The main interest to SCO has come as a by-product of Transatlantic nervousness over Iran nuclear program. As I said in my earlier diaries and posts Washington and EU capitals since new year have been feeling uneasy over multiple factors and Iran in particular. Weak economy, record oil prices, fears of dollar collapse forced Washington to engage Iranians in fashion similar to Bill Clinton's North Korean deal in the mid 1990s. To surprise of Western mediamen and policymakers they found Iran at the door of "OPEC with nukes" - SCO which can give ayatollas invincible security umbrella.

To be fair it is not the first time Iranians are trying to get security of such sort. I can recall visit of Mr Khatami to Russia in the beginning of Putin's presidency when the latter denounced Gore-Chernomyrdin deal (by it Russians agreed to halt their military cooperation with Iran, Americans in return pressed IMF and Paris, London clubs of creditors to restructure giant Russian debts inherited from erstwhile Soviet Union). Mr Khatami had pressed for comprehensive mutual defence treaty, but at the last moment Russians merely agreed "not to provide assistance to possible aggressor". This clause undermined the treaty however it was useful for renewing military cooperation.

So how close are Iranians to be admitted to SCO fold?
I don't know answer to this question though many experts believe "not close".

What SCO means for the world, for Americans and for Europeans?

SCO as you probably know was founded five years ago as border delimitation organization - Soviet Union and China had turbulent relations. Of course military cooperation was brought first under attention, military exercises were held in Kazakhstan and China, this fall they will be conducted in Russia. Military cooperation is understandable for defence is area where participating states exercise more control than in business. However priorities are changing -  business forum will be held in Shanghai on par with political discussions. Mr Putin wrote todayin newspapers about economic dimension of SCO. Nationalist bourgeoisies of SCO countries seem to be in need of framework to protect their pet projects against external influences. Another dimension is cultural contacts where Beijing should try its best to dispel fears of massive Chinese immigration and insist on maintaining visa-free agreements.

So we can say SCO is beginning to unfold in many directions, and EU was particular inspiration for SCO. Cosmopolitan philosophers of XVIII century like Russeau and Bentam dreamt about federation of states with All European parliament and international court for resolving conflicts. European continent now is less vulnerable to ravaging wars than it was before creation of EU. Yes, differences between European states do exist but nobody seem imagine military solutions of existing tensions. Without EU nationalist conflicts would still burn like in Balkans. From such angle creation of SCO is positive development on Asian continent with old rivalries and mistrusts. SCO should focus on EU model with common legislation, possibly common parliament and stronger executive office. Here I can see area of cooperation between SCO and EU.

When Westerners try to compare SCO with NATO or EU they forget fundamental differences between them. NATO is not pure European structure, it hangs on American nuclear guarantees. SCO members do not depend on external power. That's why EU future is in clouds for its members do not want to pay more for European security. Only in case of common and viable defence EU would have separate voice not to be easily discarded especially if Americans have sinister agenda of their own.

Another difference is much bigger to speak about in this diary. EU and NATO declare they have common values of liberalism and democracy. SCO from their point of view is a club of dictatorships lacking cohesion of values. Of course that is exaggeration. Western societies from many angles are not free, liberal or democratic. When my relations moved to Canada they found numerous rules, laws, prohibitions in place where one feels like in Orwellian society. You can add to this list whatever you think existing - spying on population including its purchasing, entertaining, political, sexual habits, repressions or silencing critics by corrupting them (giving dissidents some carrots), mass media brain washing and so on.
Overall Western civilization seems to me effective industrial society with protective smokescreens of democracy and liberalism conviniently used for exerting economical and political pressure on other countries. It's yet to be seen how the West will handle moral crises and sustain economic growth with increasingly assertive surroundings.

On opposite side SCO really lacks cohesive values which it can put on as a curtain. Current situation with social lifts and (re)distribution of wealth in SCO countries has much to be desired. These countries have different agendas and challenges. However, few things are common - wariness of American intentions in region, fear of Islamic fundamentalism, concern of massive Afghanistan drug trade, pervasive corruption (less in Russia and China, almost institutionalized in Central Asian princely states) and dynamic economies in transit from bureaucratic to capitalist form. For the best ideology is actions not words there are still chances SCO countries may improve their records and standings in the world through mutual cooperation and development.

What about European and American policies towards SCO? They have much in common though the latter is more articulated.

Senior fellow at conservative Heritage Foundation Mr Peter Brookes argues:

This is romantic point of view. I share more balanced analysis of Martha Brill Olcott. Her speech is vast enough to give extensive quotation here, I would urge interested to study her work attentively.
As I said earlier US do not promote democracy anywhere, they just use it as a smokescreen for their sinister designs. Mr Brookes measures is actually the same Washington was trying to pursue in Central Asia for long. Divide and rule. However without positive incentives Central Asian khanats will not go this way. Kazakhstan is noticeable exception because Russian state and Transneft were using hard tactics in negotiations with them. These problems are being solved as 2 spring meetings between Mr Putin and Mr Nazarbayev showed and what is most important Russians found no objections to Chinese great plans in Kazakhstan. I would not exaggerate Western influence in Kazakhstan, it simply needed Western investments for oil and gas industries in 1990s. Recently Russian and Chinese companies successfully started competition for Kazakh energy.

American liberals such as Leon Aaron and others keep mum on SCO simply because Bush administration current problems with Russia and China were layed during Clinton presidency. More pragmatic point of view was expressed by Brookes fellow from Heritage Ariel Cohen who deserved to be the epitome of "cleverest jew" in Bush's court (no offence meant, it's just idiom from history):

I would support the last proposal from Cohen right after "heartily welcome of President Nazarbayev and sending invitations to other leaders as Rahmonov and Bakiyev". This in line with suggestions of Martha Brill Olcott to support all Central Asian countries, give students grants, support civil societies etc. However given disastrous state of American finances all that is mere wish-thinking. And by the way Americans so often in history hit by their stick (withdrawing assistance and aid) that it is no stick anymore, just damaged reputation. Central Asians at last tell Americans: show us money! No money, no deal.  
Returning to Cohen's suggestions it's noticeable that persuasion of Russia seems to him difficult therefore he included only short passage about fear of nuclear armed islamic Iran. This is more like confession that Washington lost all leverages over Russian foreign policy and given its tactical support for Chechen separatists (through NGO's) presumed Iran threats at Russia's underbelly can hardly impress Kremlin. About work with China Mr Cohen is more detailed - America has to break Moscow Beijing axis at any costs. However he does not say, understandably, about the main reason of high oil prices - instability in Middle East, i.e. American military adventurism. I think to some degree Chinese would be susceptible to American arguments. Before completion of construction of trans-Eurasian gas and oil pipelines (at least few more years) China is vulnerable to American pressure for the US fleets control transportation routes from Middle East. It's remain to be seen how Chinese would count their reputation in Moscow because once lost trust is difficult to regain.

And small note on position of India in SCO. Usually Indians are busy with their domestic problems and Pakistan. On international arena they were more concerned with PR than real cooperation and Shanghai summit could be useful for boosting reputation inside country. However prime minister Mr Manmohan Singh decided to send oil minister Murli Deora who was just chided by super prime minister Ms Sonia Gandhi for petrol price hike. Mr Deora is a protegee of Mumbai big business and have small political clout in Delhi. Why Mr Singh did not send his actual deputy and rival Mr Pranab Mukerjee (defense minister) is understandable however these squabbles shall lead to diplomatic setback for India in Asia.