The Shanghai Cooperation Organization (SCO), a Eurasian intergovernmental alliance comprising 10 diverse member states and 24 years of existence, has entered into a new era defined not only by its traditional focus on security and diplomacy but increasingly by its potential to shape the digital futures of its ten member states.
The digital economy has become a key pillar in global growth strategies, and for the SCO, the imperative is clear: regional digital integration can no longer be an afterthought.
As we navigate an era marked by technological disruption, data-driven governance, and AI-powered productivity, the SCO’s capacity to harness the digital economy could determine its role in the global economic order.
Comprising China, Russia, India, Pakistan, Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan, Iran, and Belarus (the newest full member in 2024), the SCO covers nearly half of the world’s population and about 20% of global GDP. Yet, its digital cohesion remains uneven.
A closer look reveals both vast potential and pressing challenges—and therein lies the opportunity for cooperation and convergence.
The Big Three: China, Russia, and India Leading the Charge
China stands at the forefront of the SCO’s digital economy. In 2024, China’s digital economy surpassed ¥50 trillion (approx. $6.9 trillion), accounting for over 40% of its GDP.
As the world’s leading digital infrastructure exporter, China’s Digital Silk Road—under the Belt and Road Initiative (BRI)—is laying fiber optic cables, 5G infrastructure, and AI development frameworks across Central Asia and beyond.
Huawei, Alibaba Cloud, and China Mobile are central players in exporting technology and training to SCO countries.
Russia, while battling economic sanctions, continues to be a technological heavyweight. Its digital economy reached $150 billion in 2024, with particular strengths in cybersecurity, AI, and software development.
The country’s pivot toward digital sovereignty—through platforms like RuStore and indigenous cloud systems—is shaping the SCO’s discourse on cyber resilience. Russia’s state-led initiatives in digital ruble integration and its AI partnership with Central Asian states make it an essential player in regional tech policy.
India, the world’s digital powerhouse, contributes its own vibrant model. Through the Digital India initiative, the country has built the world’s largest biometric ID system (Aadhaar), expanded rural connectivity, and fostered a thriving fintech ecosystem.
Its digital economy is projected to hit $1 trillion by 2026, powered by over 880 million internet users and a booming startup ecosystem, now the third globally in tech unicorns.
Yet, the digital ambitions of these giants risk leaving others behind if cooperation is not institutionalized. Here lies the real challenge for the SCO: narrowing the digital divide within.
Central Asia: Emerging Hubs, Lingering Gaps
The Central Asian Republics—Kazakhstan, Uzbekistan, Kyrgyzstan, and Tajikistan—represent the SCO’s digital frontier. In Kazakhstan, digital transformation is already bearing fruit. Its Digital Kazakhstan program has lifted internet penetration to 88%, and the country’s IT exports exceeded $400 million in 2024. The Astana Hub is now recognized as a regional startup incubator, attracting both Chinese and Russian capital.
Uzbekistan has invested in e-government, fintech, and education platforms. With 82% internet penetration and a digital economy valued at $1.4 billion, the country is prioritising partnerships with Chinese firms like Huawei for telecom and cloud expansion. The challenge, however, remains inadequate connectivity in rural areas and skills gaps in emerging sectors.
Kyrgyzstan and Tajikistan are also working to catch up with the digital pace with everyone else. Despite Kyrgyzstan’s modest ICT service exports, which totalled only $32 million in 2024, initiatives like Taza Koom (Clean Society) are beginning to modernise governance and digital services. Tajikistan, with under 50% internet coverage, has made strides with Chinese infrastructure but needs urgent investment in digital education and basic connectivity.
As per the latest study published in AlterEconomics (2024), the Theil Index shows significant inequality in ICT service exports across SCO states, measuring at 0.77, indicating deep digital economic divergence.
New Members: Iran and Belarus
Iran’s digital economy is growing steadily despite global sanctions. With an estimated digital market of $30 billion, Iran has strong capacities in cybersecurity, fintech, and e-commerce, supported by a domestic talent pool and regulatory autonomy. Collaboration with Russia and China has helped Tehran navigate technology restrictions through regional alternatives.
Belarus, now a full SCO member since 2024, brings in valuable experience as a former Eastern European tech hub. Its Hi-Tech Park in Minsk continues to attract outsourcing contracts and AI development projects. However, political instability and Western sanctions have slowed foreign investment.
Pakistan: The Sleeping Digital Giant?
Pakistan’s digital economy is still nascent, valued at approximately $4 billion in 2025, accounting for just 0.6% of its GDP. Yet its potential remains immense.
With over 125 million mobile broadband subscribers, a growing fintech ecosystem, and emerging talent in software development and AI, the foundation is present. However, the trade imbalance with SCO countries has widened, rising from $8.3 billion to $11.7 billion in 2024, largely due to increased imports from China and Russia.
Pakistan’s exports to SCO states stood at only $3 billion, against a potential of $15 billion.
Trade with Central Asia remains minimal at $325 million, though it recorded a trade surplus of $243 million in 2024. Investment from China through CPEC ($70.3 billion) and from Russia in energy infrastructure (nearly $16.5 billion committed) reflects increasing regional stakes. But unless Pakistan integrates digital infrastructure with trade logistics, its economic gains will remain constrained.
The Special Investment Facilitation Council (SIFC) and Pakistan’s recent digital taxation reforms are steps in the right direction. However, much more is required—especially free trade agreements, tariff reductions with China and Russia, and secure digital corridors through Afghanistan and CARs.
Shared Challenges: Infrastructure, Cybersecurity, and Integration
The cybersecurity landscape across SCO states is another shared concern. A 2024 report by Kaspersky Lab revealed a 30 percent rise in cyberattacks across the Eurasian region. SCO’s Regional Anti-Terrorism Structure (RATS) has expanded its mandate to include cyber defense, but coordinated action remains nascent. China’s Great Firewall model and Russia’s cyber resilience programs offer frameworks, yet each country requires tailored solutions to local threats.
Financial integration remains weak. Informal payment systems like Hawala are still dominant in parts of Central and South Asia, and digital payment interoperability is rare across borders. The SCO Interbank Consortium, in which HBL represents Pakistan, must be empowered to facilitate national currency settlements, cross-border digital finance, and SME credit access.
Disparities in digital capacities are measurable. A 2024 study using the Theil Index found significant inequality in ICT service exports across SCO countries, with a coefficient of 0.77, highlighting a high level of intra-regional digital divergence. Bridging this gap requires targeted investments in digital education, infrastructure, and regulatory harmonisation.
What Next? A Framework for Digital Unity
To unlock the SCO’s full digital potential, a coordinated and forward-looking strategy is essential. The establishment of a comprehensive SCO Digital Economy Strategy 2030 would provide a structured roadmap with clear targets for enhancing regional connectivity, advancing trade digitalisation, and building digital skills across member states.
Equally important is the creation of an SCO Digital Innovation Fund to support startup ecosystems, co-finance infrastructure projects, and promote research and development. Integrating major initiatives like the Belt and Road Initiative (BRI) and the China-Pakistan Economic Corridor (CPEC) into the SCO’s digital framework would be pivotal in connecting Pakistan with Central Asian Republics through fibre-optic networks and regional data centres.
Additionally, reviving the Afghanistan Contact Group beyond its traditional security focus could help secure emerging digital corridors and facilitate safer e-commerce routes across the region.
As the SCO embraces its digital future, cooperation—not competition—must be the guiding principle. Bridging the digital divide among member states is not just a developmental necessity but a strategic imperative. With political will, policy coordination, and investment in people and infrastructure, the SCO can transform itself from a security bloc into a digitally empowered community of shared prosperity.
Muhammad Asif Noor
*The writer is the Founder Friends of BRI Forum, Advisor to the Pakistan Research Center, Hebei Normal University.
