Central Asia — encompassing the former Soviet republics of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan — was among the world’s most troubled regions in the years immediately following the breakup of the Soviet Union. To this day, these five resource-rich countries border some of the world’s tensest hot spots — Afghanistan, Iran and China’s Xinjiang Province — and are subject to intense competition among China, Russia, the EU and the US for influence. And yet, their futures appear brighter than ever.
In recent years, the five Central Asian countries have managed to rebuild their economies, stabilize their politics and deepen their engagement with the rest of the world. They comprise the fastest-growing sub-region in Eurasia — a title that the World Bank expects them to retain this year to next year, even as their average growth slows to 4.7 percent from an estimated 5.5 percent last year.
One reason for this positive outlook is demographic. Between 2004 and last year, as Central Asian countries quadrupled their total combined GDP, their collective population increased by nearly 40 percent. With about half of its 83 million people under the age of 30, the region is set to enjoy powerful growth tailwinds in the years ahead.
Central Asia is also rich in natural resources — including oil, gas, gold, lithium, lead, nickel and rare earths (such as neodymium, cerium and lanthanum) — many of which are integral to the green transition. Just this year, Kazakhstan discovered the world’s third-largest store of rare-earth deposits — about 20 million metric tonnes. At a time when many countries view stockpiling such minerals as essential to their national security, these endowments give Central Asia considerable leverage and help explain growing interest in its political leadership and governance.
Of course, as history clearly shows, natural resources alone do not guarantee economic growth and development, let alone political stability. On the contrary, economies that rely too heavily on natural resources are said to be susceptible to the “resource curse.” To achieve the objectives of development and stability, Central Asian countries have embraced a “three arrow” governance framework, comprising institutional reforms, strategic “multi-alignment” and regional integration.
The first arrow reflects the region’s shift toward more technocratic leadership. Uzbek President Shavkat Mirziyoyev — whose predecessor, Islam Karimov, ruled the country from 1991 until his death in 2016 — rose to power on pledges to expedite the privatization of ossified state-owned enterprises, reform the judiciary and empower civil society. Mirziyoyev has since made considerable progress on all three fronts. In addition, he has taken steps to introduce direct elections of governors and mayors, rather than appointing them.
Kazakh President Kassym-Jomart Tokayev, a veteran diplomat and technocrat, in 2019 succeeded Nursultan Nazarbayev, who ruled the country for nearly three decades. While Tokayev wisely shows respect for Nazarbayev, who remains a towering figure in the country’s history and politics, he has done much to transform Nazarbayev’s sclerotic system. This has included writing off bad loans held by one-sixth of Kazakhs — a bold resolution to a problem that had repeatedly forced the government to bail out banks over the previous decade — and sharply increasing infrastructure and education spending.
Beyond senior leadership, a new class of technocrats and experts from the public sector, businesses and non-governmental organizations has gained influence in Central Asia. In Kazakhstan and Kyrgyzstan, in particular, young, tech-savvy figures have assumed key decisionmaking positions, including in their countries’ cabinets. Private-sector players — including those representing small and medium-size enterprises — have also had their voices heard, bolstered by stronger property rights. While Central Asia’s institutions still lack the openness, inclusiveness and transparency one sees in Western Europe and East Asia, these changes are helping to boost accountability.
The second arrow — a multi-aligned foreign policy — entails the diversification of trade and strategic partnerships. Historically, Central Asian countries depended heavily on one power — Russia — to provide markets, investment and security. Although they are not turning their backs on Russia, they are now embracing new opportunities to increase their economic resilience (especially against supply chain shocks and commodity price fluctuations) and raise their international profiles (and, thus, their bargaining power).
The EU is actively seeking to expand its regional footprint in response to the Ukraine war, and Arab countries, especially in the Gulf, see fertile ground for mutually beneficial partnerships with Central Asian countries. China, for its part, has emerged as a renewable-energy powerhouse and major source of investment in infrastructure. This is particularly relevant for Kazakhstan, Kyrgyzstan and Tajikistan, which share a border with China — Kyrgyzstan’s largest investor last year, accounting for 23.9 percent of total foreign direct investment, which edged out Russia’s 22.7 percent share.
The third arrow — deeper regional engagement — includes the removal of barriers to trade and talent flows, as well as business activities and other commercial exchanges. This process received a major boost following the normalization of Uzbekistan’s relations with other Central Asian economies (and Turkey) in 2016. Intra-regional trade turnover surged by 80 percent between 2018 and 2023, reaching US$11 billion, thanks largely to the improvement of transport networks, such as railway links.
This process is vital, because unlike larger, state-directed economies, such as China and Russia, Central Asia’s small, open economies cannot thrive in isolation. However, the region still has a long way to go, particularly in harmonizing trade policies, standardizing customs procedures and dismantling bureaucratic hurdles. For Turkmenistan and Uzbekistan, accession to the WTO would offer powerful motivation to undertake these and other growth-enhancing reforms.
Central Asian countries face their fair share of challenges, from endemic corruption to excessive concentration of power. However, they have been quietly moving in the right direction for a while now. By continuing to bolster their institutions, pursuing diversified foreign policies and fostering regional integration, they can set themselves up for success, even in an era of escalating geopolitical fragmentation.
Djoomart Otorbaev, a former prime minister of Kyrgyzstan, is the author of Central Asia’s Economic Rebirth in the Shadow of the New Great Game. Brian Wong is assistant professor of philosophy at the University of Hong Kong.
Copyright: Project Syndicate
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