SCO CHIEF DISCUSSES IRAN, MILITARY EXERCISES,

C O N F I D E N T I A L SECTION 01 OF 03 BEIJING 024302

SIPDIS

SIPDIS

STATE FOR SCA, EAP/CM AND INR
NSC FOR WILDER, TONG AND SHRIER

E.O. 12958: DECL: 12/04/2016
TAGS: PREL PTER ENRG ZK IR CH RS
SUBJECT: SCO CHIEF DISCUSSES IRAN, MILITARY EXERCISES,
ENERGY, AID, ASEAN AND COLOR REVOLUTIONS WITH AMBASSADOR

REF: A. BEIJING 23354

B. BEIJING 11758

Classified By: Ambassador Clark T. Randt, Jr. Reasons 1.4 (b/d).


1. (C) Summary: The Shanghai Cooperation Organization (SCO)
has "no current plans" for expansion or to allow observers,
including Iran, to become full members, SCO Secretary General
Zhang Deguang told the Ambassador December 4. Zhang denied
reports that the SCO and some non-SCO former Soviet republics
will join together for military exercises in Russia next
year. The United States does not want to see the SCO
interfere with Coalition efforts in Afghanistan and would be
concerned if the SCO sought to exclude the United States from
Central Asia, the Ambassador stressed. The SCO has no
anti-U.S. agenda, Zhang said. Some SCO members are seeking
greater coordination on energy and aid, but most projects
outside the transport sector exist in name only. The SCO
launched its first activity with ASEAN today in Jakarta in
advance of the upcoming ASEAN meetings in the Philippines.
The Ambassador corrected Zhang's misimpressions about
"American-sponsored color revolutions." Zhang said he would
encourage his successor, Kazakhstan's current Ambassador to
Japan Bolat Nurgaliyev, to continue frank discussions with
the Ambassador after Zhang steps down as SCO Secretary
General at year's end. End Summary.

No Immediate Plan To Expand and Include Iran
--------------


2. (C) The Ambassador asked Zhang about reports that the SCO
would invite Iran to become a full member in 2007 (ref A).
Zhang said the SCO has no current plan to absorb new members
or to allow current observer members Iran, India, Mongolia
and Pakistan to become full SCO members. Recalling the
Ambassador's strong warning that the SCO should not give Iran
a platform during the June SCO Summit in Shanghai (ref A),
Zhang said that he, along with Chinese and Russian diplomats,
had made sure Iran did not use its observer membership in the
SCO as a platform for anti-American statements or to defend
its nuclear program. Asked recently by reporters about the
SCO position on Iran's nuclear program, Zhang said he told
the press that the SCO has no involvement with the issue and
hopes that the nuclear problem can be resolved through
negotiations.


3. (C) Zhang said coordination among current members has to
be strengthened before the SCO will be in a position to
invite new members or observers. The SCO requires all
decisions to be made by consensus, which blocks swift action.
The SCO has just begun implementing a few projects in member
countries. Not only has it not begun any project in an
observer country, but Zhang lacks instructions to even
discuss specific projects in member states with observer
members. Word has gotten out that the SCO will not expand
quickly and is not accepting applications for new observer
members, he said.

Afghanistan Relationship Unchanged
--------------


4. (C) Zhang said he does not anticipate any change in the
SCO's special "contact group" relationship with Afghanistan.
Responding to the Ambassador's questions, Zhang said the SCO
agrees with continued United States' counterterrorism efforts
in Afghanistan and believes that helping Afghanistan
establish stability and develop economically will benefit all
parties in the region. SCO members have different views
about the Coalition military presence in Afghanistan, he
acknowledged. The Ambassador emphasized that any attempt to
push Coalition forces out of Afghanistan and Central Asia
would strengthen the view that the SCO is an anti-U.S.
organization.

Military Exercises
--------------


5. (C) Western scholars who suggest that the SCO is a
NATO-like military organization misunderstand the SCO's
focus, Zhang told the Ambassador. The SCO will continue to

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engage in combined counterterrorism exercises but has no
formal relationship with the Collective Treaty Security
Organization (CTSO),he said. Zhang said he had seen media
reports that the 2007 combined SCO military exercise in
Russia would involve the CTSO and its non-SCO members Belarus
or Armenia. But he denied that non-SCO members would
participate with the SCO in combined exercises and deflected
the Ambassador's questions about details of the SCO's
military exercises.

Energy: Russia's Views Differ From Other SCO Members
-------------- --------------


6. (C) The Ambassador asked whether Russia's proposal to form
an SCO energy club constituted a prelude to efforts to limit
the United States' participation in energy development in
Central Asia. The SCO has no interest in establishing an
exclusive sphere of interest that the United States or the
European Union cannot enter, Zhang said. Even those who
might want to minimize outside influence in Central Asia
canno do so, he said, pointing to the United States'
position as the largest investor in Kazakhstan's energy
sector. Zhang said he personally believes Central Asia
should be open to development by all, but recognizes that
Russian interests with respect to the SCO and specifically
energy are not necessarily the same as those of other SCO
members. During Soviet times, the USSR kept Central Asia
isolated and some in Russia today cannot adjust to a more
open Central Asia, he said, adding that this is his personal
opinion as a long-time observer of Russia.

Economic Aid Moving Slowly, Bilaterally
--------------


7. (C) The United States welcomes development aid to Central
Asia, the Ambassador said, but would be concerned if such aid
were given in an attempt to build a political relationship
that excludes the United States. Most economic aid remains
bilateral and the vast majority of SCO-backed economic
projects exist in name only, as no actual work has begun on
energy, pipeline or most other infrastructure projects, Zhang
said. Road work on a transport corridor has begun with
funding from an SCO-backed banking consortium. Transport
improvements are well-suited to multilateral support because
they require setting common standards in customs, border
defense and other fields. During the September SCO Leaders'
Meeting, members agreed to accelerate work on an Asian
Development Bank-funded project to build a transport corridor
from China's Pacific coast to Europe via Kazakhstan and
Turkey or via Russia.

ASEAN-SCO Academic Forum Opens In Jakarta
--------------


8. (C) In advance of upcoming ASEAN meetings in the
Philippines, the SCO and ASEAN opened an expert-level
academic forum December 4 in Jakarta to discuss how the two
regional organizations might better coordinate their
activities, Zhang said. The forum is the first activity
conducted under a Memorandum of Understanding signed between
the SCO and ASEAN. The SCO has no relationship with other
ASEAN-related organizations, including ASEAN-Plus-Three or
the East Asia Summit, he said.

Questions About American Policy, "Color Revolutions"
-------------- --------------


9. (C) Zhang asked several questions about American policy on
Central Asia and about "color revolutions." Many in Central
Asia and even in China adhered to the view that USG-backed
non-government organizations, including organized religious
groups, are intentionally fomenting color revolutions in
Central Asia, Zhang said. Based on his contact with American
officials and his review of the September Congressional
hearing at which SCA A/S Boucher testified, Zhang said he
personally believes the United States' view is more balanced,
including economic, security and democracy goals in Central
Asia. The Ambassador emphasized that the United States
supports democracy and stability in Central Asia. The USG
does not direct NGOs or religious groups.

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New Secretary General and Institutional Changes
-------------- --


10. (C) Kazakhstan's Ambassador to Japan Bolat Nurgaliyev
will succeed Zhang as SCO Secretary General effective January

1. The SCO succession sequence is China, Kazakhstan,
Kyrgyzstan, Russia, Tajikistan and Uzbekistan, which Zhang
said is alphabetical according to the Russian alphabet. Each
SCO Secretary General serves a three-year non-renewable term,
he said. A former Chinese Vice Foreign Minister, Zhang will
remain affiliated with China's MFA after he departs from the
SCO but will likely work on research projects. SCO
Secretariat staff will remain unchanged, he said, although

SIPDIS
the Secretariat has expanded to include five officials of
Deputy Secretary General rank. The Deputy Secretary Generals
will be responsible for, respectively, politics, economics
and culture, news and analysis, law and administration and
the Tashkent-based SCO Counterterrorism Center. Zhang noted
grumpily that, formerly, the Director of the SCO
Counterterrorism Center held the same rank as the Secretary
General. This anomaly had been cured, he assured the
Ambassador.


11. (C) Comment: Zhang requested the meeting to thank the
Ambassador for his past hospitality and frank exchanges,
especially at a lunch meeting just before the SCO's June
Summit at which Iran's participation was a significant
concern. Zhang spoke candidly about divergence of views
among SCO members, Iran and other topics in the initial part
of the meeting, which included only Chinese staff of the SCO.
He became noticeably more cautious in his comments when we
shifted into the lunch part of the meeting, which included
SCO staff members from Russia and Kyrgyzstan.


12. (SBU) This message was resent to add addressees omitted
from the original message Beijing 24273.


13. (U) Minimize considered.
Randt