At SCO, Dar calls for promoting use of national currencies to help offset global economic shocks

AI Summary

At a Shanghai Cooperation Organisation meeting in Dushanbe, Pakistan’s Ishaq Dar urged member states to expand settlements in national currencies and establish regional development and investment funds. He said these measures could cushion financial shocks and called for greater investment in energy and transport, while criticising sanctions and protectionist policies.

Deputy Prime Minister and Foreign Minister Ishaq Dar on Tuesday encouraged members of the Shanghai Cooperation Organisation (SCO) to use national currencies for “mutual settlement” and establish other financial mechanisms to “offset international financial shocks”. He made the remarks while addressing the SCO Council of Heads of Government (CHG) meeting in Tajikistan’s capital Dushanbe, where he arrived a day earlier. The SCO comprises 10 member states, namely Pakistan, China, India, Iran, Russia, Kyrgyzstan, Belarus, Kazakhstan, Tajikistan and Uzbekistan. The two observer states are Afghanistan and Mongolia. The CHG is the SCO’s second-highest decision-making body and provides guidance on economic, financial, trade, connectivity and socio-economic cooperation, as well as the organisation’s budgetary matters. Addressing the SCO meeting, Dar highlighted the “need to accelerate efforts to promote the use of national currencies for mutual settlement”, as well as to establish the SCO Development Bank, SCO Development Fund and SCO Investment Fund. “Such tools are measures which will advance development initiatives and help the SCO region to offset international financial shocks,” the former finance minister noted. Dar reiterated his call to accelerate local currency settlements in a later address to an expanded-format session of the meeting. Two members of the SCO, Russia and Iran, face Western sanctions restricting their access to international markets and stifling their economic growth. In the joint communiqué for the Pakistan-chaired 2024 CHG meeting, SCO member states had reaffirmed the need for consistent implementation of a roadmap on gradual increase in the share of national currencies in mutual settlements. It underlined the need to protect and promote the World Trade Organisation’s multilateral trade system for inclusive global growth and reduce reliance on the American currency for international trade transactions. At that summit, PM Shehbaz Sharif had noted “growing consensus among the member states on the use of mutual currencies for settlements” and said such a transition would “shield us from global financial disruptions”. Speaking in Dushanbe, Dar highlighted that the China-Pakistan Economic Corridor (CPEC) offered “every SCO partner a compelling opportunity to participate in and accelerate our shared journey towards comprehensive economic integration”. “For our region to achieve seamless economic integration, targeted investment in core sectors, most notably in energy and transport, is vital,” he stressed. The foreign minister criticised “protectionist policies and unilateral coercive measures”, saying they contradicted the principles of international law, “suppress economic growth, block technological progress and increase inequality”. “Therefore, reform of the global financial architecture and trade regimes is essential for achieving equitable global development,” the deputy PM declared. He said Pakistan strongly advocated for “expanding investments into high-potential industries, including agriculture, mining and minerals, and information technology, to build a resilient and interconnected economic future”. He expressed Pakistan’s “belief that artificial intelligence, digital transformation, innovation, energy cooperation and international information security should become important pillars of future cooperation within the SCO”. Dar then recalled the priority areas identified by PM Shehbaz for the SCO Council of Heads of State (CHS) summit that Islamabad is set to host in 2027. These comprised peace, security and mutual trust; regional connectivity and trade; innovation, AI and digital transformation; climate resilience and sustainable energy; and people-to-people exchanges. He emphasised that strategic investment in transport and energy infrastructure was not merely beneficial but “absolutely imperative for true regional economic integration”. At the outset of his speech, Dar extended his appreciation to the Tajik government and people for their “very warm and generous hospitality”. “For the past 25 years, the SCO has remained anchored in the Shanghai spirit of mutual trust and respect for diversity and expanded its mandate to encompass trade, infrastructure, culture and innovation,” he noted. Dar went on to state that Pakistan’s journey within the SCO highlighted its commitment to the Shanghai spirit, recalling that the country’s chairmanship of SCO’s Reg­ional Anti-Terrorist Structure (SCO-RATS) and the SCO Working Group on Poverty Alleviation. He said Pakistan intended to highlight the role of small and medium enterprises in reducing poverty. ‘Pakistan wants peaceful, regionally integrated Afghanistan’ During his speech at the CHG summit, DPM Dar also raised the issue of cross-border terrorism emanating from Afghanistan. Noting that sustainable economic development cannot be guaranteed without durable peace and security in th