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Kyrgyzstan Review, 10 years ago

[29.08.23] UN-Sponsored Conference Promotes Central Asian Trade

Hosting a United Nations conference on landlocked countries, Kazakhstani President Nursultan Nazarbayev on August 28 sought to muster support for improved trade turnover in Central Asia. The lack of trade cooperation is seen as one of the main obstacles to regional economic development.
Nazarbayev, convening the International Ministerial Conference of Landlocked and Transit Developing Countries, invoked Kazakhstan's geographic importance "right in the middle of the Eurasian continent" to make an assertion: If investors and his government "tap" the country's transit potential, they "will be able to turn Kazakhstan into a key country for the exchange of goods between Asia and Europe."
But this is easier said than done. One Kazakhstani analyst, speaking on condition of anonymity, told Eurasianet that Central Asian states routinely violate trade agreements and have recently shown tendencies to isolate on a broader level. Uzbekistan, for example, closed its border to goods from Kazakhstan in December 2002 and is prone to repeat such actions without warning.
Kazakhstan belongs to several economic organizations, including the Eurasian Economic Community and the Shanghai Cooperation Organization. It has signed many treaties, including one that Nazarbayev inked in July with the presidents of Kyrgyzstan, Tajikistan and Uzbekistan. This treaty asserted the four nations' intent to act in their shared best interests to explore projects related to hydropower, food-sharing, transportation and communications. But many local observers are pessimistic that these documents will yield meaningful results.
Yet Nazarbayev told his audience, which included international investors and lenders, that "Kazakhstan sets the goal of increasing transport flows through its territory." To reach this goal, Nazarbayev may be training his attention on China.
The president emphasized China in his remarks, calling attention to efforts to improve road and rail links between the two countries. While trying to charm his huge eastern neighbor, Nazarbayev also has reached out to international bodies. In his speech, he stressed his intentions to carry out all work in accordance with United Nations policies and initiatives.
One initiative under consideration is a so-called Almaty Program of Action. The document seeks to channel international and state-level funds toward transportation infrastructure projects. The program commits donor nations, in principle, to offer favorable trade and expedite "market access" for landlocked countries.
Anwarul Chowdhury, the UN High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States, told the conference that such countries experienced weaker economic growth than any other group of developing countries in the 1990s. The United Nations estimates that between 15 % and 50 % of such countries' export earnings are "eaten up" by transit costs.
In Central Asia, this is a particularly pressing concern. "The desert and semi-desert conditions in Central Asia, coupled with severe agricultural production, significantly increase the cost of construction and maintenance of infrastructure," said United Nations Conference on Trade and Development Deputy secretary-general Carlos Fortin. He urged the region's relatively unpopulated states to intensify regional integration and cooperation, among themselves and with neighboring countries.
The Almaty Program of Action emphasizes regional transport corridors and the adoption of common rules and standards. Kazakhstani officials also seek regional integration as a primary strategy for enhancing the country's transportation strength. Transport and Communication Minister Kazhmurat Nagmanov endorsed the idea of developing regional consortia on hydropower, transportation, and foodstuffs and asked international organizations to help these consortia gel. Kazakhstan reportedly committed to hold transit tariffs in place and potentially lower them for neighboring landlocked countries.
But Nazarbayev is looking beyond Central Asia for trade links. In September, he will sign a pact with the presidents of Ukraine, Belarus and Russia declaring their four countries a "common economic space." This agreement could facilitate the movement of labor and goods between Russia and Kazakhstan, which will be a critical challenge as Kazakhstani oil wealth expands.
By Ibragim Alibekov,
Eurasianet, August 29, 2003

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