On September 15-16, a Summit of the Heads of the Shanghai Cooperation Organization member states was held in Samarkand, which became a platform for discussing the state and prospects for the development of cooperation in the SCO’s sought-after areas and areas of activity. The summit was the first face-to-face meeting of the SCO leaders since 2019, writes Obid Khakimov.
The main emphasis during the chairmanship of Uzbekistan was placed on strengthening economic and trade ties, promoting industrial cooperation, expanding transport and communication interconnectedness, digital transformation and the “green” economy.
During the chairmanship, drafts of 14 new conceptual documents initiated by the President of Uzbekistan were developed. Special attention is paid to such initiatives as the Concept of the SCO member States on the Development of Interconnectedness and the Creation of Efficient Transport Corridors, the Program of Infrastructure Development of the SCO countries, the establishment of the institute of the SCO Goodwill Ambassador.
In total, during the chairmanship of Uzbekistan, more than 80 major international events were held in all areas of cooperation, and a record number of 44 documents were adopted at the SCO summit.
The Samarkand Summit was unprecedented in expanding the number of SCO partner states. Thus, Iran has become a full member of the SCO, and Egypt and Qatar have been granted the status of dialogue partners. Decisions were also made to initiate procedures to grant Belarus the status of a full member of the SCO, and Bahrain, the State of Kuwait, the Maldives, the United Arab Emirates and the Republic of the Union of Myanmar the status of dialogue partners.
The Samarkand Summit was also a record in terms of the number of negotiations and events. Thus, the President of Uzbekistan held meetings with the UN Deputy Secretary General, with the Heads of State of Russia, China, Iran, Turkey, Mongolia, Kazakhstan, Tajikistan, Kyrgyzstan, Turkmenistan, Azerbaijan, Belarus. A number of humanitarian and cultural events were also held.
During the negotiations on the sidelines of the summit, Uzbekistan concluded numerous bilateral agreements. For example, 15 agreements worth $15 billion have been signed with China, investment agreements worth $4.6 billion with Russia, as well as a Declaration on a Comprehensive Strategic Partnership between the Republic of Uzbekistan and the Russian Federation. Also, 18 documents have been signed with Iran aimed at increasing trade turnover to one billion dollars in the near future.
Thus, the SCO Summit in Samarkand has already entered the history of the organisation, both in terms of the number of documents prepared and adopted, and in terms of the dynamics of the involvement of new states in the work of the organization. This is a brilliant success of the policy of openness and integration of Uzbekistan into the world economy pursued by President Shavkat Mirziyoyev.
In his article “The Samarkand SCO Summit: Dialogue and Cooperation in an Interconnected World”, published on the eve of the summit, Shavkat Mirziyoyev stressed that Uzbekistan’s chairmanship in the SCO fell on a period of “historical rift” when one era ends and another begins – yet unpredictable and unknown.
Among the main risks of the present time, he named a deep crisis of confidence at the global level and the risks of the revival of block thinking stereotypes, which complicates the restoration of global supply chains and exacerbates the problems of ensuring food and energy security. At the same time, “global climate shocks, growing scarcity of natural and water resources, declining biodiversity, and the spread of dangerous infectious diseases have revealed the vulnerability of our societies as never before.”
President of Uzbekistan proposed to start preparing the SCO Development Strategy until 2040 which should cover all areas of cooperation and determine priorities for the long-term development of the SCO.
At the same time, it is important to increase the practical impact of cooperation in the field of economy, trade and investment, as one of the key conditions for ensuring stability in the region and improving the welfare of the population of our countries, which is possible through the transition to actions to build production chains between the SCO countries with a shorter supply shoulder.
Trade and economic cooperation
One of the central activities of the SCO is the development of trade and economic cooperation between the members of the organisation. The SCO has achieved some success in this, despite the fact that the most capacious markets for the products of the SCO countries are located outside its borders.
The SCO countries account for 15.4% of world trade. In 2021, the total foreign trade turnover of the SCO countries amounted to $8.1 trillion, of which exports – $4.4 trillion and imports – $3.7 trillion.
In 2021, the volume of domestic trade between the SCO countries amounted to $803.7 billion, of which exports – $396.3 billion, imports – $407.4 billion. Over the past five years, the trade turnover between the SCO and Uzbekistan has grown by 1.7 times, exports by 1.2 and imports by 2. At the same time, the share of trade turnover with the SCO countries in the total foreign trade turnover of the country also increased from 47.2 to 50.2%.
In 2021, the trade turnover with the SCO countries increased by 24%, exports – by 29%, imports – by 21%. According to the results of January-July 2022, compared to the same period last year, Uzbekistan’s trade turnover with the SCO countries increased by 25.3%, exports – by 24.4%, imports – by 27.3%.
The number of enterprises in Uzbekistan with the participation of the SCO countries’ capital has quadrupled in recent years, exceeding the 7.5 thousand units, which is more than half of the total number of firms with foreign participation. The volume of attracted investments from the SCO countries by the end of 2021 amounted to $4.6 billion.
As of July 1, 2022, 2705 enterprises with Russian capital or 18.6% of the total number of companies with foreign capital were created in Uzbekistan. According to this indicator, Russia ranks first, second – Turkey (2050), third – China (2036), fourth – Kazakhstan (1186).
As the President of Uzbekistan noted in his speech at the summit: “We are interested in maximizing the existing potential, taking into account the advantages of complementarity of the economies of the SCO countries. In this regard, we propose to start forming a common space of industrial and technological cooperation based on the launch of a New SCO Economic Dialogue.” Its main task is the elimination of trade and customs barriers, the formation of guaranteed and stable production and supply chains, the promotion of joint localization and import substitution programmes, as well as the protection of mutual investments.
As tools for solving these tasks, the President proposed to hold a Week of Business Partnership of the SCO regions in Uzbekistan, the creation of an Alliance of Special Economic Zones of the SCO countries, as well as holding a Large SCO Trade Fair on an annual basis with the creation of a single electronic platform on its basis.
Food security is one of the most important priorities of Uzbekistan, especially now that this problem is escalating. Over the past five years, food imports into the country have grown 2.3 times from $1.27 billion (in 2017) to $2.92 billion (in 2021).
The difference between food imports and exports is also growing every year. Since 2017, it has almost quadrupled from $398 million to $1,548 million. In January-July of this year, food imports to Uzbekistan increased by 41.2%. In general, the provision of 25 types of food products in the domestic market remains dependent on imports.
In this regard, Uzbekistan actively supports strengthening food security in the SCO. Even before the pandemic, in 2018, at the SCO summit, the President of Uzbekistan advocated the formation of agro-industrial clusters and the expansion of the network of “green corridors” for the supply of agricultural products, and in 2019, the head of state initiated the development of the Concept of cooperation between the SCO countries in the field of “smart” agriculture and the introduction of agro-innovations. In addition, during his speech in November 2020 at the virtual summit of the heads of state of the SCO member states, Shavkat Mirziyoyev put forward an initiative to develop concrete practical measures to implement the Cooperation Program in the field of Food security.
At the summit held in Samarkand, the Concept of Cooperation between the SCO countries in the field of “smart” agriculture and the introduction of agricultural innovations was signed, and the Statement of the SCO Council of Heads of State on ensuring global food security was adopted.
It is proposed to develop General principles and approaches to ensuring food security, as well as to pay serious attention to programs for the cultivation and processing of agricultural crops, the formation of coordinated schemes of direct mutual supplies, the organization of effective logistics, “green” and express corridors for the delivery of high-quality and affordable food. In addition, President Shavkat Mirziyoyev pointed out the need to hold an international Conference on Food Security next year.
A widely known negative factor for both the economy of Uzbekistan and other Central Asian countries is the remoteness from the world ocean, as well as the interest of other Asian countries in land transport corridors. Therefore, the issues of transport cooperation occupy an important place on the SCO agenda.
In this direction, the results of the Samarkand summit can be called very successful. At the suggestion of Uzbekistan, the SCO Concept was adopted to strengthen Interconnectedness and create efficient transport corridors, and President Shavkat Mirziyoyev proposed to create an Interregional Center for Interconnectedness in Tashkent with the support of the United Nations.
In addition, the Ministry of Transport of the Republic of Uzbekistan, the Ministry of Transport and Communications of the Kyrgyz Republic and the State Committee for Development and Reforms of the People’s Republic of China in Samarkand signed a trilateral cooperation agreement on the Uzbekistan–Kyrgyzstan–China railway construction project which will expand the geography of trade and transportation from China through Uzbekistan to Turkey and further to Europe, as well as to the Persian Gulf States.
As the President of Uzbekistan noted at the summit, the implementation of the above-mentioned project, coupled with the construction of the Termez–Mazar-I-Sharif–Kabul–Peshawar railway corridor, will open up wide opportunities for strengthening interconnectedness, increasing mutual trade and investment and, in general, ensuring sustainable economic growth in the SCO space. In addition, the Head of State proposed to discuss all promising projects in the field of transport and communications at the site of the first SCO Transport Forum next year in Uzbekistan.
Other areas of activity
At the summit in the field of ecology, a joint Statement of the SCO Council of Heads of State on actions to respond to climate change was adopted, but, as the President of Uzbekistan noted, new mechanisms and formats of practical cooperation in this area are needed, suggesting the creation of the SCO Climate Council, which will include politicians, public figures, environmentalists, business representatives, which will increase the effectiveness of cooperation in promoting climate adaptation projects, combating desertification and land degradation, and the introduction of water-saving technologies.
Speaking about Afghanistan, the President of Uzbekistan noted that the tightening of the sanctions policy and the further isolation of the current Afghan authorities will inevitably lead to increased radicalization within this country. In this regard, Uzbekistan supports the development of constructive contacts with Kabul and suggests jointly establishing a special fund for humanitarian support of Afghanistan in Termez, whose funds will be directed to overcoming the social crisis, implementing educational programs for young people and projects in the field of healthcare.
The adopted Comprehensive Action Plan for 2023-2027 on the implementation of the Treaty on Long-term Good-Neighborliness, Friendship and Cooperation of the SCO Member States, as well as the Agreement between the Governments of the SCO Member States on Cooperation in the Field of tourism were aimed at the development of cultural and humanitarian ties. According to the opinion expressed by the President of Uzbekistan, it is also necessary to establish additional formats, such as the Forum of University Rectors, Days of Culture and Tourism, joint sports events and Universiades.It is also proposed to declare next year the Year of Tourism Development in the SCO space.
Samarkand Solidarity Initiative
In the modern world, the SCO is a unique organisation, uniting a variety of countries, despite their differences in economic, political, and ideological features. Thus, India and Pakistan, China and India actively interact with each other in the SCO, Azerbaijan and Armenia are SCO dialogue partners, despite the disputed territorial issues of these countries with each other.
The same applies to the economy – membership in the SCO does not hinder the development of economic integration in other formats. So, in 2020, China participated in the creation of the Regional Comprehensive Economic Partnership (RCEP) free trade zone with Australia, Japan and 12 other countries of the Asia-Pacific region, and has free trade agreements with other countries. Similarly, the cooperation of a number of countries in the EAEU format does not hinder their economic cooperation in the SCO. Moreover, there is an agreement on a free trade zone between the EAEU and China. The same applies to other SCO member states.
Previously, many experts criticized such a “vague” approach, which does not have clear criteria for membership in the organisation, as, for example, in the EU, arguing that this makes it “amorphous” without a clear position on certain issues. They also pointed out the competing, allegedly incompatible positions of certain groups of countries in the SCO: the industrial economies of India and China compete for raw materials and sales markets, and the resource-producing countries of the SCO compete with each other for markets for raw materials, while needing new technologies and innovations that other SCO countries cannot provide them. However, such a view of things puts competition between countries at the forefront, while the SCO approaches rely on cooperation.
Within the framework of SCO cooperation, the emphasis is not on competition with each other, but on the complementarity of economies based on their competitive characteristics. And this approach has already proven its advantages. The economies of the SCO countries are developing at a high pace due to the self-sufficiency of the SCO space, where largely untapped natural resources and high human, intellectual and technological potential are available.
It is worth noting that the main final document of the summit was the Samarkand Declaration, in which the SCO member states highly appreciated the results of Uzbekistan’s presidency in 2021-2022, and also welcomed the Samarkand Solidarity Initiative put forward by President Shavkat Mirziyoyev for the sake of common security and prosperity, which testifies to the loyalty of the course laid down by the “Shanghai Spirit”, its continuity and expansion The “Samarkand Spirit” formulated at the Samarkand SCO Summit.
The Author, Obid Khakimov is the Director of the Centre for Economic Research and Reforms under the Administration of the President of the Republic of Uzbekistan.