Over the last few years, the Shanghai Cooperation Organization (SCO) has emerged as a matter of Global concern, depicting the shifting of the world order from the West to the rest (Asia). In the early phase, SCO was considered to be a security bloc, but now it has transformed its image from a security bloc to a powerful economic platform, which is expected to change the dynamics of Eurasia. Amid increasing challenges to Western-centric institutions, the Shanghai Cooperation Organization (SCO) is positioned to influence the development of a multipolar economic system. The SCO comprises member states such as China, India, Russia, Pakistan, Iran, and several Central Asian countries. Collectively, these economies account for approximately 25% of global gross domestic product (GDP) in nominal terms and over 32% by purchasing power parity. The region encompasses more than 40% of the global population, which provides substantial internal demand potential.
Trade among SCO member states has grown consistently over the past two decades. In 2001, their combined share of global trade was approximately 5.4%, increasing to about 17.5% by 2020. Intra-SCO trade expanded from 667 billion US dollars in 2001 to over 6 trillion US dollars in 2020. Between 2019 and 2023, trade turnover among SCO nations increased from 336 billion to approximately 490 billion US dollars. In 2024, China, a primary economic driver within the SCO, reported trade with other member states totaling 512.4 billion US dollars, representing a 2.7% year-on-year increase. These data indicate increasing economic interdependence and a significant shift toward regional economic integration. Economic growth in the region is primarily supported by investments in cross-border infrastructure and enhanced connectivity. Initiatives such as the China-Central Asia-West Asia Economic Corridor and the China-Kyrgyzstan-Uzbekistan Railway have reduced trade costs and promoted stronger regional linkages. The development of major energy infrastructure, including pipelines connecting Russia with Central and East Asia, has improved supply reliability and facilitated the integration of energy markets. Combined with digital connectivity projects, these measures are establishing the foundation for a more integrated Eurasian economic sphere.
This is not the end, but currency and financial collaboration is the 2nd face of the SCO strategy, where members are promoted to settle their trade through local currencies to reduce their dependency on either the U.S. dollar or the Euro. Like Russia, over 41% of Russian exports within the SCO-aligned trade are settled through the Ruble. Moreover, member nations are planning to launch a joint settlement mechanism, a cross-border payment network, and regional development banks. These would finance intra-bloc investment and trade, developing financial autonomy and resilience against Western sanctions. The SCO does not reject multilateralism, but strongly recommends that all trade under the WTO follow strong rules and regulations based on equity. The Joint Statement of SCO 2025 reflects this belief. It emphasizes principles of nondiscrimination, MFN treatment, and open supply chains. This showcases SCO’s effort to reform the global trade architecture and ensure benefits to member countries. Collective resource endowment is also an edge for SCO. As member nations hold a large portion of the world’s oil, gas, coal, farms, and many scarce resources, they have a strong control on the supply of these resources to entire world so, they are capable of playing a centric role in the upcoming energy requirements necessary for the future industry diversification and have the capacity to influence future rising global demand.
Although the path is complicated because the economic credentials of SCO members are very diverse, ranging from manufacturing powers like China and India to resource-rich Iran and Kazakhstan, synchronizing the economic strength of each nation to attain collective power is difficult. The absence of vibrant deep capital markets, currency fluctuation, and low convertibility are the main hurdles to challenge the dependence of member nations on Western financial systems. But despite all challenges, the SCO trajectory indicates a power shift where the World is witnessing the birth of a new regionally anchored multipolar network after countries are struggling to break the barriers of a system dominated by the West. In this whole scenario, SCO is acting as a driver and symbol of hope to change, where member countries are attempting to write the next chapter of global economic governance.
If greater integration, financial innovation, and institutional coordination are underpinned and the trend persists, then there is no doubt that SCO has the potential to change the complete dynamics of the global economic game. The shift from West to rest purely depends on the domestic cohesion of SCO members, so SCO is still a complicated and risky experiment that dreams of a new and inclusive economic order for the 21st century.
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