SCO, EAEU, and CIS Heads of Government Convene in Kyrgyzstan
Commonwealth of Independent States to be merged with Eurasian Economic Union?
Three important Eurasian regional events have taken place in Bishkek, the capital of Kyrgyzstan – the meetings of the heads of government of the Shanghai Cooperation Organisation (SCO), the heads of government of the Commonwealth of Independent States (CIS), and the Eurasian Intergovernmental Council, part of the Eurasian Economic Union (EAEU) structure. Kyrgyzstan is the 2023 Chair of the SCO.
According to political scientist Igor Shestakov, a director of the Oy Ordo Centre for Expert Initiatives in Bishkek, all three of these influential international structures are engaged in building a new economic reality.
Shanghai Cooperation Organisation
The SCO includes China, India, Iran, Kazakhstan, Kyrgyzstan, Russia, Pakistan, Tajikistan, and Uzbekistan. Afghanistan, Belarus, and Mongolia, together with Azerbaijan, Armenia, Cambodia, Nepal, Turkiye, and Sri Lanka have observer or dialogue partner status. See the recent 2023 SCO declaration of intent here.
Eurasian Economic Union
The EAEU is a Free Trade Bloc that includes Armenia, Belarus, Kazakhstan, Kyrgyzstan, and Russia. It fills a geographic space between Western China and Eastern Europe. See trade data here.
Commonwealth of Independent States
The CIS is also a Eurasian trade bloc, however, differs from the EAEU in that individual members have bilateral agreements between them rather than as a collective whole. It includes each of the EAEU members with the addition of Azerbaijan and Uzbekistan. Moldova suspended its participation in November 2022. See trade data here.
Shestakov stated that “The countries of all three associations are key trade and economic partners, while Moscow plays a key role in the functioning and formation of the agenda of each of them. Therefore, I think that the decisions that were made at the Bishkek summits will become fundamental for the development of trade and economic cooperation within these organisations in the coming years. In my opinion, the meetings were filled with specifics. A large package of agreements was adopted within the EAEU, for example, an action program until 2045. It is worth noting that trade turnover within the Union broke records last year, and we see that this year the dynamics are not subsiding.”
He noted that the Commonwealth of Independent States, despite sceptical assessments of this organisation by some experts, continues to perform its functions, primarily in the free trade zone: “For example, the tariff preferences that the CIS gives in interaction with Azerbaijan and Uzbekistan are successfully used by other CIS partners.”
Shestakov named educational, cultural and humanitarian interaction within the framework of integration associations as an important area, emphasising that the summits discussed not only economic achievements and prospects, but also the fact that it is necessary to develop a common language space in the CIS and the EAEU. According to him, the Bishkek summits showed that the promotion of the Russian language is not only a humanitarian project of Russia, but also an important communication tool that is used to solve integration problems and business issues: “As you know, all documents within the framework of the SCO, CIS and EAEU are accepted in Russian as the mutual language. Financial, economic, and business structures interact on it.”
Transition to Regional Settlements Instead of US Dollars and Euros
Shestakov stated that the issues discussed at Bishkek summits will be at the centre of the attention of the top leadership of the respective countries during 2024. This includes a transition to national currencies in mutual settlements: “For example, China and Russia, in order to get away from US dollar dependence, are already making payments in RMB Yuan for many items. At the moment, Russia holds more than ₽600 billion (US$6.51 billion) in Chinese currency, and none in Euros or Dollars. It is clear that now there are certain issues between some members of the Shanghai Association regarding mutual trade, economic and political relations that have yet to be resolved, but the process of transition to national currencies in mutual settlements is already underway.”
Shestakov also cited security issues as one of the priority areas of cooperation within the framework of the Shanghai Cooperation Organisation. He recalled that the SCO anti-terrorism centre was created in the early 2000s, emphasising that even after more than 20 years its activities have not become less relevant, since today most countries of the association have common enemies: religious extremism and international terrorism.
He stated “The situation in Afghanistan is far from stable; according to various estimates, today there are more than 10,000 militants there, and many countries of the Shanghai Association border it or, like Kyrgyzstan, are nearby. At the same time, 2023 showed that conflicts can start anywhere in the world, so SCO members will pay special attention to security issues, especially since without resolving them it will be more difficult to increase economic cooperation.”
Infrastructure & Supply Chain Development
In the context of the economic development issues discussed at the Bishkek summits, Shestakov highlighted those related to the creation of new transport and logistics chains, which are becoming particularly relevant in light of the sanctions pressure of Western countries on key SCO members, as well as Russia. One of them was announced by the Kyrgyz side: the construction of the China-Kyrgyzstan-Uzbekistan railway.
Maxim Kaznacheev, a political scientist in Almaty, stated the summits had been productive. In his opinion, the range of issues related to the functioning of the West-East and North-South transport and logistics corridors laid out very serious long-term planning. “In this sense, with the agreed long term economic development work, the Shanghai Cooperation Organisation can become the main driver of economic growth for the entire Eurasian space.”
Commenting on the differences between the SCO, CIS and EAEU, he stated that the SCO has a wider composition of participants and larger-scale transport, logistics, trade, and economic projects. “The meeting of heads of government within the framework of the Shanghai Cooperation Organisation, in my opinion, should have been held separately. As for the EAEU and the CIS, the combination of summits with the participation of the heads of government of the member countries of these two associations was completely justified, as the topics of the discussions were more or less similar.”
Kaznacheev said that all the main issues of a Eurasian economic plan have been brought into the EAEU format, meaning the countries participating in Eurasian integration need to make a fundamental decision concerning the future of the Commonwealth of Independent States. “Now this association has practically been reduced to the size of the EAEU, and work on the CIS track no longer provides real efficiency, meaning it has turned into a simple bureaucratic structure.”
In this regard, Kaznacheev considers it necessary for the gradual involvement of CIS countries that have not yet joined the EAEU to be fast tracked into the EAEU as part of the process of Eurasian trade and development integration.
Source: AsiaIs with additional commentary by Chris Devonshire-Ellis.