Qamar Bashir
The Prime Minister’s Speech at the Shanghai Cooperation Organization (SCO)-2024 Summit in Astana, Kazakhstan (3-4, July, 2024) was a mixed bag with a few points aligned with the SCO mandate and those which didn’t. The aligned part included trade in local currencies, regional and international connectivity, setting up of development funds to fight climate change and poverty alleviation.
The Prime Minister highlighted that conducting trade and commerce within SCO in local currencies will reduce dependence on major international currencies: US dollar and Euro, and will enhance economic sovereignty by insulating member states from external financial shocks and currency manipulation. Additionally, this would lower transaction costs and foreign exchange fees, providing cost savings for businesses and fostering closer integration among SCO members. This approach he emphasized would facilitate small and medium enterprises (SMEs), making it easier for them to engage in regional trade without the complexities of accessing international financial markets.
However, it is easier said than done. SCO countries will have to overcome many challenges such as currency volatility and high inflation rates in some member states, exchange rate fluctuations, lack of financial infrastructure and underdeveloped banking systems. Moreover, language barriers, divergent monetary policies and a lack of harmonization across the region, as well as, political instability and geopolitical tensions can affect the trust and reliability needed for local currency trade agreements. Additionally, international sanctions on some member countries further complicate trade relationships and currency transactions.
The prime minister was apt when he offered SCO countries to utilize the peculiar geopolitical location of Pakistan to connect Central Asian countries with China and through Gwadar port to the rest of the world by using the conduit of CPEC and BRI and benefit from their vast network of railways, highways, and maritime routes across Asia, Europe, and Africa. Additionally, the International North-South Transport Corridor, which connects India, Iran, Russia, and Central Asia, has been another major opportunity to reduce transport costs and time for goods moving between these regions.
However, this initiative is not without challenges. The SCO will have to address the many obstacles to fully translate connectivity vision into reality such as removing infrastructure deficiencies in some member countries, reducing geopolitical tensions, overcoming regulatory and administrative barriers and economic disparities among member states. besides, harmonization of regulations to ensure the smooth implementation and success of connectivity initiatives across the region.
The part of the PM’s speech which called upon SCO to take tangible steps for poverty reductions was commendable. The SCO has made notable progress in poverty reduction through the establishment of the Special Working Group on Poverty Alleviation and the SCO Centre of Excellence on Poverty Reduction in Islamabad aimed at facilitating the exchange of best practices, research and collaborative projects in agricultural development, vocational training, and economic cooperation, aimed at boosting income levels and improve living standards in the region. As the head of the Special Working Group on Poverty Alleviation.
At the 2024 SCO Summit in Astana, new initiatives to alleviate poverty were envisaged which included comprehensive economic programs, joint agricultural projects to improve food security, and expanded educational, and vocational training programs to empower vulnerable populations, create job opportunities, and enhance economic resilience in the region. These initiatives with significant contributions from Pakistan, are expected to have a profound impact on poverty reduction across member countries.
The Prime Minister’s next important point of the speech addressed climate change and global warming which has threatened many countries in terms of water shortage, rising temperatures, unpredictable heavy and unseasonal rains and snow and natural disasters making Pakistan one of the ten most climate change affected countries of the world. SCO has made some tangible achievements to arrest climate change such as construction of renewable energy projects, increased use of green technologies and improved regional policies on pollution control. The SCO Summit July 2024 adopted a new framework for regional cooperation on carbon trading, aiming to create a unified carbon market within the SCO, encourage investments in low-carbon technologies and expanding green finance mechanisms to support sustainable projects and infrastructure development.
The Prime Minister’s reference to Afghanistan was, however, full of contradictions. At one end the Prime Minister termed Afghanistan lynchpin for the success of SCO, but on the other hand Pakistan has catapulted its position with Afghanistan from friendship to adversary by actions such as extraditing Afghan Aliens, imposing strict border control, impose penalties and levies on the movement of goods across Afghanistan and conducting cross border airstrikes. Pakistan needs a critical rethinking of its engagement with Afghanistan to align them with the SCO objectives.
The Prime Minister assertions regarding genocide committed by Israel in Palestine and calling upon the rest of the world do its bit to ensure permanent ceasefire in the region were though apt, but were hallow and without any consequence. He knew very well that the SCO forum by and large has a narrow mandate and its voice, even if raised against Israel, will have no consequence or impact.
The Prime Minister also stressed the need to resolve all outstanding regional and international dispute and conflicts on the basis of the United Nations’ resolutions with an obvious reference to dispute of Illegally Indian Occupied Jammu and Kashmir knowing very well that the United Nations is nothing but a pawn in the hand of the powerful nation who finance and foot major chunk of its budget like USA. Perhaps SCO was formed in reaction to the US influence on UN, and UN inability to resolve conflict fairly and judicially.
Though the PM’s speech resonated well with the SCO objectives, moving forward the effectiveness of these initiatives will depend on sustained cooperation and addressing the outlined challenges besides putting our own house in order by achieving political and economic stability, following the constitution and rule of law in letter and spirit without any exception.
Writer is Former Press Secretary to the President ,Former Press Minister to the Embassy of Pakistan to France ,Former MD, SRBC