How would Pan-Central Asian ideas forge regional integration? Setting new trends in trade

On 14-15 September, Tajikistan hosted the fifth consultative summit of Central Asian leaders. The leaders of the five countries (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan) have held high-level meetings with Russia, China, Türkiye, Azerbaijan, India, the Gulf states, and the European Union (EU) to set new bilateral and multilateral cooperation formats, particularly after Russia invades Ukraine.

The waning influence of Russia prompted the regional states to promote regional interconnectivity, diversify export markets, and promote trade with non-regional states, including Azerbaijan, Iran, and Türkiye.

The ideas came thick and fast at the latest semi-formal get-together of Central Asian leaders. In his speech at the summit on September 14, Kazakhstan's President Kassym-Jomart Tokayev focused on promoting more trade. The agenda of the meeting included a wide range of issues related to regional cooperation, including trade, investment, energy, transportation, security, and culture.

The heads of state also discussed current regional and international issues of mutual interest. In recent years, the region has made concerted efforts to assert its own claims and voices independent of external influence. This drive has gained significant momentum since Shavkat Mirziyoyev assumed power in 2016 following the death of his predecessor, Islam Karimov, who had favoured a more isolationist stance.

According to the estimates, intraregional trade grew by an impressive 80% to $10.6 billion in the past five years. Notably, data from the Bureau of National Statistics indicates that in the first six months of 2023 alone, Kazakhstan’s trade with other Central Asian states amounted to $3.7 billion. In 2022, that figure was $8 billion—25% higher than in 2021.

Considering the intensively rising numbers, President Tokayev seems keen to set a favourable precedent for regional trade and economic partnership to build a new Central Asia Gateway, such as the recently created online one-stop platform for entrepreneurs seeking guidance on the bureaucratic complications entailed in importing and exporting goods in the region.

In addition to the economy, a few more critical topics were included in the meeting agenda: deteriorating environmental issues, a new roadmap for social development, and healthcare problems. Of all issues, the environmental issue is becoming more ambivalent because of shrinking water resources in the landlocked Central Asian region. Also, the rapid melting of glaciers, escalating natural disasters, floods, droughts, and landslides pose grave threats.

The critical scale of the problem suggests that Central Asia's water and environmental challenges will intensify in the near future. The demand for water resources in certain parts of Central Asia is projected to triple by 2040, potentially causing economic damage equivalent to 11% of the gross regional product.

The recent summit in Dushanbe provided yet another platform to explore the possibilities of economic diversification. In this spite, Turkmenistan President Serdar Berdymukhamedov’s attendance at the summit came as a surprise. With its direct access to the Caspian Sea, Ashgabat has the potential to launch a Central Asian transport and logistics platform, the main objective of which could be to create transportation hubs in the region, form transit corridors and increase the efficiency of existing ones.

Another bonus of the summit was the participation of Azerbaijani leader Ilham Aliyev. In the last few years, Baku put a lot of effort into establishing a dynamic partnership with the Central Asian region, linking it with the Caspian basin and Türkiye.

Azerbaijan’s deep energy partnership with Türkiye and the Western countries granted it sustainable access to the European market. Therefore, a deeper engagement with Azerbaijan looks attractive for the landlocked regional states. The priority for Central Asian states is to reduce trade tariffs and additional costs, as all good transfers need to cross multiple tariff hurdles, piling on costs at every stage.

The summit in Dushanbe raises optimism regarding regional integration and partnership amid geopolitical uncertainty and security gaps. Indeed, Central Asian integration is progressing towards formalising regional cooperation mechanisms. This includes initiating industrial cooperation processes and establishing transport and logistics corridors to elevate economic collaboration among Central Asian countries.

The Central Asian region needs a new geopolitical axis and pragmatic partnership format to decrease dependence on one market, namely Russia and China. Therefore, the regional states' frequent formal and informal meetings would set a good precedent amid the changing balance of power in the region.