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The Promise of Central Asia

Kalman MizseiKalman Mizsei is the Assistant Administrator and Regional Director for Europe and the Commonwealth of Independent States at the United Nations Development Programme. Johannes F Linn is Executive Director of The Wolfensohn Initiative at the Brookings Institution in Washington DC.

By Kalman Mizsei and Johannes F Linn

Central Asia is frequently in the news these days – and most of the news seems to be bad. The casual reader, viewer, and listener has become acquainted with a region of landlocked and poor countries – Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan – that share a legacy of isolation, squandered natural resources, environmental degradation, and Soviet-era political systems.

And yet, it is also a region with a distant history of great economic and cultural achievement in the Silk Road era, and that recently has emerged as a focus of renewed global competition reminiscent of the Cold War. Can Central Asia regain a key role at the center of the huge Eurasian landmass, surrounded by some of the world’s most dynamic economies – China, Russia, and India?

While there is a laudable international effort to help Africa grow out of heavy donor dependency in the next decade, the equally momentous economic-development and human-security challenges facing Central Asia is generally not fully understood. History and geography – measured by distance from the closest seaports – have isolated these countries physically, economically, and socially, and have exacerbated the difficulties of their transitions to market economies. The result is that development and governance indicators in Central Asia are on par with those in many sub-Saharan African countries.

The Central Asian Human Development Report, recently launched by the United Nations Development Program, argues that the countries of Central Asia have a great opportunity to capitalize on their location at the center of a dynamic continent, their abundant natural resources, and their still-strong potential to forge a prosperous, stable, and cohesive region. This will require them to open up to the rest of the world, cooperate with each other and their neighbors, and radically reform their antiquated political systems.

Regional cooperation should include areas ranging from trade, transport, and transit, to water and energy, as well as efforts to control of drug trafficking. The Report estimates that by doing so, and by improving their investment climates and governance, Central Asian countries can double their incomes over ten years, modernize their economies, connect with the rest of the world, and improve the lives of their citizens dramatically.

Currently, the region suffers from tremendous transport and transit constraints. Trade times and costs are unnaturally high due to unintegrated and lengthy border procedures, high tariff rates, corruption, and underinvestment in transport infrastructure. These costs could be halved by better customs, border and transit management, improved transport corridors and more competitive transport services. By joining the World Trade Organization, improving their investment climates, and stopping interference with shuttle traders – mostly poor women trying to make a living – governments would give the region’s businesses and farmers access to markets and attract much-needed new investment.

Central Asia is blessed with an abundance of energy and water resources, even though much is wasted by inefficient use and poor maintenance of infrastructure. An estimated $1.7 billion of agricultural production is lost annually due to poor water management. The region is poised to become one of the main suppliers of oil and gas for world energy markets, and its big rivers, if properly managed, have the capacity to provide enough water both for irrigation and for electricity exports to China, India, and Russia. But cooperation is needed both within the region and with key neighbors in order to realize effective regional water and energy management.

The region is also at risk from the effects of drug trafficking. While illicit drugs are moved through all Central Asian countries, Tajikistan bears the brunt of the scourge due to its location at the northern border of Afghanistan. Up to 100 tons of heroin are estimated to pass through Tajikistan each year, which is equivalent to the estimated annual North American and West European demand. Unless Central Asian countries and their neighbors cooperate in controlling drug production, use, and trafficking, this source of major health risks, corruption, and crime will not be eradicated.

The good news today is that most of the Central Asian countries, their neighbors and the international community have recognized the importance of cooperation, openness, and integration. Kazakhstan, Kyrgyzstan, and Tajikistan are actively opening up and working together on many fronts. Unfortunately, not all are equally interested in open borders and close cooperation: Turkmenistan stands aside and Uzbekistan’s borders remain substantially closed.

Cooperation clearly is not only for the region’s governments; businesses, traders, and civil society must be involved as well. Yet it will be up to the leadership in the region to overcome obstacles to openness and co-operation. Market-oriented reforms and good governance are preconditions for effective cross-border ties. The international community, which has a shared interest in a prosperous, stable, and cohesive Central Asia, can and should play a supporting role in these efforts.

Copyright: Project Syndicate, 2005.
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Also about Central Asian States

Also about Central Asian States. Hope it's the one I think it is.

Link for the Central Asian Human Development Report,

Here is the link for the Central Asian Human Development Report.

Johannes F. Linn, the report's main author, points out that regional cooperation is essential, but must go hand-in-hand with domestic reform.

A few years ago Linn wrote that the relatively new countries of Central Asia were hit by a triple-transition over the past dozen or so years: (1) the adjustment to the economic shock of the break-up of the former Soviet Union, (2) the transition from state planning to market-driven economies, and (3) an ongoing political transition.

The degree to which the break-up of the SU hit the Central Asian republics was in Linn's view generally underestimated in the West. It hit these countries hard. 

Aside from the loss of subsidies for budgets, enterprises and households (both direct and indirect, paid through transfers for pensions and other social payments, as well as through favourable prices on transport and energy), trade was interrupted with new borders, increased transportation costs, illegal check points (highway robbery of a kind), and the collapse of traditional markets, especially in Russia. This seriously hurt industrial and agricultural production in Central Asia by disrupting access to inputs and markets.

Linn, when World Bank Vice President, Europe and Central Asia Region, told a Central Asia Donors' Consultation Meeting in Germany in 2002 that as a result of these disruptions, the Central Asian republics sustained huge economic losses, resulting in economic declines by 20-60% of their GDPs in 1995/96 relative to the levels in GDP in 1990, losses that far exceed those experienced during the Great Depression of the 1930s.

In November the Central Asia-Caucasus Institute issued a report titled Kyrgyzstan: The Path Forwar Forward (.pdf) with a section on the "pathologies" in the development of Kyrgyz society:

It seems that at least in contemporary history, never before have the pathologies of Kyrgyz society been as distinct as they have become in recent years. It is hard to determine with confidence, however, whether these is simply a “birth defect” of a new political system, similar to other post-Soviet states.  

The listed pathologies of contemporary Kyrgyz society make for interesting reading. They are (primarily amongst others):

  • Citizens’ suspicion toward one another and toward the Government;
  • Society’s disillusionment with bureaucracy;
  • Bureaucracy’s disillusionment with itself;
  • Abstract ideas – but no concrete priorities – for democratic development; and,
  • Lawlessness in a legal vacuum.

According to the report, the roots of suspicion and mistrust are closely linked with tribalism, which in Kyrgyzstan is infused with suspicion.

Disillusionment with bureaucracy is rooted in the virtual absence of a
professional, able, open and accountable system of civil service.

Whilst, the pathologies of corruption, lawlessness, and the intangibility of the concepts of democratic development have common roots: feeble state institutions and the devaluation of social moral foundations.

Oil pipelines

From China lays down gauntlet in energy war:

Simply put, the United States stands to lose major leverage over the entire strategic Eurasian region with the latest developments. The Kazakh developments also have more than a little to do with the fact that the Washington war drums are beating loudly against Iran.

Nice maps, too.

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