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C O N F I D E N T I A L SECTION 01 OF 03 SHANGHAI 000386 
 
SIPDIS 
 
NSC FOR WINTER, LOI 
 
E.O. 12958: DECL:  9/11/2018 
TAGS: CH ENRG GG IR PREL RS XD XE
SUBJECT: GEORGIA CRISIS TESTS SHANGHAI COOPERATION ORGANIZATION (SCO) 
COHESION 
 
REF: A. A: SHANGHAI 375 
     ¶B. B: SHANGHAI 53 
 
CLASSIFIED BY: Christopher Beede, Political/Economic Section 
Chief, U.S. Consulate General, Shanghai, Department of State. 
 
REASON: 1.4 (b), (d) 
 
 
 
1 (C) Summary: Several Shanghai scholars regard the Shanghai 
Cooperation Organization (SCO) annual summit's greatest success 
as maintaining solidarity among member states in the face of the 
Georgia crisis. Still, while SCO leaders are able to reach paper 
agreements on anti-terrorism, drug interdiction, and 
infrastructure building activities, implementation of these 
agreements languishes at the lower levels. The SCO has deferred 
the question of new members by allowing interested non-member 
states to apply for "dialogue partner" status. The SCO wants to 
raise its international profile and may make a concerted pitch 
for UN observership in the short term. One scholar argues that 
China would welcome the opportunity to work with the United 
States in Central Asia, and believes Afghanistan offers the best 
way forward. END SUMMARY. 
 
(SBU) Poloff met with several local experts on the Shanghai 
Cooperation Organization (SCO), Central Asia, and international 
security in early September, to discuss the August 28 SCO summit 
meeting. The scholars included: Shen Dingli, Director, Center 
for American Studies, Fudan University; Zhao Huasheng, Director 
of the Center for Shanghai Cooperation Organization Studies, 
Fudan University; Shao Yuqun, Deputy Director of the Department 
of South Asia Studies, Shanghai Institute for International 
Studies (SIIS); and Pan Guang, Director of the Center of 
Shanghai Cooperation Organization Studies (COSCOS), Shanghai 
Academy of Social Sciences (SASS). 
 
----------------- 
CRISIS IN GEORGIA 
----------------- 
 
¶3. (C) The scholars confirm the crisis in Georgia occupied a 
large part of the SCO summit agenda. Pan Guang alleges that SCO 
heads of state held a two-hour, closed door meeting -- as often 
takes place at the summit -- during which Russian President 
Dmitri Medvedev briefed his counterparts on the situation on the 
ground and solicited support for Moscow's position. While the 
SCO planned to address several regional issues, Zhao Huasheng 
claims that Russia actively tried to steer the group toward the 
Georgia conflict. Zhao agrees that it is natural for Russia to 
seek assistance from states that might be sympathetic to its 
situation. Moreover, Zhao continues, the crisis in Georgia 
undoubtedly has regional significance, given its proximity to 
Central Asia and Moscow's role in the matter. Still, the SCO 
should limit its involvement to the affairs of member states, 
and Georgia is not a member. Shao Yuqun concurs, arguing that 
U.S. and European Union (EU) backing of Georgia was an 
additional deterrent to SCO action. 
 
¶4. (C) The summit's greatest success, Zhao concludes, was to 
maintain solidarity among member states and the organization's 
overall political direction. The final SCO joint statement, Shen 
Dingli points out, recognized Russia's legitimate interest in 
events on its periphery, but reiterated SCO member states' 
long-held principle of non-intervention in the affairs of other 
states. That the SCO avoided an overt break with Moscow over the 
Georgia crisis, and that moderate language backing this stance 
was incorporated into the joint statement, is a big victory, 
Zhao believes. Pan concurs, noting that "at least Russia got 
something" out of the document. Moscow obviously wanted more 
support for its stance but accepts the reality that member 
states cannot support what it has done, Pan observes (see reftel 
A). While acknowledging that other member states did their part 
as well, Zhao asserts that Beijing played a key role in drafting 
the final language for the joint declaration. 
 
SHANGHAI 00000386  002 OF 003 
 
 
 
¶5. (C) Pan argues that the SCO's partial repudiation of Russian 
actions in Georgia proves his earlier point (see reftel B) about 
the nature of the SCO, namely, that the organization will not 
allow a single member state to dictate its political direction. 
However, this is not an unadulterated victory, Pan admits, for 
the SCO cannot effectively operate in the absence of strong 
Sino-Russian bilateral relations. Russia still regards Central 
Asia as its backyard, Pan opines, but the crisis in Georgia has 
meant that even Uzbekistan no longer supports Russia. 
 
------------------------- 
TROUBLESOME CENTRAL ASIA? 
------------------------- 
 
¶6. (C) Shao laments that while SCO heads of state continue to 
reach "paper agreements" on anti-terrorism, drug interdiction, 
and infrastructure building activities, implementation of these 
agreements languishes at the lower levels. Shao places the blame 
squarely on the bureaucracies of Central Asian member states, 
which she termed variously as corrupt, unable to effectively 
implement SCO programs, or engaged in foot-dragging due to 
unspoken fears of China's expanding regional influence. 
 
¶7. (C) Shao further notes there was some discussion among SCO 
watchers prior to the summit regarding Uzbek President Islam 
Karimov's attendance. Some reports had circulated that Karimov 
was ill and would be unable to attend, while other observers 
considered this a ruse intended to draw regional attention to 
Uzbekistan's occasional dissatisfaction with the SCO. Shao 
claims that Uzbekistan is a "problematic partner" that often 
likes to go its own way within the SCO. 
 
----------------- 
DIALOGUE PARTNERS 
----------------- 
 
¶8. (C) Pan believes the SCO successfully avoided the difficult 
question of responding to new states seeking SCO membership by 
introducing the concept of "dialogue partners." The SCO will 
allow non-member states to apply to become dialogue partners, 
apparently a step above observer status, beginning next year. 
Pan admits the SCO has merely deferred the membership problem, 
which will surely surface again during next year's summit in 
Russia. According to Pan, by that time, the issue may be even 
harder to resolve, especially if Moscow changes its position on 
Iranian membership. 
 
¶9. (C) Elaborating on the idea behind dialogue partners, Zhao 
describes the designation simply as a way for non-member states 
to get closer to the SCO. He agrees the new category allows the 
organization to preserve its cohesion, and sidestep admitting 
new members with unwieldy political baggage. Shao maintains that 
although the SCO is "not a Central Asian NATO," the group has 
consciously taken NATO's Partnership for Peace (PFP) as a 
template for creating the dialogue partner designation. Zhao 
admits he does not know what, in practice, a dialogue partner 
will be permitted to do, but notes that since observer states 
presently "just get a seat and observe," the presumption is that 
dialogue partners will have some say in SCO proceedings. Shao, 
on the other hand, is less confident that aspiring SCO members 
will be satisfied with dialogue partner status, but believes 
that those states accepted as dialogue partners will at least 
wait to see whether it represents a meaningful instrument for 
SCO engagement or is merely a holding pattern. 
 
¶10. (C) Chinese President Hu Jintao's visit to Turkmenistan -- 
which is not an SCO member state -- prior to the SCO summit, was 
merely intended to strengthen bilateral relations, Zhao claims. 
Turkmenistan is not an SCO member, Zhao observes, because it 
fashions itself as a "Central Asian Switzerland," and interprets 
its neutrality as being prohibitive of its entry into regional 
collective groups, even those that are not military alliances. 
The SCO takes the view that Turkmenistan may become a member 
 
SHANGHAI 00000386  003 OF 003 
 
 
state if it later chooses. However, the issue is not a priority 
from the Chinese perspective, Zhao notes, since Beijing already 
maintains strong bilateral relations with Ashgabat. 
 
---------------- 
UN OBSERVERSHIP? 
---------------- 
 
¶11. (C) The SCO is interested in raising its international 
profile and may make a concerted pitch for UN observership in 
the short term. In Shao's experience -- as an SCO expert who 
occasionally travels outside China to attend international 
conferences -- even many well-informed observers have not heard 
of the SCO, and the SCO recognizes this. Shao cautions pursuit 
of UN observership should not be construed as the SCO seeking a 
global role. Rather, it would give the nascent organization more 
exposure to multilateral diplomacy, experience particularly 
useful to Central Asian diplomats, whose landlocked countries 
are "rather insular" in their global outlook. Pan, meanwhile, 
reports that SCO Secretary General Bolat Nurgaliev may give a 
short speech at the upcoming UN General Assembly (UNGA). It is 
unlikely he will mention Georgia, but will probably discuss 
Afghanistan and resource management issues. 
 
---------------------- 
ENERGY CARTEL PROPOSAL 
---------------------- 
 
¶12. (C) According to Pan, Russia continues to seek to establish 
a price-making entity within the SCO that would set member and 
non-member state prices for natural gas and oil, a move that Pan 
claims is at least backed by Uzbekistan. Shao, however, doubts 
the proposal can come to fruition in the short term, if at all. 
Central Asian states are generally reluctant to treat energy 
resources as a diplomatic weapon, as Russia does, observes Shao, 
while the volatility of energy markets counsels against such a 
move. According to Pan, the cartel proposal was not raised at 
this year's summit but is sure to surface again, perhaps at a 
future SCO Prime Ministers' meeting. 
 
-------------------------- 
POTENTIAL U.S. COOPERATION 
-------------------------- 
 
¶13. (C) Shao argues that China would welcome the opportunity to 
work with the United States in the region, and that Afghanistan 
offers the best way forward. U.S. efforts to counter the drug 
trade and build infrastructure dovetail with Beijing's and the 
SCO's desire to do the same. Pan, on the other hand, continues 
to advocate a Track Two approach for potential U.S. engagement 
with the region. Shen believes the summit's results certainly 
show that the SCO is not intended to act as a counterweight to 
NATO. The SCO, Shen asserts, "only makes enemies of non-state 
entities," that is, the SCO aims to take on those transnational 
problems, such as terrorism and drug smuggling, that member 
states face. 
CAMP