FORECAST
The Shanghai Cooperation Organization (SCO) has always had an enigmatic air to it. One second it is a soapbox masquerading as a regional bloc, and the next a fast-approaching Asian NATO. Thanks to Vladimir Putin’s comments at last week’s Beijing summit, Asian OPEC can now be added to the list.
While it is true that a fundamental goal of the SCO has been to keep American influence out of Central Asia, it is highly doubtful that the bloc will ever come to challenge NATO on military terms. Even if American hegemonic decline were to usher in a more competitive international environment, ingrained distrust between China and Russia precludes the establishment of a military bloc.
With comprehensive military cooperation off the table and internal separatist movements successfully rebranded as ‘terrorist groups’, the SCO is suffering from a crisis of direction. The threats of color revolution and humanitarian intervention that the organization was founded on averting now seem like distant possibilities. Efforts to expand the group’s membership, most notably with Iran, have met with little success due to internal and external factors. In particular: Iran’s international pariah status and the SCO’s lack of vision beyond its’ original goals.
Given the slow slide into irrelevance that an aimless SCO now faces, it follows that the economic track would be best suited to inject a new impetus into the organization. No one is more pleased by this than Vladimir Putin, who used last week’s summit to suggest that the SCO establish an energy forum, a seemingly insignificant comment that, when taken with Russian overtures to use local currencies in bilateral trade with China, may eventually be looked back on as one of the first steps in de-linking oil from the U.S. dollar.
Technological advancements in the natural gas industry have made it possible to escape the geographic confines of gas pipelines and ship worldwide in the form of Liquefied Natural Gas (LNG). Now that LNG can be shipped like oil, officials in the Kremlin are focusing their attention on how Russia can leverage its massive natural gas reserves to achieve the same kind of global price control that OPEC currently enjoys.
Putin’s SCO energy forum could be a manifestation of Russian designs on controlling global natural gas markets. The SCO boasts the world’s first and second largest proven natural gas reserves in Russia and Iran. If Iran was granted full membership, the SCO would suddenly preside over the reserves required to become a pseudo Asian OPEC in the natural gas trade.
It is also possible that Russia is just hedging its bets by pursuing an SCO energy forum.The Gas Exporting Countries Forum (GECF), an organization that includes the world’s 3rd biggest reserves in Qatar, is also well-placed to adopt the mantle of a natural gas OPEC. While the GECF’s membership and pool of reserves are larger, the SCO is still a tempting platform due to the lack of American influence and large Russian clout.
Of all the BRIC countries, the Sino-Russian connection within the SCO is the closest link because it’s based on a fundamental economic reality: Russia has what China needs. While the SCO’s not-so-subtle anti-American leanings will continue to sow speculation about an Asian NATO, it’s far more likely that the SCO will continue to stress economic and energy cooperation as a means to shore up the bloc’s relevance moving forward. If there is to be any SCO scandal in the near future, it is most likely going to be some form of deal to use local currencies for oil trade within the bloc.
SUMMARY OF EVENTS: October 12 – 19, 2009
WORLD
The dollar’s position as the world’s leading reserve currency faces increased pressure as the financial crisis allows emerging economies greater influence on the world stage, analysts said Monday.
NORTH AMERICA
Canada
Canadian cash has paid for Afghan schools, police and even for insurgent fighters to turn in their weapons, but never has a Canadian dollar been offered to pacify the Taliban, a Canadian Expeditionary Forces Command spokesperson said Friday.
United States
An e-mail message buried by the Bush administration because of its conclusions on global warming surfaced Tuesday, nearly two years after it was first sent to the White House and never opened.
The Pentagon said a Washington Post story claiming it is making an “unannounced” deployment of 13,000 additional troops to Afghanistan is inaccurate.
The U.S. has denied that Washington’s giant aid package will impose certain ‘conditions’ on Pakistan, following charges that the lucrative bill violates the country’s sovereignty.
The Pentagon is reviewing the Bush administration’s doctrine of preemptive military strikes with an eye to modifying or possibly ending it.
President Barack Obama signed Thursday a massive aid package for Pakistan into law amid fears in Islamabad it might impinge on the nuclear-armed country’s sovereignty.
The United States will deploy ground-to-air Patriot missiles in Poland in 2010 and is discussing its plans for a new anti-missile system with Warsaw, a U.S. defence official said Friday.
CENTRAL AMERICA & THE CARIBBEAN
Honduras
Honduras’ de facto leader Roberto Micheletti appeared to back away on Wednesday from a deal to end a political crisis sparked when the army ousted President Manuel Zelaya in a coup.
Talks to end a post-coup crisis in Honduras ground to a halt on Friday, as de facto leader Roberto Micheletti resisted international pressure to reinstate toppled President Manuel Zelaya.
WESTERN EUROPE
Britain
The British military’s chain of command has instructed the country’s top investigators not to examine hundreds of incidents involving Iraqi deaths and serious injury, a former British military police officer told the BBC Sunday.
Gordon Brown says the UK will send 500 more forces personnel to Afghanistan – but only if key conditions are met.
Sensitive U.S. intelligence on former Guantanamo Bay inmate Binyam Mohamed should be published, Britain’s High Court ruled on Friday in a move condemned by the British government but welcomed by anti-torture campaigners.
France
Ten French soldiers killed in Afghanistan failed to realise the risks in the area because Italian officials had secretly paid the Taliban to desist from violence, a British newspaper said Thursday.
Italy
A British newspaper report alleging 10 French soldiers died in Afghanistan because Italy failed to inform them of a Taliban payoff deal has been strongly denied by both Italy and France.
EASTERN EUROPE
Russia
Georgia is training and lending safe passage to Al-Qaeda agents planning terrorist acts in the Russian Caucasus, the head of Russia’s FSB secret service charged Tuesday.
The U.S. has failed to win Moscow’s support for fresh sanctions against Iran over its nuclear programme, with Russia’s foreign minister saying that further sanctions would be “counter-productive”.
Russia and China bolstered their close but increasingly imbalanced relationship on Tuesday when Russian Prime Minister Vladimir Putin ushered through a tentative gas supply agreement and deals worth $3.5 billion.
Russia is ready to consider using the Russian and Chinese national currencies instead of the dollar in bilateral oil and gas dealings, Prime Minister Vladimir Putin said on Wednesday.
Russian Prime Minister Vladimir Putin reiterated on Wednesday a proposal that Shanghai Cooperation Organization member states form an energy forum.
Russia is concerned by U.S. missile defense talks with countries outside NATO, Deputy Foreign Minister Sergei Ryabkov said on Thursday.
MIDDLE EAST
Israel and the Palestinians came under international pressure here Wednesday to comply with a UN report demanding “credible” domestic probes of war crimes allegedly committed during the Gaza conflict.
Iran
Iran’s state shipping company has dismissed as ‘sheer lies’ Britain’s accusations that the company’s vessels have transported goods related to Iran’s nuclear program.
Israel
Prime Minister Benjamin Netanyahu said on Monday that Israel would not allow its citizens to be tried for alleged war crimes over the Gaza war and that adopting a damning UN report on the offensive endangered the stalled peace process.
Jordan
Jordan has threatened to expel Israel’s ambassador over the regime’s aggression in the Al-Aqsa mosque compound in the occupied East Jerusalem Al-Quds.
EAST ASIA
China
A court in China’s far western Xinjiang region sentenced six men to death Monday over riots between Muslim Uighurs and members of the Han Chinese majority that killed nearly 200 people in July.
A Chinese court has sentenced a further six people to death over ethnic unrest in the far-western region of Xinjiang in July, state-run media reported Thursday.
North Korea
North Korea test-fired short-range missiles on Monday, South Korean media reported, sparking consternation just as the reclusive state had been signaling to the outside world it might return to nuclear talks.
SOUTH ASIA
Afghanistan
Afghanistan’s election watchdog changed its fraud-tallying rules for the second time in less than a week on Monday, switching back to a formula that lowers the chance of overturning President Hamid Karzai’s first-round win.
Pakistan’s intelligence agency is directing Taliban attacks on Western targets in Afghanistan, Davood Moradian, a senior British government official has claimed.
An investigation of allegedly fraudulent ballots in Afghanistan’s troubled election has reduced President Hamid Karzai’s portion of the vote to about 47 percent, an outcome that will trigger a runoff between him and his closest competitor, according to officials familiar with results.
Pakistan
A suicide bomber killed 41 people in an attack on a Pakistani military convoy passing through a market on Monday as the Taliban claimed responsibility for a weekend raid on the army’s headquarters.
Pakistani officials have warned that ethnic Punjabi groups teamed up with Taliban fighters to carry out a recent attack on a military headquarters in Rawalpindi.
Pakistani aircraft bombed Taliban fighters in their South Waziristan bastion on Wednesday as more soldiers and tanks moved in for an expected offensive against the militant hub.
Teams of gunmen launched coordinated attacks on three law enforcement facilities in Pakistan’s second-largest city of Lahore, and car bombs exploded in two cities near the Afghan border Thursday, killing 39 people in an escalating wave of anti-government violence.
Pakistani warplanes and artillery pounded a Taliban stronghold Friday, as a suicide bomber killed 12 people in the city of Peshawar in the latest in a bloody wave of militant attacks.
AFRICA
Guinea
The streets remained empty across Guinea on Tuesday, the second day of a general strike called to protest against a violent army crackdown last month in which at least 150 people were killed.
Guinea faced intense pressure Wednesday over a massacre at an opposition rally, with an international court announcing a probe of the killings that an EU official called a crime against humanity.
Nigeria
Nigeria’s main militant group ended its three-month old ceasefire on Friday and threatened to resume attacks against Africa’s biggest oil and gas industry.
Zimbabwe
Zimbabwe’s Prime Minister Morgan Tsvangirai said Friday his MDC party has “disengaged” from the unity government over the treatment of his senior aide.
OCEANA
Australia
Five Muslim men were Friday found guilty of plotting a jihadist attack using guns and explosives to protest Australia’s involvement in the wars in Afghanistan and Iraq.
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