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Shanghai Cooperation Organization - Asia's energy club
August 22, 2007
The Shanghai Cooperation Organization (SCO) held its 6th annual meeting in Bishkek, Kyrgyzstan on August 16, 2007. Members include China, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, and Russia. Also attending were India, Mongolia, Pakistan, Iran, Afghanistan and for the first time,Turkmenistan.
The highlights were formalized in the Biskek Declaration:
- In an apparent dig at U.S. hegemony, they reiterated their support for UN leadership in resolving global conflicts.
- Russia and Kazakhstan called for an energy club of mutual cooperation of SCO members. The club would include reliance on the Central Asian pipeline network.
- Increased vigilance against drug trafficking around Afghanistan.
After the summit, members attended the "Peace Mission 2007" counter-terrorism demonstration of 6,500 troops from SCO countries.
Also after the summit, China signed a bilateral agreement with Kazakhstan promising increased cooperation in trade, immigration and border security. Their goal is to increase trade to $15 billion by 2015.
(Source: VOA, SCO seeks to expand influence, 8/16/07; Xinhua, China, Kazakhstan sign joint communique, 8/18/07; RFE/RL, Central Asia: SCO leaders focus on energy, security, cooperation, 8/16/07)
What the Shanghai Cooperation Organization means:
The SCO was created by China in 2001 to increase free trade, and reduce the threat of terrorism, and drug trafficking along its borders with member nations. SCO countries have a total population of 1.5 billion, 1/4 of the world's total, and have 11% of the world’s proven oil reserves.
As an alliance, these neighboring countries are forming a powerful bloc based on mutual advantage in trade and security. Reading between the lines, they are fairly unified against the U.S. intervention in the Middle East, if only because it could pose a threat to the uninterrupted flow of oil to China. It is another way that China is building a stable economic base that will advance its continued growth.
Action steps:
The growing strength of SCO countries will increase both the price of oil, and the economy of China.
- Profit from higher energy prices by including a good commodities fund in your investment portfolio.
- Lessen your own costs related to high energy prices by following the tips outlined in the World Money Watch Special Report “Oil’s Hidden Threat.”
- Learn about China's economy in the World Money Watch Special Report, "Profit from China's Growth."
Shanghai Cooperation Organization Related Articles:
Turkmenistan gas pipeline, 5/16/07
Turkmenistan elections, 2/14/07
Natural gas cartel would rival OPEC, 8/16/06
SCO meeting, 6/26/06
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