Unity path: SCO wants to deepen economic cooperation

The economic aspect of the Shanghai Cooperation Organization (SCO) should take a central place in its activities, President of Belarus Alexander Lukashenko has said. To achieve this goal, in his opinion, it is necessary to develop effective mechanisms for settlements between the participating countries in their national currencies. Izvestia investigated how ready the organization is for deeper economic integration and what is needed to deepen cooperation.

Cooperation formats

Last year, the volume of trade between Russia and the SCO countries increased by 7.5% compared to 2023, again updating the historical maximum, Nikita Kondratiev, director of the Department of Multilateral Economic Cooperation and Special Projects at the Ministry of Economy, told Izvestia. Thus, the volume of Russian exports increased by 10%, imports by 4.2%.

— Trade in services is also showing positive dynamics: in 2024, Russian exports increased by 7.8% year-on-year. All this confirms that our countries have taken the right course. And how exactly it is necessary to diversify trade and investment, develop cooperation in finance, logistics and innovation, the SCO ministers of Economy will discuss on September 6 in Vladivostok," he said.

The key areas remain the development of the North—South transport corridors, TRACECA, the Northern Sea Route, the digitalization of trade and the creation of cross-border business platforms, senior researcher Olga Ponomareva, IMEiF VAVT, told Izvestia. The priority is the formation of sustainable supply chains in food and energy. The experience of the EAEU — settlements in national currencies, single window systems, and support for cooperation — shows that such tools can accelerate the transformation of the SCO into one of the main centers of economic integration in Eurasia.

The Shanghai Cooperation Organization (SCO), founded on June 15, 2001 on the basis of the Shanghai Five, has significant potential for deepening economic integration, Peter Shcherbachenko, associate professor at the Financial University under the Government of the Russian Federation, told Izvestia. About 3.5 billion people live on the territory of the SCO, which creates a huge market for trade and investment.

— In 2019, the SCO countries adopted a program of multilateral trade and economic cooperation until 2035, focusing on increasing the share of mutual trade in national currencies. In 2024, the ruble accounted for 41.3% of export payments," he recalled. — The total GDP of the SCO countries in 2023 amounted to about $24.5 trillion, which is a quarter of the global economy. After Belarus joined, the purchasing power parity (PPP) GDP increased from 32.4% to 32.6%. Russia's trade turnover with the SCO countries reached a record of $406 billion in 2024, and mutual investments and infrastructure projects are growing.

In his opinion, the Shanghai Cooperation Organization is an important platform for multilateral negotiations that helps countries coordinate their approaches to key global issues. In his opinion, this structure is becoming an alternative to the usual Western institutions, providing participants with the opportunity to work out joint solutions and strengthen mutual cooperation.

- 2025 has been declared the Year of Sustainable Development for the SCO countries. The cooperation model will integrate environmental, economic, and social sustainability with the SCO's traditional priorities, such as security and trade and economic cooperation. The main areas of further cooperation include the development of cybersecurity, cross—border payments, as well as the creation of conditions for mutual investments and joint infrastructure projects in the field of logistics, energy and renewable energy sources (RES)," said Petr Shcherbachenko.

According to analysts, the recent actions of US President Donald Trump towards India have led to the country being under pressure and facing the need to make decisions that would make it difficult for it to be neutral in international economic and political differences, Alexander Firanchuk, a leading researcher at the IPEI Presidential Academy, said in an interview with Izvestia.

— Delhi made a choice in favor of Moscow and maintaining access to Russian oil, which caused confusion in the United States. This step politically distances India from Washington and at the same time strengthens its interaction with both Moscow and Beijing. For Delhi, there is pragmatism in this: Russian oil supplies (about $60 billion in 2024), especially with some discount, are comparable in economic importance to access to the American market (India's exports to the United States in 2024 amounted to $87 billion). In addition, the increase in duties from 25% to 50% has a less noticeable effect. In general, Trump's policy opens up opportunities for India's further rapprochement with Russia and China," he said.

Development vectors

Today, the SCO members have different levels of economic development and different economic structures, said the head of the Popular Front. Analytics" by Olga Pozdnyakova. This complicates the integration process to some extent, but it does not stop it. Due to this, the process becomes more multi-layered and with mandatory consideration of the characteristics of all participants. The creation of effective mechanisms for settlements in national currencies can increase the financial stability of the participating countries.

— However, development and integration also require improvement of the logistics infrastructure, alignment of development and implementation of digital tools. Joint investment projects, especially in the fields of energy, logistics and high technologies, can become a catalyst for economic integration. There is a way ahead to reduce trade barriers, harmonize customs procedures, synchronize the regulatory framework and develop joint financial institutions, as well as measures to support trade and investment," she said.

The Shanghai Cooperation Organization has significant potential for deepening economic cooperation between the participating countries, which is due to a number of factors, Ivan Abramov, First Deputy Chairman of the Federation Council Committee on Economic Policy, told Izvestia. First of all, the organization unites the world's largest energy producers and consumers, such as Russia, China, and India. This creates conditions for the development of effective and mutually beneficial models of energy cooperation. These countries, having similar interests in the field of energy, can actively develop projects in the field of extraction, processing and transportation of hydrocarbons, as well as participate in the implementation of "green" technologies.

— In addition, the growing interest in the SCO from other countries and regions, including Central Asia, the Middle East and Africa, indicates that the organization has significant potential to expand and deepen its economic cooperation. This opens up additional opportunities for new trade agreements, investments and joint economic projects," the politician noted.

According to the senator, the SCO has already formed a fairly solid foundation for trade and economic exchange between its members. Free trade agreements that create conditions for the removal of trade barriers help expand the sales market for the products of the member States and accelerate the process of mutual investments. The development of transport infrastructure also plays a key role, allowing for more efficient delivery of goods between countries. This contributes to the deepening of cooperation in various sectors of the economy.

In addition, the SCO is actively working to strengthen financial cooperation, Ivan Abramov emphasized. The organization's member countries are striving to create mechanisms for mutual settlements in national currencies, which will help reduce dependence on Western financial systems and strengthen financial independence. It also opens up new opportunities for joint projects, such as the creation of joint banks and other financial institutions, which will ensure the stability and development of the economy within the organization.