Central Asia’s Stunted Regionalism

The first summit of Central Asia’s leaders, without the powerful looming presence of Russians or Chinese, was held in the capital of Kazakhstan, then known as Astana, in March 2018. The meeting was momentous, though its most concrete result was in the optics: A clear signaling of a thaw in relations between countries that share borders and deep history but have spent much of the last quarter century trying to define their individual independence and carve out space for their economies. The Central Asian region is known for the granddaddy of global trade – the famous Silk Road – but also for failing to connect in modern times.

The second summit of Central Asian leaders was scheduled for April 12 in Tashkent. While Kazakhstan hosted the first summit and is the region’s largest economy, it had been on the back of Uzbekistan’s political transition that talk of regional cooperation experienced a resurgence. The late August 2016 death of the irascable Uzbek president, Islam Karimov, and the rise of Shavkat Mirziyoyev, with talk of opening and regional brotherly relations immediately on his lips, triggered a veritable wave of optimism in the region.

But the April 12 summit never happened, thanks in part to longtime Kazakh President Nursultan Nazarbayev’s shocking decision to step down on March 19 and Interim Kazakh President Kassym-Jomart Tokayev’s April 9 decision to announce early presidential elections. Quietly, though unsurprisingly, the regional summit was postponed. As of this writing, there isn’t a firm date for the rescheduled summit, but logic dictates it won’t be held until after Kazakhstan’s June 9 presidential election. The postponing of the summit until Kazakhstan has a new leader makes sense, but it also points to the difficulties Central Asia’s political climate poses to generating the kind of cooperation the region needs, and its leaders say they want.

It’s become a piece of conventional wisdom that Central Asia is one of the least economically integrated regions in the world. While true, the stated wisdom conceals important nuances. The challenges to increasing cooperation in Central Asia will invariably involve confronting harsh economic truths and hard political realities. Trade among Central Asian states in the wake of the Soviet Union’s 1991 collapse was poor; political relations were careful and at times antagonistic as the region’s new presidents bickered with their former Soviet colleagues over borders, resources, and status.

First, the economic realities. Do the states of Central Asia offer what their neighbors need most?

To answer that question, let’s look at Kazakhstan, the region’s largest economy.

As countries from around the world rushed into Kazakhstan’s late-1990s oil boom, trade between Kazakhstan and the other Central Asian states worsened over time. In 2017, Kazakhstan’s top trading partners – when looking at total trade numbers according to World Bank statistics – are Russia, China, Italy, the Netherlands, and France.

Only Uzbekistan cracks into the top 10 trading partners for Kazakhstan, coming in at seventh, just below Switzerland. Kyrgyzstan and Tajikistan sit at 20th and 21st, and Turkmenistan is between Slovenia and Latvia at 49th. Looking further back, the positions of Kazakhstan’s Central Asian partners move in interesting ways. In 2007, Kazakhstan’s Central Asian partners all fell outside the top 10 – Uzbekistan at 14th, Kyrgyzstan at 23rd, Tajikistan at 29th, and Turkmenistan at 32nd. Jumping a decade back again, to 1997, and we see the states of Central Asia were still outside Kazakhstan’s top 10 trading partners, but all fell within the top 25 – Uzbekistan at 13th, Kyrgyzstan at 15th, Turkmenistan at 17th, and Tajikistan at 23rd.

Turkmenistan’s slide, from Kazakhstan’s 17th largest trading partner in 1997 to 49th by 2017, is the most dramatic. Notably, Turkmenistan’s president, Gurbanguly Berdimuhamedov, didn’t go to the first Central Asian leaders summit. Uzbekistan’s position worsened in relative terms between 1997 and 2007 before making the leap into the top 10 by 2017. How useful is this data? Can Central Asian states ever be among their neighbor’s top trading partners? To answer that, we should look at what these countries trade with each other – again using Kazakhstan as the base example.

Kazakhstan’s cash crop is black gold, with crude petroleum comprising 45 percent of the country’s exports in 2017, and the larger category of mineral products accounting for 61 percent of exports that year. That also explains Italy’s high position among Kazakhstan’s trade partners. The Italian state oil company, Eni, owns a 16.81 percent share of Kazakhstan’s largest oil field, Kashagan and 78 percent of what Italy imports from Kazakhstan is crude petroleum. On the other side of the equation, 50 percent of Kazakhstan’s imports from Italy are machines – valves, electrical control boards, centrifuges, heaters, cranes, and so on. Looking at China, a similar picture emerges: 41 percent of what China imports from Kazakhstan are metals (refined copper, iron alloys, and raw zinc) and 36 percent are mineral products, split largely between copper ore and crude petroleum. Kazakhstan imports a far larger array of goods from China, but the plurality (40 percent) fall into the machine category, as with Italy, though the top items are broadcasting equipment and computers.

What do Central Asian states trade with Kazakhstan? For Uzbekistan, Kazakhstan’s largest Central Asian partner, imports from the north fall largely into three categories: vegetable products (33 percent), metals (29 percent), and mineral products (27 percent). In the other direction, most of what Kazakhstan imports from Uzbekistan are vegetable products (44 percent), followed by mineral products (16 percent), plastics and rubbers (7.7 percent), and textiles (7.3 percent). What about a smaller partner? Kyrgyzstan imports a wider, more balanced, range of goods from Kazakhstan: foodstuffs (20 percent), mineral products (18 percent), metals (13 percent), vegetable products 11 percent), and so on – but exports are concentrated in mineral products (58 percent).

Extrapolating from the data noted above, the states of Central Asia don’t produce high-value technological goods that Kazakhstan wants to import. There’s obviously trade between Kazakhstan and its neighbors, and that trade has increased in volume over time, but that trade sits largely in lower-value goods (like vegetables) and raw resources (like metal ores). In this sense, being a top trade partner may not be the best metric for regional cooperation – it’s a bar that may never be met, not with China and Russia as neighbors, and in Kazakhstan’s case, not given what the country needs to import. That’s the harsh economic reality: Until Uzbekistan manufactures the kinds of valves Kazakhstan’s oil industry requires, to the high standard of goods it currently imports from Italy and Germany, Uzbekistan will be stuck selling melons.

But what about the political realities? Those present a high hurdle to regional cooperation too. The core facet of the political systems in place across Central Asia is the supremacy of the man in charge. Even in Kyrgyzstan, arguably more democratic than any other Central Asian state, new presidents devour their predecessors. This makes dealing with Central Asian states largely a matter of dealing with the personality at the top of the pyramid, even for neighbors. Kyrgyzstan is the exception here in terms of leadership turnover, but revolutions and persecution of your predecessor hardly set Bishkek up as a stable partner. Because Central Asia’s leaders don’t change frequently, moments of change have the potential to be tumultuous and on a deeper level, this personality-driven regional political system has hindered the development of bureaucratic systems that can operate, sustainably, absent the man in charge who founded them.

It’s hoped that the regular interaction between Central Asia’s leaders, absent the gravitational pull of China or Russia, or the distraction of a sideline meeting at a different summit, will be beneficial for the region. That’s invariably true. It would also be beneficial if that regular interaction didn’t rest on the specific personalities involved, and couldn’t be derailed by a president deciding on a random spring day that after 29 years, he didn’t want the title of president anymore.

There’s an alternative universe in which Nazarbayev held off resigning until after the April 12 summit. He could have told the other presidents in person, imagine that. But the region’s leaders still don’t think regionally, even the one who claims credit for proposing a meeting of regional leaders in the first place.

Before Nazarbayev resigned the Kazakh presidency on March 19, he called Moscow, not Tashkent.