Does the SCO point the way to the future?

opinion June 25, 2018 01:00

By Suwatchai Songwanich
Chief executive Officer,
Bangkok Bank (China)

While the controversies surrounding the recent G7 summit in Canada attracted much media attention, another meeting of eight major economies, at almost exactly the same time, may be equally significant.



The Shanghai Cooperation Organisation (SCO), which took place in Qingdao on June 9 and 10, was the first SCO summit to include heavyweights India and Pakistan as full members. Other members are China and Russia, and the Central Asian states of Kazakhstan, Tajikistan, Kyrgyzstan and Uzbekistan. While G7 and the SCO each represent around 30 per cent of the global economy, the SCO represents 41 per cent of the world’s population compared to the G7’s 10 per cent.

Chinese media portrayed the SCO summit as supporting the rise of Asia and suggested it could close the gap in global leadership caused by the rift between US President Donald Trump and other members of the G7. However, that would be well into the future, as there are fundamental differences between the two groups.

The G7 began in 1973 as a grouping of six major economies (France, West Germany, Italy, Japan, the UK and US) with a clear focus – tackling the oil crisis with a joint response. The SCO began life as the Shanghai Five in 1996 with a more modest goal of settling border disputes between China and former Soviet states. The focus of the G7 (now enlarged to include Canada) has continued to be largely economic, although it has been broadened to include political issues, security and climate change.

By contrast, the SCO’s focus has continued to be security, albeit with more stress on the joint fight against terrorism. 

It has only recently and rather tentatively begun to include economic matters.

There is also a difference in the values they emphasise. The “Shanghai Spirit” that guides the SCO is expressed as “mutual trust, mutual respect, equality, respect for diverse civilisations and pursuit of shared development”.

By contrast, the underlying values of the G7, as described by The Diplomat magazine, are “the so-called liberal world order and democratic governments”. 

These Western ideals were elaborated upon in this year’s draft G7 communique which noted (our) “shared values of freedom, democracy, the rule of law and respect for human rights and our commitment to promote a rules-based international order”.

The G7 communique was not endorsed by the US, not because of disagreement over the values but because of disagreement over tariffs. By contrast, a potential conflict within the SCO over the Belt and Road Initiative (BRI) was deflected. India, a traditional rival to China, does not support China’s push on this. The SCO solution was simply to exclude India from the paragraph in the final declaration expressing support for the BRI.

Given its very different goals and composition it is difficult to imagine the SCO ever replacing the G7 but perhaps instead we will have future with less “order” and more “Shanghai Spirit”.