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Monday, 1 September 2025

Tanjin SCO summit: more geoeconomics on the way

As expected the Tianjin Summit of Shanghai Cooperation Organization (SCO) concluded on 1 September 2025 adopted a cautious declaration of its intent and expected progress. My take is that SCO is slowly transforming into a geoeconomics gathering.

Originally “The Shanghai Five” was formed in 1996 with five countries namely China, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan. It was renamed as Shanghai Cooperation Organization (SCO) in 2001 after adding Uzbekistan into its fold. In June 2017, SCO expanded to include India and Pakistan. Iran joined in July 2023, so did Belarus in July 2024.

Besides, the main members the SCO has observer States for nations such as Afghanistan & Mongolia, and Dialogue Partners including Azerbaijan, Armenia, Cambodia, Nepal, Turkey and Sri Lanka. The latest summit saw many non-SCO members attending chiefly amongst them were Indonesia, Malaysia and Vietnam.

Here is my critique:

1. Though SCO members accounts for nominal GDP around 23% and PPP approximately 36% of the world's total, the figure is lopsided as the three giants China, India and Russia (RIC) gobble almost 80% of GDP.

2. SCO’s share of global GDP has doubled, reaching 30%. Even though intra-regional trade has shown significant growth, amounting to over $650 billion in 2024 it almost reflects the giant share relating to RIC.

3. The member countries of the Shanghai Cooperation Organization have decided to create the SCO Development Bank. I cannot understand why you need another development bank while BRICS Development Bank is still in its formative days.

4. Although the SCO countries expressed their readiness to support the international community's efforts to ensure peace and development in Afghanistan, a mechanism for that was neither contemplated nor disclosed.

5. Interestingly Kazakh President Kassym Tokayev broke the ice with his suggestion for the creation of a Shanghai Cooperation Organization (SCO) Water Research Centre in Kazakhstan. He was a pathfinder because he wanted specific goals in geoeconomics to be outlined.

6. Presumably SCO has the Eurasian Mind-set with more attention paid to Asia -Europe land link rather than Asia-Europe co-operation in trade & development.

7. Notable absentee is Bangladesh. While far away Sri Lanka is included as Dialogue partner Bangladesh was given a step motherly treatment, perhaps due to the tension prevailing between India & Pakistan.

One good thing happening is the recognition that SCO cannot remain solely as geostrategy & geopolitics organization anymore. Geoeconomics drive the growth potential of Asia-Europe. True contiguous land mass is an eligibility to be counted as full member of SCO. Undoubtedly, Bangladesh deserves her place in SCO as full member.

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist

Thursday, 28 August 2025

Indian dilemma affects her geoeconomics

Of late, India found herself on the horns of dilemma. Go with geopolitics or resort to geoeconomics. Put it in other way continue to pally with USA or seek a new beginning with arch rival China. Whatever is the outcome, geoeconomics has become a crucial arbiter.

The Indian experiment continues to foster in two minds. The elites throw the weight around the west, America leading the pack. That demands tying up with the rules based international order (RBIO) as a nuptial thread. But her umbilical connection was, is and continues to be on the side of socialism, non-alignment and Russo-friendliness. Most of her population supports the latter. In the contest between elites and masses, unfortunately the former are winning hands down.

Foreign policy, if it is to be a barometer, shows India aligning more with the western interests rather than with the global south. In fact like Janus India exhibits two faces, one looking at America led west and the other staring down at BRICS, SCO and other paraphernalia. Perhaps the time tested relationship with Russia is sometimes compromised as India plans to hike up her bilateral trade with America to the tune of US$ 500 Billion by 2030.

What fixes India to the western side is that she generates huge remittance income from abroad. In fact India is the largest recipient of remittance income, globally. An estimated US$ 135.5 billion fills her coffer this year alone. Remittance being about 15% of her national income, it is not a toy to play with. A crucial geoeconomics fact was hidden in this figures. Surprisingly, America is the primary source of avowed remittance, pushing Gulf to the second place.

Trump knows the maths. If he bans outgoing remittance to India from USA, that is match over for India. He can also persuade Gulf countries to hire more Pakistani and Bangladeshi labour. In any case, this is trending as Gulf is hesitant to renew existing labour contracts from India and might also dissuade new ones being negotiated.

Oligarchs and elites know their game. India cannot continue to buy Russian oil deep discounted and re-sell refined petroleum at windfall prices. Trump continues to torment India stating umpteenth number of times that he, who got the ceasefire between India and Pakistan. Another arrow in his arsenal is the number of planes India lost in the recent skirmish with Pakistan. He recently blurted out saying India lost seven jets to the chagrin of Indian establishment.

All these years India played on the side of geopolitics. Run with the hare and hunt with the hounds. Now her position is highly compromised. Trump made an astute move putting India on notice that if she continues buying Russian oil, she is in for trouble. On 27 August 2025, a 50% flat rate tariff is imposed on goods exported to America by India.

Now the contest begins whether geopolitics or geoeconomics is the saviour for India. My guess is as good as yours.

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist

Wednesday, 27 August 2025

Bury Geopolitics, bang on Geoeconomics

Gone are the days when America sneezes the globe catches the cold. Then it was America a lone star in any conceivable activity of post-war re-development. All three hats fit America’s head: geopolitics, geostrategy and geoeconomics. Time up to choose geoeconomics over the other two.

Geopolitics is hinged upon the power play in terms of politics, diplomacy, persuasion and also the aspect of command & control. United Nations being formed, Bretton wood sisters being organized, the globe looked at the American led group to be the saviour of world.  Cold war apart most if not all countries had vast population eulogizing American as Samaritan.

The predication came with the collapse of the bipolar world where earlier USA & Soviet Union had an unwritten law of keeping the distance and more than that keeping away from pressing the nuclear button. Throwing caution to win Gorbachev trusted Reagan and dismantled his massive Soviet State that consisted nations stretching from Eastern Indian Ocean to Western Atlantic. As Reagan exited presidency, America started to toy with the idea of unipolar world where the coteries of west European nations banded together in the NATO alliance beginning to set the “rules based international order” (RBIO) where American set the rules and the rest of the world had to follow suit.

Geopolitics is the key concept that drove western nations to be manacled under a single capitalistic system. Trade is the flow, Dollar is the conduit, and the system would not tolerate any disobedience. Then came the bolt from the blue. China begin to rise. USA ignored Napoleonic dictum. “There lies a sleeping giant. Let him sleep! For when he wakes, he will shake the world". On the contrary America befriended China using Ping-Pong diplomacy tactfully arranged by Pakistan.

Investments poured in from America to China. In fact an entire production system dismantled and shipped to Beijing gave China new found identity as an industrialized nation. Progress in the beginning was slow as it picked up it was soaring the heights of Himalaya. Richard Nixon who met Mao in February 1972, laid the foundation of Chinese revival. Soon the dragon filled the vacancy of veto carrying status in the UN Security Council vacated by Taiwan.

After a half century later in 2022 China is a peer competitor to USA. Not only that she is indeed, a near competitor to America led west in other geo areas: geostrategy, geotechnolgy and now in geoeconomics.

It is time for the American led west to bring some sense of balance into their foreign policy. Geopolitics must be given a fitting burial. The new challenge is not in politics or geo strategy but in geo technology and overarching geoeconomics. Bang on geoeconomics if you wants to survive America!

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist