Islamabad The Shanghai Cooperation Organization summit ends in Pakistan today, amid hopes for strengthening economic cooperation between the organization’s countries, especially in the field of trade, investment and infrastructure.
The Shanghai Cooperation Organization constitutes an important platform for member states to enhance regional communication and broader economic cooperation among the organization’s countries, by facilitating regional trade, investment and interconnection.
Economic initiatives that are closely aligned with China’s Belt and Road Initiative are the most important aspects of the organization’s drive for growth across the region.
As for Pakistan, the joint economic corridor between it and China, which is considered the crown jewel of the Belt and Road Initiative, stands at the top of the list of priorities for relations with Beijing and the organizations in which the world’s second-largest economy participates as a major player, and this makes Pakistan a key player in the regional economic scene.
Economic initiatives
The Shanghai Cooperation Organization focuses on strengthening economic relations and promoting trade between member states. It also works to promote regional trade agreements, investments and cooperation in sectors such as energy, transportation and agriculture, which is of particular importance to landlocked countries within the organization, as it facilitates access to larger markets.
The organization also creates investment opportunities among member states. For example, countries such as China and Russia invest in various sectors throughout the region, such as technology, manufacturing, agriculture, and energy, which helps in economic development, job creation, and strengthening local industries.
In this context, economist and researcher at the Institute for Strategic Studies in Islamabad (ISSI), Ahmed Naeem Salek, says that the combined gross domestic product of the members of the Shanghai Cooperation Organization has exceeded $20 trillion in recent years, representing about 30% of the domestic product. Global total, the organization has also witnessed a steady increase in trade volumes, with growth of about 12% annually.
Salek added – in an interview with Al Jazeera Net – that the Shanghai Cooperation Organization is working to enhance multilateral cooperation in areas such as agriculture, finance, and digital economies, providing a platform for smaller economies to benefit from increased trade and investment opportunities.
Salek explains that among the main initiatives is the Shanghai Cooperation Organization’s commitment to promoting infrastructure development projects, which has greatly enhanced connectivity across Eurasia (Asia and Europe) and led to lowering and strengthening trade costs regionally.
He pointed to the role of establishing free trade zones and cross-border economic corridors in simplifying commercial activities, while promoting digital economies and e-commerce initiatives promote economic integration.
Salek added that the organization facilitates cooperation in the field of energy between resource-rich member states such as Russia, Kazakhstan and Uzbekistan with energy importing countries such as China and India.
What is the importance of the summit for Pakistan?
Regarding the importance of the current summit for Pakistan, economic expert Osama Rizvi says – to Al Jazeera Net – that the Shanghai Cooperation Organization summit is an opportunity for Pakistan, despite the security fluctuations and economic crises it has gone through. Hosting the summit indicates the global role that Islamabad plays in politics.
The vision of the Belt and Road Initiative is consistent with the economic goals of the Shanghai Cooperation Organization, especially with regard to improving infrastructure, roads, and transportation networks, enhancing trade, and encouraging investment throughout the region, which has created opportunities for member states of the organization to communicate and join the Belt and Road Initiative.
Ahmed Salek says that the SCO’s economic goals are closely aligned with the Belt and Road Initiative’s goals of creating trade corridors and investment opportunities across Asia, making them complementary in many ways.
Pakistan attaches great importance to infrastructure projects and communication with regional countries within the framework of regional exchange and joint trade, in addition to its strategic location overlooking the Arabian Sea, which makes it a major corridor for trade with Afghanistan, the countries of Central Asia, and China, all the way to Russia and Europe. Hence, the importance of the economic corridor is highlighted. Common between China and Pakistan.
Salik says that Pakistan, as a major member of the organization since 2017, has been able to benefit from its strategic location as a transit hub between Central Asia, China and South Asia.
The China-Pakistan Economic Corridor project – a vital component of China’s Belt and Road Initiative – is one of the tangible economic outcomes of Pakistan’s engagement with members of the Shanghai Cooperation Organization.
Salik added that the SCO’s focus on promoting regional trade through reducing tariffs and improving market access allows Pakistan to increase exports to SCO member states, thereby diversifying its trading partners beyond traditional Western markets.
He pointed out that the corridor project is the cornerstone of the Belt and Road Initiative because it is designed to strengthen Pakistan’s infrastructure, energy and transportation sectors while providing a direct route for China to the Arabian Sea, enhancing regional connectivity for the benefit of the SCO member states and access to the best trade routes.
For his part, Osama Rizvi says that the China-Pakistan Economic Corridor project is about to enter another phase, as 36 projects have been completed so far, worth $26 billion.
