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    Central Asia
     Apr 26, 2012


Nazarbayev's free-trade goal
offers Central Asia a future

By Roman Muzalevsky

Meeting with ambassadors on March 2, Kazakh President Nursultan Nazarbayev suggested that Central Asian states launch a common free trade zone, saying the region "enjoys a vast potential to be a global center". The initiative comes on the heels of an earlier proposed plan to create a Union of Central Asian States, which would evolve as a node of global energy security, uninterrupted trade flows and continental stability.

Some view the initiative as a way to help regional countries strengthen their sovereignty in the face of internal and external challenges and shape the region's future in concert. But thus far

 

such regional initiatives have been unsuccessful due to poor inter-state cooperation and frequent bickering.

Here, history seems to be repeating itself. When the Russian empire was advancing into the feudal khanates of Khiva, Bukhara and Kokand in the 19th century, its army faced no formidable opponent in the Central Asian lands. Frequent inter-khanate clashes, lack of regional vision, and industrial and technological backwardness had not only made life difficult for subjects of the khanates but had also helped carry the day for the would-be masters, first in the face of Tsarist Russia and later the Soviet Union.

About 150 years later, the newly independent states of Central Asia continue to fear not only the agendas of outside powers but also those of each other. The lack of political liberalization and economic modernization has meanwhile hindered their integration into the global economy. If and how the states should self-organize to deal with internal and external challenges is still a question mark.

But it should not be. The region's geography and history, geo-economic trends, challenges and future potential call for such integration naturally. The Central Asian states suffer from their landlocked status and lack of cross-regional infrastructure links. The lack of cooperation from within Central Asia and the region's relative isolation from without has impeded efforts of these landlocked countries to revive their historic roles of being Silk Road corridors at the time when rising China and India are rapidly reshaping the economic landscape of Eurasia.

Some form of integration would make it easier to cope with common challenges such as the effects of the global financial crisis, the planned withdrawal of the North Atlantic Treaty Organization from Afghanistan, extremism and terrorism, narco-trafficking, illegal migration, water and energy issues. It would also pave the way for development of the intra-regional security framework to tackle home-grown and imposed risks.

Such framework is in demand, as became evident in June 2010 when neither the Collective Security Treaty Organization (CSTO - comprising Russia, Belarus, Armenia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan) nor the Shanghai Cooperation Organization (SCO - including China, Russia, Kazakhstan, Tajikistan, Kyrgyzstan and Uzbekistan) responded adequately to the ethnic violence between the Uzbek and Kyrgyz in Osh, Kyrgyzstan.

As the two giants on Central Asia's borders, Russia and China lead the SCO, which is promoting economic, transportation and security initiatives. Russia, in turn, sets the agenda for the CSTO - a "half dead, half alive" organization whose members distrust each other and Russia's policies in particular.

Uzbekistan, for example, has long been wary of Russia's regional role, while Kyrgyzstan and Tajikistan have recently squabbled with Moscow over the unpaid compensation for Russia's military presence on their territories. But despite this mistrust, the regional authorities rely on the CSTO "alliance" to preserve their regimes and to prevent external aggression, especially as the United States plans to withdraw from Afghanistan by 2014.

There are, of course, hurdles on the way toward intra-regional security and economic integration. The Central Asian states have still not resolved long-standing water and energy problems, territorial claims and border delimitation issues. They display varying paces of economic and political development.

Kyrgyzstan and Kazakhstan, for instance, have achieved more progress in advancing political and economic modernization. Uzbekistan and Turkmenistan lag behind. Kazakhstan and Uzbekistan, the regions' largest economies with 2011 gross domestic product figures of US$216 billion and $94 billion respectively, not only demonstrate different paces and models of economic development but also engage in rivalry over primacy in the region.

All regional states are also in the process of consolidating their newly-gained sovereignty, displaying a strong sense of nationalism and resistance to integration initiatives, either intra- or extra-regional. Finally, there are already regional post-Soviet structures including Central Asian states, which are perceived as duplicates of any possible intra-regional integration initiatives.

Some include the Eurasian Economic Community (involving Russia, Belarus, Kazakhstan, Kyrgyzstan, and Tajikistan; Uzbekistan joined the body in 2006 but then suspended its work in 2008) and the Customs Union (comprising Russia, Belarus, and Kazakhstan; Kyrgyzstan is interested in membership), which serve as the platform for the proposed Eurasia Union initiative in Post-Soviet space.

But pressures toward intra-integration are there. In 2007, Kazakhstan proposed creating the Union of Central Asian States, signing an agreement with Kyrgyzstan to create an "International Supreme Council" and the Treaty of Eternal Friendship with Uzbekistan and Kyrgyzstan.

The treaty was supposed to serve as the foundation for the Union, which is allegedly modeled on the European Union to deal with border, trade, and security issues in the region with 55 million consumers. Nazarbayev thus explained the rational for the union: "In the region, we share economic interest, cultural heritage, language, religion, and environmental challenges, and face common external threats. The founding fathers of the European Union could only wish they had so much in common. We should direct our efforts towards closer economic integration, a common market and a single currency."

He concluded that "further regional integration will lead to stability, regional progress, and economic, military and political independence" and that this is the only way for the region "to earn respect in the world and "achieve security".

Why Kazakhstan proposed such an initiative and why Uzbekistan remains passive is understandable. Kazakhstan is the largest and most dynamic regional economy, with a persistent record of integration initiatives, positioning itself as the pivot country with a "multi-vector policy" and global vision for the region, of which it is increasingly an economic engine. Uzbekistan, on the other hand, has long pursued an isolationist course.

Turkmenistan's policy of neutrality raises further questions about success of regional integration initiatives. Perhaps, the proposed free trade zone and cross-regional infrastructure projects facilitating access to the Indian Ocean and new markets will lay the foundation for the envisioned union.

The scope and number of cross-regional infrastructure initiatives are growing. Some energy initiatives include the launched Turkmenistan-Uzbekistan-Kazakhstan-China gas pipeline extending across the region over 1,833 kilometers; the planned Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline; and the Central Asia-South Asia electricity scheme (CASA-1000) to bring electricity from Kyrgyzstan and Tajikistan to Pakistan and Afghanistan.

TAPI and CASA-1000 projects are estimated to cost $4 billion and $1 billion, respectively, and deliver up to 33 billion cubic meters (bcm) of gas and 1,000 megawatts of electricity annually.

Some transport initiatives, in turn, include the Kazakhstan-Turkmenistan-Iran-Persian Gulf and the Kyrgyzstan-Tajikistan-Afghanistan-Iran railway lines, as well as the Tajik-Pakistani agreement allowing Tajikistan to use the port at Gwadar and China's plans to consider building a railroad through Afghanistan to the Afghan-Tajik border.

The case of Tajikistan merits a close look because the alleged railway and economic blockades by Uzbekistan isolate Tajikistan from the northern routes, prompting Dushanbe to develop southern transport and energy corridors. As a downstream country, Uzbekistan is concerned that Tajikistan's upstream hydro-electric projects will damage the environment and Uzbek agriculture, which is heavily dependent on cotton cultivation. Tajikistan, in turn, says the projects are intended to address its energy deficit and reduce dependence on unreliable energy imports from Uzbekistan.

Uzbek President Islam Karimov has reportedly convened a Security Council meeting recently, for the first time since 2009, to discuss the state of Tajik-Uzbek ties. Resolving regional water and energy issues remains a key to unleashing the enormous potential of regional cooperation in trade, energy and transport.

If Central Asia states do not wish to fade into the annals of history, as did their predecessors in the 19th century, they should embark on genuine regional integration initiatives in the 21st to strengthen their statehood in the age of globalization and amid the rapidly changing landscape of Eurasia. A common free trade zone could well offer such a platform at a time when the Union of Central Asian States may seem like a premature venture to regional countries.

Roman Muzalevsky is an international affairs and security analyst. He can be reached at muzalevsky@hotmail.com.

(This article first appeared in Jamestown.org. Used with permission.)

(Copyright 2011 The Jamestown Foundation.)





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