Wednesday, 29 March 2000

THE DECLINE OF CENTRAL ASIAN INTEGRATION

Published in Analytical Articles

By Richard Dion (3/29/2000 issue of the CACI Analyst)

BACKGROUND: Each of the Central Asian states perceives national security threats from other states in the region. Kazakhstan fears the threat of militant Islam and terrorism from Tajikistan. Kazakhstan is also currently engaged in a rather bitter border dispute with Uzbekistan.

BACKGROUND: Each of the Central Asian states perceives national security threats from other states in the region. Kazakhstan fears the threat of militant Islam and terrorism from Tajikistan. Kazakhstan is also currently engaged in a rather bitter border dispute with Uzbekistan. In a similar vein, Tajikistan claims that Uzbekistan is abusing its geography for political purposes to prevent progress in the Tajikistan peace process and is manipulating its power as a supplier of natural gas. Kyrgyzstan is furious about the incursion of Tajik rebels who took four Japanese hostages last Fall. The hostage crisis was a glaring demonstration of the weakness of Kyrgyzstan’s armed forces. These security threats have led the Central Asian states to place greater restrictions on cross-border relations thus hindering Central Asian integration and economic development.

Last year, Turkmenistan was one of the first of the Central Asian countries to introduce a visa regime for CIS citizens. Turkmenistan justified its actions citing national security issues and argued that the free movement of the region’s population had only been meant to be temporary to allow the many nationalities in the CIS to return home after the fall of the Soviet Union. The other Central Asian countries are now considering the implementation of a visa regime, even between close allies such as Kazakhstan and Kyrgyzstan. The leaders of these countries point to the increasing threats to national security. This is largely the result of fears raised by the incursion of militants based in Tajikistan into Kyrgystan where they kidnapped four Japanese scientists. This event, coupled with the bombings one year ago in Tashkent, has led to the imposition of an unofficial visa regime severely restricting the movement of CIS citizens and foreigners in Uzbekistan.

The Berlin-based Transparency International has rated Kazakhstan, Kyrgyzstan and Uzbekistan in the top 15 most corrupt states in the world. Corruption is a major factor limiting regional trade and transit and harming the integration of the region. This corruption manifests itself on the borders for individual merchants, but is the greatest problem for truck drivers. These "taxes" are enormous and at times erase all profits. The high cost of taxes has bankrupted small freight forwarding companies and prevented the development of family businesses in border areas such as southern Kazakhstan and Kyrgyzstan with Tashkent. The fault lies with customs officials, but is indirectly caused by the region’s politicians who have signed many agreements relating to trade and transit facilitation.

IMPLICATIONS: Much of Central Asia’s population has just recovered from the Russian crisis during which many local people became aware of the importance of markets and experienced how regional instability hurt their businesses. Prior to the Russian economic crisis, relaxed border security allowed merchants who wanted to buy and sell goods across the borders of the new Central Asian states without a great deal of hindrance. Uzbekistan is intensifying and consolidating its border controls, particularly in the most militantly Muslim and economically desperate region in all of Central Asia, the Ferghana Valley. The greater the restrictions on cross-border interactions, the more steeply regional trade will decrease and subvert the economic development of the region..

Although more than five agreements exist within Central Asia and the Caucasus to facilitate trade, the agreements more often than not confuse and hinder trade in the region. Likewise, approximately six international conventions have been developed by the United Nations to ease transit through the landlocked countries of Central Asia. If these agreements are signed and implemented, trade might run much more smoothly. However, regional trade institution leaders are often motivated by their own personal interests. They prefer the confusion of multiple agreements to further their own economic and political agendas and disregard the interests of the Central Asian population for regional integration.

With the vast majority of Central Asia’s population tied to agriculture and the trading of goods, the implications of declining Central Asia integration for the region’s population is ominous. Many of the urban markets where merchants sell their goods are in Uzbekistan that contains the region’s largest population at 23 million. When trade is restricted, a large portion of the population specifically merchants in cross-border trade become disgruntled with the political leadership. The very groups opposed to the status quo in Central Asia, particularly to Karimov’s regime in Uzbekistan, could gain financial support from small merchants. Even more frightening is the likely possibility that larger, wealthier business leaders that normally would not consider supporting more radical factions in Central Asia, might be pushed to do so and exacerbate regional instability.

CONCLUSION: The real culprit in the decline of the Central Asian integration is the international community. The West’s mystification of the new Great Game in Central Asia over the last decade has led many of the region’s leaders and politicians to develop and push an overwhelming number of agreements with countries wishing to conduct business in Central Asia and China. These agreements have only further complicated the issue of trade and transit in a very politicised environment.

Regional security and co-operation will play a large role at a World Economic Forum Summit with Central Asian leaders and the international business community 26-28 April in Almaty. However, the region’s politicians have already significantly limited regional trade in the name of national security. They have restricted economic growth in the process. Ironically, this could lead to another type of national security problem as an increasingly disgruntled population faces growing impediments to regional trade and economic development. Should the status quo continue, the economic, social and political fragility of Central Asia will worsen.

AUTHOR BIO: Richard Dion, UNDP

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