A New Balance in Central Asia?

D

ay by day, international interest in the Turkic republics and Central Asia, in general, is growing. It seems that global interest in the region has increased, especially after the decisions taken by the Organization of Turkic States at its 9th Summit in Samarkand on November 11, 2022. One of the main reasons for this interest is undoubtedly the weakening of Russia’s influence in the region due to the war in Ukraine. Since the beginning of 2023, China, the European Union, Qatar, Saudi Arabia, Germany, the United States, and the United Kingdom have held important summits and bilateral meetings with the aim of developing solid cooperation with the Central Asian states in the future.

The population of the five Central Asian countries, namely Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan, is around 80 million. Their geographical area covers more than four million square kilometers and the sum of their cultivated land exceeds 28.5 million hectares. These countries are very rich in natural resources such as oil, gas, gold, and uranium, and investment rates in the landlocked Central Asian region are increasing every year. In 2022, Kazakhstan attracted the most foreign direct investment in Central Asia with $6.1 billion.

While Uzbekistan followed Kazakhstan with $2.53 billion, Turkmenistan attracted almost $1 billion, Kyrgyzstan almost $300 million, and Tajikistan around $170 million. As these are the official figures, the actual figures are much higher. According to data from Uzbekistan, after the reforms that began in 2017, foreign investment in the country has increased tenfold in the last six years. In January 2024, during his visit to China, the president of Tajikistan signed a $400 million investment agreement with the country. In addition, the volume of e-commerce in Central Asia, which is developing rapidly, is expected to exceed $66 billion by 2028.

In 2022, Turkey’s exports to Central Asian countries grew by around 30%, reaching approximately $12 billion. Turkey’s trade volume with Turkmenistan is increasing every year, with $4.7 billion exported to Kazakhstan, $3.3 billion to Uzbekistan, and $1.9 billion to Turkmenistan. In a few years, Turkey’s trade volume with Turkmenistan, which has reached $2.5 billion in 2023, is expected to exceed $5 billion, while in 2023, Turkey’s share of the construction sector in Turkmenistan will be $3.2 billion.

European organizations are planning to invest €1.5 billion in the region to develop the Trans-Caspian transport route (Central Corridor) to transport Kazakh oil to the West. The main purpose of this corridor is to reduce dependence on transit routes through Russia.

The Turkic republics are located at the center of the East-West trade routes, along the transit route, and the importance of this corridor is increasing every year. Factors contributing to this importance include international imports, the development of exports, the desire to reach markets in the region, the aim to transfer energy resources and precious metals safely and at low cost, the need to establish logistics bases for long-distance transfers, and the need to create alternative lines and routes in order to increase predictability. In this context, alternative railways and roads are constantly being built in the Central Asian region and work continues on the establishment of major logistics bases.

A new diplomatic format: “C5+”

On May 18-19, 2023, a summit of heads of state was held, known as the “C+C5” (China + Central Asia 5). At the invitation of Xi Jinping, the summit brought together Kassym-Jomart Tokayev, the president of Kazakhstan; Sadyr Zhaparov, the president of Kyrgyzstan; Shavkat Mirziyoyev, the president of Uzbekistan; Emomali Rahmon, the president of Tajikistan; and Serdar Berdimuhammedov, the president of Turkmenistan. This summit had a new format as it was the first China-Central Asia leaders’ summit to be held at the point where the Silk Road began after the collapse of the Soviet Union. It was commented that China wanted to take advantage of the historical conjuncture  as the summit was held at a time when Russia’s relations with Central Asia had stagnated due to the Russia-Ukraine war.

The programs and cooperation agreements signed at the summit drew attention to China’s determination  to develop more solid and predictable relations with Central Asia in the future. China’s exports to the Central Asian region will amount to $62.3 billion by 2023—overall, it should be noted, not a very large figure for the Chinese economy. Moreover, the Central Asian countries are of geostrategic importance to China, particularly in terms of trade routes from the region to the West, while China’s efforts to develop alternative routes for Central Asia continue. Uzbekistan received a $398.8 million loan from China in 2023. Most of these loans will be used for energy, transport, agriculture, and water management. China, in fact, is the main source of financing for Kazakhstan and other countries in the region.

European Union-Central Asian Heads of State Summit (EU+CA)

After China’s C+C5 format, meetings and visits have shown that there is great interest in the Central Asian countries. The President of the European Council Charles Michel visited Kyrgyzstan to host the 2^nd Summit of Central Asian Heads of State on June 2-3, 2023. The summit, which took place in the Kyrgyz city of Cholpon-Ata, was attended by President Sadyr Zhaparov of Kyrgyzstan, President Kassym-Jomart Tokayev of Kazakhstan, President Emomali Rahmon of Tajikistan, President Shavkat Mirziyoyev of Uzbekistan, Deputy Chairman of the Turkmenistan Council of Ministers Nurmuhammet Amannepesov, representing President Serdar Berdimuhamedov of Turkmenistan, and President of the European Council Charles Michel. Multilateral and mutually beneficial cooperation and the future of relations between the European Union and Central Asia were discussed in the context of international relations.

The summit also reaffirmed the determination to continue the high-level dialogue between Central Asia and the EU, and to develop the EU-Central and Eastern Asia (CEA) (EU+CA) partnership in accordance with the priority areas identified by the parties, with the aim of achieving common prosperity and security in Central Asia. The participants expressed their intention to adopt the EU-CA Cooperation Roadmap at the next ministerial meeting and underlined their commitment to making Afghanistan a secure, peaceful, stable, and prosperous country. The heads of state and government also instructed the foreign ministers and the EU High Representative Josep Borrell to formalize and advance the implementation of the joint roadmap to deepen relations between the European Union and Central Asia.

Intense interest in Central Asia has led Germany to pursue a more active policy in the region. German Chancellor Olaf Scholz invited the Central Asian leaders to his country and hosted a major summit on September 29, 2023. The visit was the first time the leaders of these five countries visited a European Union country together. Following the start of the Russia-Ukraine war, when oil supplies from Russia were cut off, Kazakhstan began supplying oil to the Schwedt refinery in Germany. At this point, Germany sees Kazakhstan as an alternative in energy supply and as a geography where investments can be made in the production of green hydrogen energy.

At the summit, Germany declared it would establish a Strategic Regional Partnership with the C5 countries in the fields of economy, energy, natural resources, climate, environment, and regional cooperation. In the short term, it is understood that Germany attaches great importance to strengthening energy security and creating alternative energy supply routes, especially with Kazakhstan, in order to prevent a possible energy crisis in the country. The statement made at the summit on continuing efforts to develop the EU “Global Gateway” project as an alternative to the “Belt and Road Initiative” also attracted attention.

Growing Arab interest in Central Asia (GCC+C5)

While countries such as Saudi Arabia, Qatar, and Lebanon have recently opened embassies and consulates in Central Asian countries, they have also begun to establish important trade links and invest in projects in the region.

Following the European Union-Central Asian Heads of State Summit, Sheikh Tamim bin Hamad Al Thani, president of Qatar, one of the most important states in the Arab world, made an important official visit to Uzbekistan, Kyrgyzstan, Tajikistan, and Kazakhstan on June 5-9, 2023. During these visits, agreements were signed between Qatar and the regional countries in the fields of energy, tourism, and education. Qatar’s intention to invest in the region’s subsurface and surface resources, as well as the common goals of exploiting the region’s resources by supporting key projects in the region, were clear from the meetings held during the visits.

The Summit of Heads of State and Government of the Gulf States and the Cooperation Council for Central Asia (GCC+C5), also under the leadership of Saudi Arabia, was held in Jeddah on July 18-19. This summit is seen as the beginning of a new phase of joint cooperation mechanisms between Central Asian and Gulf countries. The latter independently maintain trade relations with the former; the Gulf countries have serious mutual project-based trade relations with the region, especially Kazakhstan and Uzbekistan. The summit set the goal of creating a way and an opportunity for the countries of the region to mutually improve their cooperation in the economic and cultural fields.