8 December 2012, 15:02

SCO creates foundation for major projects

SCO creates foundation for major projects

Countries of the Shanghai Cooperation Organization have signed a number of agreements to secure a financial basis for the organization’s further development.

During an SCO summit in Kyrgyzstan’s capital Bishkek on December 5th, the organization’s heads of government agreed to establish a Development Fund and a Development Bank. Experts say chances for strengthening economic cooperation in the Asia Pacific region are good amid the current world crisis. 

SCO leaders agreed on a development plan for the next four years and approved the 2013 budget. As he addressed the summit, Russia’s Prime Minister Dmitry Medvedev urged members of the Shanghai Cooperation Organization to join their efforts in forging an effective economic policy. Moscow expects the SCO partners to take an interest in the Russian-Chinese proposal to create a mobile satellite system and support the creation of effective logistics which would help to reduce the cost and time of transporting goods. Dmitry Medvedev also said that the SCO’s energy club should be key in ensuring energy security all over the world.

Over the past few years, Asia Pacific has been the focus of international attention as ‘an island of stability’ amid the raging economic crisis. Countries of the Shanghai forum have a good reason to step up ties, Denis Tyurin of the SCO Business Club says.

"Given the current economic difficulties, the Asia-Pacific region, first of all China, is a territory of pronounced economic growth. For this reason, all post-Soviet countries, including Russia, are demonstrating greater interest in developing ties with China."

Initially, the Shanghai Cooperation Organization was set up for promoting economic ties among its member countries. But for many years, however, it remained but a political club. Now, the situation has changed, Alexei Maslov of the High School of Economics, says.

"Countries of the Shanghai Cooperation Organization have been stepping up economic cooperation over the past 3 or 4 years. They have been expanding customs corridors and transport communications and have launched a number of joint projects. They have created a joint fund and a SCO bank account. Paradoxically, they couldn’t use joint funds to finance large projects. That’s why they are currently working on creating a financial foundation for all major projects."

Founded in 2001, the SCO comprises Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. Attractive in terms of economic opportunities, the region has become the center of international attention. Members of the SCO have established effective cooperation to safeguard their interests against some of the global powers that are used to settle problems by force. Other alliances, including the Collective Security Treaty Organization, are designed to deal with all sorts of issues of concern, including the deployment of American Patriot missiles in Turkey. The structure of CSTO troops will be improved to include a military committee and signatories to the Treaty will create a joint system of air and missile defense with the participation of all countries of the CSTO which include Russia, Kazakhstan, Armenia, Belarus, Kyrgyzstan and Tajikistan.

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