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SCO and BRICS: Forging International and Regional Connections

“На одном колесе не уедешь”

Башкирская пословица

“You won’t get far on only one wheel”

Bashkir proverb highlighting the importance of preparation and cooperation.

This summer, the parallel summits of the Shanghai Cooperation Organisation (SCO) and BRICS in the Russian city of Ufa attracted plenty of media attention, many focusing on their geopolitical aspects. Of course these are important, and in my view the high-level encounters which the summits facilitate can provide a fresh forum for dialogue, not only between nations with growing ties such as Russia and China, but also among those with potential tensions, notably India and Pakistan. In addition, I want to highlight an aspect of the Ufa conferences that is often overlooked, namely the fact that the very location of these summits, in the capital city of the Bashkir minority (unknown to many non-Russians), highlights Russia’s considerable regional investment ambitions.

The attendance of many heads of state at the summits generated a significant number of column inches. From the BRICS, Presidents Putin, Xi, Rousseff, Zuma and Prime Minister Modi were in attendance, whilst the SCO’s Central Asian members were represented by their respective leaders. First and foremost, the presence of so many Presidents or PMs of large and increasingly important nations demonstrates how seriously the governments involved now take these relatively new groupings. Given the scale of the meetings (as RT reports, around 10,000 attended the summits), it is remarkable to think that neither organisation existed a mere fifteen years ago.

Another sign of the growing weight carried by these groups of nations is of course interest from new countries wishing to join. As reported by The Economic Times, the SCO proved to be a landmark summit with both India and Pakistan added to the organisation’s roster. Until now both have held observer status at the SCO, but this expansion – the first in the grouping’s history – will give the body a vital new South Asian strength.

In fact, the inclusion of India and Pakistan is likely to have benefited both the SCO and the countries themselves. As well as raising the SCO’s profile, India and Pakistan’s inclusion in the summit provides the sometimes-troubled neighbours with a new forum for dialogue as equal partners, a promising development given the organisation’s historical focus on security issues and existing expertise in this area.

With India joining, it became one of three large Eurasian countries with membership to both the SCO and BRICS, the other two being Russia and China. Both of these countries have already benefited considerably from the growing contact and collaboration which the two bodies promote.

The latest manifestations of this cooperation at the summits are the efforts to further establish the Russia-backed Eurasian Economic Union and China’s ‘Silk Road Economic Belt’ initiative (The Diplomat).  Strengthening these Sino-Russian ties is critical for developing regional infrastructure and connectivity and will be backed in part by the New Development Bank (formerly the BRICS Bank) which was launched in Shanghai on 21st July, and lauded as a challenger to comparable institutions (FT).

Under the aegis of these and other initiatives, promotion of regional Eurasian business ties is central to Russia’s ability to leverage its position within both BRICS and the SCO. This brings me to my second point, namely the importance of where the two summits took place. Ufa is the capital of the Bashkortostan region, which like some of the other Russian localities which I have discussed in previous posts is relatively ‘unknown’. But like these regions, it is a destination with much to offer investors.

For those in the know, Bashkortostan has in fact been on the business radar for some time. In April last year Euromoney reported on the region’s pioneering development of a B2B Centre under the local Chamber of Commerce and Industry which, with ultra-modern facilities, bilingual staff and extensive contacts in both local business and government, seeks to smooth the investor’s entry into the region by providing airport pickups, consulting, and tax advisory services.

In line with such pro-investment developments, the regional head of Bashkortostan, Rustem Khamitov, outlined his plans to promote greater business ties ahead of the BRICS/SCO summits at both a regional and international level. As Interfax reported, Khamitov sees Bashkortostan’s hosting of the events as a key opportunity for cementing new business relationships. These relationships will ultimately see the region double its trade with SCO countries, from China’s growing interest in the region’s iron, steel and agricultural sectors, to existing ties with India which already purchases locally manufactured aircraft engines from Russia. Moreover, in addition to these larger-scale deals, Bashkortostan is also committed to the promotion of region-to-region cooperation between SMEs. Indeed, in what is another first for the organisations, Ufa will play host to a follow-up specialised Interregional Forum for BRICS and SCO SMEs in October.

Thus, whilst developments at the very highest level of international diplomacy were undoubtedly part of the respective summits in Ufa, it is pleasing to note that actors on the ground also looked to promote the interests of local business. As the above proverb shows, the local Bashkir population has long valued preparation and cooperation in the interests of progress, and the Ufa summits have yielded numerous new strings to the SCO and BRICS bows, or indeed in the terms of the proverb itself, added wheels to their carts.

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