From Iran sanctions to a new development bank: What the Bishkek summit reveals about the SCO’s challenge to Western economic power
By Shahnoor Saqib I SCN NEWS
BISHKEK/KARACHI — The Shanghai Cooperation Organisation used its 2026 summit in Bishkek to deliver one of its clearest collective challenges yet to Western military and economic pressure, condemning strikes on Iran, opposing unilateral sanctions and backing Tehran's right to peaceful nuclear technology while simultaneously pushing deeper financial, energy and trade cooperation among a group representing more than 40% of humanity. Yet beneath the carefully negotiated declaration lies a more complicated reality: the SCO is becoming increasingly important as a platform for countries seeking alternatives to Western-dominated institutions, but its members remain divided enough that transforming political solidarity into a genuinely alternative economic and security architecture will be far harder.
The Bishkek Declaration, adopted Tuesday by leaders including China's Xi Jinping, Russia's Vladimir Putin, India's Narendra Modi, Pakistan's Shehbaz Sharif and Iran's Masoud Pezeshkian, condemned military strikes on Iranian territory that caused civilian casualties and economic damage. The declaration said the attacks violated international law and the United Nations Charter, expressed support for Iran's sovereignty and territorial integrity and called for the conflict to be resolved through political and diplomatic means. The SCO also expressed condolences over the death of Iranian Supreme Leader Ayatollah Ali Khamenei and those killed during the conflict.
That language matters because Iran entered the SCO as a full member only in 2023. Three years later, Tehran has managed to place its confrontation with Washington near the centre of the organisation's political agenda. The grouping also opposed what it called unilateral coercive measures inconsistent with international rules — language aimed broadly at sanctions imposed without United Nations authorization — while supporting members' right under the Nuclear Non-Proliferation Treaty to research, produce and use nuclear energy for peaceful purposes without discrimination. For Tehran, facing renewed American economic pressure after six months of war, that amounts to valuable diplomatic backing.
But diplomatic backing and economic protection are different things. U.S. Treasury Secretary Scott Bessent said Tuesday that Washington was likely to announce additional sanctions against banks dealing with Iran as part of an effort to intensify financial pressure on Tehran. That announcement came as Pezeshkian was sitting alongside the leaders of some of the world's largest economies in Bishkek, illustrating the fundamental test facing the SCO: whether a bloc capable of criticizing Western sanctions can develop financial mechanisms capable of reducing their practical impact.
The summit's answer was to push further toward economic infrastructure of its own. SCO leaders backed continued work on a long-discussed SCO development bank, while Putin argued that such a lender should operate with maximum independence from financial systems controlled by states that use economic tools for political leverage. Members also committed themselves to implementing the SCO Economic Development Strategy through 2030, expanding financial cooperation and strengthening energy ties. The objective is increasingly clear: trade among Eurasian states should become less vulnerable to sanctions, dollar-based financial restrictions and disruptions to Western-controlled payment channels.
That ambition should not, however, be confused with the existence of a unified anti-Western alliance. The SCO officially maintains that it is a non-bloc organisation, and its ten members have sharply different strategic interests. China and Russia want greater insulation from U.S. economic power; Iran urgently needs alternatives to sanctions; India maintains deep strategic and commercial relationships with the United States and Europe; Pakistan balances relations with China, Gulf partners and Washington; and the Central Asian states generally seek multiple economic partners rather than exclusive alignment with either side. Even the Iran crisis illustrates those differences: Modi used his meeting with Pezeshkian to stress freedom of navigation and commerce through the Strait of Hormuz while calling for dialogue and protection of civilian shipping.
That diversity is simultaneously the SCO's weakness and its significance. Unlike NATO, it does not impose collective defence obligations. Unlike the European Union, it does not possess a common market, currency or supranational government. But its membership brings together China, India, Russia, Pakistan and Iran, alongside the major Central Asian states and Belarus. The organisation traces its origins to the Shanghai Five established in 1996 and became the SCO in 2001. Today its members account for roughly 43% of the world's population and around 23% of global economic output, giving even carefully worded consensus positions considerable geopolitical weight.
Bishkek also produced institutional changes that could matter beyond the immediate Iran confrontation. The leaders approved 28 documents, including amendments to the SCO Charter and measures involving regional security, counter-narcotics cooperation and institutional links with other international organisations. The organisation also continued discussions on investment funds, transport connectivity, energy corridors and mechanisms for financing major regional projects. These initiatives receive less attention than summit declarations on wars and sanctions, but they are potentially more important to the SCO's long-term influence: alternative institutions become consequential only when countries actually use them to finance projects and conduct trade.
For Pakistan, Bishkek carries an additional significance. Kyrgyzstan formally handed the 2026–27 SCO chairmanship to Pakistan, and Prime Minister Shehbaz Sharif set the theme as “Turning Vision into Action: Connectivity, Innovation and Shared Prosperity.” Lahore was also designated the SCO Tourism and Cultural Capital for 2026–27. Islamabad therefore inherits leadership of the organisation precisely as it tries to move from broad political declarations toward practical questions involving connectivity, investment and alternative financial cooperation.
That creates both an opportunity and a diplomatic challenge. Pakistan sits geographically between China, Central Asia, Iran and the Arabian Sea, giving it potential relevance to the transport and energy corridors the SCO wants to expand. At the same time, Islamabad maintains important economic and security relationships with the United States and Gulf states and therefore has little incentive to turn its SCO presidency into an explicitly anti-Western project. Its more useful role may be translating geopolitical rhetoric into cross-border infrastructure, trade facilitation and investment mechanisms that remain open enough to accommodate members with different foreign-policy alignments.
The Iran crisis is consequently an important test of what the SCO is becoming. Bishkek demonstrated that Tehran can obtain political solidarity from governments representing a vast portion of Eurasia. Russia promised to maintain economic ties with Iran despite the military and political environment, while Pezeshkian described Tehran's relationship with Moscow as strategic and thanked Putin for Russia's support during the conflict and sanctions. But Iran's continuing economic difficulties also demonstrate that membership in a large geopolitical grouping does not automatically neutralize American financial power.
The deeper story from Bishkek is therefore not that the SCO has replaced the Western-led international system. It plainly has not. The more consequential development is that some of the world's largest non-Western powers are increasingly building institutions intended to give themselves the option of operating with less dependence on that system. Whether the proposed development bank, expanded energy cooperation and regional connectivity mechanisms eventually acquire enough scale to make that possible will determine whether Bishkek is remembered mainly for another declaration — or as another step toward a more fragmented global economic order.