Eurasian Integration Yearbook 2012

2011: Data and Reviewsthe SCO was suspended in late 2009, when Russia stated that countries placedunder UN sanctions on security grounds could not be admitted to the SCO.Meanwhile, Moscow welcomes India’s declared intention of joining the SCO,since the latter can act as a counterweight to the influence of Beijing. However,because of the serious competition between India and China – the two majorpowers of Eurasia – this step is quite difficult to realise. The summit showed thatAfghanistan appears to be another preoccupation of those wishing to furtherSCO expansion. As the US withdrawal from Afghanistan becomes inevitable,and Hamid Karzai’s administration is actively taking over control, the SCO isobliged to take into consideration the future of the Afghan state.Kazakh President Nursultan Nazarbayev put forward a number of initiativesduring the anniversary summit of the SCO in Astana, including a proposal toestablish a common energy space in SCO member states.The delegates also returned to the question of establishing an SCO SpecialAccount, the resources of which could be used for the technical and economicevaluation of large-scale projects. The SCO Special Account should become a“liquidity cushion” for projects that have great integration potential. However,creating such a fund is part of a broader plan to establish a joint fund to financeprojects within the SCO, and its authorised body. So far the SCO member stateshave failed to reach consensus on the structure of this body. Beijing insists oncreating a separate structure, while Moscow has suggested it should be basedon the Eurasian Development Bank, the majority of which is owned by Russiaand Kazakhstan.China has taken the lead in granting loans to SCO member states. ChinesePresident Hu Jintao reminded the summit that in 2009 China pledged to provide$10 billion in concessional loans to SCO member states. However, the countryhas significantly exceeded its obligations. Kazakhstan has received $15 billionin credits from China in the last two years. At the peak of the economic crisis,Russian companies Rosneft and Transneft borrowed $25 billion from ChinaDevelopment Bank.Russia does not view these developments as a threat to Russian interests inCentral Asia, claiming rather that China’s greater flexibility in the SCO andproposed financial instruments merit comprehension and support.Trade and InvestmentsRussian enterprises move to KazakhstanApril 4, 2011www.sco.org, Kommersant, Kursiv.kzBoris Titov, head of the Business Russia organisation, claims productioncosts in Russia are too high, especially in industries bearing the cost of250 EDB Eurasian Integration Yearbook 2012