Off Center

By Shi Ze

Central Asia’s internal problems obstruct the region’s economic potential

The author is director of the Center for Eurasian Security and Development at the China Institute of International Studies

Compared with its outstanding achievements in maintaining regional security and stability, the Shanghai Cooperation Organization (SCO)—which consists of China,Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan—has not made much progress in terms of encouraging multilateral economic cooperation. Among the many obstacles blocking economic cooperation, the most problematic ones stem from poor relations among Central Asian countries. Regional cooperation exhibits a tendency of de-integration as situations inside and outside the region have changed, posing a major challenge to the future development of the SCO.

Team Central Asia

Central Asian countries managed to cooperate temporarily after the breakup of the Soviet Union, but lately that cooperative spirit has been replaced by competition and cautiousness.Although these countries signed many political cooperative agreements 10 years ago, few have been inked in recent years. There has been little in the way of legal documents on economic cooperation signed among countries in the region. The current dilemma persists, stubbornly,for a variety of reasons.

Sour political and diplomatic relations are among the most troublesome issues. The Soviet Union’s disintegration left behind lasting disputes over territory and water resources as well as ethnic and religious clashes. Mutual trust in these countries has weakened, while misunderstandings grow more rigid. Deterioration of political relationships has had a direct influence on economic cooperation.

There is not enough momentum currently to drive cooperation in the region. Given their similar economic structures, Central Asian countries often turn to partners outside the region for economic cooperation and lack the will to work with one another. Statistics show that trade between Central Asian countries and countries outside the region are higher than trade among Central Asian countries themselves. Economic cooperation in the region has seen little progress due to insuf ficient inner drive.

Central Asian countries stand at differing economic development levels, further complicating cooperative efforts. For example,per-capita income in the better developed Kazakhstan is over 10 times higher than in Tajikistan and Kyrgyzstan.

Con flicting goals make reaching consensus a difficult challenge. Central Asian countries have more disagreements than agreements on cross-border cooperative programs in the fields of transportation, energy and telecommunications. To make matters worse, they are faced with capital shortages.

When relationships between Central Asian countries deteriorate or stall, the ensuing delay in their cooperation brings a negative influence to the economic development of related nations. Stagnated economic development,in turn, exacerbates social conflict. Turbulent power transitions have taken place twice in Kyrgyzstan in recent years. Tajikistan is now being confronted with constant internal disorder and rampant separatist activities. Hidden dangers lie in Uzbekistan and Kazakhstan due to struggles over power transitions. As political elites in Central Asian countries are dragged down by domestic events, they pay more attention to present interests instead of long-term,comprehensive programs.

Internal political changes within Central Asian countries often deliver significant blows to the SCO’s long-term plans. Due to their limited capability and development levels, Central Asian countries miss out on significant cooperation with the SCO. These countries have yet to receive tangible benefits from the SCO’s programs on disaster relief, agriculture, water resource development and infrastructure construction.

positive changes

Generally speaking, progress in a multinational organization depends on the participating countries’ economic development, how complementary their economic structures are and a willingness to cooperate. Considering the stagnated development of the Central Asian countries and their tendency of de-integration, there are several ways to make positive changes.

China should research cooperative options in the wider pan-Central Asian region based on the SCO framework. West China, including Xinjiang Uygur Autonomous Region, neighbors Central Asia in the west, Russia in the north, and Southwest Asia in the south. The area can also link Central Asia to the Asia-Pacific in the east through channels inside China. It’s clear that west China holds a potential advantage in its location.

China can break the geographic limits of Central Asia and seek cooperation on a global scale. It can build transportation, information and logistics networks centered in Urumqi. In this way, Russian products could move deeper into China and reach the Indian Ocean countries through Xinjiang. Moreover,India, Pakistan and Iran could join the regional cooperative circle while deepening their cooperation with west China. Enhancing cooperation with Central Asian countries will help west China live up to its geographic and transportation advantages.

China should more actively push forward multilateral cooperation under the SCO framework to form a pan-Central Asian economic zone to the benefit of all participants. This will create a positive effect on expanding multilateral cooperation in the SCO, while accelerating the implementation of China’s west development policy.

Central Asian countries often turn to partners outside the region for economic cooperation and lack the will to work with one another

The SCO should be practical as it pushes forward economic cooperation. It can adjust its current development plan and lower expectations if need be, starting with easier cooperative projects. It should focus more on projects that are in accord with the development levels of Central Asia. For example,it can help member countries improve infrastructure and conditions for cooperation by ameliorating customs clearance procedures,establishing cross-border transportation and telecommunications networks, and promoting financial services and personnel training.Moreover, it should take precaution in activities that might offend the countries’ sense of sovereignty.

ASIA EXPRESS: Trains from China and Kazakhstan set off during the inauguration ceremony of the second crossborder railway linking the two countries in Korgas, northwest China’s Xinjiang Uygur Autonomous Region, on December 22, 2012

The SCO should heed the de-integration tendency of Central Asian countries, and take impartial steps to promote peace and cooperation among them. It needs to seek compromises that take all parties’ interests into consideration, so as to prevent disputes from escalating. At the same time, it should try to find projects that are attractive to all countries involved in order to boost their participation and optimism. The SCO can create a win-win situation by making tangible achievements in these projects.

Amid slow economic development and ongoing social problems in the Central Asian region, the SCO must prioritize projects related to livelihood, as well as those that can bring visible benefits in the short term, such as hydropower plants, road construction and repair, smallscale processing, post-disaster reconstruction and agriculture. Moreover, it should propel the economic structure transformation of its members through effective cooperation to promote internal cohesion. By improving sustainable development and social stability in its member states, the SCO can help spur comprehensive regional cooperation.

SCO members with greater capability and influence, such as China, Russia and Kazakhstan, can add more investment and policy support to regional economic development.Preferential policies are typically more effective than simple investment increases. For example,they can reduce tariffs to stimulate cooperation and economic development among the less developed countries. ■