Central Asia Has Key Growth Drivers And Potential For Tripling Regional Trade Volumes To US$15 billion

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Kazakhstan’s President has been talking up Central Asia trade at the Central Asian Heads of State Summit In Kyrgyzstan    

The current trade indicators between the Central Asian economies do not reflect the full potential, Kazakhstan’s President Kassym-Jomart Tokayev said during the 4th Consultative meeting of heads of Central Asian states currently being held in Kyrgyzstan. The event is attended by the leaders of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan.

Tokayev said that over the past five years, the trade turnover of Kazakhstan with other countries of Central Asia has grown by 42%, reaching US$6.3 billion, yet had the potential to nearly triple that to US$15 billion, given the huge reserves for increasing mutual trade.

“The threat of a global recession brings to the fore the issue of accelerated development of regional economic cooperation. With industrial and trade supply chains collapsing, the trend towards regionalization is becoming more and more visible everywhere. Against this background, the figures I have given for trade between our countries still do not reflect the full potential. Central Asian economic cooperation may very well become one of the key sources of growth for our national economies.” Tokayev said.

Reading into this, the current reshaping of the geopolitical arena involving Russia and the EU means that the Russian economic pivot to Asia and rise of China and India are being seen as advantageous for Central Asia. All the Central Asian economies have experienced rising multilateral trade volumes this year, due in part to rebounding internal demand after Covid, an increase in Chinese demand, and an increase in Russian demand as the country looks east after the EU severed trade ties.

However, the region has experienced some difficulties in border demarcation and security issues, with riots in both Kazakhstan and Uzbekistan this year, along with minor border skirmishes.

Tokayev addressed this, referring to Kazakhstan’s experience in border delimitation, proposing the creation of an expert’s platform for developing mutually acceptable approaches to the border issue. Experienced lawyers, cartographers, border guards and other specialists should be involved in this work, while coordination could be managed by the Central Asian Council of Foreign Ministers, he suggested.

Tokayev stated that “Today, the most important mission of Central Asia, in my opinion, is to build bridges between the competing poles of global politics and economics. Sooner or later the period of geopolitical confrontation will end, but the bridges built will remain. They will become an invaluable legacy for future generations of the Central Asian.”

That in part is a reference to the Belt and Road Initiative amongst other schemes, which is seeing huge development projects coming to fruition, including the China-Kyrgyzstan-Uzbekistan railway and improved Central Asian connectivity through the INSTC to Asia and Europe.  

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Chris Devonshire-Ellis is the Chairman of Dezan Shira & Associates. The firm assists British and Foreign Investment into Asia and has 28 offices throughout China, India, the ASEAN nations and Russia. For strategic and business intelligence concerning China’s Belt & Road Initiative please email silkroad@dezshira.com or visit us at www.dezshira.com