Nato's rival in the east

Observations on Central Asia

On 16 August, the leaders of an influential but not widely known group called the Shanghai Co-operation Organisation (SCO) met in the Kyrgyz capital of Bishkek for their annual summit.

The SCO, made up of China, Russia and four former Soviet central Asian countries (Uzbekistan, Tajikistan, Kazakhstan and Kyrgyzstan) gathered just as their armies were concluding their first joint military exercise in Russia, involving 6,500 soldiers and 500 combat vehicles.

The meeting will have been watched closely by governments and commentators convinced that the SCO, formed in 2001, is becoming an anti-western rival to Nato. "It has the potential to develop into a powerful authoritarian bloc opposed to democracy," says Mike Gapes, chairman of the Commons foreign affairs select committee.

These fears are well founded. In 2005, the SCO described the Andijan massacre in Uzbekistan, in which troops fired on anti-government protesters, killing an estimated 500, as an "anti-terrorist"operation - a clear show of solidarity in the face of EU and US demands for an independent investigation. Shortly afterwards, Uzbekistan refused to extend the lease on the US airbase at Karshi-Khanabad and the SCO issued a forceful declaration calling for the US-led coalition to withdraw its forces from central Asia.

Squeezed between Russia and China, central Asia is of enormous strategic importance because of its energy resources and borders with Pakistan, Afghanistan and Iran. Western influence in the region is already on the slide. Central Asian countries did not reap the economic or political benefits they had hoped for from their support of the war on terror. Their governments are also weary of western backing for pro-democracy dissent and colour revolutions, preferring to ally with less critical Asian nations.

Flush with oil and gas money, the countries of the SCO are booming. The economies of all the SCO states are growing at more than 6 per cent a year and trade between member states is expected to rise from $20bn in 2003 to $80bn in 2010.

India, Pakistan, Mongolia and Iran hold observer status and all except Mongolia have requested full membership, though the SCO has failed to agree on enlargement. The SCO's reluctance to expand belies its bullish stance.

"The SCO is not based on a set of shared values," says Dr Roy Allison, an expert in security policy in Russia and central Asia at the London School of Economics. "It is a club of authoritarian regimes seeking international and domestic legitimacy. There is hostility between central Asian countries and the alliance between China and Russia is nothing like that between the UK and America. For example, there is very little intelligence-sharing - always a good indicator of closeness."

The larger the SCO becomes, the less likely it is that members will be able to unite on anything. Energy-starved India is a potential rival for resources and does not want to damage its ties with the US (particularly after gaining US support for its nuclear programmes). Pakistan is regarded as a source of instability, while Iran's support for Shia militias sits uneasily with the region's struggle against Islamic fundamentalism.

"The idea that the SCO is a sinister military bloc is completely misguided," says Oksana Antonenko, senior research fellow at the International Institute for Strategic Studies. "The US cannot accept that the SCO is a regional institution that deals with regional issues. It is the only multilateral forum in which central Asian disputes can be resolved."

The SCO and its predecessor, the Shanghai Five, have successfully dealt with border disputes between China and the former Soviet republics, while softening rivalry between China and Russia. It is telling that its first function was to avoid conflict between members. It does not offer a collective security guarantee.

Antonenko argues that there are compelling reasons for the EU to work with the SCO. Both want a stable Afghanistan and, if central Asia becomes insecure, "Europe may face problems from terrorist networks based there, interrupted energy supplies or increasing flows of illegal immigrants". A recent EU paper recommends forming "ad hoc contacts" with regional groups, including the SCO, and the EU plans to double financial assistance to central Asia.

The military exercises in Russia may be dismissed as posturing (on defence, the US outspends the next 15 countries combined, including Russia and China), but the west is going to have to get used to dealing with a powerful bloc of nations with little regard for human rights or democracy.