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Cooperation or Connectivity: How will the SCO function from now?

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Authors: Wang Li & Palamdorj Bayartsetseg

[yt_dropcap type=”square” font=”” size=”14″ color=”#000″ background=”#fff” ] W [/yt_dropcap]ith the inclusion of India and Pakistan into the Shanghai Cooperation Organization (SCO) at the summit meeting on 9 June 2017, there is much uncertainty surrounding the future of the organization’s ability to maintain stability and cohesiveness.

This is the first time the SCO has grown to include new nations since its establishment in 2001, and once the two countries are formally admitted the eight-member bloc will not only cover nearly half of the world’s population and 3/5 of the Eurasian continent bordering three oceans (the Indian, the Pacific and the Arctic Oceans), but also include four nuclear powers—Russia, China, India and Pakistan. With their inclusion, it is one of the largest regional organizations in the world, however, it is unclear if India and Pakistan will complicate the organization’s efficiency and affect the SCO’s ability to promote regional stability and prosperity.

Those who tend to believe in “the Thucydides Trap”, or recognize the differences among the “Big Three”—Russia, China and India, find it difficult to look at this merger optimistically, especially because of the long contentious history between India and Pakistan. According to some analysts, while the increase in SCO members will bring diversity to its voice, it also has the potential to affect the current equilibrium among the original six states. On June 9, Carnegie-Tsinghua Center for Global Policy held the forum “Shanghai Cooperation Organization at Crossroads”. The keynote speakers provided their insightful views from Russia, the United States, and India, but it seemed to omit the Chinese opinions on the summit meeting of the SCO in Astana.

Like any international or multilateral organization, it is essential for both new and old SCO member states to ensure the organization continues to maintain the necessary cohesion among them. Theoretically, the forces that bring states together and drive them apart will affect the security of individual states by determining both how large a threat they face and how much help they can expect. Therefore, the factors that determine how states choose alliance or “strategic partners”, as China asserts, will shape the evolution of the SCO as an international organization. Therefore, the central issue that remains is how these states will respond to “threats” and the likelihood of working together to combat threatening ‘forces”.

China affirmed that since it was founded 16 years ago, the SCO has become a significant platform and reliable support for the member countries to enhance mutual trust, deepen public diplomacy, expand practical cooperation, and jointly safeguard regional security and stability. Yet, with the increasing uncertainties and instabilities in the current international and regional situation, the member states agreed to be more cooperative within the SCO framework. As a rising power and the dual core founders of the SCO, it is highly expected China will assume its usual role. During one SCO summit, Chinese President Xi Jin-ping called for all member states to work jointly in safeguarding regional peace and building a community of shared future, which then resulted in an SCO convention on combating terrorism and extremism. China is considering hosting another similar convention and promised to take the primary share of the budget for the Secretariat of the SCO to facilitate its work as scheduled. In addition, given the recent deterioration of the security situation in Afghanistan, the SCO reached a consensus that “without security, there will be no development to speak of. And it called upon all parties to support the war-worn government in Kabul to reinforce the fight against all sorts of the acts of terrorism and religious extremism which remain a long and arduous task”. It deserves noting that China made the compromise to take the term of separatism out of the “three evil forces”—terrorism, separatism and extremism, which have been the key words of the Chinese discourse with international terrorism.

Secondly, although China has quite a wide range of disagreements with member states such as India, it highlighted the year of 2017 as the SCO’s 15th anniversary and the 10th anniversary of the signing of the Treaty on Long-Term Good-neighborliness, Friendship and Cooperation. In Astana, Xi lost no time to reiterate the “Shanghai Spirit” mainly embodied in the two documents, which have become more cohesive in the face of the vicissitudes of the region and the world as a whole. At the moment of the accession of India and Pakistan to the SCO on June 9, Chinese leader first congratulated India on being a full member of the SCO, adding that the two parties would work together for more high-level interaction, strategic dialogues and policy alignment within the SCO framework. As a regional bloc in which Sino—India cooperation can extend to other issues in the region, the SCO is also able to provide a new angle for bilateral ties between Beijing and New Delhi. As Indian scholar Raja Mohan put it, the deepening strategic partnership between Moscow and Beijing and a transformed India-United States relationship have fundamentally altered the context of India’s interest in the SCO. As China’s rise has begun to constrict India’s room for maneuver in the subcontinent of Asia and the Indian Ocean, unlike in the past, Moscow may not be willing to help New Delhi balance Beijing. However, being a full member of the SCO does provide India with much more strategic capacity. At the least, Prime Minister Modi has taken the utility of the SCO to deal with two of India’s immediate security issues: counter-terrorism and connectivity.

China certainly welcomes the fruitful outcomes gained at the Astana Summit, which includes the expansion of the SCO for the first time. The leaders in Beijing are also content with the deepening cooperation between old and new members in terms of the “Shanghai Spirit”. Perhaps more significant is that because of wide support of the “Belt and Road Initiative” and SCO development strategies during the summit, China seems to be more confident than ever to seek the glory it claims on the world stage. In the meantime, China appeals to all members to adhere to inclusiveness and openness in order to have dialogues with other countries or international and regional organizations. For the SCO overlaps with many key areas of the Belt and Road Initiative, it also serves as a security complement to the ambitious economic-focused BRI. But just as the BRI is leading China to become more entangled in regional geopolitical security challenges, the SCO’s two new members, India and Pakistan, will likely complicate the organization’s normal function.

In closing, China has perceived the SCO as a first testing ground for promoting common interests through a multilateral platform in which China is the strongest, but not the only strong player. It was also viewed as a first step toward a Sino-Russian condominium in Central Asia, in which Beijing and Moscow could create a regional order to benefit both powers and could be accepted by the countries of the region. In order to get there, China was promoting the creation of the SCO’s free trade area (FTA) and a joint development bank. Yet, Beijing soon discovered that Moscow was worried that China would use the SCO FTA and the development bank to promote its own agenda and to buy influence in Central Asia at Russia’s expense. Because the SCO headquarters are located in Beijing – and the organization has Shanghai in its name – it is seen as a big enough symbolic trophy to keep China pleased.

As a matter of fact, in Henry Kissinger’s opinion, the contemporary Asian order includes outside powers as an integral feature: the United States whose role as an Asia-pacific power was explicitly affirmed in joint statements by the two governments in 2013; and Russia, geographically an Asian power and one co-founder of Asian groupings such as the SCO, has forged the highest-level strategic partnership with China of the day. Therefore, the leaders of China are well aware that given the rivalry between India and China and the continuing enmity between India and Pakistan, they do represent major challenges to the future function of the SCO. The key to the challenge is that if Moscow rises to the occasion, it can create a useful platform for managing international order across Greater Eurasia. If it fails to do so, the SCO will be dysfunctional, with the rivalries and enmities on the continent running unchecked. The picture seems not so rosy, but it is the reality faced from now by all member states of the Shanghai Cooperation Organization.

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Defense

The world arms sales market

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New data from SIPRI’s Arms Industry Database, released last December, show that arms sales by the world’s twenty-five largest defence equipment and military services companies totalled 361 billion dollars in 2019. This is an 8.5% increase in real terms in arms sales compared to 2018. All this emerged from the studies by the Stockholm-based International Peace Research Institute founded in 1966.

In 2019 the top five arms companies were all based in the United States: Lockheed Martin, Boeing, Northrop Grumman, Raytheon and General Dynamics. These five companies together recorded 166 billion dollars in annual sales. In total, twelve U.S. companies rank among the top 25 for 2019, accounting for 61% of total sales.

For the first time, a Middle East company appears in the top twenty-five. Edge, based in the United Arab Emirates, was established in 2019 from the merger of over twenty-five smaller companies. It ranks twenty-second and accounts for 1.3% of the total arms sales of the top twenty-five companies. This demonstrates that oil revenues in the Near and Middle East are also invested in businesses that produce jobs and money, and are not just accumulated for the personal expenses of the ruling elite. Edge is an example of how high domestic demand for military products and services, combined with the desire to become less dependent on foreign suppliers, is driving the growth of arms companies in the Near and Middle East.

Another newcomer to the top twenty-five list in 2019 was L3Harris Technologies (ranking tenth). It was created by the merger of two U.S. companies that were both in the top twenty-five in 2018, namely Harris Corporation and L3 Technologies.

The top twenty-five list also includes four Chinese companies. Three of them are in the top ten: Aviation Industry Corporation of China (AVIC, ranking sixth), China Electronics Technology Group Corporation (CETC, ranking eighth) and China North Industries Group Corporation (Norinco, ranking ninth).

The combined revenue of the four Chinese companies in the top 25 list, which also includes China South Industries Group Corporation (CSGC, ranking twenty-fourth), grew by 4.8% between 2018 and 2019. Chinese arms companies are benefiting from the People’s Liberation Army’s military modernisation programmes.

Conversely, the revenues of the two Russian companies in the top twenty-five, namely Almaz-Antey and United Shipbuilding, declined between 2018 and 2019, for a combined total amount of 634 million dollars. A third Russian company, United Aircraft, lost 1.3 billion dollars in sales and dropped off the top 25 list in 2019. Domestic competition and reduced government spending on modernising the Russian Navy were two of the main challenges for United Shipbuilding in 2019.

After the United States, the People’s Republic of China recorded the second largest share of 2019 arms sales by the top twenty-five companies, accounting for 16%.

The six Western European companies together account for 18%. The two Russian companies in the ranking account for 3.9%. Nineteen of the top twenty-five arms companies increased arms sales in 2019 compared to 2018. The largest absolute increase in arms sales revenue was recorded by Lockheed Martin: 5.1 billion dollars (11% in real terms). The largest percentage increase in annual arms sales (105%) was reported by French manufacturer Dassault Aviation Group. A strong increase in export deliveries of Rafale fighter aircraft pushed Dassault Aviation into the top 25 arms companies for the first time.

The Sipri report also examines the international presence of the 15 largest arms companies in 2019. These companies are present in a total of 49 countries, through majority-owned subsidiaries, joint ventures and research facilities. With a global presence in 24 countries each, Thales and Airbus are the two most internationalised companies, followed closely by Boeing (21 countries), Leonardo (21 countries) and Lockheed Martin (19 countries).

The United Kingdom, Australia, the United States, Canada and Germany host the largest number of these companies.

Outside the North American and Western European arms industries, the largest number of foreign corporate entities is hosted by Australia (38), Saudi Arabia (24), India (13), Singapore (11), United Arab Emirates (11) and Brazil (10).

There are many reasons why arms companies might want to establish themselves abroad, including better access to growing markets, collaborative arms programmes or policies in host countries that link arms purchases to technology transfers.

Of the 49 countries hosting foreign industries in the top 15 arms companies, seventeen countries are low- and middle-income ones. Southern countries seeking to restart their arms production programmes have welcomed foreign arms companies as a means for benefiting from technology transfers.

Chinese and Russian arms companies in the top 15 list have only a limited international presence. Sanctions against Russian companies and government limits on takeovers by Chinese companies seem to have played a role in limiting their global presence.

All these data were collected by the Sipri Arms Industry Database founded in 1989. At that time, it excluded data for companies in Eastern European socialist countries, including the Soviet Union. The updated version contains 2015 data, including data for companies in the People’s Republic of China and the Russian Federation. An archive of the first one hundred data sets for the period 2002-2018 is available on the Sipri website (www.sipri.org), while for the first twenty-five ones it has been updated with the latest available information.

Arms sales are defined as sales of military goods and services to military customers at national and international levels. Unless otherwise stated, all changes are expressed in real terms. Comparisons (e.g. between 2018 and 2019 or between 2015 and 2019) are based on the groups of companies listed in the respective year (i.e. the comparison is between different groups of companies).

For 2020-2021, Sipri is releasing its dataset on arms sales of the world’s largest companies along with the results of a mapping on the internationalisation of this industry. For this reason, a new dataset was created, including 400 subsidiaries, joint ventures and research facilities linked to the top fifteen arms companies in 2019. Data sources included corporate investment documents, information on company websites, public records and newspaper and magazine articles.

To be included in the mapping, an arms industry must have been active for the majority of its fiscal year, as well as be located in a country other than that in which its parent company is headquartered and also (i) produce military goods or provide military services to military customers; (ii) produce or provide services for dual-use goods to military customers.

This is the first of the key data handovers in view of the publication of the next Sipri Yearbook in mid-2021. Before that, Sipri will release its data on international arms transfers (details of all major international arms transfers in 2020), as well as its data on global military expenditure (comprehensive information on global, regional and national trends in military expenditure). We will inform readers of all this in due course.

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Defense

Aman-2021 Naval Exercise: Maritime Diplomacy

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Pakistan has hosted Aman-2021 biannual multi-national naval exercise(Feb.11-16) that has been the focal-point for Indian media particularly due to the significance of this naval drill . The prime disposition of this naval exercise was that, it was conducted in peace times, therefore no country can misperceive the exercise.

Secondly, the objectives of the Aman-2021 are quite clear that;

  • The exercise aims to contribute to regional stability
  • The exercise is a united resolve against the threats of terrorism, piracy and other related threats to maritime domain
  • This exercise is likely to enhance interoperability between the regional as well as extra-regional navies. It also will bridge the gap between regional and extra-regional naval forces to unite against a common threat

Pakistan navy has been remarkable in bringing 45 countries’ naval forces together .Some of the notables are the U.S., Russia, China and Turkey.

All major nations want their influence in the Indian Ocean Region(IOR) due to its strategic chokepoints and the Sea-Lines of Communications(SLOCS) that are vital maritime routes between ports, used for trade ,logistics and naval forces. Indian Ocean is one of the vital global trade arteries accounting for more than 80% of world’s oil shipments passing through this region. This region has world’s fastest growing economies and a home to 2.7 billion population. This region is lucrative market for multinational corporations but rise of Asian economies has got competition with European economies. The IOR is supra-rich in natural resources that is why during colonial times, colonial powers preferred to colonize countries in this region. This region’s natural resources are equivalent to combined with rest of the world. In short, this region is the most significant due to its political, economic, strategic and geological features. That is the primary reason, great powers wish to maintain their influence in the region.

Aman-21 exercise has provided participating countries with an opportunity to demonstrate naval strength. Russia, U.S., and China are largest navies in the world and they are collaborating under on a single platform(Aman-21).Russia’s participation with NATO members makes this naval exercise very special because the former has not done so since the 2011 ‘Bold Monarch’ naval exercise -off the coast of Spain.

All the participating navies are gathering under the slogan “togetherness for peace” and despite having differences between them, some of the countries are uniting to thwart threats to maritime security and stability. Some of the scholars are terming Pakistan navy’s maritime diplomacy as a huge success. As the number of participating countries grew immensely due to the message of peace that Pakistan navy is promoting. Though, the primary objective of the exercise is to counter threats of hybrid warfare, piracy, drug trafficking, arms trafficking, human smuggling, terrorism and climate change.

At the sidelines of the Aman-21, Pakistan navy organized 9th international Maritime Conference (IMC)2021 in Karachi. Advisor to Prime Minister on National Security, Dr.Moeed Yusuf stated “Pakistan’s blue economy has the potential of billions of dollars but it is earning around $200 million from ocean resources.

Pakistan navy aims to contribute more in regional peace and stability by transforming itself into a blue water force equipped with state of the art technology (surface, airborne, submerged, unmanned) to play a greater role in the IOR. Pakistan’s strategically located Gwadar port is in close proximity of the Strait of Hormuz, which is a vital area for world’s developed nations due to oil transit chokepoint and it connects Middle East with South and Central Asia.

India always sees Pakistan’s efforts for promoting regional peace with a greater doubt. India’s relations with Pakistan plummeted after Modi government revoked Article 370 and 35-A, altering Jammu and Kashmir’s autonomous status. Indian media did a lot of propaganda regarding Pakistan’s successful naval exercise. Even one of the Indian magazine The Week captioned “ Pakistan’s navy chief visits Russian warship. worry? “It also claimed that Pakistan’s navy chief Admiral Mohammad Amjad Khan Niazi visited the Admiral Grigorovich. The Admiral Grigorovish is a frigate that has the capability to carry missiles, torpedoes, anti-submarine, anti-air and anti-ship guns. Pakistan’s naval chief was given the tour of weapon system and communication equipment on board the ship. This naval exercise has been an opportunity for navies to demonstrate their professionalism and showcase their weaponry.

As the Aman-21 was concluded Iran and Russia started a two-day naval drill in the northern part of Indian Ocean. India also joined the naval exercise without any proper invitation and due to diminutive participation of Indian navy, it could not make that strategic impact that was thought by India. Now some of the Indian media outlets deny India’s participation in the Iran-Russia naval exercise. India’s efforts to neutralize the strategic impact of Aman-21,evaporated and Aman-21 naval exercised concluded with achieving desired objective of bringing 45 naval forces together under the slogan of “togetherness for peace”. Pakistan’s efforts for promoting regional peace and stability will bear more fruits after the China-Pakistan Economic Corridor’s completion and regional connectivity for collective good.

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Indo-French Bonhomie is Destabilizing South Asia

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India is rapidly increasing its weapons capability in order to threaten and coerce Pakistan so that latter could submit to India’s hegemonic designs. Such hegemonic aspirations not only threaten South Asia’s regional equilibrium but also take entire region to the brink of nuclear brinkmanship. Some of the Western countries are eager to sell their weaponry to India and in particular, France has taken the weapons sale to an entire new level by selling nuclear-capable fighter jets to India. This is unprecedented from a Western country which is also signatory to the Nuclear Nonproliferation Regime (NPT). Selling of such weapons to Modi regime is worrisome not just for South Asia but entire global peace and security.

One of the major contributors to Indian arms buildup is France, which has provided technologically advanced conventional and strategic weaponry to India. India largely depends on foreign assistance to acquire weapons and over the period of a decade, Indo-French defense cooperation has strengthened. It is because both countries have convergence of interests when it comes to strategic policy in the Indo-Pacific region. However, this convergence is destabilizing the South Asian region, and contributing to security challenges for Pakistan.

Indo-French strategic partnership mainly spans in the fields of defense, nuclear and space. In the first week of January 2021, India and France held their annual strategic dialogue, led by Indian National Security Advisor Ajit Doval and Diplomatic Advisor to French President Emmanuel Bonne. It is interesting to see that France is not only following Indian footprints in the Indo-Pacific region but it’s also been vocal about India’s entry into Nuclear Suppliers Group (NSG), a global body which controls global nuclear commerce. France is also at forefront regarding India’s seat at high tables of UN Security Council.

This is ironic and disappointing in the sense as to how a member of civilized world community like France neglects Indian atrocities in the Indian illegally Occupied Jammu and Kashmir (IIJO&K). Indian atrocities in occupied Kashmir are no more a secret. Entire world community condemned PM Modi’s illegal annexation of disputed territory. France reaction was awful to the core. Instead of mediatory role, France called Kashmir as India- Pakistan bilateral issue. France put a blind eye on number of UN Resolutions which clearly state Kashmir as a disputed territory. India has violated those resolutions, but irony lies in the fact that France wants India to be part of very prestigious body whose resolutions means nothing for it.

India’s relationship with France is not confined to one domain of defense; rather it includes energy cooperation, cyber security, space exploration and other areas of strategic convergence. Their strategic partnership also focuses on bilateral cooperation in combating terrorism. It is ironic to note their selective choosing of terrorism. France remains oblivious to India’s state sponsored terrorism in Pakistan and persecution of Kashmiri Muslims. France’s silence on such matters not only put a question mark on its global standing but also shows how countries like France lose moral grounds just for the sake of some economic incentives. This moral bankruptcy is unimaginable and condemnable.

South Asia is a fragile region. Massive arms import and weaponization of India has direct ramification for Pakistan’s security calculous. In order to match increasing conventional superiority with India, Pakistan may be compelled to participate in arms race fueled by countries like France. France’s defense industry and its strategic collaboration with Indian defense firms also pose a serious threat of technological reverse engineering. At the same time, there is no clear indication of end user agreement on French weapons in India. Whether there would be any end-user agreement is yet another question.

There’s no second thought that, France is actively fueling India – Pakistan arms race. India has been buying arms and ammunitions for decades and remains the world’s topmost importers for last many years. Indian imports of weapons from France have risen by 75%, making latter the third largest supplier of arms to India in last 5 years. France is exporting weapon systems to India, which are not only conventional but also have strategic implications. The application of such weapon systems also varies from air to land to sea. This clearly signifies that France is destabilizing the region.

The Indo-French Strategic Partnership is being deepened at the expense of regional balance of of power in South Asia. The already fragile strategic stability in South Asia is under assault from France’s massive arms transfer to a revisionist India. French sale of sophisticated military technology to India, at this scale, is further deteriorating the regional stability and eroding global norms and rules.  There must be an end to this frenzy which is being run in the name of “strategic partnership”. France needs to realize the severity of the situation created by its weapons sale to an aggressor before it gets too late.

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