not new (it was first announced by China and Russia more than 10 years ago), the demand for the creation of their own financial institutions within the Organisation has today acquired a different meaning. Thus, within the framework of the latest summit, the SCO members noted the absence of major projects implemented under the auspices of the Organisation. Of course, such statements actually augur the transformation of the alliance and a departure from the original tasks of ensuring security in the region. However, the alignment of the projects of the Eurasian Economic Union, the Belt and Road initiative and the SCO, announced in 2022, demonstrates the intention to develop the economic track of the Organisation.

At the same time, the announced Economic Development Strategy of the SCO for the period up to 2030 has turned out to be a stumbling block for the members of the Organisation. This document was not signed by India. Despite the absence of public statements, the likely reason is the strengthening of China’s position in the SCO and the active promotion of Chinese initiatives. The most acute topic could be the issue of promoting the China-Pakistan economic corridor within the framework of the Belt and Road initiative. Let’s not forget about the escalation of the conflict on the Sino-Indian border in 2020. Does this mean that internal contradictions destabilise the SCO or threaten to cause its collapse?

Of course, the SCO, like any other organisation, has internal contradictions, because it unites under its auspices countries that have historical claims to each other. Nor can one count on the fact that internal contradictions can be ironed out forcibly, since there is no leader-country in the SCO and there is no rigid vertical scheme. Rather, we can talk about the countries that make up the core of the Organisation.

At the same time, when analysing the current composition of the alliance and the announced expansion, one can characterise the SCO as an umbrella organisation, under the auspices of which countries unite to represent interests in those areas and at a level where joint activity is more efficient.

The announced expansion of the SCO is evidence of the political solidarity of the future members of the alliance regarding the revision of the global “rules of the game” and the formation of a fair, multipolar world order. However, there is an interesting point that became noticeable after the announced decision of Saudi Arabia — not only non-Western centres of power, but also those who are not satisfied with their status within the Western coalition or seek to revise it are beginning to join the alliance. In other words, the expansion of the SCO and BRICS towards such actors as Saudi Arabia amid the current turbulence demonstrates the political split among the Western countries and the desire for some players to reconsider their status or diversify their political assets. Among other things, the increase in settlements in national currencies fits into the proposal voiced by Vladimir Putin within the framework of the 6th Summit of the Conference on Interaction and Conference on Interaction and Confidence Building Measures in Asia (CICA) on October 13, 2022 to revise the global financial system. That is, a classical restructuring of the architecture of the world order is planned, which includes not only a transformation or replacement of international institutions, but also a change in the financial centres. In this sense, the SCO, which brings together a quarter of world GDP and 15% of total world trade, can contribute to the weakening of the dollar in the global financial market.

Let’s not forget that the architecture of each new world order is formed during a period of turbulence, since in addition to the battle on the battlefield, the parties agree on the rules of the new world. For example, the contours of the Yalta-Potsdam system of international relations began to take shape in 1944, with the Bretton Woods Conference, which laid the foundations of the financial order. The ongoing processes of expansion of the SCO and BRICS in the context of the crisis of the UN and the G7 form the architecture of the new world order. Moreover, the expansion towards the countries of the Western Alliance demonstrates the paradigm of the new world — the basis of interaction will be mutually beneficial trade and commitment to the principles of a multipolar world.
Views expressed are of individual Members and Contributors, rather than the Club's, unless explicitly stated otherwise.