Effective connectivity needed to reap benefits of SCO membership
by Ashok B Sharma on 07 Jul 2015 2 Comments

The Eurasian concept that was once considered dead and gone after the Cold War is set to revive. This time the Russian township, Ufa, will work wonders. South Asia is slated to be an active partner in the Eurasian concept. India along with Iran and Pakistan who were in the queue will get full membership of the Shanghai Cooperation Organisation (SCO) – a Eurasian political, economic and security organisation founded in 2001 and including China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.


The host country, Russia, has invited the Indian Prime Minister Narendra Modi, Pakistan Prime Minister Nawaz Sharif and Iranian President Hassan Rouhani to attend the 15th SCO Summit, an indication that these three countries will get full membership of the SCO. Afghanistan, India, Iran, Mongolia and Pakistan at present enjoy Observer Status at this gathering. India had formally applied for membership of SCO prior to Dushanbe Summit in September 2014. China was insisting upon quid pro quo, that is, New Delhi’s help in Beijing getting membership of SAARC. But this did not work as SAARC is a purely regional organisation.


After NATO imposed sanctions on Moscow following its annexation of Crimea, Vladimir Putin was eager to show the western powers that their economic boycott cannot hold good as long as Russia has friends in the neighbourhood. Ufa, therefore, would be a big show and a rebuff to the NATO powers. Not only the SCO will be expanded with the inclusion of India, Iran and Pakistan, thus carrying major South Asian countries, at the insistence of Putin, Ufa will host simultaneously the 7th BRICS Summit and the Eurasian Economic Union Summit in continuum. The Eurasian Economic Union, set up in May 29, 2014 presently includes Russia, Armenia, Belarus and Kazakhstan as members.


If Modi’s diplomacy with Putin could facilitate New Delhi’s entry into SCO, the latter found the right time to strike the right chord to have a broader framework for the Eurasian concept. Beijing also wanted its “all-weather friend” Pakistan to join SCO. The SCO foreign ministers who met in Moscow in June paved the way for expansion of the SCO.


The leaders of the BRICS countries – Brazil, Russia, India, China and South Africa – will discuss the theme BRICS Partnership: A Powerful Factor for Global Development, that would define their role in the global architecture. The BRICS Development Bank is also to kick-off formally at this time. The role of Asian Infrastructure Investment Bank will be discussed at SCO Summit.


In the BRICS Outreach Session, Russia as the chair of the summit has invited leaders of the SCO – both members and observers – as well as members of the Eurasian Economic Union plus Azerbaijan and Turkmenistan. Thus Modi will have the opportunity of meeting as many as 12 leaders. Though Modi’s bilateral meetings with these leaders have not yet been scheduled (or announced), it will be interesting to see if a bilateral with Nawaz Sharif materializes.


Connectivity is likely to be an important part of the discussions at both the SCO and BRICS summits. The project for the multi-modal International North-South Transport Corridor (INSTC) connecting Iran, India, Central Asia, Russia and Europe by ship, rail and road route is likely to get a push in the presence of a broader spectrum of leaders and stakeholders. The route primarily involves moving freight from India, Iran, Azerbaijan and Russia via ship, rail and road, increasing trade connectivity between major cities such as Mumbai, Moscow, Tehran, Baku, Bandar Abbas, Astrakhan, Bandar Anzali and others. There is some hope of this project moving at a faster pace with the recent inauguration of Kazakhstan-Turkmenistan-Iran rail link. Dry runs of two routes were conducted in 2014, the first being Mumbai to Baku via Bandar Abbas and the second Mumbai to Astrakhan via Bandar Abbas, Tehran and Bandar Anzali, to identify and address key bottlenecks. The results showed transport costs were reduced by $2,500 per 15 tons of cargo. Other routes under consideration include via Armenia, Kazakhstan and Turkmenistan.


As Bandar Abbas is already congested, Iran planned developing a deep sea port at Chabahar. India’s Shipping and Road Transport and Highways Minister Nitin Gadkari during his visit to Iran renewed India’s commitment to the Chabahar project and negotiations for finalizing a commercial contract under which Indian firms will lease two existing berths at the port and operationalize them as container and multi-purpose cargo terminals are underway. Chabahar will connect by rail and road links to Afghanistan to Central Asia and beyond.


Parallel to this plan of connectivity through Chabahar port, Beijing has planned an economic corridor connecting Gwadar port in Pakistan. Its other plans are for Maritime Silk Route and One Belt One Road connectivity in South Asia.


India’s trade with Central Asian countries is hampered due to poor connectivity. Hopes rests on the development INSTC and using Chabahar port and subsequent rail and road links to transport goods to Afghanistan and beyond.


Along with his visit to the BRICS Summit, Modi will visit all five Central Asian countries that are natural resource rich and members of the SCO, barring Turkmenistan. The visit to Turkmenistan is likely give a push to the TAPI gas pipeline project which needs to appoint a consortium leader. Turkmenistan has the fourth largest gas reserves and Kazakhstan is one of the major oil producers and the world’s largest uranium producer – the feedstock needed for nuclear power projects. Indian public sector giant, ONGC Videsh is slated begin exploratory drilling in collaboration with a Kazakh firm in Satpayev block. India has Strategic Partnership Agreements with Kazakhstan and Tajikistan; Modi is likely raise India’s relationship with other three countries to a similar level of strategic partnership.


Central Asian countries hold India in very high esteem and have long cultural and historical links with India. There is a love for the Hindi language, the Ramayana and the Mahabharata and Bollywood films! Possibilities of cooperation in hydro-power generation and fertilizer production are also being explored. India is already helping these countries in capacity building and IT. With new membership in the SCO, the proposed India-Eurasian Economic Union FTA, and bilateral engagement with all Central Asian countries, India can benefit from this Eurasian region only if effective connectivity becomes a reality.   

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