The 23rd meeting of the Heads of Government of the Shanghai Cooperation Organization in Islamabad took decisions firming up the structure of the secretariat, but more importantly it backed China’s Belt and Road Initiative. While the BRI has been widely seen as exclusively Chinese vehicle to win friends and influence people throughout the world, the prospect vis opened up of other SCO members participating in it, not just as recipients of Chinese largesse but as contractors on various projects carried out in third countries. The meeting also took special note of terrorism. There is terrorism affecting Chinese projects being executed in Pakistan, as well as terrorism affecting members, with India insisting that the unrest in it was because Pakistan was fomenting it. At the same time, Prime Minister Shehbaz Sharif cogently pointed out Afghan sponsorship of terrorism in Pakistan because it provided safe havens to terrorist organizations.
Another issue which the Summit looked at, though without finding a solution, was that of trading in local currencies. There is a lot of talk of the SCO acting as the impetus to greater trade amongst the members, but that is all actually a codeword for breaking the monopoly of the US dollar as the standard. The SCO may not provide the solution, because BRICS is also seen as having potential because it might come up with a new means of financing trade. However, the whole discussion revolves around the fact that a dollar unbacked by gold is not adequate. The problem that affects the SCO members is not that the USA does not print enough dollars (it does so to finance federal government deficits), but it uses this reserve-currency status to throw its weight about, imposing sanctions to suit its own whims.
One of the more logical mechanisms would be the setting up of an SCO bank. No decision was taken, though the sense of the Summit inclined towards that. The only problem is that there may not be enough preparation for such an organization. It also remains to be seen whether the bank would also function as a development bank, or whether that should be a different organization. The SCO is searching for role after the original purpose of its formation, the expulsion of US forces from Afghanistan, was achieved. Now it seems an organization more focussed on the more economic goals involved in supporting the BRI.
