Central Asia's Shrinking Connectivity Gap: Implications for U.S. Strategy

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CENTRAL ASIA’S SHRINKING CONNECTIVITY

GAP: IMPLICATIONS FOR U.S. STRATEGY

Roman MuzalevskyU.S. ARMY WAR COLLEGE

Carlisle Barracks, PA and

UNITED STATES

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Strategic Studies Instituteand

U.S. Army War College Press

CENTRAL ASIA’S SHRINKINGCONNECTIVITY GAP:

IMPLICATIONS FOR U.S. STRATEGY

Roman Muzalevsky

November 2014

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CONTENTS

Foreword .................................................................... vii

About the Author …………...............................…….ix

1. Introduction ...............................................................1

2. External Factors and Initiatives Advancing Central Asia's Connectivity .....................................7

3. Regional Connectivity Framework and Performance of Local Economies ..........................61

4. Regional and Domestic Dynamics Constraining Central Asia's Connectivity........... 99

5. The Role of the United States: A Way Forward ....................................................131

6. Conclusion .............................................................155

Appendix ................................................................... 163





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FOREWORD

Once sealed off from the rest of the world dur-ing the Soviet times, the states of Central Asia todayare rapidly integrating with the global economy. Theopening up of China in the 1980s, the demise of theSoviet Union a decade later, and the ongoing global-ization have all served as grand forces facilitating thishighly monumental development. The U.S. regionalmilitary involvement after September 11, 2001, andengagement by other actors have further enabledthese countries to reconnect with the world, this timeas sovereign units. Today, more than 2 decades afterthey gained their independence, the Central Asiancountries, along with the rest of the world, face a greatchallenge and an opportunity—the rise of China, In-dia, and resurgence of Russia. These neighboring

powers are investing and facilitating internal and ex-ternal links of the region and profoundly shaping theregion’s external connectivity at the very time as theUnited States withdraws its troops from Afghanistanand sees a relative decline in its global and regionalpower and inuence.

In this insightful and forward-looking work, Mr.Roman Muzalevsky, a widely published internationalaffairs and security analyst with hands-on experiencein and knowledge of the Central Asian region, uncov-ers these and other ongoing and projected economicand geopolitical dynamics shaping what he terms a“Central Asia Shrinking Connectivity Gap.” He thenprovides timely policy recommendations for the Unit-ed States for it to remain an indispensible player on

the regional and global scene capable of upholdingthe global security and economic order in the face ofthe rising powers. The author contends that the Cen-tral Asian states stand to benet from the growing in-



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volvement of the outside players. But he also cautionsthat they may lose if they are unprepared to protect

their sovereignties by, for instance, failing to advancetheir stalled intraregional integration. As it increas-ingly becomes a point of competition over resources,routes, bases, and trade deals, the region faces signi-cant prospects of integrating with the world, just as itis set to confront a plethora of risks potentially revers-ing or redirecting its surging connectivity.

Mr. Muzalevsky cogently argues that the CentralAsian states welcome a long-term U.S. presence to bal-ance other actors and to promote their links with theglobal economy. The problem, he explains, is that theyview the United States as a noncommitted partner, es-pecially considering U.S. plans to disengage militarilyfrom the unnished conict in Afghanistan. The au-thor concludes that the U.S. future global and regional

role and capabilities depend on how successfully theUnited States calibrates its grand strategy given thecurrent and projected dynamics, calling for a rigorousand sustained U.S. regional strategy amid the rise ofChina, India, and Russia—the growing powers thatare capable of challenging regional and, potentially,international structures and institutions.

The Institute of Strategic Studies is thereforepleased to offer this work as a source of major insightsfor scholars and as a source of timely and critical ad-vice to policymakers shaping the fate of the global andregional security and economic orders.

DOUGLAS C. LOVELACE, JR. Director Strategic Studies Institute and U.S. Army War College Press



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ABOUT THE AUTHOR

ROMAN MUZALEVSKY works for iJet International,Inc., performing research, reporting, and analysis ofglobal, regional, and national security affairs, risks,and trends, as well as focusing on incident responseand crises management. He is also a ContributingAnalyst on Eurasian Affairs and Security at James-town Foundation. Previously, he worked for CSMSolutions Inc., National Democratic Institute, DFIDPublic Finance Reform Project, Central Asia-Cau-casus Institute, security consultancy Wikistrat, andglobal strategy advisory consultancy Krull Corp. inthe United States and Central Asia. He conducted re-search on security issues and trends in the post-Sovietspace at the Center for Political and Military Analy-sis at Hudson Institute as part of the George F. Jewett

Foundation Fellowship Award for Projects on Studyand Practice of Grand Strategies. Mr. Muzalevsky hasauthored numerous articles on Eurasian and globalaffairs, geopolitics, security, and strategic trends. In2013, he was selected as a Fellow of the Washington,DC-based Eurasia Foundation’s Young ProfessionalsNetwork program for Eurasia specialists. Mr. Muza-levsky holds an M.A. in international affairs with aconcentration in security and strategy studies fromYale University and a diploma in international affairsfrom the International Ataturk Ala-Too University inKyrgyzstan, Central Asia.





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CHAPTER 1

INTRODUCTION

Today’s world marks the era of profound changesin the international system over the last 2 1/2 decades.From globalization and fragmentation tendencies totransnational threats and the emergence of new powercenters, the international order has been under stress,challenging the United States as the strongest powerto address security issues of global scale, including inthe remote region of Central Asia. It is in this regionthat one can track the emergence of the U.S. globalsupremacy after the collapse of the Soviet Union andobserve its relative decline at the start of the 21stcentury due to the “rise of the rest” and the failingwar effort in Afghanistan. It is also here that old and

new power centers and aspiring contenders, some ofthem nuclear-armed (like Russia, China, and India),increasingly have tested Washington’s ability to shapethe global and regional orders. Most prominently, itis the region that is seeing the rise of major powers,which have been advancing its connectivity with theglobal economy and causing power shifts that gener-ate security risks and benets for both the global orderand the ability of the United States to shape it.

In the 1980s, few could predict the collapse of theSoviet Union a decade later, al-Qaeda attacks againstthe United States on September 11, 2001 (9/11), orstrong economic performance by the rising powers ofChina, India, Turkey, and Russia. Equally, few couldanticipate the repercussions of these developments

on the remote, landlocked, and impoverished Cen-tral Asian region and the global order. For decades,the Tsarist Russia’s control and the Cold War stale-



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mate had prevented the region from becoming a hubof commerce, trade, and ideas that had existed in the

Silk Roads era centuries earlier. But the opening up ofChina to the rest of the world beginning in the 1980s,the collapse of the Union of Soviet Socialist Republics(USSR), the U.S. regional military involvement after9/11, the rise of neighboring powers, and the region’svast resources and transit potential have endowedCentral Asia with signicantly more prospects forintegration with the international system than everbefore. These trends have expanded the global econ-omy and beneted the region on many levels. Yet,they have also increased the risk of collisions betweengreat and emerging powers, which are vying for inu-ence in Eurasia and the global arena amid the relativedecline of American global power and the diminishedability of Washington to shape the global and regional

security orders.Relatively closed political and economic systems,

low levels of foreign trade and investment, the lackof intra- and inter-regional energy, trade, and transitcorridors, insignicant information exchanges, andpoor regional political and economic cooperation ex-plain Central Asia’s limited capacity for global eco-nomic integration. The region is “Central” in name,but not in practice. According to Thomas Barnett,Central Asia and a number of other regions representthe “Non-integrating Gap”—the areas excluded fromthe “Core” of globalization, represented by developedand emerging economies that are more fully con-nected to the global economy. The “seam” countries,in turn, border the “gap” and the “core” areas.1 (See

Figure 1-1.)



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The map according to Thomas Barnett, taken from Klaus Dodds,Global Geopolitics: A Critical Introduction, New York: Routledge,2013, p. 20.

Figure 1-1. The Core, Seam, and Gap Countries.

However, this connectivity gap has been shrink-ing rapidly in recent years—in part due to the U.S.military presence and growing inuence of emerg-ing powers (China, Russia, India, and Turkey)—on

terms that may not be conducive to regional securityor in line with visions of the United States, individualpowers, or local countries. Rapid power transitions inEurasia and the world associated with the rise of newpower centers have thus increased security risks, evenas they have upped prosperity and stability prospectsthat arguably come with the expanding economicconnectivity. The United States should play a major

role in shaping the region’s expanding connectivitythat has been possible due to major transformationaldevelopments.



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These developments include the collapse of theSoviet Union, which advanced the course of global-

ization worldwide; the military involvement of theUnited States as the largest maritime power into theEurasian heartland for the rst time in history after9/11, which has put Central Asia into global spotlightand promoted cooperation within and among actorsin the South Caucasus, Central and South Asia; theunprecedented rise of China and India as enginesof global and Eurasian integration, which has beenreviving Central Asia’s strategic importance for major powers and transcontinental linkages; Russia’srenewed focus on economic integration of the post-Soviet space via the Customs Union (CU) and Eur-asian Economic Union (EEU) initiatives; and the rapiddevelopment of Central Asia’s considerable naturalresources and transit potential, enabling the local

economies to anchor to the global economy led by tra-ditional powers and increasingly redened by emerg-ing ones (potentially by military means in the future).These trends have challenged the U.S. efforts seekingto include fringe economies into the global systemand provide a visionary leadership in the increasinglymulticentric world.

Russia, China, and India are increasingly focusingon the energy resource-rich Central Asia as a securitybuffer zone and potential trade conduit of transcon-tinental proportions. The proposed Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline proj-ect; the Turkmenistan-Uzbekistan-Kazakhstan-Chinagas pipeline initiative; Kazakhstan-China gas and oilpipeline schemes; and China’s transcontinental rail-

way and trade initiatives, among numerous othertranscontinental projects, are already reconnectingCentral, South, and East Asia on the scale reminiscent



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of the Great Silk Roads era that had ourished cen-turies earlier. These developments entail considerable

economic, political, and military presence of majoractors, potentially leaving the United States on thefringes of major dynamics shaping Eurasia.

Washington’s skewed Central Asia strategy, dis-proportionately focused as it has been on Afghanistanin the last decade, has undermined its ability to shapethe global order. Meanwhile, Russia, India, and Chinahave invested substantial and growing political, eco-nomic, and military capital in Central Asia, turning itinto a critical component of their regional and globalstrategies, while enabling the region to integrate withthe global economic system. But just as Central Asiahas proceeded with its internal and external integra-tion, the United States is retreating, raising the ques-tion about how it has and should shape the region’s

integration with the global system on terms that areconducive to global stability. The question is especial-ly pertinent given the economic integration benets ofthe U.S.-led Northern Distribution Network (NDN)running nonmilitary supplies from the Baltics via theCaucasus and Central Asia to Afghanistan.

As a global power with democratic ideals, theUnited States has done much to open Central Asia tothe global economy and thereby facilitate global se-curity. However, it has been foregoing benets of theregion’s shrinking connectivity gap by either ignoringor ineffectively shaping the region’s security orderand connectivity to the global economy amid the riseof new power centers. This is not only because of itsmilitary withdrawal from Afghanistan, or the strong

push by Moscow for integration in the post-Sovietspace, or even Turkey’s attempted regional activism.The U.S. relative global power is declining, in large



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part due to the rise of new power centers, promptinga reconguration of the global economic and security

architecture and arguably unbalanced shift by Wash-ington to the Pacic at the expense of other areas.

The retreat by the United States comes when afailure to regulate Central Asia’s connectivity processcould increase global security risks signicantly. Thisis because no power or group of states from either in-side or outside Central Asia have built a constructivesecurity and economic order in the region, contestedby nuclear powers that are leveraging regional re-sources and their regional positions for the pursuit ofglobal agendas. While the region’s external connectiv-ity has conformed to the U.S. global agenda in princi-ple, in some instances it has been diverging from U.S.goals and interests in practice. In this context, somehave viewed the U.S. New Silk Road Strategy (NSRS)

as incapable of retaining, let alone enhancing, the U.S.inuence in the greater region, where rapidly industri-alizing and heavily populated India and China alongwith the resurgent Russia have sought to sideline theUnited States as major players.



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CHAPTER 2

EXTERNAL FACTORS AND INITIATIVESADVANCING CENTRAL ASIA’S CONNECTIVITY

One hand cannot clap alone.

Ali-Shir Nava’i1

OPENING UP OF CHINA, COLLAPSE

OF THE SOVIET UNION, AND THE ADVANCEOF GLOBALIZATION

The opening up of China in the 1980s and thebreak-up of the Soviet Union in 1991 proved to be themost signicant geopolitical developments for CentralAsia in the last 3 decades. Once sealed off and heavilymilitarized due to the Sino-Soviet tensions in the 1960sand the Sino-Indian war in 1962,2 Central Asian statesembarked on domestic development and integrationwith the global economy as independent entities be-ginning in the 1990s. Opportunities emerged and con-tinue to emerge for the regional countries to build en-ergy, trade, and transit links with Europe, SoutheastAsia, and the Middle East. These evolving “bridge”

initiatives have strengthened the sovereignty of therepublics in the region proclaimed by Russia a zoneof its “privileged interests.” With the gained indepen-dence began the process of nation-building, whichis far from complete today, including in Kazakhstanthat has emerged as the most successful Central Asianstate. However, the regional states have played an

increasingly important role in advancing economicconnectivity across Eurasia, an area that the rapidlyexpanding links between the United States, Europe,



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and Southeast Asia had ignored in the post-WorldWar II era.3

Following a severe economic decline in the 1990s,accompanied by the stalled intraregional integrationthat had once dened Central Asia in the Soviet era,the regional economies have been on the growing eco-nomic trajectory since 2000s, expanding intraregionaleconomic links and cultivating ties with a diversegroup of actors, including Russia, China, India, Tur-key, Iran, Pakistan, and Afghanistan, among others.4 Economic ties of Central Asian countries with Chinaand Russia have expanded in particular, with Chinabeing notably proactive in shoring up its regionaleconomic inuence as it has sought a regional and,increasingly, global power status. Beijing’s and Mos-cow’s regional engagements have been predicatedon concerns about regional security, stability of the

regimes, the region’s vast resources, and the growinginvolvement by potential contenders like the UnitedStates, the European Union (EU), India, Pakistan,Turkey, and Iran.5 However, while the external linkshave allowed for the region’s trade with the rest ofthe world to grow rapidly after 2000, the intraregionaltrade between Central Asian economies hasbeen lagging.6

Central Asian states were thus thrust into global-ization, being pulled to various poles yet not succeed-ing in building an integrated economic space or com-mon security architecture to ensure national interestsamid the rise of new power centers. In a way, the re-gion has become a “laboratory” for testing differentsocial, political, and economic models in the context

of globalization7 and a platform for interstate rivalriesover regional inuence. Still, Central Asian states havebeneted from being at the crossroads of the expand-



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ing transcontinental commerce driven by China, In-dia, Russia, Turkey, among others, helping to advance

the global trade that has grown two times faster thanthe global economy over the last 3 decades.8

Given its traditional interest in expanding globaltrade, the United States should facilitate the efforts ofCentral Asian countries seeking to pursue a smootherand faster integration with the world economy. This isespecially pertinent, given the lingering aftershocks ofthe 2008 global nancial crisis, a decline in global tradegrowth compared to gross domestic product (GDP)growth in the last 2 years, as well as the tendencies forregional integration and protectionism often centeredaround a number of economic poles represented byestablished and rising powers like Brazil, Russia, In-dia, and China. So pronounced have these trends be-come recently that they have prompted some to ques-

tion whether we have “exhausted the drive towardever-more-globalization” and if “localism is on therise.” For example, between May 2012 and May 2013,countries introduced three times as many protection-ist measures as they implemented policies to open uptrade. Anti-trade policies alone cost $93 billion in U.S.dollars in global trade in 2010,9 while the crisis sig-nicantly undermined world exports in 2009.10 Cross-border capital ows today are approximately 60 per-cent of what they were before the nancial crisis. Thedire repercussions for the global economy promptedformer Assistant U.S. Treasury Secretary for Interna-tional Finance Charles Collyns to remark that “global-ization has stalled” and others to question whether itwas desired in the rst place.11

Central Asian economies were largely sparedfrom the malaise, which has, in a way, helped to keeptheir interests in global integration alive. However,



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Kazakhstan became a victim of its own success andis still recuperating from the crisis, which started lo-

cally in 2007, well before it had engulfed the rest ofthe world. Of all the regional countries, Kazakhstanis the only state that has successfully promoted re-forms since the 1990s, enabling it to integrate into theglobal economy, even if the lack of transparency andoverreliance on external credit negatively impactedits economy in 2007-08. Notably, the Kazakh leader-ship largely has viewed the crisis as an opportunity torene the country’s economic course, rather than re-treat and redene more than 2 decades of policies ad-vancing Kazakhstan’s regional and global integration.Today, the country’s leadership ambitiously seeks tobring Kazakhstan to the world’s 30 top economies by2050, including by leaning on emerging economies topromote the country’s global integration.

While the global crisis rendered worldwide eco-nomic links “shallower and narrower” according tothe 2012 DHL Global Interconnectedness Index, thedepth measure of the index (i.e., how much of an econ-omy is internationalized) has recovered to the pointwhere it is now 10 percent higher than it was in 2005.However, it remains below the gure in 2007, whilethe breadth of connectedness (how many countries aneconomy connects with) has continued to decline andis 4 percent lower than in 2005.12 Yet, the global tradeis regaining momentum, with exports running at a his-torical high of about 30 percent of global GDP, aboutthe same percentage share in 2008 before the crisis, ac-cording to the study. Trade and investment betweenemerging countries and investments by emerging

economies into developed countries are growing andboosting global connections.13 These trends indicate alot of room for further globalization, especially because



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the expansion of international information ow is justbeginning. Only about 1 percent of all letter mail sent

globally is international, while only 2 percent of voicecalling minutes are international (adding up calls overthe Internet is estimated to bump up this gure toabove 5 percent). Even Internet trafc remains largelydomestic, with international trafc reaching only 17percent of the total.14

As the crisis has demonstrated, globalization iscertainly not without its risks, while integration intothe global economy is not always a happy ride. Butthe benets of the globalization, advanced by theUnited States as the largest economy since World WarII and later co-promoted by newly rising powers, hasalready reduced poverty by the millions, contributingto socio-economic stability and security in many partsof the world and enabling scores of developing na-

tions to ascend to new economic heights. For CentralAsian economies that have only recently become inde-pendent, the globalization offers a chance to becomefull-edged economic subjects and turn into solidiedpolitical entities as nation-states. In large part madepossible by the opening up of China in the 1980s andthe collapse of the Soviet Union in 1991, the expandingeconomy ows across Central Asia, mainly driven byoutside powers, to offer the regional countries capa-bilities and the best hopes in decades to become trulysovereign actors.

As the Central Asian states seek the benets ofexternal integration, the resurgence of Russia and therise of China as the largest economic power in CentralAsia bring forth new challenges for the regional coun-

tries, particularly in light of impending U.S. militarywithdrawal from Afghanistan, perceived as depriv-ing them of a critical balancing force. After all, theU.S. military and economic involvement in Central



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Asia following September 11, 2001 (9/11) has exerteda transformational effect on the region’s integration

with South Asia and the world.

U.S. MILITARY AND ECONOMIC PRESENCE INGREATER CENTRAL ASIA AFTER 9/11

The U.S.-led Operation ENDURING FREEDOMin Afghanistan has relied heavily on cooperation ofRussia and Central Asian countries. But despite thepredominantly military aspect of that cooperation, theU.S.-led coalition’s involvement has produced trans-formational effects of geopolitical and economic na-ture not yet fully grasped or manifested. Not only hasit advanced the cross-border trade between Afghan-istan and its neighbors to the north and east, but ithas also opened the way for inter-regional integration

involving Central and South Asia. It has further pro-duced prospects for the two regions to connect withthe transcontinental and global economy.

The U.S. military collaboration with Russia andCentral Asian states immediately after 9/11 madepossible the coalition’s outreach to the Afghan North-ern Alliance as a counterforce to the Taliban and theiral-Qaeda associates, as well as the opening of militaryfacilities in Uzbekistan and Kyrgyzstan.15 But it wasthe opening in 2008 of the Northern Distribution Net-work (NDN) that has unleashed a closer military andeconomic cooperation within and between Centraland South Asia after decades of the regions’ relativeisolation due to the closed Soviet borders, unstableAfghanistan-Pakistan frontier, and the still lingering

tensions between nuclear-armed Pakistan and India.16

Using commercial providers, the NDN relies onthree branches to transport nonlethal supplies to Af-



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ghanistan: NDN North, which starts in Latvia andgoes through Russia, Kazakhstan, and Uzbekistan;

NDN South that goes from Georgia via Azerbaijan,Kazakhstan, and Uzbekistan, bypassing Russia; andTajik-Kyrgyz-Kazak (KKT), which originates in Ka-zakhstan and passes through Kyrgyzstan and Tajiki-stan into Afghanistan. The NDN uses existing roadand rail infrastructure, but also relies on the Uzbek aircargo hub in Navoi and sea ferries in the Caspian.17 Before the NDN came to life, the Pakistani port of Ka-rachi handled the transit of almost 90 percent of U.S.nonlethal goods. By 2011, the NDN had accounted forthe transit of almost 75 percent of the U.S. sustainmentcargo and 40 percent of all cargo. The NDN has al-lowed Central Asian states to receive U.S.$500 millionin transit fees annually. Kazakhstan, Uzbekistan, andKyrgyzstan now stand to benet from the 2012 reverse

transit deal with the United States, which allows fortransport of cargo out of Afghanistan via Central Asiaafter the completion of the military mission.18 (SeeFigure 2-1.)

The NDN has encouraged closer transit coopera-tion between Central Asian countries, which have suf-fered from long-standing border, water, and energydisputes. However, it has also fostered corruption dueto a new stream of money available to relatively closedregimes19 and authoritarian practices in a geopoliti-cally shifting environment marked by growing linksbetween the region, on the one hand, and China andRussia, on the other. Both Moscow and Beijing haveresisted the U.S. regional military presence, but haverelied on it to ensure regional security and economic

opportunities in the short term. In the meantime, theEU and the United States have struggled to promoteinstitutional reform in Central Asia.



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Source: U.S. Transportation Command, taken from Ibid., Jeffrey

Mankoff, p.3.

Figure 2-1. The Northern Distribution Network.

Such reforms would allow for even faster and health-

ier integration within the region and with the globaleconomy based on genuine reforms20 rather than op-portunities offered solely by the NDN or the rise ofemerging powers.

After all, the NDN is but one tool that continuesfacing logistical and geopolitical challenges. A reportby the Center of Strategic and International Studies,titled The Northern Distribution Network and the Modern

Silk Road: Planning for Afghanistan’s Future, indicatesthat planners need to concentrate on the followingtasks to ensure a more efcient and reliable operation



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of the NDN: increasing local procurement, improvingcustoms procedures, developing the Pakistani port at

Gwadar, improving transparency, and acknowledg-ing tense ties within Central Asia that may threatenthe NDN and thus require conict mitigation strate-gies.21 Besides these gaps, critics point to the NDN’sfailures to improve living standards and ensure a moredurable intraregional cooperation.22 Others point tothe link between trade and the NDN to be misleadingsince a single party determines supply and demandfor military equipment.23

Addressing related challenges will produce ben-ets for the NDN, which, in turn, would facilitate thetranscontinental economic integration with a focus ondevelopment of Central and South Asia. At the sametime, the NDN issues should not obscure the poten-tial transformational impact of the U.S. military in-

volvement in the greater region. Besides encouragingcloser transit collaboration within Central Asia, it hasreopened Afghanistan’s northern border for the legaltranscontinental trade with Central Asia for the rsttime in decades and laid a foundation for expandingthe legal trade along the Afghanistan-Pakistan fron-tier, enhancing trade, energy, and transit cooperationbetween and within Central and South Asia.24 In thelarge scheme of things, it has facilitated the much-needed integration of Central Asian and South Asiancountries into the global economic system by focus-ing on the underdeveloped and relatively isolatedcountry of Afghanistan, which Washington’s NewSilk Road Strategy (NSRS) sees as a land bridge of themultilayered integration.

The NDN has further revealed an economic poten-tial that has served as a foundation for the NSRS—anextension of previous policy seeking the integration



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of Central and South Asia. (The U.S. 2006 National Se-curity Strategy, for instance, advocated the restoration

of “historical role” of Afghanistan as a land bridge be-tween South and Central Asia, given the region’s stra-tegic importance.25). Secretary Hillary Clinton statedthis when launching the NSRS in 2011:

[Let’s build] an international web and network of eco-nomic and transit connections. That means buildingmore rail lines, highways, [and] energy infrastructure,

like the proposed pipeline to run from Turkmenistanthrough Afghanistan through Pakistan into India(TAPI). It means upgrading the facilities at bordercrossings. And it certainly means removing the bu-reaucratic barriers and other impediments to the freeow of goods and people.26

A geopolitically crucial implication stemming from

the implementation of related projects is not only thedevelopment and integration of Afghanistan into thegreater region and the world—itself a considerableundertaking. It is also the reconnection of Central andSouth Asia and their integration into the global econ-omy as an integrated, viable, and inter-regional unit.But the question is whether Washington is committedand how it will respond to integration initiatives of

Russia, China, and India. After all, the United Statesnds itself in a coordinating, even observing role,which lacks necessary nancial and institutional com-mitment. As a result, the United States may lose divi-dends, while China, India, and Russia seek to expandand solidify their inuence in Central Asia as enginesof global and Eurasian economic integration.

According to Professor Frederick Starr, who haschampioned the concept behind the NSRS, the strat-egy is regional in scope given the region-wide chal-



17

lenges and prospects stemming from the developmentof Afghanistan and its integration into transcontinen-

tal networks of trade, energy, and transit. It is “againstno one” and seeks cooperation from other countriesto develop or nalize the following priority projects:completing the Ring Road and Kabul-Herat highwayand anchoring them to transcontinental corridors;nishing the construction of railway routes crossingAfghanistan and connecting Europe and Asia; andfollowing through on the Turkmenistan-Afghani-stan-Pakistan-India (TAPI) and Central Asia-SouthAsia 1000 (CASA-1000) initiatives linking Centraland South Asia via Afghanistan.27 The United Stateshas identied about 40 development projects as partof the NSRS, focusing on NDN infrastructure to en-hance trade facilitation programs.28 The NSRS “soft-ware” component is crucial to reduce corruption and

enhance efciency at border crossings. In Uzbekistan,for instance, one needs 71 days to export and 92 daysto import an item.29

Assistant Secretary of State for South and CentralAsian Affairs Robert Blake said this about the impor-tance of reviving the Silk Roads:

Currently, South and Central Asia is one of the least

economically integrated regions in the world. Inte-gration is vital to help create vibrant economies inAfghanistan, Pakistan and the broader region, andshould be accelerated. New opportunities for crossborder trade, transportation, infrastructure develop-ment, and energy links can provide new jobs and en-hance the quality of life for all people in South andCentral Asia.30

Washington’s cooperation with Central Asia is animportant component of the U.S. strategy that seeks tointegrate Afghanistan into the regional and global eco-



18

nomic order. The United States has assisted Afghani-stan in acceding to the International Road Transport

system to facilitate trade and transit with South andCentral Asia.31 It has helped improved efciency andtransparency of the local and regional electricity mar-kets as part of its Regional Electricity Market Program.It considers building and extending ber optics linksto South Asian in order to then integrate them withthe global ows.32 The United States has also backedthe construction of the road linking Uzbekistan andAfghanistan and a bridge connecting Afghanistan andTajikistan for the rst time. It has further relied on theU.S.-Central Asia Trade and Investment FrameworkAgreement (TIFA) with regional states to facilitate in-traregional trade, investment, and economic develop-ment, in addition to launching a ministerial level poli-cy dialogue.33 While laudable, some of these initiatives

have focused more on Afghanistan than Central Asianstates in their own right over the last decade. Coupledwith its cautious policy due to concerns about Russia’sreaction, the U.S. predominant focus on Afghanistanhas deprived it of resources and attention to pursuea more durable, substantive, and long-term strategytoward Central Asia.

The NSRS is unlikely to change these circum-stances. Critics point to the lack of U.S. commitment,major security and geopolitical risks, as well as theabsence of funding to pursue the strategy, portrayingthe NSRS as “. . . a vision and call to action rather thana well-articulated and organized strategy. . . .”34 Theyhighlight the need for more substantial aid, expandedprivate sector participation, and “formidable conven-

ing powers” for the strategy to succeed.35 They alsopoint to prevalent corruption and red tape that serveas major impediments.36 Furthermore, China, Russia,



19

and Iran prefer the regional integration to proceed ontheir own terms rather than on American terms. Some

Russian experts note that the United States developedthe NSRS to project its dominance in Central Asia af-ter the military withdrawal from Afghanistan and thatRussia, as well as China, Iran and India, needs to coun-ter it.37 Ever since the United States initiated Silk Roadpolicies in the 1990s, Russia in particular has resistedrelated initiatives, perceiving them as underminingits leverage and reorienting regional states away fromMoscow.38 In 2006, the U.S. State Department groupedCentral and South Asia into one unit, a move seen asa way to pursue this very objective, while facilitatingthe regions’ links with each other and the world.39

The projected decline in the already low U.S. fund-ing for the region is expected to hamper the NSRSrealization given a relatively low U.S. interest in the

region in practice, disengagement from Afghanistan,and the U.S. overall scal issues in the age of auster-ity.40 In 2010-12, the United States provided aboutU.S.$520 million in security and U.S.$380 million indevelopment assistance, with its total aid amountingto almost U.S.$3.9 billion since 1992 to support de-mocratization and market reforms in Central Asia.41 Despite this valuable support, the U.S. economic pres-ence has been insignicant compared to China, Rus-sia, and the EU. This undermines the NSRS, whichrelies on economic drivers and components to pursuethe set goals.

The criticism of the NSRS and the limited U.S. re-gional economic engagement raises the question ofwhether the NSRS is a façade of “responsible” with-

drawal from the region, packaged in the illusorylanguage of responsibility and commitment. Whilehigh-ranking U.S. ofcials emphasize the strategic im-



20

portance of Central Asia for U.S. interests,42 the realitybegs to differ. Besides the mentioned dynamics, the

United States remains a distant power that does notenjoy major trade ties with Central Asia. More to thepoint, the resurgent Russia, rising China, and emerg-ing India pursue specic economic and political initia-tives to revive the Silk Roads. These and other actorshave been implementing for years some of the compo-nents of the U.S. concept in practice. In a way, this hasprovided Washington with an excuse not to extend along-term commitment to the region via a more directeconomic engagement. But these dynamics have high-lighted the importance of the region for the U.S. grandstrategy seeking to promote global connectivity as apillar of world stability—a growing imperative con-sidering the increasing capabilities and intentions ofrising powers to shape the global and regional orders.

While transformational, the U.S. military involve-ment and limited economic presence in the greaterregion may either represent a eeting moment in thegreat sweep of history or translate into a lasting stra-tegic dividend that Washington could exploit as it in-creasingly confronts new challenges. As it adjusts itsregional strategy, it should consider the constrainedyet important regional engagement by partners andallies, such as Japan, the EU, and Turkey.

LIMITED BUT CRUCIAL INVOLVEMENTOF JAPAN, THE EU, AND TURKEY

Japan has pursued several initiatives to revive theinternal and external connectivity of Central Asia: the

Eurasian Diplomacy since 1997; the Central Asia plus Japan Dialogue since 2004; the Arc of Freedom andProsperity since 2007; and the Initiative of a Eurasian



21

Crossroads since 2009. However, accommodation toRussia’s interests, issues unique to Japan’s political

system (short terms in ofce, frequent elections, etc.),43

and competition from other payers have underminedtheir effectiveness. In the eld of democratization, forinstance, Japan is seen more as “coaxing” rather than“cajoling” regional leaders. Many also view Japan’srole as more focused on development than geopoli-tics, an approach suggesting an effort by Japan to pur-sue a “distinct role in international affairs.”44 Japan’sexcessive dependency on global markets for strategicresources explains its unimposed, yet not less far-sighted, strategy toward the resource-rich CentralAsia. This strategy is likely to become more activegiven the rise of China, which has tense ties with To-kyo, and the expanding regional presence of India andSouth Korea.45

Japan already has a major nancial commitmentin the greater region, seeking to enhance its econom-ic presence and regional security amid tensions withChina and ahead of the coalition’s withdrawal fromAfghanistan. Japan looks to Central Asia to addressconcerns with regional security and access to strategicresources considering China’s restrictions on exportsof rare-earth minerals.46 After all, Japan’s dependenceon oil and petroleum products is 99.7 percent. It alsoranks rst in the world in its dependence on importsof 20 types of essential commodities.47

Japan’s activities in Central Asia feed into its grandstrategy of liberalizing global trade and advancing anopen international system, aimed at facilitating Ja-pan’s access to strategic resources and enhancing its

technological edge as new power centers rise to chal-lenge its power and status. Japan intends to involvethe resource-rich region into integration processes of



22

the dynamically developing East Asia, advancing itsregional Great Silk Road policy to enhance energy,

transport, and telecommunications linkages betweenCentral Asia and the world in order to promote the re-gion’s connectivity with the global economy.48 Japan’sInitiative of a Eurasian Crossroads, announced in2009, seeks to develop energy, trade, and transit linksacross Eurasia by focusing on Central Asia as a trans-continental link of growing, strategic importance.49

In the sphere of energy production and export, To-kyo had planned to participate in the Turkmenistan-China gas pipeline project, but high costs and a changein China’s energy policy impeded those efforts.50 Still, Japan actively supports policies of Central Asiancountries to diversify their energy export routes, in-cluding via TAPI. Japan also backs the developmentof railways connections between China, Central Asia,

and Iran, which provide linkages to Shanghai in Chi-na, Pusan in South Korea, Osaka in Japan, and ports inSoutheast Asia.51 It helps upgrade and build railwaylines in southern Uzbekistan, as well as airport ter-minals in Astana, Almaty, and Bishkek.52 As a globalcommunications technology leader, it supports thedevelopment of the Central Asian component of theTrans-Asian and Trans-European ber optic line.53

In Kazakhstan, Tokyo is active in the elds ofatomic energy, rare earth minerals, and industrialtechnologies production. In Kyrgyzstan, it focuses onthe development of transit, agricultural, human, andsocial development infrastructure. In Tajikistan, it isinvolved in road rehabilitation programs, aiding theconstruction of the Kurgan Tyube-Dusti Road linking

Tajikistan with Afghanistan and Pakistan.54 In Uzbeki-stan, Japan helps develop and upgrade telecommuni-cation, air, and ground transit infrastructure, having



23

provided U.S.$2 billion in loans to the country overthe last 2 decades. In Turkmenistan, it participates in

the modernization of ports and railways, develop-ment of gas reserves, and construction of chemicalplants worth U.S.$13 billion. Japan actively supportsthe growing cooperation between Afghanistan andCentral Asia, as evidenced by its organization of theTokyo Conference on Reconstruction of Afghanistanin 2012.55 In 2012, it promised U.S.$700 million to fa-cilitate cooperation in Central Asia, rebuilding of Af-ghanistan, international trade, and investment.56 From2001 to 2009, it provided U.S.$1.79 billion in humani-tarian aid to Afghanistan to support reconstructionand democratization efforts.57

In the region, Japan’s role has thus focused on de-velopment as a pillar of security, with Tokyo servingas a major donor and a source of infrastructure assis-

tance, which are critical for advancing the internal andexternal integration of the region. But the economic,political, and military presence and proximity of othermajor powers to Central Asia have ensured that Japanremains more of an economic rather than a geopoliti-cal force in the region for the time being.

As in the case of Japan, the resurgence of Russiaand the rise of China have overshadowed Turkey’sgrowing role in Central Asia, even if Ankara is nowa major power in its own region seeking a globalpower status. Under the Erdogan-led Islamic Justiceand Development Party-dominated government since2002, the country’s economy has become the world’s15th largest, allowing Turkey, a North Atlantic Trea-ty Organization (NATO) member, to pursue a more

autonomous foreign policy. The stalled EU accessionprocess, the West’s relative decline in global inuence,the Iraq war, and other regional crises have prompted



24

it to advance ties with neighbors and emerging pow-ers as part of its “strategic depth” strategy and “zero

problems with neighbors” policy.58

Turkey’s ties with Central Asian countries, withwhich it shares historic, cultural, and linguistic ties,as well as its cooperation with Russia and China, havebeen growing signicantly over the last decade. Tur-key is now one of the six largest trading partners forCentral Asia, with major investments in construction,food production, hotel management, nancial servic-es, energy, information technology (IT), and telecom-munication industries.59 In 2010, its trade with andforeign direct investment (FDI) to the region reachedU.S.$6.5 billion and U.S.$4.7 billion, respectively.60 Its trade with Russia and China, the most powerfulShanghai Cooperation Organization (SCO) actors, isexpected to hit U.S.$100 billion in both cases in the

next several years. However, Ankara is seeing grow-ing competition in trade and investment from Iranand India.

In 2008, Turkey launched a Silk Road Project tohelp reconstruct the Silk Road by cooperating withRussia, China, Azerbaijan, Georgia, India, Iraq, Iran,Kazakhstan, Kyrgyzstan, Mongolia, Pakistan, Syria,Tajikistan, Uzbekistan, Afghanistan, and South Korea.The initiative seeks simplication of border crossingand trade facilitation, collaborating with the WorldCustoms Administration, United Nations (UN) Eco-nomic Commission for Europe, European Organiza-tion for Forwarding and Logistics, and InternationalRoad Transport Union.61 Turkey has also supportedrelated goals through its international development

agency, TIFA created to support stability in and globalintegration of Central Asia, and the Confederation ofBusinessmen’s and Industrialists of Turkey, which



25

has sought to expand ties with Central Asian states toadvance global trade.62 According to the Turkish Min-

ister of Customs and Trade Hayati Yazici, “The tradevolume of the Silk Road countries has quadrupled inthe last decade and there is a noticeable shift in thegrowth of these countries in contrast to Europe andother regions.”63 In 2013, Turkey declared its interestin joining the SCO, given the slowed EU accessionprocess and an opportunity to build lucrative ties withemerging powers to the east.

But Moscow, Beijing, and Ankara are as much stra-tegic rivals as they are partners. All three compete forenergy resources and their delivery routes, includingin Central Asia. Turkey has supported the efforts ofthe regional states to diversify their energy exportsroutes and sought to become an energy hub for theregion’s energy resources destined for European

markets. It supported the construction of the Baku-Tbilisi-Ceyhan oil and the Baku-Tbilisi-Erzurum gaspipelines bypassing Russia, and looks forward to theparticipation in the proposed Trans-Caspian gas pipe-line to bring Turkmenistan and Kazakhstan’s energyresources to Europe.

Turkey has the most extensive ties with Kazakh-stan, whose participation in the West China-WesternEurope corridor it has strongly supported. In Turk-menistan, it has been heavily involved in the con-struction and energy resources development sectors.Despite its “zero problems” policy, it still has strainedties with Uzbekistan over Turkey’s alleged support toUzbek opposition and criticism of the Uzbek regimefor the Andijan massacre that left hundreds dead in

2005. In Kyrgyzstan, Turkey supports democratic re-forms, having provided humanitarian and technicalaid worth U.S.$20 million after interethnic clashes in



26

2010. In 2013, Ankara offered to turn the Manas transitcenter used by NATO into a commercial airport. Tur-

key has further supported democratization in CentralAsia and is seen as a model of development, but hasnot received sufcient support from its NATO alliesin related efforts.64 Meanwhile, Central Asian stateshave gravitated to Russia, the EU, the United States,and China.65

Similar to Japanese and Turkish initiatives, theEU’s Central Asia Strategy, launched in 2006, has ad-vanced cooperation in energy security, rule of law,democratization, and conict prevention in the re-gion. The EU is also increasingly involved in bordermanagement, energy, transit, and trade facilitation,representing one-third of the region’s external trade.But the EU’s largely developmental rather than geo-political role has ensured that the union has remained

a marginal geopolitical actor compared to the UnitedStates, Russia, and China. However, the uncertain fu-ture of Afghanistan explains the EU’s recent push fora security role in the region.66

Like Turkey, it actively supported the Baku-Tbilisi-Ceyhan oil and the Baku-Tbilisi-Erzurum gaspipelines, which have enabled Azerbaijan and Geor-gia to access Western markets. Since 2006, the EU hasactively sought to facilitate a southern energy corri-dor to bring Caspian gas to Europe following a Rus-sian-Ukrainian gas dispute. The proposed Nabuccopipeline was meant to do the job, but it has becomeless viable given EU’s complicated politics, uneasyties between Turkmenistan and Azerbaijan, the rivalTrans-Anatolian Pipeline advanced by Azerbaijan and

Turkey, and Russia’s strong resistance to the pipelinebypassing its territory.67 The EU continues its effortsto develop westward energy connections from the



27

Caspian and Central Asia, but it is China’s growingenergy demand that may undermine the EU’s energy

import policy, despite Turkmenistan’s promises to ac-commodate the EU’s projected gas demand.

The EU’s larger energy strategy, which seeks todiversify sources of production and import of en-ergy supplies, given the EU’s excessive dependenceon Russia’s gas exports, has also fed on the INO-GATE initiative that pursues energy policy coopera-tion among countries of Eastern Europe, the Cauca-sus, and Central Asia with a strong focus on energysecurity and diversication. Some of the INOGATEprograms concern the Trans-Caspian-Black Sea GasCorridor and energy-saving plans in Eastern Europeand Central Asia.68 The project complements a num-ber of trade and transit initiatives pursued under theEU regional strategy, which seek to advance the con-

nectivity of Central Asian states and the countries ofthe Caucasus.

The Transport Corridor Europe-Caucasus-Asiaprogram (TRACECA), launched in 1998, aims to fa-cilitate development of transit and trade links by-passing Russia and connecting the EU, the Caucasus,and Central Asia. However, growing investments byother actors have questioned the effectiveness of theprogram, which requires strengthening of its “insti-tutional and policy dimensions.”69 Still, the programhas evolved somewhat over the years and includes theSilk Wind initiative to build high-speed multimodalcontainer transit corridors. It also seeks to implementelectronic exchange of information and simplied bor-der crossing procedures to reduce transit times.70 The

EU further supports the Viking Railroad railway andmaritime project linking Scandinavia, the Caucasus,Central Asia, and China, with Kazakhstan expressing



28

a particular interest in the initiative.71 The EU is Ka-zakhstan’s biggest trade partner, accounting for 37.7

percent of its exports and 32.3 percent of its overalltrade turnover in 2010.72 Much like China, the EU re-placed Russia as Central Asia’s largest trading part-ner, expanding the region’s westward connectivity.73

Besides separate multilateral connectivity initia-tives, the EU has also provided development aid tothe region to improve domestic, intraregional, aninternational connections of the local economies. Itprovided € (euro) 750 million of aid during 2007-13,with 30 percent of funds intended for facilitation ofregional integration in the areas of energy, transit, en-vironment, and education. For 2014-20, it has pledgedto provide about € 1 billion to support socio-economicdevelopment and regional security via bilateral andmultilateral funding. Kazakhstan will no longer re-

ceive bilateral funding, but will be eligible for regionalfunding.74 The EU further provides 70 percent of theOrganization for Security and Co-operation in Eu-rope’s (OSCE) budget and 62 percent of capital for theEuropean Bank for Reconstruction and Development(EBRD), which supports projects worth U.S.$3 billion,which is crucial given their focus on security and de-velopment.75 Moreover, the EU companies are someof the region’s major investors and are particularlyactive in Kazakhstan.

Despite its crucial development role that has beenenhancing the connectivity of Central Asian countrieswith the global economy, the EU’s agenda has not re-sulted in effective implementation of governance, ruleof law, and democratization programs. While part of it

has to do with the design and effectiveness of the pro-grams themselves, the lack of desire and cooperationby local elites to pursue genuine democratization has



29

constrained related efforts as well. Meanwhile, Russiaand China have invested and donated considerable

aid and resources without conditions on developmentand democratization. This does not lessen the impor-tance of the EU’s largely developmental approach butreveals its constraints given the growing presence ofChina, which serves as an additional and major re-source of investment and aid.

CHINA’S RISE AND GEOPOLITICALREALIGNMENT IN THE HEART OF EURASIA

Threats of terrorism and Islamic fundamentalism,Central Asia’s vast energy resources, concerns aboutstability of regional regimes and China’s Xingjianprovince, China’s expanding trade, and policies of theWest, Russia, and India—all explain China’s growing

interest in the region in the last 2 decades. China’s strat-egy, guided by the need to pursue “comprehensivesecurity” by addressing both conventional and non-conventional threats,76 hinges on its rapid economicexpansion. This growing engagement has made Chinathe dominant economic actor in Central Asia and isbound to accelerate the geopolitical realignment in theheart of Eurasia, expanding the region’s connectivity.As an Indian analyst put it, “The frontiers of Chinaare moving even if its boundaries are not.”77 China hasbeen driving the global trade growth for years, pursu-ing trade routes all around the world, including in-creasingly with and through Central Asian states. (SeeFigure 2-2.)



30

Source: Goldman Sachs, taken from Sam Ro, “Map: The world’s

fastest-growing trade routes since 2005,” Business Rider , December

24, 2013.

Figure 2-2. The World’s Fastest-growing TradeRoutes since 2005.

In Central Asia, Beijing has relied on the SCO,bilateral deals, and its Silk Road Economic Belt strat-egy unveiled in 2013 to advance its economic agen-da. China has attempted to maintain its impressive,decades-long economic growth and advance nationaland regional security and development by ensuringcontinued ows of labor, capital, resources, and tech-nologies that link its internal and neighboring eco-nomic zones. The underdevelopment of China’s res-tive Xingjian, Tibet, and Inner Mongolia, as well as the

China accounts for half of the fastest-growing trade routes in recent times...A selection of the world's 20 fastest-growing trade lanes >US$20 bn annually (2012), based on2005-2012 CAGR of imports and exports in current US$ (includes re-exports)Note: Singapore excluded from map owing to the extent of re-imports and re-exports.

Source: UNComtrade.



31

proximity of these areas to Central Asia, has drivenBeijing’s interests in the region. For China, Central

Asia is a springboard for developing the areas andexpanding China’s own internal and externalconnectivity.

Already, more than half of external trade of Xingji-an, which hosts China’s nuclear testing ground atLop Nor and nuclear ballistic missiles, is with CentralAsia.78 Despite the expected change in China’s eco-nomic growth model over the next 3 decades from theone based on accumulation to the one based on do-mestic consumption, the burgeoning “Middle King-dom” has no other way but to rely on nearby economiczones to sustain its economy.79 This is more pertinentfor China, given the forecast slowdown of its econom-ic growth, looming debt and difculties associatedwith the management of popular expectations.80 Cen-

tral Asia’s growing strategic importance for Beijing’stranscontinental and global policies thus highlight thebenets and challenges for the region’s connectivity asChina seeks to secure its unity and periphery.

While China relies mostly on sea lanes for exports,its ongoing expansion as the soon-to-be largest econ-omy of the world has spurred increased demand fortranscontinental land corridors. China has already be-come the top trading and investment partner for Cen-tral Asia, sidelining Russia and providing the regionaleconomies with more room to maneuver. China’sglobal economic reach is much more extensive thanRussia’s. Its GDP was ve times the size of Russia’s in2010, making Moscow concerned about China’s grow-ing economic inuence in Central Asia.81 Its trade with

the region in 2011 amounted to U.S.$39 billion com-pared to Russia’s at U.S.$16.5 billion, while its FDI hitU.S.$2.9 billion in 2010 compared to Russia’s U.S.$3.17



32

billion. In 2012, China’s trade with the region reachedU.S.$46 billion, 100 times the amount in 1992.82

In 2013, China’s President Xi Jinping signed U.S.$50billion in deals with Central Asian counterparts as heunveiled China’s Silk Road Economic Belt strategy toadvance economic integration across Eurasia from thePacic to the Baltic Sea. Notably, China has called forimproving currency convertibility as part of its strat-egy. Its strategy is widely seen as a countermove toRussia’s own regional integration initiatives launchedin response to China’s growing economic inuence,as well as a response to the U.S. dollar-based tradesystem.83 Despite projected benets, China’s growingeconomic presence also represents a major concernto Central Asian countries that see their markets in-creasingly inundated with cheaper Chinese goods.84 China’s imperial history in the region is not helping,

either. China’s control in Central Asian areas, includ-ing Xingjian, has extended to the total of at least fourcenturies.85 China’s growing regional inuence proj-ects a perception of China’s efforts to pursue “a sys-tem of tributary relations under modern conditions”in its relations with Central Asian states.86

China’s “belt” strategy relies on several major tran-sit, trade, energy, and investment initiatives. China ispursuing its Pan-Asian railway plan to link 28 stateswith 81,000 kilometers of railroads. As part of the plan,Beijing intends to build a high-speed railway networkacross Asia and Europe via Central Asia, linking 17countries and comprising three major routes con-necting Kunming in China with Singapore throughSouth Asia, Urumqi, and Germany via Central Asia,

and Heilongjiang with Southeastern Europe throughRussia. Compared to other transport projects, Chinahas immense nancial resources to implement relatedinitiatives.87





34

China’s growing involvement in the region’s tran-sit projects goes hand in hand with its successful ef-

forts to invest in the region’s energy markets and todevelop energy export routes as alternatives to sea-based corridors, which pirates or navies of majorpowers, including the United States and, increasingly,India, could challenge in times of conict. Accom-plishing related tasks would facilitate trade in energyresources, commodities, and goods across Eurasia.This would reduce China’s dependence on the IndianOcean and the Strait of Malacca patrolled by U.S. andIndian navies, undercutting the perceived U.S. policyof “strategic exclusion” of China.93

China’s economic reach in Central Asia is espe-cially pronounced in Kazakhstan, where its ChinaNational Petroleum Corporation (CNPC) acquired en-ergy rms Petrokazkahstan for U.S.$4.18 billion and

half of MangistauMunaiGas for U.S.$2.6 billion. It alsobought an 8.33 percent share of Kashagan oil eld, thelargest discovered eld in the last 3 decades, solidify-ing its presence in the country’s energy market.94 Toenhance its presence, China provided U.S.$10 billionin loans to Kazakhstan in 2009 during the global -nancial crisis and, along with Kazakhstan, launchedthe Beineu-Bozoi pipeline in 2014 to deliver up to 14million tons of Kazakh oil to China annually.

In Turkmenistan, China loaned about U.S.$4 bil-lion for developing South Yolotan elds and providedU.S.$6.7 billion for the construction of the Turkmeni-stan-China gas pipeline, which has an annual capacityof 40 billion cubic meters and runs via Kazakhstan andUzbekistan.95 Beijing and Ashgabat now plan to build

a new pipeline to supply gas to China via Uzbekistanand Kyrgyzstan. This new project could enhance Uz-bekistan’s leverage over Kyrgyzstan, though China’s



35

involvement is likely to quell related concerns. Chinais the second-largest trade partner for Uzbekistan,

where it invests heavily in the transport market.96

China also built an oil-processing plant in Kyrgyzstan.Beijing views it imperative to develop and link exist-ing and new regional pipelines with those in China,including the Xinjiang-Shanghai gas pipeline—a criti-cal component of China’s West Development Strat-egy. With time, potential participation of Japan andSouth Korea in related projects could foster a dynamicconnection between Central and East Asia,97 thoughChina may prevent such developments from occur-ring, given rivalries in East Asia.

Beijing’s growing involvement in the regional gasand oil trade has challenged Russia, which has soughtto purchase gas and oil distributions networks to atleast control energy resource deliveries. In 2013, Rus-

sia’s gas giant Gazprom acquired Kyrgyzstan’s gassystem, promising to modernize the Soviet era net-work. Initially welcomed as a way to break Russia’sregional grip, China’s emerging dominance in the re-gion’s gas market now threatens to also sideline theEU, potentially leaving it without projected gas im-ports in the long-term, a prospect that worries Wash-ington.98 China’s growing economic presence as partof its institutionalized “belt” strategy and the SCOcauses additional concerns, including for the UnitedStates. Washington has traditionally viewed China’sregional rise as a check on Russia’s advances, but nowhas to contend with Beijing’s potentially dominantgeopolitical role in the region.

China’s projected military involvement to protect

its expanding economic interests adds a military di-mension to the perceived regional rivalry among greatpowers. China recently agreed to offer U.S.$3 million



36

in loans to Turkmenistan to boost its capability againstattacks on energy infrastructure. It also pursues lim-

ited military ties with Kyrgyzstan and Tajikistan. In2009, it offered U.S.$3.7 million to Uzbekistan to in-stall mobile scanning systems at border crossings.99 In2005, China “seriously considered” the possibility ofhaving a base in southern Kyrgyzstan to help counter“terrorism, separatism, and extremism.”100 However,China’s military ties with Central Asian states re-main limited due to Moscow’s predominant regionalsecurity role.

In this context, some experts discount the SCO as acounterbalancing tool of Kremlin and Beijing. Howev-er good it may be for expanding the region’s connectiv-ity and advancing stability through counterterrorismprograms, the SCO lacks the spirit of multilateralism,with China and Russia preferring bilateral deals with

regional states to bypass each other’s potentially ad-verse responses. Membership by Central Asian statesin the SCO indicates the “primary constraint of stra-tegic regionalism,” manifesting itself in the desire ofthese countries to either restrain their more powerfulpartners or at least shape more benecial outcomes.Internal incoherencies and antagonisms within theSCO thus make it more of a crippled economic andpolitical player rather than a geopolitical heavyweightopposing the United States or NATO. Ivan Safran-chuk, editor-in-chief of the Bolshaya Igra (The GreatGame) magazine, put it best: “SCO does not intend tooppose the US globally or regionally, so that it oper-ates not against America, but without it.”101

The SCO’s real or perceived capabilities notwith-

standing, China’s rise is undeniable and set to expandCentral Asia’s eastern and western vectors of connec-tivity. With time, the Central Asian states may nd



37

it increasingly imperative to turn not only north, butalso south to deect the pressure from the east as they

pursue an efcient and secure way of connecting withthe world. India’s delayed but potentially transforma-tional regional engagement is there to help.

INDIA’S DELAYED ARRIVAL ANDRECONNECTION OF CENTRAL ANDSOUTH ASIA

While India is a latecomer in the region, it is notunwelcome among Central Asian countries that areeager to diversify ties and have access to the Indiansub-continent and Ocean. India launched its “ConnectCentral Asia” policy in 2012, seeking to link Centraland South Asia and position India as the engine of thishistorically and geopolitically monumental develop-

ment. According to Shri Ahamed, Indian Minister ofState for External Affairs, the new policy “is based onpro-active political, economic and people-to-peopleengagement with Central Asian countries, both indi-vidually and collectively.”102 For India, reconnectingwith Central Asia is becoming an urgent imperativeto ensure long-term development of Afghanistan,strengthen India’s position relative to China, and pro-mote its expanding trade by land via Central Asia toEuropean and Middle Eastern markets, which is ex-pected to hit U.S.$100-120 billion annually by 2015.103

As part of the policy, India plans to set 14 ightlinks with all Central Asian states, develop local IT,energy, banking, and pharmaceutical industries, andto build energy infrastructure and e-networks link-

ing the two regions. In Kazakhstan, Indian rms areinvolved in coal, oil, and uranium industries. Indiahas imported more than 3,500 tons of uranium from



38

Kazakhstan since 2009.104 In Tajikistan, Indian compa-nies are involved in a hydropower project, a reection

of importance India attaches to the region’s hydro-energy capacity for the CASA-1000. In Kyrgyzstanand Tajikistan, Delhi plans to open an Indian-CentralAsia University and a military hospital, respectively.In Uzbekistan, its companies are present in the phar-maceuticals, IT, construction, energy, and mining sec-tors. As the world’s sixth largest energy consumer, itis a major party to TAPI and CASA-1000, seeking anactive role in the development of the region’s energyreserves to reduce its dependence on energy importsfrom the Middle East and meet its long-term economicgrowth projections. Delhi has recently expressed in-terest in building a gas pipeline from southern Ka-zakhstan to India. However, instability in Pakistanand Afghanistan, as well as the standoff between Iran

and the West has impeded India’s efforts to importenergy resources from Central Asia and Iran (via pro-posed Iran-Pakistan-India gas pipeline).105

India’s “connect” policy seeks to address theregion-wide instability by focusing on the develop-ment of Afghanistan to facilitate inter-regional de-velopment. Delhi plans to invest U.S.$100 million todevelop the Iranian port at Chabahar with a view toconnect it to Afghanistan and on to India via railwaysand roads. It spent U.S.$136 million to connect theport with the Ring Road in Afghanistan, where it hasinvested U.S.$2 billion in infrastructure over the lastdecade and sought to develop the Hajigak and otherdeposits worth U.S.$1-3 trillion. The port will enableDelhi to access Central Asian markets without relying

on Pakistan and position it favorably vis-à-vis China,which helped build a rival Pakistani port at Gwadar,linking China and the Persian Gulf. The Chabahar



39

port is but one link in the India’s North-South TransitCorridor connecting the Indian-built Zaranj-Delaram

highway in Afghanistan and providing an outlet forIndia’s goods to Central Asia.106 In case of entente be-tween Iran and the West, the corridor would facilitateIndia’s trade with Central Asia, expanding a north-south vector of the transcontinental trade. Besides itsfunding for roads, railways, medical facilities, powernetworks, and other socio-economic infrastructure,India helped Afghanistan become a member of theSouth Asian Association for Regional Cooperation toboost its long-term development and stability,107 anessential prerequisite for India’s own unimpeded eco-nomic rise and reconnection with Central Asia.

India’s strained ties and rivalry with Pakistan overinuence in Afghanistan and its strategic competitionwith China have dictated its outreach to Afghanistan

and Central Asia. In line with its nonalignment tra-dition, India has positioned itself as an autonomousactor. But it has attained only limited regional pres-ence compared to Russia, China, and the EU, whichdominate trade and investment. India’s trade with theregion was just U.S.$500 million in 2012, compared toChina’s trade at about U.S.$29 billion (In 2010, tradebetween Russia and Central Asia was € 7 billion,which made Russia the region’s third largest tradepartner after China and the EU).

India has expressed a particular interest in cultivat-ing defense industry ties with the regional countries.108 Besides developing a strong relationship with Uzbeki-stan as its major arms supplier, India has sought mili-tary ties with Bishkek and Dushanbe after opening a

mountain biomedical research center in Kyrgyzstanand requesting access to Ayni airbase that it helped re-furbish in Tajikistan. However, Russia’s military ties



40

and aid to Kyrgyzstan and Tajikistan have preventedit from gaining its rst-ever military base overseas.

Meanwhile, China’s assertive energy policy has out-maneuvered India in the energy sphere. In 2013, Indiafailed to secure an 8.4 percent stake in Kashagan oileld, which Kazakhstan chose to give to China for thesame amount of U.S.$5 billion. The deal was one ofabout 20 agreements between China and Kazakhstanworth U.S.$30 billion. Beijing also outperformed Delhiin securing rights to develop the Galkynysh gas eldin Turkmenistan and launching a pipeline in 2009 tosupply Turkmen gas to China.109

India gained an SCO observer status to enhanceits regional inuence, but it sees few prospects forproductive interaction within the group because itperceives China as seeking to block its access to andprevent its attempted active engagement in Central

Asia.110

The U.S. role will be critical for expandingDelhi’s regional presence given similarity of regionalgoals expressed in the Indian “connect” policy andthe U.S. NSRS. Looking long term, India’s expandingglobal economic presence, its lagging yet promisingregional potential, and its growing interest in integrat-ing South and Central Asia via Afghanistan has shownDelhi’s potential as an ascending global economicpower poised to transform the landscape of the broad-er region by expanding Central Asia’s southward vec-tor of connectivity and reconnecting the region withSouth Asia. India’s projected rise adds a layer of com-plexity to the already complicated regional dynamics,including those centered on Russia’s resurgence inCentral Asia.



41

RUSSIA’S RENEWED FOCUS ON ECONOMICINTEGRATION IN THE POST-SOVIET SPACE

Sharing traditionally strong yet increasinglycontested ties with Central Asian states, Russia hasviewed Central Asia as a zone of its exclusive inter-ests, leveraging its regional policy to advance a multi-polar international system. Besides seeking to addressconcerns about regime stability, terrorism, Islamicfundamentalism, and narco-trafcking in CentralAsia, Moscow has sought to retain its waning gripon the production and exports of the region’s energyresources and prevent China, the EU, and the UnitedStates, among other actors, from extending their inu-ence in the region,111 including by pursuing recent in-tegration initiatives in the form of the Customs Union(CU) and the Eurasian Economic Union (EEU). While

these initiatives can advance the region’s connectivityon Russia’s terms, they could also impede its multi-vector orientation and weaken the sovereignty of theCentral Asian states.

Russia’s regional strategy has not been withoutsetbacks, which nevertheless helps explain Moscow’sefforts to revitalize integration processes in the post-Soviet space. Despite relative success, Russia has notdeveloped sufcient “soft power” capabilities, resort-ing to “hard power” to satisfy its ambitions and, as aresult, undermining the appeal of the CU and EEU in-tegration initiatives. In the 1990s, Russia had struggledto retain its inuence in the post-Soviet space, eventhough the existing economic infrastructure and linksleft over from the heydays of the Soviet Union served

as the basis for the now sovereign regional states torun their economies. Not only was Russia weak, butit has also perceived itself contending with new actors



42

in its own backyard. All around, Russia has seen ene-mies bent on containing its wishful rise. The perceived

encroachment of the West and the “color” revolutionsin Ukraine, Georgia, and Kyrgyzstan has intensiedRussia’s fears of the U.S. rising inuence in CentralAsia, Eastern Europe, and the Caucasus. Meanwhile,China’s rapidly growing inuence in Central Asia hasput Russia on alert, prompting Moscow to manageChina’s regional rise within SCO while leaning on itto deter U.S. ambitions. Russia’s joint call with Chinain 2006 and in 2014 for Washington to vacate militarybases in Central Asia and Afghanistan show theiruneasiness about the U.S. regional presence.

Since 2000, Russia’s growing energy export rev-enues have enabled it to project a more assertiveeconomic policy at home and abroad. However, thechallenges posed by the West in Eastern Europe and

the South Caucasus, as well as by China’s expand-ing economic inuence and U.S. military presence inCentral Asia, have grown concurrently in scope andperception. Russia’s growing economic clout has fedimperial nostalgia and Russia’s perception of itself asa great power, making the implementation of mea-sures to achieve related ambitions a more likely andaccepted scenario in Central Asia and beyond. Theresistance of regional states to perceive Russia’s ef-forts at domination, the need for Russia to buttress itsimage of a great power through economic and mili-tary means, as well as real and perceived attempts bythe West to expand its regional reach have resultedin a shaky stability on the EU’s doorstep. The 2008Russian-Georgian war and recognition by Moscow of

Georgia’s breakaway provinces of South Ossetia andAbkhazia as independent states, as well as the 2014annexation of largely Russian-populated Crimea fol-



43

lowing a local referendum and the standoff betweenRussia and the West over Ukraine’s geopolitical ori-

entation, are all outcomes of these volatile dynamics.In a way, these dynamics have served to hamper theexternal connectivity of the broader Caspian region.Pointedly, none of the Central Asian states have recog-nized the independence of South Ossetia and Abkha-zia or the annexation of Crimea, though their negativereactions have been muted.

Under Vladimir Putin’s second presidency since2012, Moscow’s drive for post-Soviet integration hasintensied, with Russia supporting the creation of theCU, the EEU, and the Eurasian Union by 2025, whichwould include EEU members and potentially Arme-nia, Tajikistan, and Kyrgyzstan, among possible oth-ers. President Putin stated this about the CU and EEU:

We suggest a powerful supranational associationcapable of becoming one of the poles in the modernworld and serving as an efcient bridge between Eu-rope and the dynamic Asia-Pacic region. This proj-ect also implies transitioning to closer coordination ineconomic and currency policies in the Customs Unionand [Common Economic Space] and establishing afull-edged economic union.112

As other emerging powers, Russia nds it hardcompeting globally in certain markets and seeks re-gional integration to protect itself from global com-petition while facilitating access for its products toregional markets.113 The global nancial crisis under-scored Russia’s vulnerabilities, increasing the negativeperception by the Kremlin of the U.S.-led global eco-

nomic order that Moscow, along with Beijing, Delhi,and Brasilia feels it could and should challenge. Seenin this light, the CU and EEU enhance the region’s con-nectivity but could impede its multivector orientation.



44

According to a 2013 survey, two-thirds to three-fourths of the CU members population viewed the

CU favorably, with the perception declining from80 percent to 73 percent in Kazakhstan and 72 to 67percent in Russia (due to implications stemming fromthe second wave of the global nancial crisis in 2013),yet rising in Belarus from 60 to 65 percent comparedto 2012. Interestingly, the population in Uzbekistan,whose regime resists any, especially Russia’s, integra-tion schemes, had the highest favorable perception (77percent), followed by Tajikistan (75 percent), Kyrgyz-stan (72 percent), Armenia (67 percent), Georgia (59percent), Moldavia (54 percent), Ukraine (50 percent),and Turkmenistan (50 percent).114

Despite favorable perceptions, neither Kyrgyzstannor Tajikistan, both members of the World Trade Or-ganization (WTO), rush to join the CU. According to

the Asian Development Bank (ADB), joining the CUwould decrease the amount of goods re-exported fromChina through Kyrgyzstan to Russia and Kazakhstan,affecting hundreds of thousands of people engaged intrade. Kyrgyzstan demands nancial aid, stabilizationfunds, as well as assurances of free movement of laborand special status for Dordoi and Kara-Suu marketsthat are part of the emerging Silk Road serving Chi-na’s exports and Kyrgyzstan’s re-exports throughoutCentral Asia and Russia, among other conditions, inreturn for membership.115 In May 2014, Kyrgyzstansubmitted a new roadmap for joining the CU thatreects the conditions.

The question of membership in the CU, and poten-tially the EEU, for Kyrgyzstan and Tajikistan mirrors

the choice before Ukraine: in both cases, Russia seeksto thwart the designs of its perceived challengers, seek-ing to prevent Ukraine from pursuing the Free Trade



45

Association Agreement and pro-Western course andpreventing Kyrgyzstan and Tajikistan from falling

into China’s orbit and pursuing an Eastern course.116

InCentral Asia, the U.S. military involvement and Chi-na’s rapidly expanding economic inuence, in largepart, has prompted Moscow’s vigorous integrationistcourse. With a double-headed eagle as its coat of arms,Russia nds such dual dynamics geopolitically hardto tolerate and, as recourse, has continued buildingfor itself a distinct, Eurasian geopolitical identity bypursuing an integration project in the heart of Eurasia.

Secretary Clinton once remarked on Russia’s inte-gration initiatives: “We know what the goal is, and weare trying to gure out effective ways to slow downor prevent it.”117 The remark has played to Russia’sperception of U.S. hostile intent to undermine Rus-sia’s inuence and prompted the Kremlin to pursue

“the goal” even more actively. This perception hasalso been extended to China, which has emerged asa formidable economic player, challenging Russia inCentral Asia in the energy, trade, manufacturing, andinvestment sectors. Russia is simply not ready to co-operate with China on regional economic integration.But it does not necessarily suggest it cannot cooperatewith Beijing on larger strategic issues in the same wayas the United States may have trade disputes withits EU allies, but work with them on other matters.118 While their interests converge in their common pur-suit of global status, the interests of Russia and Chinahave diverged over regional economic goals.119

Moscow’s close ties with Kazakhstan and Belarushelp Russia facilitate its integration drive. In May

2014, the parties created the EEU, though many viewthe move premature. Both Minsk and Astana haveraised issues with the CU and EEU as better serving



46

Moscow’s interests. Just a month earlier, President ofBelarus Alexander Lukashenko questioned the utility

of creating the EEU, citing the country’s disagreementwith the position of energy-rich Russia and Kazakh-stan to retain tariffs on energy exports for the next de-cade.120 Meanwhile, President of Kazakhstan Nursul-tan Nazarbaev has emphasized that the EEU is “not anattempt to restore the USSR; there is no return to thepast, and there won’t be . . .,” a position reecting theinterest of the Kazakh leadership in preventing the re-emergence of Soviet Union-type structure that wouldcompromise Kazakhstan’s sovereignty. Furthermore,Astana had not been happy about Moscow’s attempts“to assume new powers” within the CU commis-sion.121 Meanwhile, debates have surfaced whetherthe CU had done more bad than good for Kazakhstan.The country’s imports from Russia had grown from

31.3 percent in 2009 to 42.8 percent in 2011, causingan increase in trade decit by 63 percent and a drop inreal income and capital returns.122 However, PresidentNazarbaev is known as a protagonist of Eurasian inte-gration and, while in power, is likely to pursue the de-clared course with Russia as its strategic partner whileadvancing the country’s multivector foreign policy.Deputy Foreign Minister Erjan Kazyhanov describedKazakhstan’s foreign policy priorities this way: “ThePresident in his address set the priorities: Russia,China, U.S., EU, Asia, and the Middle East. The chiefprinciple here is an economic prot.”123

Whether Russia and its EEU partners succeed intheir union is a big question. Besides the previous is-sues, the members have suffered from overlapping

functions of other initiatives, like the Commonwealthof Independent States (CIS), as well as the distrust bymembers who are guarding their newly gained sover-



47

eignties and successfully cultivating diverse ties withmajor powers. Sergei Chalogo, a Russia expert, has

pointed to the ineffectiveness of Russia-led initiativesthis way:

The EurAsEc’s anti-crisis fund is one’s own small IMF[International Monetary Fund], the single economicspace—one’s own EU, the CU—one’s own WTO, whilethe Collective Security Treaty Organization (CSTO)—is one’s own NATO. That is, everything is as it should

be with adults; only that nothing works.124

How the EEU members lead a union comprised ofeconomies of varying scale and pace of developmentis unclear. Nor is it clear what immigration policywould look like once others join, if at all, given strongnationalism in Russia and growing calls for visa re-strictions and quotas for laborers from Central Asia

and the South Caucasus. The saying captures the iro-ny best: “The Russians want two dreams to come trueat the same time: for all non-Russians to be expelledfrom Russia and for themselves to move abroad.”125

The varying pace of development of Central Asianstates (the CU, EEU, etc.) has spurred Moscow to pur-sue a differentiated policy by relying on multi- and

bilateral frameworks. Disparities in wealth and re-sources, as well as proximity to Russia, have denedthe extent of dependence of Central Asia countries onties with Russia. Kazakhstan, Turkmenistan, and Uz-bekistan have managed ties with Moscow on a moreindependent basis compared to Tajikistan and Kyr-gyzstan, which depend heavily on Russia for aid, in-vestments, and military assistance. Russia has viewed

Kazakhstan, the largest and richest state with a strongmultivector policy and common border, as its closestally in Central Asia. In 2006, they established the Eur-



48

asian Development Bank (EDB), which now has Kyr-gyzstan, Tajikistan, Armenia, and Belarus as members,

to fund infrastructure projects. In 2008, they createdan Anti-Crisis Fund within EDB with U.S.$8.5 billionin nancial resources to support the poorer membersfollowing the global nancial crisis.126 In Tajikistanand Kyrgyzstan, Russia has invested in hydro-energyprojects, assisting with the construction of Sangtuda 1hydroelectric plant responsible for 10 percent of Tajik-istan’s electricity production and offering U.S.$1.7 bil-lion for construction of the 1,900 megawatt Karambata1 hydroelectric project in Kyrgyzstan.127 Its ties withUzbekistan, however, are strained, with Tashkentavoiding or resisting Russia’s integration initiatives.

Russia has also sought to partake in inter-regionalmultilateral projects to retain its ability to affect andshape regional geopolitical trends and outcomes,

even if these projects are viewed as reorienting Rus-sia’s perceived client states. These include TAPI andCASA-1000, supported by the United States, India,and Central and South Asian states.128 Russia stillhas a lot of economic, political, and military levers toshape the region’s trajectory. However, Moscow viewsChina’s leading economic position, India’s impendingexpanded involvement, and the U.S. potentiallyprolonged military presence as undermining Russia’sregional presence. Along with Russia’s rising clout,these dynamics have prompted Moscow to up itseconomic integration agenda, while relying on andoccasionally using its “hard power” to retain itsregional position. This has created opportunitiesand challenges for the region’s connectivity and

local economies, which seek to harness evolvingdynamics and connectivity initiatives to improve theirperformance.



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ENDNOTES - CHAPTER 2

1. A quote by Ali-Shir Nava’i (1441-1501), a great poet andphilosopher from Herat in present-day Afghanistan.

2. David Kerr, “Central Asian and Russian Perspectives onChina’s Strategic Emergence,” International Affairs, Vol. 86, No. 1, January 2010, p. 141.

3. Johannes Linn, “Connecting Central Asia and the Caucasus

with the World,” Paper prepared for the First Eurasian EmergingMarket Forum, Thun, Switzerland, January 23-25, 2010, p. 5.

4. Johannes Linn, “Central Asian Regional Integration andCooperation: Reality or Mirage?” The Economics of the Post-So-viet an Eurasian Integration, Eurasian Development Bank (EDB)Eurasian Integration Yearbook 2012, Almaty, Kazakhstan:EDB, p. 114.

5. Kerr, p. 134.

6. Linn, “Connecting Central Asia and the Caucasus with theWorld,” p. 9.

7. I. Iskakov, “Problemy i perspektivy integratsii evraziiskogoprostranstva” (“Issues and Prospects of Eurasian Integration”),ББК 63.3(2)64-6, p. 243.

8. “Have we reached the end of globalization?” Global PublicSquare, January 4, 2014.

9. Ibid.

10. Pankaj Ghemawat and Steven Altman, DHL Global Con-nectedness Index 2012: Analyzing Global Flows and Their Power to In-crease Prosperity, DHL, 2012.

11. Peter Coy, Matthew Campbell, and Simon Kennedy,“From Davos, a View on the State of Globalization,” BloombergBusinessweek, January 16, 2014.



50

12. “Going Backwards: The World Is Less Connected than ItWas in 2007,” The Economist, December 22, 2012.

13. Coy et al.

14. Ghemawat and Altman.

15. Dmitri Trenin, “Contemporary Issues in International Se-curity: Central Asia,” Stephen Blank, ed., Central Asian SecurityTrends: Views from Europe and Russia, Carlisle, PA: Strategic Stud-ies Institute, U.S. Army War College, April 2011, p. 41.

16. Frederick Starr, foreword in Andrew Kuchins, ThomasSanderson, and David Gordon, The Northern Distribution Networkand the Modern Silk Road: Planning for Afghanistan’s Future, Wash-ington, DC: Center for Strategic and International Studies (CSIS),December 2009, p. v.

17. Kuchins et al., pp. 9-10.

18. Jeffrey Mankoff, “The United States and Central Asia Af-ter 2014,” Samuel Brannen, ed., The Turkey, Russia, Iran Nexus:Evolving Power Dynamics in the Middle East, the Caucasus, and Cen-tral Asia, Washington, DC: CSIS, p. 4.

19. Mankoff, pp. 4-5.

20. Alexander Cooley, “Principles in the Pipeline: ManagingTransatlantic Values and Interests in Central Asia,” International Affairs, Vol. 84, No. 6, November 2008, pp. 1183-1186.

21.Kuchins et al., p. 12.

22. Graham Lee, “The New Silk Road and the Northern Dis-tribution Network: A Golden Road to Central Asian Trade Re-form?” Occasional Paper Series No. 8, Eurasia Project, Open SocietyFoundation, October 2012.

23. Vladimir Fedorenko, The New Silk-Road Initiatives in Cen-tral Asia, Rethink Paper No. 10, Washington, DC: Rethink Insti-tute, August 2013, p. 8.



51

24. Professor Frederick Starr, Interview with Guli Yuldashevaand Mavlon Shukurzoda, “New Silk Road Strategy: Problemsand Perspectives,” Jamestown Foundation Blog, November 22, 2011.

25. Charles Ziegler, “Central Asia, the Shanghai CooperationOrganization, and American Foreign Policy from Indifference toEngagement,” Asian Survey, Vol. 53, No. 3, May-June 2013, p. 497.

26. Former U.S. Secretary of State Hillary Clinton, quoted inRichard Solash, “Progress Noted, But Questions Remain Over‘New Silk Road’ Initiative,” Radio Free Europe/Radio Liberty,September 16, 2012.

27. Interview with Starr.

28. Mankoff, p. 20.

29. Stephen Blank, “Central Asian Perspectives on Afghani-stan after the US Withdrawal,” Afghanistan Regional Forum Series No. 2, Central Asia Program, Washington, DC: George Washing-ton University, November 2012, p. 21.

30. Assistant Secretary of State for South and Central AsianAffairs Robert Blake, quoted in Ibid.; Kuchins, pp. 20-21.

31. “Integration Crucial To Central Asian Prosperity,” Voice of America, November 30, 2013.

32. “Integrating Central Asia into the World Economy: TheRole of Energy and Transport Infrastructure,” Washington,DC: The Wolfensohn Center for Development, October 22-23,2007, p. 10.

33. Blank, “Central Asian Perspectives on Afghanistan afterthe US Withdrawal,” p. 18.

34. Linn, “Central Asian Regional Integration and Coopera-tion: Reality or Mirage?” p. 106. Also see Mankoff, p. 21.




52

36. Kuchins, p. 26.

37. “Amerika hochet sdelat’ Tsentralnoi Azii” (“Ameri-ca Wants to Silken Central Asia”), Fond strategicheskoi kultury,November 8, 2013.

38. Mankoff.


40. Ibid., p. 21.

41. Fedorenko, pp. 8-9.


43. Yuasa Takeshi, “Central Asia in the Context of Japanese-Russian Relations,” The China and Eurasia Forum Quarterly, Vol. 8,No. 2, pp. 102, 126.

44. Christopher Len, Uyama Tomohiko, and Hirose Tetsuya,eds., Japan’s Silk Road Diplomacy Paving the Road Ahead, Washing-ton, DC: Central Asia-Caucasus Institute, 2008.

45. Takeshi, pp. 129-130.

46. Roman Muzalevsky, “Japan Looks to Central Asia forStrategic Resources,” Eurasia Daily Monitor Vol. 9, Issue 215, No-vember 26, 2012.

47. Valijon Khoshimov, “Foreign policy of Japan and CentralAsia,” Fellow Report, The Japan Institute of International Affairs,August 18, 2012, pp. 25-26.

48. Len, pp. 7-8, 46.

49. Prime Minister of Japan Taro Aso, “Japan’s Diplomacy:Ensuring Security and Prosperity,” Speech at The Japan Instituteof International Affairs, June 30, 2009.



53

50. Olga Dobrinskaya, “Japan and Turkmenistan on the WayTowards Closer Cooperation,” Prudent Solutions Analytical Center ,October 8, 2013.

51. Khoshimov, pp. 9-10.

52. Takeshi, p. 127. Also see Manabu Shimizu, “Central Asia’sEnergy Resources: Japan’s Energy Interests,” Elizabeth Van DieDavis and Rouben Azizian, eds., Islam, Oil, and Geopolitics: Central Asia after September 11, Lanham, MD: Rowman & Littleeld, 2007,pp. 111-112, 119.

53. Khoshimov, p. 10.

54. Japan’s Ofcial Development Assistance White Paper2012, pp. 130-133.

55. Dobrinskaya.

56. Ministry of Foreign Affairs of Japan, August 20, 2013,available from www.mofa.go.jp/, accessed June 1, 2014.

57. Mirzokhid Rakhimov, “Central Asia and Japan: Bilateraland multilateral relations,” Journal of Eurasian Studies, Vol. 5, Issue1, January 2014, pp. 79-86.

58. Roman Muzalevsky, “Turkey Looks Forward, Talks SCO,”Eurasia Daily Monitor , Vol. 10, Issue 27, February 13, 2013.

59. Wojciech Tworkowski, Realism Mixed with Romanticism:Turkey’s Relations with the States of Central Asia, CES Report, War-saw, Poland: Centre for Eastern Studies (CES), July 2008, p. 46.Also see Mustafa Kutlay and Salih Doğan, “Turkey and CentralAsia: Modern Economic Linkages along the ‘Silk Road’,” The Jour-nal of Turkish Weekly, January 13, 2011.

60. Thomas Wheeler, Turkey’s role and interests in Central Asia,Safeworld Brieng, London, United Kingdom (UK): Safeworld,October 2013, p. 7.

61. Ministry of Customs and Trade of the Republic of Tur-key, Information Note on Silk Road Customs Cooperation Initiative,February 2012.



54


63. Abdullah Bozkurt, “Turkish Minister Says RevivingSilk Road Trade Route Remains Turkey’s Goal,” Today’s Zaman,December 2012.

64. Wheeler, pp. 4-5.

65. Richard Weitz, “Towards a New Turkey-NATO Partner-ship in Central Asia,” Turkish Policy Quarterly, Vol. 5, No. 2, 2006.

66. Ann-Sophie Gast, “A shift in the EU Strategy for CentralAsia?” Moscow, Russia: Carnegie Moscow Center, April 30, 2014.

67. Neil Melvin, “The EU Needs a New Values-Based Realismfor its Central Asia Strategy ,” EUCAM Policy Brief No. 28, October2012, pp. 2-4.

68. INOGATE Energy Portal, available from www.inogate.org/, accessed on April 5, 2014.

69. Michael Emerson and Evgeny Vinokurov, “Optimisationof Central Asian and Eurasian Inter-Continental Land TransportCorridors,” EUCAM Working Paper No. 7, 2009, p. 8. Also see Ibid.; Linn, “Connecting Central Asia and the Caucasus with theWorld,” p. 10.

70. “Silk Wind Project Targets Container Train Route LinkingEurope and Asia,” EU Neighborhood Info Center , September 2012.

71. Nichlas Norling, “Viking Railroad Connects Scandinaviawith South Caucasus, Central Asia, and China,” Central Asia Cau-casus Institute Analyst, November 2, 2011.

72. Yevgeniy Vinokurov, “Pragmatic Eurasianism,” ЕЭИ ,Vol. 4, No. 21, November 2013, p. 17.

73. Ariel Cohen, “How the U.S. Withdrawal from Afghani-stan Will Affect Russia and Eurasia,” Stephen Blank, ed., Central Asia after 2014, Carlisle, PA: Strategic Studies Institute, U.S. ArmyWar College Press, November 2013, p. 25.



55

74. European Commission, “EU announces future commit-ments for development with Central Asia Region,” Press ReleaseIP/13/1119, November 20, 2013.

75. Kim Gould, “Strategiya EES po Tsentranoi Azii” (“EU’sCentral Asia Strategy”), Postmodern Geopolitics, May 27, 2011.

76. Pan Guang, “China and Central Asia: Charting a NewCourse for Regional Cooperation,” Washington, DC: The James-town Foundation, Vol. 7, Issue 3, February 7, 2007.

77. Quoted in Kerr, p. 127. For discussion on China’s interestsin Central Asia, see p. 133.

78. Richard Weitz, “China’s Military Goals, Doctrine, and Ca-pabilities in Central Asia,” Stephen Blank, ed., Central Asia After2014, Carlisle, PA: Strategic Studies Institute, U.S. Army War Col-lege Press, November 2013, pp. 86-87.

79. Kerr, p. 128.

80. Fareed Zakaria, “Can China reform in time?,” Global PublicSquare, January 4, 2014.

81. Geir Flikke, “Collusive Status-seeking: The Sino-RussianRelationship,” Stephen Blank, ed., Central Asia After 2014, Carl-isle, PA: Strategic Studies Institute, U.S. Army War College Press,November 2013, p. 34.

82. Mankoff, p. 22.

83. Martha Brill Olcott, “China’s Unmatched Inuence inCentral Asia,” Washington, DC: Carnegie Endowment for Inter-national Peace, September 18, 2013.

84. Rollie Lal, Central Asia and Its Asian Neighbors: Security andCommerce at the Crossroads, Santa Monica, CA: RAND Corpora-tion, 2006, p. 9.

85. Adiljan Umarov and Dmitriy Pashkun, Tensions in Sino-Central Asian Relations: Implications for Regional Security, CentralAsia Series, Watcheld, England: Conict Studies Research Cen-tre, Defence Academy of the United Kingdom, January 2006, p. 2.



56

86. Kerr, p. 140.

87. Roman Muzalevsky, “The Implications of China’s High-Speed Eurasian Railway Strategy for Central Asia,” Eurasia Daily Monitor , Vol. 7, Issue 64, April 2, 2010.

88. Shiping Tang, “Economic Integration in Central Asia: TheRussian and Chinese Relationship,” Asian Survey, Vol. 40, No. 2,March-April, 2000, p. 370.


90. Arkadii Dubnov, “Еvraziyskaia integratsia: ni besplatnyhrjnfet, ni restavratsii SSSR” (“Eurasian Integration: Neither FreeCandy, No Restoration of the USSR”), RIA Novosti, December25, 2013.

91. Roman Muzalevsky, “China-Kyrgyzstan-Uzbekistan Rail-way Scheme: Fears, Hopes and Prospects,” Eurasia Daily Monitor ,Vol. 9, Issue 102, May 30, 2012.

92. Richard Weitz, “Massive East-West Transit CorridorNears Crucial Phase,” Central Asia-Caucasus Institute Analyst, No-vember 12, 2013.

93. Richard Boucher, “China’s Backdoor Breakout,” ForeignPolicy, December 12, 2013.

94. Simon Pirani, “Central Asian Energy: the Turning Point,”Emerging Markets, February 2010.

95. Mankoff, p. 23.

96. Olcott.

97. Guang.

98. Blank, p. 18.

99. Sébastien Peyrouse, “Military Cooperation between Chinaand Central Asia: Breakthrough, Limits, and Prospects,” Vol. X,Issue 5, March 5, 2010, pp. 11-12.



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100. Weitz, “China’s Military Goals, Doctrine, and Capabili-ties in Central Asia,” pp. 90-91.

101. Quoted in Kerr, pp. 146-148.

102. Roman Muzalevsky, “India’s ‘Connect Central Asia’ Pol-icy Seeks to Compensate for Lost Time,” Eurasia Daily Monitor ,Vol. 9, Issue 176, September 27, 2012.


104. Dipanjan Roy Chaudhury, “Scope of India, KazakhstanContract for Fresh Uranium Supply Will Be Bigger Than Before,”The Economic Times, December 30, 2013.

105. Sergej Mahnovski, Kamil Akramov, and Theodore Kara-sik, Economic Dimensions of Security in Central Asia, Santa Monica,CA: RAND Corporation, 2006, pp. 43-44.

106. Micha’el Tanchum, “India’s Central Asia ambitions out-foxed by China and Russia,” Eastasiaforum, October 12, 2013.

107. Richard Weitz, “Afghanistan and India Deepen StrategicCooperation,” Central Asia-Caucasus Analyst, January 22, 2014.

108. Sébastien Peyrouse, “Russia-Central Asia: Advances andShortcomings of the Military Partnership,” Stephen Blank, ed.,Central Asian Security Trends: Views from Europe and Russia, Carl-isle, PA: Strategic Studies Institute, U.S. Army War College Press,April 2011, p. 24.

109. Tanchum.

110. Kerr, p. 149.

111. Roman Muzalevsky, “Russia’s Strategy in Central Asia:an Analysis of Key Trends,” Yale Journal of International Affairs, Vol. 4, Issue 1, 2009, p. 26.

112. Russian former Prime Minister Vladimir Putin, “Novyiintegratsionnyi proekt dlia Evrazii – budushchee, kotoroe rozh-daetsia segodnia” (”A New Integration Project for Eurasia—TheFuture in the Making”), Izvestiia, October 3, 2011.



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113. Tang, p. 375.

114. Aleksandr Shustov, “Integratsia: za i protiv. Resultatyoprosa na postsovetskom prostranstve okazalis vesma neojidan-nymi” (“Integration: Pros and Cons. The Survey Reveals QuiteUnexpected Results for Post-Soviet Space), Stoletie, October18, 2013.

115. Dubnov.

116. Ibid.

117. Quoted in Charles Clover, “Clinton Vows to Thwart NewSoviet Union,” Financial Times, December 2012.

118. Ibid., pp. 365-374.

119. Flikke, p. 35.

120. “Otlojit sozdanie Evraziiskogo soiuza na 10 let” (“De-laying the Creation of the Eurasian Union for 10 years”), Kapital, April 30, 2014.

121. Dubnov.

122. Тulkin Tashimov, “Tamojennyi soiuz: v Rossii ‘Mishka’takje ‘kosolapyi,’ no brend, a nash yt menee vkusnyi, no uje kon-trafakt” (“Customs Union: In Russia, “Teddy bear” Is, too, Club-Footed, but a Brand; Ours Is No Less Tasty, but already a Coun-terfeit”), Inosmi, October 8, 2013.

123. Quoted in Muzalevsky, “Russia’s Strategy in CentralAsia: an Analysis of Key Trends,” p. 35.

124. Quoted in Roman Muzalevsky, “Russian-Led CustomsUnion Intensies Sino-Russian Rivalry in Central Asia,” EurasiaDaily Monitor , Vol. 8, Issue 147, August 1, 2011.

125. Quoted in Jens Siegert, “Natives, Foreigners, and NativeForeigners—The Difcult Task of Coexistence in Russia,” Russian Analytical Digest No. 141: Xenophobia and Migrants, December 23,2013, p. 7.



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126. Linn, “Central Asian Regional Integration and Coopera-tion: Reality or Mirage?” p. 105.

127. Marlène Laruelle, “Foreign Policy and Myth-making:Great Game, Heartland, and Silk Roads,” Marlène Laruelle andSébastien Peyrouse, eds., Mapping Central Asia: Indian Perceptionsand Strategies, Surrey and Burlington, UK: Ashgate, 2011, p. 11.

128. Gulnoza Saidazimova, “Integraziya v Tsentralnoi Azii:realii, vyzovy, vozmojnosti” (“Integration in Central Asia: Reali-ties, Challenges, and Opportunities”), Tsentralnaia Azia i Kavkaz,September 2000.







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been more successful in solidifying their sovereign-ties compared to Kyrgyzstan and Tajikistan. On bal-

ance, however, some would argue that Central Asiancountries—having failed to consolidate themselvesas viable, successful, and modern nation-states—con-tinue to be objects rather than subjects of internationalaffairs.4

The rise of China, India, Russia, and Turkey, aswell as ongoing rivalries over the direction of globaland regional processes, have supplemented this re-gional context, with select countries forming region-based sources of inuence and partnerships with oth-er powers as a way to counter the perceived policiesof domination by other, stronger powers, includingin Central Asia. Globally, one can see such dynam-ics manifest themselves in a transition of power awayfrom the West, “the rise of the rest,” and the arrival of

multipolarity.

Regionally, one can see related dynam-ics in the “marriage of convenience” between Chinaand Russia on the issue of necessary U.S. militarywithdrawal from Afghanistan and Central Asia, aswell as in the expanding regional economic involve-ment by China, Russia, and, less so in the short term,India. Therefore, a U.S. failure to translate its mili-tary presence into a durable and long-term economicone could leave Washington without levers to affectregional and global processes and outcomes.

Despite the uncertainty of the U.S. long-term en-gagement, Central Asia has a lot to look forward to,given ongoing dynamics as well as its vast resourcesand strategic location, standing to benet from infra-structure, trade, energy, and transit projects. Located

in the middle of Eurasia, Central Asia can serve de-veloping markets in the east, west, north, and south.Already, the Eurasian continent is rapidly integrat-



63

ing, with the largest share of global trade occurringbetween Eurasian economies, increasingly via Central

and South Asia. While the sea-borne trade predomi-nates, land routes are set to take on an expandingshare of continental trade due to cost and time advan-tages, as other integration processes have shown. Theeconomic dynamism of China, India, and other ac-tors enable Central Asian countries to serve as trade,energy, and transit conduits and access points forgoods, energy, capital, labor, investment, and ideas.5 In many instances, Central Asian states have eagerlyembraced such roles and expanded their external ties.(See Figure 3-1.)

Source: Gill and Raiser, 2011, taken from Ibid ., Johannes Linn, p. 97.

Figure 3-1. Global Trade Flows(2008, in billions of dollars).

Part of merchandise trade realized...





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Railway corridors in Central Asia feed on the

Soviet-era railway network, but they also take advan-tage of the expanding networks built by China, Iran,and the regional states. Central Asia countries are aplatform of multi-modal corridors being advancedby: Russia- and Kazakhstan-led European EconomicCommunity (EEC); China- and Asian DevelopmentBank (ADB)-led Central Asia Regional Economic Co-operation (CAREC) program; and Europe-promotedPan-European Azes and the Transport Corridor Eu-rope-Caucasus-Asia (TRACECA) program. The ADB,European Bank for Reconstruction and Development(EBRD), International Monetary Fund (IMF), IslamicDevelopment Bank (IsDB), United Nations Develop-ment Program (UNDP), and the World Bank (WB)all back the CAREC initiative, which supports transit

system construction and facilitation projects worthU.S.$13 billion in Afghanistan, Azerbaijan, Kazakh-stan, Kyrgyzstan, Mongolia, Pakistan, China, Tajiki-stan, Turkmenistan, and Uzbekistan. In 2008, CARECcommitted U.S.$6.7 billion for major transport projects,which include: the Europe-East Asia (U.S.$3 billionby ADB, U.S.$2 billion by WB, and nancial supportfrom EBRD and IsDB); the Mediterranean-East Asiaroad and rail networks from China via Central Asia tothe South Caucasus; the Russia-East Asia corridor by-passing Central Asia; the East Asia-Middle East andSouth Asia road linking China, Kyrgyzstan, Tajiki-stan, Afghanistan, and Pakistan; the Europe-MiddleEast and South Asia road and railway lines connectingKazakhstan, Uzbekistan, and later Afghanistan.7 (See

Figures 3-3, 3-4, and 3-5.)



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F i g u r e 3 - 3 . C A R E C

T r a n s i t C o r r i d o r s .



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Source: CAREC Project Portfolio, 2010, taken from Ibid ., Johannes

Linn, p.109.

Figure 3-4. CAREC Investment Loans and Grants,by Sector and Date, 2001-10.

Source: CAREC, 2011, taken from Ibid ., Johannes Linn, p.109.

Figure 3-5. Financing of CAREC Programs, 2011.



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CAREC considers supporting the following tran-sit links connecting: Russia, Kazakhstan, Kyrgyzstan,

and China; Azerbaijan, Turkmenistan, Kazakhstan,Kyrgyzstan, and China; Russia, the Central Asiancountries, Afghanistan, and Iran; Russia, Mongolia,and China; Pakistan, Afghanistan, Tajikistan, Kyrgyz-stan, and China; Russia, the Central Asian countriesexcept Kyrgyzstan, Afghanistan, Iran, and Pakistan.8 Markedly, Russia, India, Turkey, and Iran are not partof the CAREC project. The initiative has made notableprogress in transport and trade facilitation but hasbeen less effective in the energy and trade policy ar-eas, while excluding water management at the requestof China and Uzbekistan. It has done relatively betteron the “hardware” but not “software,” requiring im-provements in legal, regulatory, and administrativeareas, as well as better linkages with national devel-

opment strategies of member countries.9

The Special Program for the Economies of CentralAsia (SPECA) is another initiative supported by theUN that advances trade, energy, and transit coopera-tion between Central Asia, Afghanistan, and Azerbai- jan and their integration into the global economy.10 But much like CAREC, SPECA has suffered fromoverlapping functions and lack of efciencies andcoordination.11

Several existing and planned major rail corridorsserve to boost Central Asia’s connectivity. The 9,000kilometer (km)-long Trans-Siberian Railway connectsEurope and Russia’s east, with branches extending toChina, North Korea, Mongolia, and Central Asia. Rus-sia’s planned investments into the line by 2015 are es-

timated at U.S.$1.5 billion. The 11,000km-long North-ern Trans-Asian Corridor links China’s Lianyungangon the Pacic coast via Kazakhstan with Russia andWestern Europe. China plans to continue electrifying



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and double-tracking the line as it develops Xingjian(it has double-tracked about 90 percent and electried

about 29 percent of the line). Lianyungang serves asthe originating point for the insufciently developedand utilized Southern Trans-Asian Corridor, whichlinks Kazakhstan, Uzbekistan, Iran, and Turkey. TheCentral Trans-Asian Corridor is another underdevel-oped line, linking China and Kazakhstan with Russiaand Ukraine with networks to Poland, Slovakia, andHungary. Kazakhstan, Turkmenistan, and Iran aredeveloping the North-South Eurasian Corridor link-ing Russia and Central Asia with India and South Asiaand the Middle East. The underutilized TRACECATrans-Caspian Corridor, in turn, runs from Kazakh-stan via Uzbekistan, Turkmenistan, Azerbaijan, andGeorgia, with sea links to Ukraine, Romania, Bulgaria,and Turkey.12

Major automobile corridors in the developmentstage include the West Europe-West China corridor,backed by EBRD, ADB, WB, Inter-American Develop-ment Bank (IDB), and the New Eurasian Land Trans-port Initiative. The former is about 8,500km-longand, for the most part, runs parallel to the CentralEurasian rail corridor, linking Europe with Russia,China, Kazakhstan, Uzbekistan, and Kyrgyzstan. TheWB issued a loan of U.S.$2.125 billion to nance theconstruction of the corridor. The latter extends fromBeijing via Urumqi to Bakhty and Almaty in Kazakh-stan, Russia, Latvia, Lithuania, Poland, Germany, andBelgium, and is expected to see an increase in cargotransit through Russia and Kazakhstan by 5.2 milliontons annually. There are also major multimodel cor-

ridors involving rails, roads, and waterways that linkEurope and India via Russia, Iran, and Central Asia.The 7,200km-long line from Bombay to St. Petersburg,for instance, is increasingly used to accommodate the





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Figure 3-8. Trans-Asian Railway Network.

Inter-regional energy projects are another compo-nent of Central Asia’s expanding connectivity frame-work, with the growing energy demand in China,India, and the EU driving their implementation. Themajor existing projects include gas pipelines fromTurkmenistan and Kazakhstan to China, Russia, andIran, as well as an oil pipeline from Kazakhstan to

China. Another major planned project is the Turkmen-istan-Afghanistan-Pakistan-India (TAPI) Pipeline, ex-pected to supply up to 33 billion cubic meters (bcm) ofgas annually to help meet the growing energy needsof the developing Afghanistan, energy decit-strickenPakistan, and rising India. ADB approved the U.S.$7.6billion-worth initiative in 2012, while the project par-ties have made purchase agreements and are nearing

concluding stages of negotiations. Another project,CASA-1000, involves the construction of transmis-sion lines to supply 1,000 megawatts of electricity



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from Kyrgyzstan and Tajikistan to Afghanistan andPakistan. In 2014, the WB earmarked about U.S.$500

million for the U.S.$1 billion-worth initiative. TheUnited States and Russia have both expressed a stronginterest in the projects, which would enhance theirleverage.

Despite their benets, TAPI and CASA-1000 lackprivate sector involvement and face security challeng-es. Afghanistan may see more instability after the U.S.military withdrawal, while Pakistan will continue itsstruggle with home-grown militant groups. Mean-while, prevalent corruption and porous borders of theregional states have facilitated trans-border drug traf-cking and organized crime activity that many fearwill only rise. Still, the demand for these projects isthere, and Central Asia can help meet the energy de-mand in Asia, where gas and oil needs are expected

to grow by 22–27 percent between 2007 and 2035.14

The region’s contribution to Asia’s demand will helpmeet the global energy demand, forecast to rise by 50percent in the next 25 years.15

The integration into the global economic system forthe landlocked Central Asia cannot rely on the “hard-ware” (transit infrastructure) alone. Increasingly, it isthe “software” in the form of technical, political, andnancial components that parties need in order to fa-cilitate intra- and inter-regional connectivity. Despitechallenges of intraregional cooperation, the regionalstates have worked with the WB, IMF, ADB, EBRD,the United States Agency for International Develop-ment, and the United Kingdom (UK) Departmentfor International Development, among others, to im-

prove their policies in these areas. However, relativelyclosed Uzbekistan and Turkmenistan have underper-formed. Turkmenistan is currently considering an



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entry into the World Trade Organization (WTO), andthis could prompt Ashgabat to advance needed re-

forms sooner rather than later.16

Kyrgyzstan has longbeen a WTO member, while Kazakhstan is activelyseeking membership in 2014-15 as well. Kazakhstan’sCustoms Union (CU) and Eurasian Economic Union(EEU) membership may complicate its WTO aspira-tions (however, Russia, a CU member, became a WTOmember in 2013). In the case of South Asia, a proposedtrade and transit pact involving Tajikistan, Afghani-stan, and Pakistan as part of the Afghan-Pak tradetransit agreement would allow for more unimpededtrade in the region. However, security risks threatenits implementation, despite expected positive effectsof expanded trade within and between Central andSouth Asia on stability in the broader region.

Global dynamics, the region’s immense natural

resources, as well as energy, trade, and transit corri-dors are all factors shrinking Central Asia’s connec-tivity gap and reect the concurrent cooperation andcompetition between major players over processesand directions of Central Asia’s internal and exter-nal economic integration. While promising for Cen-tral Asia’s overall development, such trends are alsofraught with the potential for risks and collisions. AsDeputy Secretary of Kazakh Security Council MaratShaihutdinov stated:

The rivalry between projects of global players is in-tensifying, pushing our countries to so-called nalgeopolitical choices. On the one hand, this leads to theregion [Central Asia] becoming an object of externalinuence. On the other hand, it leads to a slow yet

dangerous increase in conict potential.17



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Related dynamics thus call for more successfulperformances by local economies in advancing their

connectivity processes and joint policies to enhanceregional economic integration in order to strengthentheir positions in the transcontinental and globaleconomies.

KAZAKHSTAN: REGIONAL ECONOMICLEADER KEEN ON GLOBAL INTEGRATION

Kazakhstan is considered the region’s leader interms of diversity and vastness of natural resources,rapid pace of economic reforms, and developmentpolicies seeking to integrate Kazakhstan within Cen-tral Asia and the global economy. In 2012, its grossdomestic product (GDP) stood at U.S.$235.6 billion,exceeding the combined GDP of all other Central

Asian economies. Kazakhstan has displayed one ofthe highest growth rates in the world over the last de-cade, in large part due to vast natural resources andpolitical stability that has helped it attract more thanU.S.$180 billion of foreign direct investment (FDI)since independence. Kazakhstan ranks 11th and 14thin the world in oil and gas reserves. It has 12 percentof world’s uranium reserves, enabling it to become theworld’s largest uranium producer and supplier (about37 percent). It also has huge reserves of tungsten, bar-ite, copper, gold, iron ore, and zinc.18 The country’smultivector foreign policy has enabled Kazakhstan topursue strategic cooperation with Russia and relatedintegration initiatives in the former Soviet space, al-lowing it to cultivate strategic partnerships with the

United States, the EU, China, and increasingly India.Importantly, authorities aim to turn Kazakhstan into amajor Silk Road hub of transit, energy, and trade links



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in Eurasia as the country continues its efforts at re-gional and global integration as part of its ambitious

accelerated economic modernization program. Au-thorities plan the program will put Kazakhstan withintop 50 economies of the world by 2030.

While many tout Kazakhstan as the most success-ful Central Asian state that has managed to consolidateitself as a viable state capable of demonstrating strongresults after nearly 2 decades since independence, itssuccess is not, and has not been, devoid of serious de-velopment challenges. Kazakhstan’s political arenaremains tight, leaving little room for the already mar-ginalized opposition. Kazakh authorities adhere to theconcept of gradual development, whereby economicrather political development takes a priority. Kazakh-stan suffers from poor and unequal regional economicdevelopment, with wealth concentrated in the capital

Astana in the north and the nancial and former capi-tal Almaty in the south. Its economy overly dependson energy exports and suffers from prevalent corrup-tion within government structures.

The impact of the global nancial crisis on Kazakh-stan, which had borrowed heavily from external mar-kets, demonstrated the extent of Kazakhstan’s inten-tions to position itself as a small yet increasingly activeplayer in the global economy. But it also underscoredcases of mismanagement by authorities and the pri-vate sector, which were eager to capitalize on the rela-tively cheap yet poorly protected credit available oninternational markets. The crisis caused serious eco-nomic challenges for Kazakhstan, whose effects per-colated through Central Asia and South Caucasus, for

which Kazakhstan is a growing source of investment.The labor unrest in the oil town of Zhanaozen in thecountry’s western province in 2011, which led to the



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government crackdown that left at least 14 killed, re-veals the extent of unaddressed development issues.

Despite related pressures, Kazakhstan did notclose its economy to the outside world in responseto the global nance crisis, but opened up for moreFDI while gambling on accelerated modernizationof its resource-dependent economy. It has advancedfrom 74th to 59th place among 183 economies in theWB’s Ease of Doing Business report for 2011, though itneeds to do more to improve corporate governance,the legal and regulatory environment, as well as todevelop better infrastructure and improve efciencyof production.19 Authorities announced a number ofinitiatives after the unrest in Zhanaozen to generatecross-regional synergies, which they have sought tolink with the east-west and north-south geo-economicdynamics driven by Kazakhstan’s growing trade,

energy, and transit ties with Russia, China, the EU,and India. Kazakh leadership has repeatedly empha-sized the importance of reviving the Silk Roads andposition Kazakhstan as its hub, especially after thedeleterious impact of the global crisis that exposed aseries of challenges with the country’s heavily energyexports-dependent economy. But Kazakhstan rstneeds to enhance its transit capacity. As PresidentNazarbayev said:

Transport infrastructure is at the heart of industrialeconomy and society. . . . I have said many times thatit is impossible to reach the level of a developed coun-try without modern high-quality highways. As weare located between Europe and Asia, between theNorth and the South; transportation remains of great

importance to Kazakhstan. To set up a network ofinternal roads, we have initiated the construction ofhighways.20



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Kazakhstan’s 2013 transportation infrastructure

development plan earmarked more than U.S.$32 bil-lion of public and private investment to upgrade andbuild transportation and logistics infrastructure, amove the authorities hope will lead to 1 percent in-crease in annual GDP growth and help Kazakhstanmove from 86th place on the WB’s Logistics Perfor-mance Index to 40th place.21

As part of its “infrastructure triad” plan, the gov-ernment intends to turn its four largest cities—Astanain the north, Almaty in the southeast, Shymkent in thesouth, and Aktobe in the northwest—into regional de-velopment centers connecting major industrial zones.It also envisions the construction of the new, 1,200kmlong Zhezkazghan-Shalkar-Beineu railway by 2015,linking the country’s west and east and connecting

Kazakhstan via the Caucasus to the EU and China’sLianyungang seaport on the Pacic Ocean. For 2014,authorities had earmarked U.S.$18 billion to supporttransport development, planning to upgrade up to 85percent of national highways and 70 percent of localroads. They also plan to increase the speed of internalcargo transit via railways by 15–20 percent and exter-nal cargo transit by up to 20–30 percent, while aimingto increase the volume of cargo transit to 25 milliontons and collect U.S.$1.5 billion in transit revenuesin 2015.

Kazakhstan aims to develop its logistics servicessector and use the territory of the EEU members, po-tentially also including Kyrgyzstan and Tajikistanin the future, for transit and export of its goods via

north and south. To the west, it anticipates using theBaku-Tbilisi-Kars railway, due to start operating bythe end of 2014, to export its oil and grain, as well as



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expanding the port at Aktau and logistics center inAktobe as gateways to the west. To the south, it looks

to reap benets of the recently constructed railway toTurkmenistan and Iran, which enables an outlet to thePersian Gulf.22 Furthermore, Kazakhstan and Azerbai- jan have agreed to build the Caspian segment of theTrans-Eurasian Information Super Highway, whichinvolves laying a ber-optic cable linking major infor-mation exchange hubs in Europe and Asia.23

Geopolitically more signicant is Kazakhstan’sparticipation in the construction of the Western Eu-rope–Western China transit corridor. Due by 2015,the corridor is expected to raise Kazakhstan’s GDPby 68 percent above the 2010 baseline and the GDP ofCentral Asian countries by 43 percent, reducing tran-sit times and transit costs via Kazakhstan by U.S.$230million and create more than 30,000 jobs.24 The devel-

opment of the Khorgos crossing at the border withChina into a Special Economic Zone with its own air,ground, and railway infrastructure is another prior-ity for Kazakhstan. It would link the Khorgos cross-ing with the Chinese nanced high-speed railway lineconnecting Astana and Almaty. Kazakhstan and Chi-na have considered investing U.S.$100 million into theconstruction of the terminal infrastructure in China’sPacic port of Lianyungang to increase the volumeof transit trafc from 18 to 36 million tons of cargoby 2020.

Kazakhstan has proved to be far more successfulthan its neighbors in advancing its internal and exter-nal connectivity over the years. Its relative politicalstability and economic dynamism have coalesced to

produce a positive impact on the country’s long-termdevelopment. As it moves forward, Astana shouldponder the demands on the political system that arelikely to increase as the country’s population becomes



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wealthier and politically savvier. Externally, authori-ties should ensure that it continues to accompany its

deepening integration with Russia and Belarus as partof the EEU with equally persistent and energized ef-forts to cultivate ties with China, India, the EU, andthe United States to boost its economic and politicaldevelopment as a strong, sovereign states. In the pro-cess, it should involve its Central Asian neighborsin multilateral initiatives to enhance integration andexpand the region’s connectivity with the world.

KYRGYZSTAN: FRAGILE ECONOMY WITHSTRONG RE-EXPORT POTENTIAL

Kyrgyzstan is politically the most open countryin the region, but has a relatively weak economy andinsignicant deposits of energy resources. It depends

heavily on remittances by hundreds of thousands oflaborers in Russia and exports of gold. Remittancesaccounted for 31 percent of GDP in 2011, while goldmining—for 10 percent of GDP, 60 percent of exports,and 40 percent of industrial production, indicating thelack of diverse production and export base. Its nowchronic political instability following two governmentoverthrows in the last 9 years and interethnic clashesin 2010 hamper its internal and external developmentefforts, though its economy showed signs of a recoveryin 2013, growing by 10.5 percent, largely as a result ofstrong dynamics in gold exports.25 Kyrgyzstan has alsobecome the region’s re-export gateway for China’s ex-panding merchandise exports across Central Asia. Itsrelatively open political environment and proximity

to China offer it immense development opportunitiesas it seeks to become a hub on the China-led Silk Roadextending from China’s Xingjian and Afghanistan viaCentral Asia to Iran and the Caspian.



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Kyrgyzstan’s political instability, viewed as a signof messy democratic development, has prevented the

country from attracting more FDI and maintaining asteady economic course. Kyrgyzstan further has anundiversied trade structure, making it vulnerable touctuations in world commodity prices. It dependsheavily on foreign aid for much-needed infrastructureand institutional development.26 Kyrgyzstan also un-derutilizes its advantages of WTO membership, fail-ing to stimulate and diversify its predominant rawmaterials-based exports in order to decrease an exter-nal trade balance, even if it became the rst country inthe region to join WTO and open its economy to for-eign markets. Kyrgyzstan has leaned on its Great SilkRoads Doctrine since 1998, seeking to position itselfas a major hub between Europe and Asia but has notachieved signicant results.27 But this is changing, in

large part given the rise of China.As an upstream country, Kyrgyzstan has major

yet heavily underutilized hydro energy capacity, butnancial challenges have prevented it from buildingnew infrastructure. The increased demand for elec-tricity exports to South Asia may bring the neededresources to expand the use of the hydro potential.Kyrgyzstan also has signicant gold and rare earthmetal reserves, vast deposits of nepheline, as well aslocalized reserves of coal, oil, and gas.28 Energy re-source wealth of Russia, Kazakhstan, and Uzbekistanmake Kyrgyzstan susceptible to leverage, promptingBishkek also to cultivate diverse economic ties withother actors and implement reforms to speed up itseconomic development and enhance its internal and

external connectivity.In 2013, the administration of President Almazbek

Atambayev, who gained a 6-year term in 2011 in the



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country’s rst peaceful transfer of power, adopteda 5-year economic development strategy seeking to

implement economic reforms. Authorities planned tospend U.S.$13 billion to double GDP in 5 years, draw-ing on aid and investment to nance agriculture, min-ing, transport, power and other sectors. The strategyseeks to harness the region’s geo-economic and geo-political trends to secure nancial resources to expandand integrate its economy into global markets by rely-ing on China, Russia, and Kazakhstan, among others.Possible failures by authorities and instability at homeor in the region could easily frustrate these efforts.29

Kyrgyzstan especially looks to neighboring Chinato support its development strategy, aiming to expandits transport infrastructure as well as manufacturingand logistics centers at what are Central Asia’s larg-est trade markets at Dordoi and Kara-Suu in the north

and south. China’s expanding trade into Russia andEurope goes through these markets, and Moscow’s ef-forts to enlist Kyrgyzstan and Tajikistan into the CUare not coincidental. The annual trade between Kyr-gyzstan and China stands at about U.S.$5 billion, andinclusion of Kyrgyzstan into the CU and EEU wouldundermine Kyrgyzstan’s trade with China and its re-export potential.

Kyrgyzstan welcomed China-built oil renery andnow considers China’s participation in the construc-tion of the railway line linking China and Uzbekistanvia Kyrgyzstan; a proposed Kazakhstan-Kyrgyzstan-China oil pipeline; and an envisioned gas pipelinefrom Turkmenistan via the southern part of Kyrgyz-stan. Kyrgyzstan views these projects as an opportu-

nity to close the geographic and economic divides thatexist between the north and south of the country andevolve as a crucial transit link for expanding trade andenergy ows throughout Eurasia.





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TAJIKISTAN: WEAK ECONOMY WITH LIMITED

SHORT-TERM INTEGRATION CAPACITY

Tajikistan’s economy is one of the weakest in theregion, heavily dependent on foreign aid and remit-tances from hundreds of thousands of migrants work-ing in Russia. The economy suffers from prevalentcorruption, state interference, and excessive depen-dence on exports of aluminum. According to a WB re-port, remittances accounted for 47 percent of its GDPin 2012, while aluminum made up 55 percent of all ex-port revenues in 2011.30 Geopolitical challenges stem-ming from tensions with Uzbekistan and Tajikistan’sown lack of resources in part explain the country’s po-litical and military dependence on Russia. Tashkenthas in the past exercised leverage over Tajikistan in

the energy and transit spheres, prompting Dushanbeto develop southern, western, and eastern vectors oftrade and transit links to break its relative isolation.Tajikistan’s development challenges, such as inade-quate economic linkages between regions and associ-ated centrifugal dynamics, as well as its rigid politicalsystem and proximity to unstable Afghanistan under-mine the country’s development efforts. Meanwhile,the increase in narco-trafcking from Afghanistan toand via Tajikistan has questioned Tajikistan’s viabilityas a state.

Tajikistan suffers from economic and politicaldivisions—in large part due to geopolitics—whichincrease the prospects of separatism in the Gorno-Ba-dakhshan Autonomous Region (GBAO) in the south-

east, Rasht Valley in central-north, and the Sughdprovince in the north. In 2012, authorities launchedan offensive against a paramilitary group led by Tolib



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Ayombekov, an insurgent eld commander duringthe civil war in the 1990s, following the assassination

of the regional head of State National Security Com-mittee. The group had former United Tajik Oppositionghters within its ranks, who opposed current Presi-dent Emomali Rahmon during the war and are basedin GBAO and the Rasht Valley. The clashes left morethan 60 people killed and led to popular protests byresidents demanding the withdrawal of military forc-es from the province. During the conict, the groupreportedly had forces on standby across the border inAfghanistan. The confrontation underscored the lackof development in GBAO, the region’s distinct charac-ter, and its weak and uneasy relationship with centralauthorities. Tajikistan is thus interested in advancinginternal linkages to thwart centrifugal forces withinthe country.

As its neighbors, Tajikistan sees it crucial to re-vive the Great Silk Roads and seeks to capitalize ona number of related initiatives to enhance its internaland external integration. It aims to leverage its WTOmembership, gained in 2013, to liberalize its traderegime and enhance its connectivity by participatingin Silk Road projects.31 In 2014, President Rakhmoncalled for more active participation in global trade,highlighting the need to break the country’s trans-port isolation while referring to the Dushanbe-Kulmahighway that links it with China and the Turkmen-istan-Afghanistan-Tajikistan railway. But Tajikistanneeds to develop internal infrastructure capacity toaccommodate the projected increase in energy, trade,and transit ows, a major challenge considering the

country’s terrain and the legacy of the war. Accordingto a 2011 ADB report, Tajikistan lost about 80 percentof its transit infrastructure after independence.32



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Tajikistan’s strong but heavily underutilized hy-droelectric potential, if developed, would enable the

country to play a major role as a regional integrator inthe electricity markets in Central and South Asia.33 Ta- jikistan is a major party to CASA-1000, which wouldhelp it diversify its skewed export base, increase theinow of revenues, and rectify its energy decit, whilefacilitating cooperation within and between Centraland South Asia. However, this and other initiativesface strong resistance from the neighboring Uzbeki-stan, which has in the past enforced a railway block-ade on Tajikistan in an effort to impede its imports ofmaterials needed for the construction of water dams.Downstream Uzbekistan views such projects, espe-cially the Rogun project to build the world’s largestdam, as threatening its economic security. Tajikistan,in turn, considers them essential in contributing to its

energy security and development.In South Asia, Tajikistan looks to Pakistan and In-

dia to break its relative isolation. Expectedly, pursu-ing multilateral cooperation with Tajikistan, Afghani-stan, India, and Pakistan is politically difcult, butthe steady progress on TAPI and CASA indicates itis economically promising. Bilateral and multilateralprojects are thus bound to grow in importance, withIndia likely to become a signicant partner for Tajiki-stan if the Pakistani-Indian rapprochement becomesa reality. Geography dictates that cooperation withAfghanistan and Pakistan will be crucial if Tajikistanwants to tap in the dynamism afforded by the currentand projected rise of India.

Just as Dushanbe in Central Asia, Islamabad seeks

to break its relative isolation in South Asia. Pakistandoes not have direct trade links with Central Asia orbenecial trade deals with India. The Indo-Pakistani



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informal annual trade is about U.S.$2-3 billion, withPakistan accounting for less than 0.5 percent of In-

dia’s trade and India accounting for about 1 percentof Pakistan’s trade. A normalization of their ties couldboost the joint trade by 20 times and open new vis-tas of inter-regional cooperation with countries inCentral Asia and the Middle East. Pakistan and Indiaare both wary of each other’s regional ambitions. AsChina, Pakistan is concerned with attempts by Indiato project its military inuence in Tajikistan and widerCentral Asia, though Russia’s preponderant regionalsecurity role has thus far impeded India’s related ef-forts.34 In 2013, Tajikistan agreed to extend the lease byRussia of its military base in return for tariff-free fuelsupplies and privileges for hundreds of thousands ofTajik migrants laboring in Russia.35

Pakistan offered to invest U.S.$600 million in the

Rogun dam in the early-1990s, but the investment didnot come due to the Tajik civil war. As of 2011, Tajiki-stan imported most of its cement for construction fromPakistan, which then planned to create new enterpris-es in Tajikistan. Dushanbe and Islamabad further seekto develop the north-eastern Afghan Wakhan corridorlinking Tajikistan, Pakistan, and China by construct-ing a road and a railway link between Pakistan andTajikistan to enhance inter-regional connectivity.Backed by Afghanistan and Russia, the completion ofthe project would provide Tajikistan and Russia withaccess to Pakistani ports, the Arabian Sea, and theIndian Ocean, expanding trade for Pakistan and Af-ghanistan in and via Central Asia into Russia. Giventhe rise of China, linking the corridor to China via the

Karakorum highway makes this project geopoliticallysignicant as well.



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With the support from China and Iran, Tajikistangained access across the Pamir Mountains to Afghani-

stan via a U.S.-built bridge and plans to build a railline from Dushanbe to Afghanistan.36 Meanwhile, theconstruction of a fth bridge linking Tajikistan’s Khat-lon Region with Afghanistan’s Khotlon Province isexpected to facilitate not only internal, but also intra-regional and extraregional trade.37 Like Kyrgyzstan,Tajikistan is also in dire need of developing its con-strained air hub capacity by opening up the sector toprivate market.38 India’s efforts to establish air trafcconnections with all Central Asian states provides anopportunity for Tajikistan to seek support from Delhito facilitate the country’s southward connectivity.

Tajikistan will need to depend signicantly onoutside actors to nurture and expand its economicdevelopment and break its relative isolation in the re-

gion. The good news is many actors are interested inexpanding their own connectivity by using Tajikistanas a springboard, including Iran, China, India, andPakistan. Dushanbe needs to harness external dynam-ics while promoting domestic political and economicreforms to create synergies and boost its own devel-opment and connectivity with the wider region andthe global economy. This is imperative considering itsrelatively weak economy, as well as its limited short-term yet signicant long-term potential to become amajor integrator, along with Afghanistan, of Centraland South Asia.



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UZBEKISTAN: RELATIVELY STRONGPERFORMER WITH UNTAPPED

CONNECTIVITY POTENTIAL

Uzbekistan’s economy, while growing rapidly andsteadily over the last several years (forecast to grow at6.9 percent in 2014), suffers from overwhelming statecontrol in several major sectors, prevalent corruption,and weak rule of law. It displays signicant inefcien-cies due to the lack of private markets and trade diver-sication, as well as ineffective state planning. Gold,uranium, oil, gas, and cotton dominate the country’sexports. Uzbekistan’s location, its abundant natural re-sources, a relatively more developed railway system,and a higher level of industrialization could lead to amuch more successful economic performance. How-ever, heavy state control and authoritarian political

system, touted as they are in the country for ensuringstability, hamper Uzbekistan’s development effortsand its potential to serve as a major regional economicplayer on par with Kazakhstan. A popular joke that itwas not Uzbekistan that left the Soviet Union but theother way around indicates development challengesunder the President Islam Karimov-led regime. Theseissues will continue despite looming generationalchange, given the age of the president.39 As it consid-ers participating in major transcontinental projects,Uzbekistan will increasingly face the challenge ofreconciling its needs for internal security andliberalization.40

Uzbekistan is the world’s seventh largest gold pro-ducer (though gold mining remains underdeveloped)

and third largest cotton exporter, pursuing especiallyclose trade ties with Russia, Turkey, China, and Ka-zakhstan.41 Uzbekistan has about 100 types of miner-



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als, with its mineral potential estimated at U.S.$3.3trillion. With U.S.$5 trillion cubic meters worth of

natural gas reserves, it is also the world’s 10th largestgas producer. A number of Japanese companies areactive in the country’s energy industry, developing oiland gas reserves at Ustyurt, Bukhara, Khiva, South-West Gisar, Surhandarya, and Fergana regions.42 Statecompany Uzbekneftegaz and Russian Lukoil, in turn,participate in the Kandym–Khausak–Shady–KungradProject to develop gas elds, the initiative backed bythe ADB, IDB, and the Korean Development Bank,among others. Uzbekistan has sought to develop newoil and gas pipelines, having in its network 868km ofoil and 9,594km of gas pipelines as of 2006. Uzbeki-stan further ranked seventh in the world in the pro-duction of uranium in 2011, but this sector remainsunderdeveloped.43

Despite its resource wealth, a lack of FDI and weaktransportation infrastructure have prevented Uzbeki-stan from becoming a major gas exporter and a majorbase in the region for multinationals that have foundmore comfort in the relatively open Kazakhstan. Whileit has seen growing levels of FDI over the last years,particularly from Kazakhstan, Russia, Turkmenistan,India, Pakistan, China, South Korea, Japan, Germany,and Ukraine, Uzbekistan continues to suffer from rel-atively low FDI inows, displaying the lowest foreigninvestment rates per capita in the CIS and showingan estimated net FDI at 2.09 percent of GDP in 2010.To expand FDI inows and technology transfers, au-thorities built special industrial zones at Navoi andAngren.44

One cannot imagine the development of thebroader region without a more active engagement byUzbekistan, which borders all Central Asian states



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and Afghanistan. Uzbekistan forms part of the Trans-Caspian railroad, a legacy of the Russian Empire en-

abling the connection between the Caspian Sea, on theone hand and Kazakhstan and Russia, on the other.Despite being wary of regional and multilateral ini-tiatives, Uzbekistan has made strides in the develop-ment of domestic transit infrastructure (such as theGuzar-Boysun-Kumkurgan highway in the south) andexpanded cooperation with Afghanistan by buildingrail links to the country that needs Central Asian mar-kets to improve its stability. In 2010, ADB helped Uz-bekistan nance the construction of a railway linkingHairaton with Mazar-i Sharif in Afghanistan. CARECplans to assist Uzbekistan with extending the line by230km—a U.S.$450 million-worth initiative—to en-sure connection with an Afghan-Tajik border point atSher Khan Bandar on the Pyanj River.45

Uzbekistan is also interested in the proposedUzbekistan-Kyrgyzstan-China railway project. Therailway would run from Kashgar in China’s Xinjiangvia Kara-Suu in Kyrgyzstan to Andijan in Uzbekistan,potentially going as far as Europe through Turkeyand signicantly boosting Uzbek economy by offer-ing new trade partners and business opportunities.However, the uncertain prospects of the line develop-ment in Kyrgyzstan may frustrate Tashkent’s hopes.Importantly, the Uzbek government issued a decreeon July 11, 2014 outlining measures that would facili-tate the country’s plans to join the WTO, though a lackand slow pace of economic and political reforms willprevent it from achieving that goal sooner.

Overall, Uzbekistan’s geopolitical position offers it

signicant opportunities to expand its internal and ex-ternal connectivity, provided it opens up its politicaland economic system. Doing so will allow the leader-



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ship to tap in the country’s central location, immensewealth and dynamism of its population—the region’s

largest—to serve as a regional and inter-regional in-tegrating force. Uzbekistan should seriously considerKazakhstan’s experience in opening up its economicsystem and accompanying it with necessary reformsto boost its connectivity.

TURKMENISTAN: CLOSED, STATE-DOMINATEECONOMY WITH STRONG ENERGY EXPORTCAPACITY

The Turkmen government wields pervasive con-trol in all domains of the country, including the econ-omy. Turkmenistan has opened up considerably sincethe death of former President Saparmurat Niyazovand has recently announced its intention to join the

WTO. But the current administration led by PresidentGurbanguly Berdymuhamedov needs to do signi-cantly more to open up the economy and the politicalsystem. Despite a steady and fast economic growthrate averaging more than 5 percent over the years,its economy has remained heavily dependent on gasand cotton exports and suffered from issues similarto those in Uzbekistan. A closed and tight politicalsystem, excessive state control, prevalent corruption,weak rule of law, and proclaimed neutrality in inter-national relations have prevented Turkmenistan frombecoming a magnet of FDI and an active regional play-er. According to the WB, its FDI is much lower thanthat of Kazakhstan, though it did rise rapidly fromabout U.S.$418.2 million in 2005 to about U.S.$2 bil-

lion in 2010.46 Turkmenistan’s agricultural sector (thecountry is among the world’s top 10 cotton producers)employs 50 percent of the labor force and produces



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more than 60 percent of the country’s GDP, leaving alot of room for industrialization and urbanization as it

seeks to expand its national economy.The country’s substantial gas reserves have en-

abled it to play a major role in regional energy mar-kets, prompting Ashgabat to pursue diversicationof its export routes to alleviate geopolitical pressuresthat stem from Russia’s traditional yet waning grip onthe country’s energy production and exports, expand-ing its external connectivity signicantly.47 Turkmeni-stan further ranks sixth in global gas reserves and 20thin gas production, though some estimates suggest thecountry’s gas reserves are the fourth rather than thesixth-largest in the world.48 After a 2009 dispute withRussia over gas exports, Turkmenistan embarked ondiversication of its export routes. By 2011, it had ex-ported 14.3bcm to China, 10.2bcm to Iran and 10.1bcm

to Russia, a notable achievement considering its pre-2009 annual exports to Russia totaling 40bcm. It nowaims to export up to 65bcm of gas to China by 2016. Itrelies on a number of existing and planned pipelines inthe region to expand its exports and external connec-tivity, especially given the growing energy demand inthe EU, China, India, Pakistan, and Afghanistan.

It supplies gas to Russia and Iran via the CentralAsia-Centre and Bukhara-Urals pipelines and theKorpezhe-Kurt Kui pipeline, respectively. In 2010,with its partners, it launched the Dovletabad-Sarakhs-Khangiran pipeline to Iran and the Central Asia-Chinapipeline linking it with China’s East-West pipeline. Itnow pursues an East-West pipeline linking its easterngas elds to the Caspian Sea to supply up to 30bcm of

gas to markets in Europe annually starting in 2015 andthe TAPI pipeline to supply similar amount of gas. TheUnited States has supported Turkmenistan’s efforts to



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diversify gas export routes and backed the proposedTAPI and Trans-Caspian initiatives, which face major

nancial, transit, and geopolitical challenges.49

Turkmenistan also seeks to improve transit infra-

structure within the country and with its neighbors bypursing upgrades and new connections. In 2013, Turk-menistan and Kazakhstan began operating a new rail-way connecting the energy-rich regions of both coun-tries. The link, which is 540 miles long, connects Ozenin Kazakhstan with Etrek in Turkmenistan throughUzbekistan; the parties plan to extend it to the Iranianrail network.50 It also participates in the construc-tion of the railway linking it with Afghanistan andTajikistan. Turkmenistan is also building roads andrailroads connecting it with the Afghan Ring Road, acrucial initiative considering the underdeveloped raillinkages within and with Afghanistan.

As any other regional state, Turkmenistan has alot of room and need for expanding its connectivity.It needs to liberalize its economic and political systemto promote greater efciencies in economic develop-ment and trade. The country’s success in diversifyingits energy exports over the last years suggests the ex-istence of skills that authorities should apply in othereconomic areas to boost the country’s potential forinternal and external economic integration.


1. Abai Kunanbaev, Book of Words (orig. title Kara Syoz), Word38, Rolan Seisenbaev, trans., Semipalatinsk, Kazakhstan: 2001.Abai Kunanbaev (1845-1904) was a great writer and poet fromChingis-Tau (now Karaul) in present-day Kazakhstan.

2. Leonid Savin, “Новый шелковый путь и евразийская интеграция” (“The New Silk Road and Eurasian Integration”),Geopolitika, April 2, 2013.



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3. Ivan Volkov, Osnovnye napravlenia i perspektivy integratsiiTsentralnoi Azii v globalnye mirovye protsessy: na materialah Kyr- gyzskoi Respubliki ( Major Vectors and Prospects of Central Asian In-tegration into Global Processes: The Kyrgyz Republic as a Case Study),Dissertation, Bishkek, Kyrgyz Republic, 2007.

4. Nikolai Zlobin, “Evraziiskaia integratsia. Proekt zaver-shen” (“Eurasian Integration. Project Complete”), availablefrom www.n-zlobin.livejournal.com/23719.html, accessed on April12, 2014.

5. Johannes Linn, “Central Asian Regional Integration andCooperation: Reality or Mirage?” The Economics of the Post-Sovietand Eurasian Integration, Eurasian Development Bank (EDB) EurasianIntegration Yearbook 2012, Almaty, Kazakhstan: EDB, p. 97.

6. Michael Emerson and Evgeny Vinokurov, “Optimisationof Central Asian and Eurasian Inter-Continental Land TransportCorridors,” EUCAM Working Paper No. 7, 2009, pp. 5-7.

7. Ibid.

8. “Integrating Central Asia into the World Economy: TheRole of Energy and Transport Infrastructure,” Washington,DC: The Wolfensohn Center for Development, October 22-23,2007, pp. 2-3.

9. Linn, “Central Asian Regional Integration and Coopera-tion: Reality or Mirage?” p. 111.

10. Ibid., pp. 30-32.

11. Emerson, p. 11.

12. Ibid., pp. 9-10.

13. Ibid.

14. Roman Muzalevsky, “CASA-1000 Project Moves ForwardDespite Security Risks,” Eurasia Daily Monitor, Vol. 10, Issue 178,October 7, 2013.



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15. The Wolfensohn Center for Development, p. 10.

16. Martha Brill Olcott, “Central Asia Today: An After-thought,” Washington, DC: Carnegie Endowment for Interna-tional Peace, June 4, 2013; and “Turkmen Leader Sets Up SpecialCommission on Joining WTO,” Universal Newswires, January25, 2013.

17. “Amerika hochet sdelat’ Tsentralnoi Azii” (“AmericaWants to Silken Central Asia”), Fond strategicheskoi kultury,November 8, 2013.

18. Vladimir Fedorenko, The New Silk-Road Initiatives inCentral Asia, Rethink Paper No. 10, Washington, DC: Rethink In-stitute, August 2013, p. 19.

19. Ministry of Industry and New Technologies of the Re-public of Kazakhstan, available from www.invest.gov.kz, accessedApril 5, 2014.

20. Quoted in Roman Muzalevsky, “Kazakhstan Makes Beton Development of Country’s Transit Capacity,” Eurasia Daily Monitor , Vol. 11, Issue 24, February 6, 2014.

21. Richard Weitz, “Decisive Year for Kazakhstan’s EurasianHub Ambitions,” Eurasia Daily Monitor , Vol. 11, Issue 5, January11, 2014.

22. Muzalevsky, “Kazakhstan Makes Bet on Development ofCountry’s Transit Capacity,” Eurasia Daily Monitor , Vol. 11, Issue24. Also see Richard Weitz, “Kazakhstan and Azerbaijan Envis-age Wide-Ranging Cooperation,” Eurasia Daily Monitor , Vol. 10,Issue 224, December 13, 2013.

23. Weitz, “Kazakhstan and Azerbaijan Envisage Wide-Ranging Cooperation.”

24. Weitz, “Decisive Year for Kazakhstan’s Eurasian HubAmbitions.”

25. Country Report, available from www.foresight.exan.info,accessed April 5, 2014.



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26. Sergej Mahnovski, Kamil Akramov, and Theodore Kara-sik, Economic Dimensions of Security in Central Asia, Santa Monica,CA: RAND Corporation, 2006, p. xv.

27.Volkov.

28. Fedorenko, p. 27.

29. Roman Muzalevsky, “Kyrgyzstan Leverages Geo-Eco-nomics and Geopolitics to Expand Its Economy,” Eurasia Daily Monitor , Vol. 10, Issue 20, February 4, 2013.

30. Country Report. 10


32. Oleg Salimov, “Tajikistan’s President Outlines Priori-ties for 2014,” Central Asia-Caucasus Analyst, Vol. 16, No. 9, May7, 2014.


34. Roman Muzalevsky, “Tajikistan and Pakistan at a Cross-roads: Energy, Trade and Transport across Central and SouthAsia,” Eurasia Daily Monitor , Vol. 8, Issue 21, January 31, 2011.

35. Salimov.

36. Frederick Starr, foreword in Andrew Kuchins, ThomasSanderson, and David Gordon, The Northern Distribution Net-work and the Modern Silk Road: Planning for Afghanistan’sFuture, Washington, DC: Center for Strategic and InternationalStudies (CSIS), December 2009.



39. Paul Goble, “Looming Generational Change in CentralAsian Leadership,” Eurasia Daily Monitor , Vol. 11, Issue 89, May13, 2014.



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40. Mahnovski et al., p. xv.

41. Country Report. Also see Fedorenko, p. 28.

42. Valijon Khoshimov, “Foreign Policy of Japan and CentralAsia,” Fellow Report, Tokyo, Japan: The Japan Institute of Inter-national Affairs, August 18, 2012, pp. 24-25, 29.

43. Country Report. Also see Fedorenko, p. 29.

44. Ibid.

45. Ibid.

46. Ibid.

47. Roman Muzalevsky, “Turkmen Energy Initiatives Crip-ple Russia’s Status as an “Energy Superpower,” Eurasia Daily Monitor , Vol. 7, Issue 213, November 30, 2010.

48. Fedorenko, p. 22. Also see Country Report.







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CHAPTER 4

REGIONAL AND DOMESTIC DYNAMICSCONSTRAINING CENTRAL ASIA’S

CONNECTIVITY

Where there is ruin, there is hope for a treasure.

Rumi1

MAJOR TECHNICAL, ECONOMIC, POLITICAL,AND SECURITY CHALLENGES

Despite the fast-developing trade, energy, andtransit infrastructure within and between Central andSouth Asia driven by the dynamism of neighboringeconomies and, to a lesser extent, the local economiesthemselves, the regional countries lag in global con-nectedness. Their landlocked status and major tech-nical, economic, and political challenges constraintheir global market access and international tradeows, impeding the region’s internal and externalconnectivity.

Figure 4-1. Global Market Access.



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The “modern activity gap” concept (see Figure4-2) underscores the lack of information connectivity

to the global communication ows in the late-1990sfor the region comprising parts of Central and SouthAsia and extending from the Black Coast to China’sXingjian. Each dot represents overhead satellite inter-cepts of all types of communications in a 24-hour pe-riod in the late-1990s.2 This picture has changed overthe last 15 years, especially given the fast develop-ment of Internet, migration patterns and concomitantneed to maintain connections with the region, amongother factors. But it also reveals a low starting posi-tion of Central Asia in terms of its information connec-tivity and, perhaps more importantly, given the lackof overall development in the region, in terms of itseconomic linkages with the global economy.

Figure 4-2. Communicationsin the Globalized World.

The DHL’s 2012 Global Connectedness Index,which measures the global connectedness of 140countries based on the depth and breadth of coun-



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tries’ trade, capital, information and people ows,shows that South and Central Asia as a broader re-

gion is behind across almost all parameters, rank-ing last on depth and third from last on breadth. Itshigher breadth (connectedness with countries outsidethe region) than depth (connectedness with countrieswithin the region) reveals low levels of intraregionalintegration due to tensions between India and Paki-stan in South Asia, as well as interstate tensions overborder, water, and energy issues in Central Asia. In theperiod 2005–11, the broader region displayed the low-est proportion of intraregional merchandise exports,standing at just 7 percent. Less than 15 percent of in-ternational ows are intraregional, indicating deeperconnections to countries outside the broader region.3 In 2012, intraregional trade in Central Asia reachedonly U.S.$3 billion, which represents 6.2 percent of

total imports, revealing the importance of developingopen markets and trade routes in the region.4 Accord-ing to the 2005 United Nations Development Program(UNDP), the potential benets of effective regionalcooperation for Central Asian states could lead to apossible doubling of regional gross domestic product(GDP) over 10 years.5

Kazakhstan ranks 54th in global connectedness,making it the top-ranked country among 12 countriesin the broader region of Central and South Asia. Itranks strong on the capital pillar (28th out of 122 coun-tries on depth and 17th out of 67 on breadth) and on thepeople ows pillar (25th out of 116). Kyrgyzstan ranks124th on the global connectedness and 10th amongthe 12 states in Central and South Asia. Its depth of

trade, particularly trade in services, is notably high,positioning the country as 17th globally for servicesexports depth and 10th for services imports depth. In



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the region, it ranks 1st on both services exports andimports depth. Tajikistan ranks 132 in global connect-

edness and 11th in the broader region. It also ranks30th out of 139 on the depth of its outward migrationand 40th out of 140 countries on the depth of merchan-dise imports. Uzbekistan ranks 123rd in global con-nectedness and 9th in the region. On the people pillar,it ranks deepest, at 73rd out of 116 countries, due tohigh migration and international student ows. Itslowest depth rank is on the information pillar, whereit stands 128 out of 140 countries.6

These statistics are relevant for the broader regionof Central and South Asia in one important respect aswe ponder Central Asia’s shrinking connectivity gap:the DHL’s Index shows that, following the nancialcrisis that made the world less global, most interna-tional ows today occur within rather than between

regions. The poor state of intraregional trade ties inCentral and South Asia signicantly hampers theirconnectivity. But the index also reveals that enhanc-ing global connectedness may bring trillions of dollarsin gains and that even the most connected economiesstand to benet due to their predominantly domesticactivities.

A series of technical, economic, and political chal-lenges help explain the dynamics. Technical issues in-clude excessive duties, corruption, poor cooperationon trade facilitation (customs, border crossings, poorlogistics, and other related inefciencies), varyingmigration rules, and lack of harmonization that stieintra- and inter-regional trade. An Asian Develop-ment Bank (ADB) survey of almost 1,000 truck drivers

hauling goods across Afghanistan overwhelminglysuggests that bureaucracy is the major impediment totrade.7 For instance, in one particular route that stretch-



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es from Tajikistan to Russia across all Central Asiancountries but Turkmenistan, 35 percent of costs went

to unofcial payments, and 5 out of the 8 days the triptook were spent waiting at checkpoints. Central AsiaRegional Economic Cooperation (CAREC) estimatesthat trade facilitation improvements could result inthe annual growth of the overall economy of its mem-bers, including Xingjian but not the rest of China, by8.1 percent and reach U.S.$351 billion by 2018. Besidesimproving “software,” the regional countries wouldneed to upgrade existing and develop new transit cor-ridors. The legacy of the Soviet transport infrastruc-ture is still there, but it ensured connectivity withinthe union and not much with neighbors outside theunion. To become an effective and efcient transit hub,Central Asia countries would need to improve region-al infrastructure by investing U.S.$2-3 billion annu-

ally to carry out needed upgrades, according to ADB.8

Investment in transit infrastructure, standardization,and professionalization of customs agencies, with as-sistance from development institutions, is crucial forreducing corruption, promoting private investment,and allowing regional economies to compete betterwith other fast-developing transcontinental routes.

The landlocked status of regional countries, techni-cal challenges, and lack of general economic prospectsshould prompt intraregional cooperation to removerelated impediments, but the economic and politicalissues plaguing the region help explain the lack ofprogress on this front. Of all regional countries, onlyKazakhstan and Kyrgyzstan have shown a particu-larly strong desire to integrate with the global econo-

my by supporting economic and trade liberalization.While the gas-rich Turkmenistan, like Kazakhstan, isnow ranked as a middle-income country, its economy







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able to citizens makes it hard to address related issues,prompting the need for external involvement that can

also serve as a negative factor by exacerbating rival-ries among outside powers for regional inuence.13

For instance, Russia has used its predominantmilitary and political inuence in Tajikistan and Kyr-gyzstan, as well as its plans to invest in the countries’hydro sectors, to apply pressure on Uzbekistan whichhas resisted Moscow’s efforts at perceived domina-tion.14 In 2009, Moscow sought to take advantage ofstrained Uzbek-Kyrgyz ties and open a military basein Osh, prompting Tashkent to turn to Washington.The Kyrgyz government asked for a base in Batken,located in the region that is home to Uzbek enclaves.Having a base in Batken would allow Bishkek to keepTashkent in check, given occasional territorial disputeswith Uzbekistan. The United States offered Kyrgyz-

stan to set up a military training center in Batken, butultimately neither the center nor the Russian militaryfacilities were built in either Osh or Batken regions.15

The risk of conicts induced internally or exter-nally persists in the energy-rich Caspian, which is see-ing growing militarization. The unresolved status ofthe Caspian Sea has exacerbated the regional securityenvironment, stiing foreign direct investment (FDI)and development of the region’s vast, yet contestedresources. The related developments have negativelyaffected efforts of Central Asian states to build westand south energy, trade, and transit connections, un-dermining as they are the prospects of the proposedtrans-Caspian gas pipeline connecting Turkmenistan’sgas elds to Europe.16 Moreover, recurrent clashes be-

tween Turkic Uyghurs and Han Chinese in Xingjian—notably in 1990, 2009, and 2013—are a testament tothe instability of China’s western frontier bordering



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the formerly Soviet Central Asia.17 The perceived lackof regional stability has prompted concerns about the

risks posed to the rapidly expanding trade betweenChina and Central Asian countries, though China’srapid pace of development and its expanding tradewestward via Xingjian through Central Asia is likelyto solidify Beijing’s hold on the region while spurringa wider regional economic development conducive tolong-term stability.

The region’s lack of environmental security; reg-ular droughts; and risks of water, energy, and foodcrisis in the context of global warming and relatedimpacts may threaten Central Asia’s glacier systemand negatively affect water supply for irrigationand hydro energy use. As the Eurasia DevelopmentBank concluded in a report in 2009, shortages of wa-ter and electric power would undermine the regional

economic development and could trigger interstateconicts.18 Together, environmental, as well as secu-rity chal-lenges in the Fergana Valley, the Caspian,Xingjian, and Afghanistan, threaten Central Asia sta-bility within and along the region’s perimeter, puttingthe region’s shrinking connectivity process under riskand hampering FDI and economic development thatunderpin its external connectivity. Only by pursuingstronger regional integration would Central Asianstates be able to withstand related pressures and en-hance their connectivity prospects—an imperativethey have yet to materialize.



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STALLED INTRAREGIONAL INTEGRATIONPROCESSES IN CENTRAL ASIA

More than 20 years after they gained indepen-dence, Central Asian countries continue to fear notonly the agendas of outside powers, but also those ofeach other. This is despite a wide range of commonchallenges requiring joint efforts by the regional statesto consolidate their sovereignty, ensure regional se-curity, and pursue more effective regional and globaleconomic integration.19

Several developments have impeded regional eco-nomic integration. The Central Asian states displayvarying paces of economic and political development,being torn as they are by conicting models of devel-opment and integration promoted by Russia and Chi-na, among others.20 Kyrgyzstan and Kazakhstan have

been far more successful in advancing political andeconomic modernization compared to Uzbekistan,Tajikistan, and Turkmenistan. Kazakhstan’s economyis larger than the economies of all the regional coun-tries combined, standing at U.S.$216.4 billion in 2001compared to the region’s second largest economy ofUzbekistan standing at U.S.$94.04 billion. Kazakhstanboasts a relatively high level of development, ranking68th in a 2011 UN report on human development. Uz-bekistan, Kyrgyzstan, Tajikistan, and Turkmenistanrank 115th, 126th, 127th, and 102nd, respectively.21 Ka-zakhstan, Turkmenistan, and Uzbekistan are large en-ergy producers and exporters, while Kyrgyzstan andTajikistan are large importers of energy resources andexporters of migrants. Kazakhstan has become a mag-

net for migrants of other regional countries, thougha regional migration policy in Central Asia does notexist.22 Fostering political and economic liberalization



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would ensure a more effective and rapid domestic de-velopment of Central Asian economies, intraregional

cooperation, and external connectivity.The Central Asian states are also in the process of

consolidating their newly gained sovereignties, dis-playing a strong sense of nationalism and resistanceto integration initiatives, either intra- or extraregional.Ideologies that support their national building effortsoften conict. But given their weak economic and se-curity positions, as well as lack of other choices savefor stronger regional integration, they continue pursu-ing ties within outside powers and regional organi-zations led by Russia (Collective Security Treaty Or-ganization [CSTO]; Commonwealth of IndependentStates [CIS]; the Customs Union [CU]; and EurasianEconomic Union [EEU]) and China (SCO). Functionsof these structures overlap and are often ineffective,

while relatively weak positions of Central Asianstates prevents them from inuencing these institu-tions. Furthermore, Moscow and Beijing favor bilat-eral approach to dealings with the regional countries,hampering regional cooperation efforts. Lack of com-mitment by leaders, funding, and involvement of theprivate sector and civil society have impeded regionalintegration as well.23 Expectedly, the lack of intrare-gional cooperation by Central Asian states themselvesopens room for manipulative involvement by outsidepowers, depriving them of mechanisms to better man-age their internal and external ties. While relationswith Russia and China help advance the region’s con-nectivity, an integrated region would ensure a moreeffective and secure way of pursuing it and ensuring

that any push for connectivity advanced by an outsidepower is not imposed or one-directional.



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To be sure, the regional states made an effort topursue intraregional cooperation. They rst created

the Central Asian Commonwealth, transforming itinto the Central Asian Economic Community (CAEC)in mid-1990s. In 2001, the CAEC became the CentralAsian Cooperation Organization (CACO), but theCACO ceased to exist in the 2000s. Meanwhile, effortsto pursue intraregional security cooperation have lednowhere, with the regional states relying primarily onexternal military and security cooperation with majorpowers (Russia-led CSTO, China-led SCO, the U.S.-led North Atlantic Treaty Organization [NATO] andNATO’s Partnership for Peace [PfP] program, and theEuropean Union’s [EU] Border Management Programfor Central Asia). The Centrazbat, created on the ba-sis of the CAEC in 1990s to coordinate joint militaryexercises, held common exercises with NATO units

between 1997 and 2000, but had not evolved into aneffective military integration initiative.24 Even securitychallenges stemming from the conict in Afghanistanhave not advanced intraregional, integrated policies.While participation in the Northern Distribution Net-work (NDN) has been a notable achievement, it hasbeen advanced through participation of the UnitedStates and other external parties.

Enhancing intraregional cooperation would ad-vance Central Asia’s position in the global economy,but the regional states need to integrate internally tocreate synergies when integrating externally. As Pres-ident Nursultan Nazarbaev cautions:

We witness a clear rivalry of great powers over eco-

nomic domination of the region. We are now poisedwith a choice: we eternally remain the source of rawmaterials for the world economy and wait for the com-ing of the next empire, or engage in serious integrationof Central Asia.25



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As the strongest regional actors, Kazakhstan and

Uzbekistan could drive the regional integration, butthey need to overcome their rivalries. Uzbekistan fur-ther needs to expand its vision of its potential in theage of globalization.

The rivalry between Uzbekistan and Kazakhstanover primacy in the region and their colliding domes-tic, regional, and global visions hamper intraregionalintegration, with Kazakhstan looking to geo-economicstatecraft while Uzbekistan leaning more on geo-politics toolkit in their world views and approaches.While Kazakhstan is the region’s largest economy byfar, Uzbekistan is the most-populated, centrally locat-ed, and borders all Central Asian states, while beingseen as the core of the region’s cultural and historicalheritage.26 Kazakhstan has a persistent record of in-

tegration initiatives, positioning itself as the countrywith a multivector policy and global vision for itselfand the region. Uzbekistan, in turn, has long pursuedan isolationist course and refrained from intraregionalcooperation in a number of areas.

Pointedly, Kazakhstan did not close its economyto the outside world in response to the global nancialcrisis, but instead chose to open up for more FDI whilepursuing more stringent regulations to avoid nancialrisks. It has displayed impressive economic growth inrecent years, accounting for about 50 percent of theregion’s GDP and attracting up to 85 percent of totalFDI since independence. The state dominated econo-mies of Uzbekistan and Turkmenistan, however, havefailed to implement reforms and attracted the lowest

FDI in the region in relative terms.27 Uzbekistan had seen a good start as a proponent of

regional integration in the 1990s, calling for a regional



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security conference, advancing the Nuclear WeaponFree Zone in the region, and initiating the 6+2 for-

mat of negotiations on stabilization of Afghanistan in1998. However, the history of colonial legacy, rivalriesamong great powers, uncertainties after the demise ofthe Soviet Union, as well as risks of instability in Af-ghanistan have prompted it to rely more on bilateralrather than multilateral ties.28 In 2005, President IslamAbduganievich Karimov stated that “strategic uncer-tainty remains in the region. Geostrategic interests ofmajor world powers and our neighboring countriesconcentrate and sometime collide in this part of theworld.” For instance, just as any other outside actor,Russia has used the instability in Afghanistan as away to inuence its relationship with Central Asianstates, providing signicant economic and militaryaid to Tajikistan and Kyrgyzstan, yet being unable to

nd a cooperative partner in Uzbekistan.In 2008, Tashkent launched the “6+3” format of

talks on advancing security in Afghanistan and thewider region, but proved unable to get internationalsupport, re-entering CSTO in 2006 and leaving itagain in 2012. In another instance, it became a Eur-asian Economic Community (EurAsEC) member in2006 but left in 2007. Since its independence, it left theCSTO, EurAsEC, and CACO. It also disengaged fromthe Istanbul process on Afghanistan and UN SpecialProgramme for the Economies of Central Asia (SPE-CA) project, choosing to remain a SCO member to bal-ance Russia and, increasingly, China’s own growingeconomic clout in Central Asia. As analyst FarkhodTolipov put it, the country’s policy “has undergone

evolution from promising start in the 1990’s, throughuncertainty in the 2000’s, up to isolationism and stag-nation today,” undermining prospects at regional in-



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tegration. Its 2012 foreign policy concept emphasizedits preference for bilateral ties and objection to the de-

ployment of foreign bases in Uzbekistan, membershipin any military alliance, and involvement of outsidepowers in the resolution of regional conicts.29 AllCentral Asian states distrust Moscow and its regionalinitiatives, but it is Uzbekistan that has shown its abil-ity to resist them, a position different from Kazakh-stan that borders Russia and nds it more benecialto pursue integration with Moscow in various areas.

The political, security, and economic componentsof Uzbekistan’s grand strategy contrast sharply withthose of Kazakhstan, which is a member of all majorpost-Soviet integration initiatives and has successfullyexploited its growing ties with China, Russia, and theUnited States at the same time. Astana’s ambitiousplans to integrate into wider global economic network

hold an extraordinary potential to better bridge Cen-tral Asia with the rest of the world and exert a positiveimpact on the development of the region’s relativelyless open and successful economies. This, of course,would be impossible without the development of in-tra- and inter-regional infrastructure in the areas ofenergy, trade, and transit, among others.30 Regionaleconomic integration would entail common customs,labor, economic, and security policies, especially con-sidering the process of globalization that intensiescompetition. While achieving this is difcult, start-ing with common transit and trade policies would befeasible.31

In 2012, Kazakhstan suggested launching a com-mon free trade zone in Central Asia for the region to

become “a global center.” This initiative came on theheels of an earlier proposed Union of Central AsianStates (UCAS), which would evolve as a node of global





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vate a more cooperative stance toward regional in-tegration projects and dynamics. Achieving this will

go a long way toward enhancing intra- and extrare-gional connectivity, especially given the geopoliticalposition of Uzbekistan and its proximity to Afghani-stan, whose uncertain future threatens to undermineKabul’s potential role as a transcontinental integrator.

AFGHANISTAN POST 2014: UNCERTAINFUTURE OF TRANSCONTINENTALINTEGRATOR

Afghanistan served and could serve as a majortranscontinental and inter-regional integrator of Cen-tral and South Asia. But despite its promising poten-tial, it confronts a series of geopolitical and securitychallenges that make its national development and

the expansion of inter-regional economic ties highlyproblematic, albeit increasingly relevant and crucialin order to ensure the broader region’s connectivity tothe global economy and its viability as an integratedunit. This suggests a particular importance attachedby Kabul, neighbors, and distant partners to the goalof developing and reconnecting Afghanistan to theexpanding network of transcontinental trade.

The security situation in Afghanistan is far fromstable and is expected to get worse as coalition forcesseek to withdraw fully in 2016. It is placing Uzbeki-stan, Turkmenistan, Tajikistan, and Kyrgyzstan un-der signicant security risks in the form of possibleincrease in drug trafcking, terrorism, cross-bordercrime, and even the potential to spark conicts within

Tajikistan, which continues to suffer from the legacyof its civil war and ties to groups in Afghanistan.34



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The implications of the political transition in Af-ghanistan after the presidential election in spring of

2014 and the withdrawal of coalition troops by theend of the year are therefore all more signicant. Tali-ban continue to stage frequent attacks across Afghani-stan, including Kabul, and, with the likely support ofPakistan’s Inter-Services Intelligence, may come backto the political scene in some form or another.35 Profes-sor Steven Metz noted related challenges this way:

I simply cannot imagine a situation where the Karzaigovernment defeats the Taliban, imposes stability overall of Afghanistan and builds an economy capable ofsustaining Afghanistan’s population growth (which isone of the highest on earth) and supporting a massivesecurity force (or nding other employment for thehundreds of thousands of members of the police andarmy).36

The return of the Taliban to power or civil war andcontinued insecurity would endanger the prospectsof Afghanistan and Central Asia serving as transcon-tinental hubs, undermining their expanding externalconnectivity. A civil war in Afghanistan would againput the country’s development back, potentiallyleading to military intervention by powers withinor outside the region. The U.S. military presence hasplayed a crucial role in opening Afghanistan and Cen-tral Asia to South Asia and the global economy. Butits military withdrawal from Afghanistan without asustainable regional strategy in its wake threatens toundercut Washington’s policy, active since 2006, ofreconnecting Central and South Asia to enhance their

connectivity.The uncertainty about Afghanistan’s future, the

lack of multilateral stabilization initiatives, and prev-



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alent distrust by Kabul of Pakistan’s policies furthercomplicate the regional security situation.37 However,

some believe that Central Asian states and their coop-eration with Russia, the United States, the EU, China,and India will enable them to prevent cross-bordermilitancy that occurred in the region’s southern pe-rimeter in the late-1990s and early-2000s. Others sug-gest that Afghanistan, even under the Taliban, wouldhave no choice but to expand its role of an inter-re-gional integrator as the country’s budget would beunsustainable without expanding the economy viatrade, investment, and economic integration withinthe broader region.38

This is in part why the United States has relied onits New Silk Road Strategy (NSRS) to substitute itsmilitary strategy with an initiative based more on eco-nomics as it prepares to disengage military from Af-

ghanistan. The NSRS calls for integrating the economyof Afghanistan with Central and South Asia and mak-ing Kabul a hub of inter-regional economic integrationand ows. However, the NSRS suffers from numerousimpracticalities, including the lack of funding, organi-zation, and commitment to specic projects, as well aslimited U.S. regional economic presence.

Despite legitimate criticism, the NSRS feeds into2008 Afghanistan’s National Development Strategy,which seeks to restore Afghanistan’s role as a majorinter-regional hub:

Afghanistan is a country with signicant potential foreconomic development. It has substantial water, agri-cultural and mineral resources and is well positionedto become a trade and business hub linking the mar-kets of Central Asia, the Middle East, South Asia, andChina. The potential exists for sustainable economicgrowth in the future. Afghanistan’s commercial con-



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nections to regional and global economies were se-verely disrupted and must be redeveloped. The devel-opment of a competitive private sector will depend onestablishing access to foreign markets and developingviable export activities.39

This is where Central and South Asian economiescome in, as Afghanistan’s trade with Central Asiain 2010 represented a meager 7 percent of its overalltrade,40 while its trade with Pakistan and India has an

enormous, untapped potential. Afghanistan also hasmajor reserves of natural resources. Afghanistan andIndia have already agreed to mine an estimated 1.8billion tons of iron, while China obtained rights to de-velop Afghanistan’s Aynak copper mine reserves. In2012, Kabul issued four tenders in copper and gold inan effort to promote its Silk Road initiative.41

In 2013, Afghanistan, Turkmenistan, and Tajikistanagreed to build a new railway linking Akina-Andk-hoy, Atamurat-Ymamnazar, and Pyandzh to bolstereconomic ties of the three countries. Opening of theAmu Darya bridge in 2007 was, in turn, critical for ex-panding trade between Afghanistan and Tajikistan.42 Tajikistan, Afghanistan, and Pakistan now expect tosign a trade and transit pact as part of the 2010 Afghan-

Pak trade and transit agreement, facilitating trilateraltrade in the geopolitically tense region. However, thedeal faces political impediments, despite its poten-tial to improve relations between and within Centraland South Asia.43 Kazakhstan, which does not borderAfghanistan, has committed U.S.$8 million in devel-opment assistance, while Uzbekistan has assisted withinstallation of ber optic cables linking Afghanistanto global networks.44 Uzbekistan has also become amajor supplier of electricity to Afghanistan since 2009



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and promoted rail linkages with the country, building11 bridges from Mazar-i-Sharif to Kabul and a railway

line, supported by the United States and ADB, fromHeraton to Mazar-i-Sharif. These rail lines could belinked to other railways in Afghanistan resulting in“railroad frenzy” because interested parties are build-ing new links to Iran, Central Asia, and China.45

In this context, securing Afghanistan’s secondlargest, southern city of Kandahar is crucial after thepullout of troops because it offers a key to developingthe country’s Ring Road and facilitating nationwidedevelopment and ensuring access to the Pakistaniport of Gwadar, the Middle East, Central Asia, andEurope.46 Afghanistan also looks to develop links tothe port at Chabahar, which competes with Gwadarport that Russia, India, and Iran are developing.

The construction of railways and roads in Afghani-

stan is essential for the country’s and wider region’sdevelopment and integration with the global econo-my. ADB estimates that the completion of roads in Af-ghanistan would increase trade among neighbors by160 percent and do so via Afghanistan by 113 percent,raising Afghan exports by 14 percent (U.S.$5.8 billion)and imports by 16 percent (U.S.$6.7 billion). Mean-while, the transcontinental trade is forecast to increaseAfghanistan’s GDP growth by anywhere between 8.8-12.7 percent, indicating the importance of Afghanistanfor the transcontinental trade and the latter’s impor-tance for Afghanistan’s own development.47

Improving rail and road links of Afghanistan withits neighbors and pursuing regional energy transmis-sion projects for and through Afghanistan are some of

the major initiatives pursued as part of the deepeningcooperation within the Regional Economic Coopera-tion Conference on Afghanistan (RECCA). RECCA’s



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participants in 2012 agreed on a number of deals inthe following areas: “infrastructure, human resource

development, investment and trade, regional disasterrisk management, and regional ber optic connectiv-ity.”48 Besides being a member of RECCA, Afghani-stan has applied for WTO membership and is also amember of CAREC, OSCE, the South and Central AsiaTrade Forum, all of which are necessary for enhancingthe country’s development and role as a key transcon-tinental integrator.49

Afghanistan’s success as a transcontinental inte-grator depends on overcoming signicant regionalsecurity, geopolitical, and economic developmentchallenges after decades of conict in the country,which stymie the integration between Central andSouth Asia and undermine the regions’ global eco-nomic integration. This success also depends on the

manner in which Iran (bordering Afghanistan, Paki-stan, and Turkmenistan and sharing cultural afnitywith Tajikistan) and its Western partners manage toturn their adversarial relationship into a fruitful, last-ing engagement. Such impending cooperation maylead to fundamental realignments in the Middle East,Central and South Asia, affecting Afghanistan and theregions’ external connectivity.

IRAN’S ISOLATION AND IMPENDINGENTENTE WITH THE WEST:IMPLICATIONS FOR CENTRAL ASIA

The ongoing talks between Iran and the West overTehran’s controversial nuclear program following a

series of most stringent sanctions to date have openedprospects for the development of a more coopera-tive relationship between Iran and the West. Such a



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development portends signicant implications forCentral and South Asia, not to mention the Middle

East. While similar talks have failed in the past, his-tory knows examples of transformational shifts oncea set of conditions are aligned. Tehran’s outreach tothe West to pursue the talks occurred in the circum-stances of Iran’s increasingly isolated and failingeconomy. Meanwhile, the rise of United States as amajor global energy producer has led to changes inregional and global energy balances. Furthermore, thegreater Middle East has seen a number of volatile geo-political dynamics in recent years, including the warsin Syria, Iraq, and Afghanistan, as well as the ArabSpring. These and other factors have provided an im-petus to impending and substantive, yet not necessar-ily assured, improvement in the relationship betweenIran and Western countries.

No one knows for certain when, or if, this im-provement will occur, but actors need to be preparedto capitalize on this development and harness relatedimplications to benet their policies. This is especiallytrue for Central Asian states and Afghanistan, whichhave treated their ties with Iran with caution due totensions between Iran and the West and their ownconcerns about Tehran’s ambitions.50 These coun-tries may gain from Iran’s integration into the globaleconomy, despite possible adverse effects on CentralAsian energy exporters that will be incentivized topursue diversication of their energy exports-depen-dent economies. Led by the newly elected PresidentHassan Rouhani, who replaced Mahmoud Ahmadine- jad in 2013, the Iranian administration seeks to make

multi-literalism and the expansion of ties with inter-national economic institutions a foreign policy prior-ity as a way to contribute to “global norm-setting.”51



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If it can reemerge as a responsible actor, both Iran andcountries throughout Central and South Asia will be

able to ensure a smoother and more secure connec-tivity to the global economy. That said, actors shouldalso be prepared to face potential adverse risks stem-ming from the realignment of geopolitical relations inthe region stretching from the Middle East to SouthAsia. This especially concerns the relationships be-tween predominantly Sunni and Shiite states on theone hand, and the ties between the United States andSaudi Arabia, among others, on the other.

A number of existing and planned projects withIran’s participation reveal the potential impact of suchimproved ties despite, indeed because of, sanctionsthat have prompted Iran’s engagement with Cen-tral and South Asia. Tehran’s agreement to limit itsnuclear program in return for easing of the sanctions

has led to an uptick in economic rhetoric and relationsbetween India and Iran, demonstrating the prospectsof Iran’s expanding relations with Central and SouthAsian states. India and Iran are particularly interestedin nishing the Chabahar port, which will enable themto connect with Central Asia and Afghanistan. Cur-rently, Pakistan impedes India’s effort to trade withAfghanistan, despite allowing some Afghan exportsto reach India. Having the port, to which India hascommitted U.S.$100 million after investing U.S.$100million to construct a 220 kilometer-long road linkingAfghanistan and Chabahar, will be a game changer forIndia and Iran. This is especially so because Chabaharcompetes with the Pakistani port at Gwadar, whichChina helped nance to facilitate energy and trade

ows to and from its western regions.52

Iran is increasingly projecting its economic andpolitical inuence in northwestern Afghanistan andsouthern Turkmenistan, building roads and railways



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linking it to Afghanistan and Central Asia. Whileits investments in Afghanistan are not substantial,

its reach is growing, driven as it is by the desire toavoid the impact of international sanctions.53 Just asthe United States, China, India, Central Asian coun-tries, and the current government in Kabul, ShiiteIran is not interested in the comeback to power of theWahhabi ideology-inspired Taliban in Afghanistan,where Tajiks make up about one third of the country’spredominantly Sunni Muslim population. Iran worksclosely with Tajikistan and Afghanistan to preventthis scenario and break the relative isolation of all thethree Persian-speaking countries from regional andglobal economic networks. This trilateral partnershipis unlikely to turn into a political or military alliancesoon, but it does enable Iran to increase its inuence inCentral Asia, allowing Tajikistan and Afghanistan to

access regional markets. Such cooperation is expectedto promote the reconnection of Central and SouthAsia within and with the Middle East. In this context,and facing Turkey’s relatively active foreign policy inthe Middle East and beyond, Tehran has sought to ex-pand its ties with Central Asian countries, primarilyby participating in transport and hydro-energy proj-ects. These are the areas of collaboration that Tehran,Dushanbe and Kabul can hardly ignore given theirisolation from global markets and post-2014 regionalsecurity concerns.

In 2010, Tehran and Dushanbe signed a new de-fense treaty, agreeing to deepen their economic ties.Iran’s trade and investment in Tajikistan stood atU.S.$250 and U.S.$650 million in 2009 and 2010, re-

spectively. Iran helped construct the Anzob tunnel,which runs 5,000 meters and links Dushanbe andTa-jikistan’s second largest city of Khujand. Thetunnel



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helps Tajikistan avoid a potential transport blockadeby Uzbekistan and ensures Tajikistan’s and Iran’s

further connection to Kazakhstan, Kyrgyzstan, Tajiki-stan, and South Asian ports through Afghanistan andPakistan, cutting travel time from Central Asia to Iranby 4-5 hours. In a sign of support to Tajikistan, Tehranthreatened to block Uzbek rail cargo running via Iranif Uzbekistan did not lift its 6-month-long blockade onfreights en route to Sangtuda-2 hydro-station—Iran’sU.S.$180

million investment project in Tajikistanviewed as a tool to rectify Tajikistan’s energy short-ages and as a threat to Uzbekistan’s agriculture andleverage over the upstream Tajikistan. Nevertheless,Iran and Uzbekistan maintain a strong trade relation-ship. Iran invested in the construction of the corridorlinking Tashkent, Mazar-i-Sharif, and Heart, connect-ing to the Chabahar port in the Gulf of Oman and

ending at Bandar Abbas in the Persian Gulf.54

Iran fur-ther cooperates with Turkmenistan and Kazakhstan,which in 2013 completed a 540 mile-long railway linelinking Kazkah Ozen with Turkmen Etrek throughUzbekistan and now plan to connect it to the Iranianrail network. The line would give Central Asian coun-tries another outlet to the Persian Gulf.55

However, Iran has worked to prevent Kazakhstanand Azerbaijan from building underwater pipelinesacross the Caspian on environmental grounds, whichimpedes East-West connections.56 The unresolved sta-tus of the Caspian prevents littoral states from exploit-ing the region’s vast energy resources and deliveringthem to regional and global energy markets.

Overall, however, regional countries could benet

immensely from Iran’s involvement in transcontinen-tal trade, energy, and transit initiatives, enabling Cen-tral and South Asian states to access ports and markets



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in the Middle East and expand their connectivity withthe global economy. The projects mentioned earlier

suggest the beginning of what could yet result in amajor regional transformation spurred by potentiallyimproved ties between Tehran and the West.


1. Rumi, known as Jalāl ad-Dīn Muhammad Balkhī, amongother names, was a great poet, theologian, and Su mystic, who

was born in present-day Afghanistan or Tajikistan and died inKonya, present-day Turkey (1207-73).

2. Andrew Kuchins, Thomas Sanderson, and David Gordon,The Northern Distribution Network and the Modern Silk Road: Plan-ning for Afghanistan’s Future, Washington, DC: Center for Strategicand International Studies (CSIS), December 2009, pp. 23-24.

3. Pankaj Ghemawat and Steven Altman, DHL Global Connect-

edness Index 2012: Analyzing Global Flows and Their Power to IncreaseProsperity, DHL, 2012.

4. Stephen Kaufman, “State’s Blake Sees Growing EconomicIntegration in Central Asia,” IIP Digital, March 14, 2013.

5. Johannes Linn, “Central Asian Regional Integration andCooperation: Reality or Mirage?” The Economics of the Post-Sovietan Eurasian Integration, Eurasian Development Bank (EDB) Eurasian

Integration Yearbook 2012, Almaty, Kazakhstan: EDB, pp. 100-101.

6. Ghemawat and Altman.

7. Professor Frederick Starr, Interview with Guli Yuldashevaand Mavlon Shukurzoda, “New Silk Road Strategy: Problems andPerspectives,” Jamestown Foundation Blog, November 22, 2011.

8. “Integrating Central Asia into the World Economy: The

Role of Energy and Transport Infrastructure,” Washington,DC: The Wolfensohn Center for Development, October 22-23,2007, pp. 2, 6, 9.



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9. Shi Tsze, “Analiz obratnogo protsessa ekonomicheskoiintegratsii v regione Tsentralnoi Azii” (“Analysis of the ReverseProcess of Economic Integration in Central Asia”), Geopolitika, June 4, 2013.

10. Johannes Linn, “Connecting Central Asia and the Cau-casus with the World,” Paper prepared for the First EurasianEmerging Market Forum, Thun, Switzerland, January 23-25, 2010.

11. Roman Muzalevsky, “The “Persian Alliance” and Geo-political Reconguration in Central Asia,” Eurasia Daily Monitor ,Vol. 7, Issue 161, September 9, 2010.

12. Jeffrey Mankoff, “The United States and Central Asia Af-ter 2014,” Samuel Brannen, ed., The Turkey, Russia, Iran Nexus:Evolving Power Dynamics in the Middle East, the Caucasus, andCentral Asia, Washington, DC: CSIS, pp. 6-7.

13. Olga Oliker and Thomas Szayna, eds., Faultlines of Con- ict in Central Asia and the South Caucasus: Implications for the U.S. Army, Santa Monica, CA: RAND, 2003, pp. xxii, 39.

14. Mankoff, p. 7.

15. Stephen Blank, “Central Asian Perspectives on Afghani-stan after the US Withdrawal,” Afghanistan Regional Forum Se-ries No. 2, Washington, DC: George Washington University, Cen-tral Asia Program, November 2012, p. 19.

16. Johannes Linn, “Connecting Central Asia and the Cauca-sus with the World,” p. 8.

17. Charles Ziegler, “Central Asia, the Shanghai CooperationOrganization, and American Foreign Policy from Indifference toEngagement,” Asian Survey, Vol. 53, No. 3, May-June 2013, p. 504.

18. Linn, “Connecting Central Asia and the Caucasus with theWorld,” p. 8. Also see Adiljan Umarov and Dmitriy Pashkun, Ten-sions in Sino-Central Asian Relations: Implications for RegionalSecurity, Central Asia Series, Watcheld, England: Conict Stud-ies Research Centre, Defence Academy of the United Kingdom, January 2006, p. 2.



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19. Roman Muzalevsky, “Will Common Challenges ForceCentral Asian States to Integrate?” Eurasia Daily Monitor, Vol. 9,Issue 78, April 19, 2012.

20. Zh. Omurova, “Rol’ Tsentralnoi Azii v sovremennyh in-tegratsionnyh protsessah” (“The Role of Central Asia in ModernIntegration Processes”), Informatsionno-analiticheskii tsentr , Janu-ary 26, 2012.

21. Erkin Baidarov, “Tsentralnoaziatskaia integratsia v kon-tekste yedinogo kulturno-tsivilizizatsionnogo prostranstva”(“Central Asian Integration in the Context of the Common Cul-tural-Civilizational Space), Washington, DC: Carnegie Endow-ment for International Peace, September 9, 2013.

22. E. Eshamanova, “Realii I perspektivy integratsii stranTsentralnoi Azii” (“Realities and Prospects of Integration of Cen-tral Asian Countries”), Tsentr Izucheniya stran postsovetskogo zaru-bezhyia, March 16, 2007.

23. Ibid., Linn, “Central Asian Regional Integration and Coop-eration: Reality or Mirage?” pp. 102-103.

24. Sébastien Peyrouse, “Russia-Central Asia: Advances andShortcomings of the Military Partnership,” Stephen Blank, ed.,Central Asian Security Trends: Views from Europe and Russia,Carlisle, PA: Strategic Studies Institute, U.S. Army War CollegePress, April 2011, p. 14. Also see Ibid., Wojciech Tworkowski,Realism Mixed with Romanticism: Turkey’s Relations with theStates of Central Asia, CES Report, Warsaw, Poland: Centre forEastern Studies (CES), July 2008, pp. 48-49.

25. М. Kalishevsky, “Kazakhstan: From ‘Multi-vector’ For-eign Policy to ‘Multi-polarity’ of CIS,” Fergana Information Agency,March 2007.

26. Gulnoza Saidazimova, “Integraziya v Tsentralnoi Azii:realii, vyzovy, vozmojnosti” (“Integration in Central Asia: Reali-ties, Challenges, and Opportunities”), Tsentralnaia Azia i Kavkaz,September 2000. Also see Alisher Taksanov, “Faktory integratsiiI dezintegratsii Tsentralnoi Azii” (“Factors of Integration andDisintegration in Central Asia”), available from www.unesco.kz/ci/ projects/omrc/pechbillosh/pubister02.htm, accessed May 5, 2014.



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27. Sergej Mahnovski, Kamil Akramov, and Theodore Kara-sik, Economic Dimensions of Security in Central Asia, Santa Monica,CA: RAND Corporation, 2006, pp. xiv-v.

28. Farkhod Tolipov, “Flexibility or Strategic Confusion? For-eign Policy of Uzbekistan,” Uzbekistan Initiative Papers, February2014, pp. 3-5.

29. Ibid.

30. Roman Muzalevsky, “Kazakhstan Pushes For Integrationwith the Global Economy,” Eurasia Daily Monitor , Vol. 8, Issue113, June 13, 2011.

31. Eshamanova.

32. Mankoff, pp. 6-7.

33. Quoted in Richard Weitz, “Massive East-West TransitCorridor Nears Crucial Phase,” Central Asia-Caucasus InstituteAnalyst, November 12, 2013.

34. Olga Oliker and Thomas Szayna, eds., Faultlines of Con- ict in Central Asia and the South Caucasus: Implications for the U.S. Army, Santa Monica, CA: RAND, 2003, pp. xxii, 40.


36. John Little, Interview with Steven Metz, “Rethinking In-surgency,” Blogs of War , January 24, 2011.


38. Richard Weitz, “Afghanistan and India Deepen StrategicCooperation,” Central Asia-Caucasus Analyst, January 22, 2014.

39. Andrew Kuchins, Thomas Sanderson, and David Gordon,The Northern Distribution Network and the Modern Silk Road:Planning for Afghanistan’s Future, Washington, DC: Center forStrategic and International Studies (CSIS), December 2009, p. 2.



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40. Mankoff, p. 20.

41. Vladimir Fedorenko, The New Silk-Road Initiatives inCentral Asia, Rethink Paper No. 10, Washington, DC: Rethink In-stitute, August 2013.



44. Mankoff, p. 5.


46. Kuchins, Sanderson, and Gordon, p. 15.

47. Frederick Starr, ed., The New Silk Roads: Transport andTrade in Greater Central Asia, Washington, DC: Johns Hopkins

University, SAIS, 2007, pp. 7-9.

48. Linn, “Central Asian Regional Integration and Coopera-tion: Reality or Mirage?” pp. 106-107.

49. The Wolfensohn Center for Development, pp. 13-14.

50. Rollie Lal, Central Asia and Its Asian Neighbors: Security andCommerce at the Crossroads, Santa Monica, CA: RAND Corpora-

tion, 2006, pp. 11-12.

51. Mohammad Javad Zarif, Minister of the Islamic Republicof Iran, “What Iran Really Wants: Iranian Foreign Policy in theRouhani Era,” Foreign Affairs, May-June 2014.

52. Sanjeev Miglani, “India accelerates Iranian port project af-ter U.S.-Iran thaw,” Reuters, November 29, 2013. Also see SteveRoy, Turkey, Russia, Iran and Central Asia After 2014, Washing-

ton, DC: Center for Strategic and International Studies, January16, 2013.

53. Roy.



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54. Lal, pp. 13-15.


56. Richard Weitz, “Kazakhstan and Azerbaijan EnvisageWide-Ranging Cooperation,” Eurasia Daily Monitor , Vol. 10, Issue224, December 13, 2013.



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CHAPTER 5

THE ROLE OF THE UNITED STATES:A WAY FORWARD

Не думай, как бы ни был ты велик, Что ты всего достиги все постиг.(No matter how great you are, do not think that you haveachieved and understood everything).

Юсуф Хас Хаджи баласагуни1

(Yusuf Balasaguni)

ADJUSTING U.S. GRAND STRATEGYTO NEW ERA DYNAMICS

While the U.S. supremacy is unrivaled and un-likely to end any time soon, the rise of new centers

of power has challenged the U.S. traditional role andefforts to shape global and regional security orders.“Multicentricity,”2 or even “nonpolarity,”3 as well asthe dispersion and uidity of power spurring newmodes of interaction are now the dening features ofthe international system. This system rests on interna-tional economic, nancial, and institutional linkages

spanning the entire globe and dynamically interactswith the process of globalization. It has neither theplace nor the tolerance for unipolarity once ascribedto the United States in the 1900s. Instead, it has plentyof room for numerous actors exercising inuence in avariety of areas. This makes it imperative for Wash-ington to adjust the means of its grand strategy in theage of austerity and rely more on diplomacy and mul-

tilateral efforts to shape regional trajectories. The U.S.grand strategy should seek to: 1) ensure secure globalcommons; 2) advance globalization; and 3) forestall



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the rise of an actor capable of displacing the UnitedStates as the rule-setting global power and disrupting

the global security and economic order.The U.S. Navy’s mission as “a global force for

good” reects the increasingly crucial U.S. role in theworld4 as the United States withdraws its troops fromAfghanistan, pivots to Asia Pacic, deals with instabil-ity in the Middle East, works to support Europe’s se-curity, and encourages Central Asia’s integration intothe global economy on terms that are more favorableto long-term global and regional stability rather thannarrow visions of select actors. Doing all this at once,and with similar level of effectiveness, determination,and foresight as during the Cold War, will be no easytask in the new realities of the 21st century. But theUnited States should not forget its legacy and role inadvancing global connectivity and stability. It helped

rebuild and accommodate in the international systemthe now prosperous and secure yet once revisionist,post-World War II Germany and Japan. It has furtherradically advanced the centuries-old process of glo-balization—especially after the collapse of the SovietUnion—which has brought millions out of poverty,contributed to the rise of more prosperous societies,and is yet to absorb countries on the periphery of theglobal economy, including in Central and South Asia.(See Figure 5-1.)



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Source: World Bank, taken from Christopher Chase-Dunn, Yukio Kawa-

no, Benjamin Brewer, “Trade Globalization since 1795: Waves of Inte-

gration in the World System,” American Sociological Review, Vol. 65,

No 1, February 2000, pp.77-95.

Figure 5-1. Core, Semi-periphery, and Periphery,Late-20th Century.

As Central Asia’s connectivity gap shrinks, theregion is increasingly moving from the periphery ofthe global economy to the center of global geopoli-tics,5 with China, India, the European Union (EU), andRussia all eyeing opportunities to shape regional out-

comes and challenging the United States to channelrelated processes for the benet of a more stable re-gional and global security order. This imperative be-comes stronger given the intensifying rivalries amonggreat powers and Central Asian states themselvesover access to resources, routes, markets, bases, andopportunities. While Russia has enjoyed a predomi-

nant security presence in the region for decades, itsposition may soon change, as evidenced by the U.S.military involvement after September 11, 2001 (9/11)



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and China’s expected military expansion to protect itseconomic interests across the continent.

A potential militarization of the region—withouta durable institutional security framework and amidrapid power transitions—threatens not only the re-gional stability but may result in the imposition of aone-sided vision of the region’s economic future andits place in the global economy. Speculations alreadysurface about the possibility of Russia deployingtroops to the south of Kyrgyzstan and Tajikistan, orChina intervening in Central Asia if Russia is inca-pable of ensuring regional security after the pull-outof coalition forces from Afghanistan, which may welltranslate into long-term military presence based onprinciples of domination and exclusion. Meanwhile,the economic expansion of a rising global power witha zero-sum approach to international affairs may

advance the region’s external connectivity in a one-dimensional way. While benecial in many respectsfor expanding the region’s connectivity, China’s andRussia’s integration efforts can be inward-looking andconstrain related processes.

The global and regional trends are thus forcing theUnited States to develop and pursue “a coherent Eur-asian strategy that integrates European, Middle East-ern, South Asian and East Asian policy into a compre-hensive design.” 6 The United States should work withpotential rivals in constructive ways, striving to turnthem into partners and allies of the evolving globaland regional orders while recognizing that such ac-tors currently seek to challenge its global and regionalagenda in the world and Central Asia. In the process,

the logic of its grand strategy should be premised onone simple reality: global commons are “central to themaintenance of U.S. power and inuence,” and the



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United States has been committed to global commonsas the “connective tissue of the international system”

for decades.7

As part of this commitment, and amidthe rise of new powers, it needs to assess long-termeconomic and military balances and identify likely al-lies early on in order to focus its current policies onfuture intended outcomes.8

The rise of China, India, and resurgence of Rus-sia—all geopolitically dynamic powers whose risingglobal inuence is inevitably linked with their region-al presence in the neighboring Central Asia—call fora more subtle, engaged, long-term, and concerted U.S.regional strategy. Such strategy should naturally feedinto the U.S. grand strategy and focus on the pursuit ofthe following broad vectors to expand Central Asia’sexternal connectivity: calibrating U.S. military role ingreater Central Asia; addressing risks of inter- and

intrastate conicts in Central and South Asia; boost-ing U.S. economic role and presence in the broader re-gion; cooperating with established and rising powersto shape the region’s connectivity. As it pursues thesevectors, Washington should be mindful of the needto cooperate and, where necessary, compete with es-tablished and rising powers in the region, as well asto leverage desires, sometimes necessities, of CentralAsian countries in expanding the U.S. long-term roleand presence in the region.

CALIBRATING U.S. MILITARY ROLE INGREATER CENTRAL ASIAPOST-AFGHANISTAN

By the end of 2016, the United States plans to with-draw most of its forces from Afghanistan, but its fu-ture military role and presence in greater Central Asia



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is still uncertain. The United States has committed toomuch in time, blood, treasure, and credibility to leave

Afghanistan and Central Asia to their fate, making itimperative to continue efforts aimed at developingand integrating Central and South Asia with the glob-al economy. Washington would need to apply a cer-tain level of military capability and political nesse tocreate and sustain conditions for a smooth transitionout of Afghanistan in the short term, a stable regionaldevelopment in the medium term, and prevention ofregional militarization and arms race in the long term.The United States has a unique opportunity to prolongits broader regional military presence and advance itsagenda—a notable imperative considering the needfor possible future missions as other actors increasetheir own military capabilities, including in CentralAsia. If it fails now, the projected military expansion

by other actors will make this task far more difcult inthe future.

In its military strategy, Washington should affordCentral Asia a larger and distinctly regional role. Thestrategy should focus on:

1. continuing to support counterterrorism, anti-drug trafcking, and special operations capabilitiesof regional states as ends in themselves and as a plat-form for more substantive military cooperation in thefuture;

2. arranging for temporary and permanent basingrights;

3. advancing reforms of local armed forces andinteroperability as part of the North Atlantic TreatyOrganization (NATO) Partnership for Peace (PfP)

Programs and bilateral ties;4. boosting military-to-military and civilian-to-ci-

vilian contacts and cooperation in the area of defense



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and emergency management through education pro-grams and military exercises;

5. capitalizing on the Northern Distribution Net-work (NDN) achievements to promote partnerships;

6. preventing further militarization and arms race,especially in the Caspian to the west and the FerganaValley to the south;

7. encouraging indigenous approaches to manag-ing collective security and related institution buildingas pillars of regional and global stability; and,

8. cultivating ally and partner military ties with allmajor players for condence building purposes andcontingencies that may require a joint military actionin support of U.S. security interests.

The United States is unlikely to secure heavy orpermanent military presence in the region given the

objections of Russia, China, Iran, and some elites inCentral Asian countries. Any such presence couldcontribute to the militarization of and arms race in thegreater region bordering four nuclear-armed powers(potentially ve if Iran “goes nuclear”). But the Unit-ed States needs to have a military role and presencesufcient to discourage attempts at military domina-tion and protect the region’s push for inclusion intothe global economy, while retaining the exibility tochoose whether to intervene in any particular situa-tion or conict in the region.

The conicts in Ukraine and the South China Seahave shown the need for Washington to reinforceits support for allies and partners in the post-Sovietspace and East Asia, as well as for its allies to assume

a greater share of responsibility for their defense byrelieving the military burden on the United States.This imperative is acute, given the rise of potentialmilitary challengers, strong domestic and overseas



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opposition to controversial instances of U.S. militarypresence, and signicant cuts in U.S. defense spend-

ing. Washington should encourage Japan, South Ko-rea, Germany, France, and the United Kingdom (UK)to contribute a larger share to NATO, the protectionof global commons, and their own national defense. Areduction of military burden could allow the UnitedStates to focus on military deployment, planned or inresponse to conicts, in areas that are critical to its in-terests but lacking adequate security infrastructure, asin Central Asia.9

Any military deployment in Central Asia is boundto be a political, geographic, and logistical challenge,given the potentially unstable regimes, prevalent cor-ruption, complex terrain, weak military infrastructure,remoteness of the United States, and lack of interop-erability, not to mention signicant security or politi-

cal inuence of other actors, nascent military reforms,and weak armed forces of regional countries. Thesechallenges require Washington to provide targetedmilitary assistance, focus on advancing capabilitiesallowing for deployment of special or light forces atshort notice, and advancing its institutional militaryties with the region. Washington should tread withcaution: the more it involves itself in Central Asiamilitarily, the more responsive it is expected to be, po-tentially putting itself in a complex position obligatingit to intervene during an intra- or interstate conictwhen a preferred option may be not to do so.10

Consequently, boosting military-to-military andcivilian-to-civilian contacts and defense coopera-tion via education programs and military exercises

is a forward-looking strategy to ensure sustainedmilitary collaboration with counterparts in CentralAsian countries without provoking hostile reactions



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by other powers to U.S. alleged ambitions in thebroader region.

Washington and its Central Asian partners shouldconsider raising the quantity and quality of educa-tional exchange programs involving respective futuremilitary and civilian defense leaders. U.S. professionalmilitary schools, including staff and war colleges, aswell as the Near East South Asia Center at the Na-tional Defense University in the United States andthe George C. Marshall European Center for SecurityStudies in Germany already serve as major platformsfor such program activities. But these institutionsshould strengthen their alumni programs in order toretain critical ties with potential leaders. If not done al-ready, engaging alumni in research and developmentof practical recommendations in the areas of defenseand emergency preparedness on an institutional level

would enhance the alumni programs and encouragein Central Asia the concept and practice of think tanksas inuencers of military and defense policy. Provid-ing nancial support and expertise for the purposeof building public policy think tanks would promoteand signal a more engaged and lasting presence inthe region.

The U.S. Central Command (USCENTCOM) andU.S. European Command (USEUCOM) should, inturn, enhance the frequency and scope of military ex-ercises and general collaboration programming withcounterparts in Central and South Asia. The exercisesshould necessarily rest on multinational collaborationframeworks, emphasizing as they are developmentand reconstruction, humanitarian aid, emergency

preparedness, disaster relief, and anti-terrorism com-ponents. Of growing importance will be the need tostrengthen collaboration among and between US-





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further military ties, assuring its regional counter-parts that the United States will continue to provide

military assistance in order to build strong regionalcounter-terrorism, anti-drug trafcking, and deploy-able peacekeeping capabilities—all in line with theUSCENTCOM 2013 Posture Statement.11

The NDN has provided a platform for U.S. mili-tary and economic cooperation with the region, mak-ing it important for Washington to use this legacy tocultivate military ties and advance partner capacitywith regional countries on a bilateral and multilat-eral basis. Given the geopolitical dynamics in the re-gion, the Unites States is likely to seek basing rightsin Uzbekistan and Kazakhstan that pursue a moreautonomous policy compared to Tajikistan and Kyr-gyzstan, which depend heavily on China and Russiafor economic and military aid and have declined U.S.

efforts at prolonging its presence. The United Statesentertained plans to establish a military base or RapidResponse Center in Uzbekistan, which suspended itsCollective Security Treaty Organization (CSTO) mem-bership in 2012 and now hosts a NATO center taskedwith defense planning, military education, and civilemergency preparedness. It also considers the possi-bility of security of a facility at the Kazakh port cityof Aktau on the Caspian Sea. However, littoral Russiaand Iran are likely to derail this effort.

While it is inevitable that the United States willdeepen its military ties with select Central Asiancountries, it should seek to advance its partnershipswith all regional states and in a way that genuinelyseeks to build multilateral, intraregional initiatives,

relationships, and dynamics. This is critical as Wash-ington seeks to promote win-win outcomes as part ofNew Silk Road Strategy (NSRS) and prevent militari-



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zation as spurred by actors from within and outsidethe region. This is why the U.S. military role should

cultivate a more durable and long-term institutionalsecurity infrastructure by fostering multilateral part-nerships with countries in and outside the region,encouraging Central Asian states to pursue collec-tive solutions to the management of common securitychallenges. Rivalries of outside powers and conictsamong Central Asian states without a durable institu-tional framework in place (not imposed, but inclusiveand collective) is a recipe for disaster of continentalproportions, which Washington should work to avoid.

ADDRESSING RISKS OF INTERSTATE ANDINTRASTATE CONFLICTSIN CENTRAL AND SOUTH ASIA

The United States should accompany its militaryrole with a security and political strategy to prevent,mitigate, and address the risks of intra- and interstateconicts in the wider region of Central and South Asia,which could hamper the region’s internal and externalconnectivity. In Central Asia, it should focus relatedpolicies on addressing prevalent poverty, corruption,weak rule of law, and lack of economic development,as well conict prevention and mitigation specicallytailored for the Fergana Valley, known for potentiallyvolatile disputes involving Uzbekistan, Tajikistan, andKyrgyzstan over water, energy, land access, and bor-der issues. Encouraging cooperative policies by Uz-bekistan, which borders all four Central Asian statesplus Afghanistan, in these areas would stimulate re-

gional cooperation. The United States should promoteKazakhstan’s regional integration efforts and utilizeAstana’s growing clout to advance security and stabil-



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ity in the broader region, while encouraging Tashkentto do the same.

In the Caspian, the United States should foster co-operation among the littoral states, especially amongKazakhstan, Turkmenistan, Azerbaijan, and Iran (subject to the impending rapprochement between Tehranand the West), which collectively represents one ofthe world’s most energy-rich areas and yet-to-be-de-veloped trade and transit nodes linking Central Asia,the Caucasus, and Europe. Given the growing levelsof militarization in the region, Washington shoulddiscourage interstate tensions, prevent conicts overenergy resources and their transit, and encourage thelittoral states to resolve the status of the Caspian soon-er rather than later.

In South Asia, Washington should work with Is-lamabad and Delhi to mitigate perceptions of the

Pakistani-Indian rivalry, advance condence-buildingmechanisms, and develop bilateral and multilateralframeworks of response to the risks of internationalterrorism and proliferation of weapons of mass de-struction (WMD). In the process, it should assist Paki-stan in building stronger anti-terrorism capabilitiesto ensure Pakistan’s viability as a state and ease theconcerns of Central Asian states about developing tieswith this nuclear-armed, terrorism-stricken, Islamicstate.12 Of particular importance is the need for theUnited States to promote economic ties between Indiaand Pakistan, which with time could improve the se-curity relationship between the perceived rivals.

As it seeks to develop policies for Central andSouth Asia, Washington should continue efforts at

developing and imbedding the conveniently locatedAfghanistan into inter-regional dynamics. However,it needs to commit the necessary level of effort, co-



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ordination, leadership, and nancial resources toadvance this goal in concert with other actors. While

U.S. policies may get it right on paper, they lack vig-or, not to mention nancial resources and long-termstrategic commitment. But it is the advancement ofAfghanistan’s and Pakistan’s development that is im-perative for boosting the connectivity between Cen-tral and South Asia and integrating this wider regioninto the global economy as an integrated, dynamiceconomic unit.

Fostering indigenous, collective security coop-eration frameworks and institutions within and, withtime, between the two regions will be fundamentallyimportant to prevent or mitigate external pressures to-ward creating exclusive spheres of inuence centeredon rising powers. Of course, building collective secu-rity institutions with rising powers will, too, be im-

portant for condence-building purposes and to man-age the rise of these powers. But this process shouldnecessarily factor in the need to ensure appropriatebalancing by other actors to maintain stability. Givenconstrains on its military and economic capabilities,Washington needs to boost the use of diplomacy. Thisis critical because the rise of new power centers makesthe application of U.S. military power harder, increas-ingly requiring it to rely on diplomacy to advance itsgoals, including that of enhancing its economic roleand presence in Central and South Asia.

BOOSTING U.S. ECONOMIC ROLE ANDPRESENCE IN THE BROADER REGION

The United States should recognize the potentialof its military and security policies to contribute tomilitarization of the region, as well as the limits of its



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“hard power” in fostering connectivity without re-lying on economic presence, which is currently and

precariously lacking in substance and commitment.It should match its efforts at reforming or advancingglobal security, nancial, and economic institutions inlight of the rise of new powers with efforts on the re-gional level in Central Asia as well. It should be sensi-tive to concerns of Central Asian countries about risksthat are likely to stem from the integration with SouthAsia, given the instability in Afghanistan and Paki-stan. It should also highlight the benets of economicconnectivity between the two regions for prosperityand general stability in what could be a much morevolatile broader region.

Washington needs to pursue a more concerted ef-fort to realize the vision of its NSRS, which needs morenancial resources, leadership, and coordination. Ac-

tors view this economic strategy as a substitute forthe military disengagement from Afghanistan, but donot nd it resourceful enough, especially as the im-pending military pull-out threatens to undermine theNDN-generated business activity. The United Statesneeds to support the engagement of American andWestern businesses, encourage diversication of ener-gy, trade, and transit links, as well as advance reformsto boost the region’s economic development potential.Providing aid will be crucial, but helping advance lo-cal business capacity and private sector engagement isa much more durable, long-term, and ultimately self-sustaining approach to regional development.

The United States should develop the “software”component of its economic policies with a view to im-

prove the business climate and expand internationalows of regional countries. This entails reducing tariffand nontariff trade barriers as part of the Trade and



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Investment Framework Agreement (TIFA) and work-ing with development and nancial institutions, non-

governmental organizations (NGOs), and the WorldTrade Organization (WTO). Improving governanceand enhancing transparency as part of related democ-ratization programs will remain critical for promotingand sustaining accountable governments that are keenon intra- and extraregional integration.

In terms of the “hardware” component, it shouldprovide more direct support to Turkmenistan-Af-ghanistan-Pakistan-India (TAPI) and Central AsiaSouth Asia Electricity Transmission and Trade Project(CASA-1000), as well as assign priorities and allocatefunding for specic energy, trade, and transit regionaland inter-regional infrastructure projects. U.S. directengagement will be a signal for other actors who maybe interested in such projects but have security con-

cerns to participate in them. Unfortunately, the lack ofcommitment to the NSRS by Washington itself revealsa low priority assigned by the United States to theregion and its importance for U.S. interests, regard-less of theoretical arguments that otherwise require adeeper and more substantive U.S. engagement in theregion. While sustaining a military role in the regionis important to ensure a more seamless integrationof Central and South Asia into the global economy,having no substantial economic stake in the region,puts the United States at a heavy disadvantage in itsnascent but increasingly important strategic relation-ships with Central Asian states.



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COOPERATING WITH OTHER ACTORS TOSHAPE CONNECTIVITY OF CENTRAL AND

SOUTH ASIA

The United States does not enjoy considerableeconomic presence in Central Asia. Nor is it expectedto commit needed nancial, political, and diplomaticresources to promote its global and regional goals byleveraging its regional inuence, even if this impera-tive has grown in urgency. Hence, besides improvingon its performance as part of the NSRS and generaleconomic presence, Washington should work withestablished and rising powers to advance CentralAsia’s connectivity. Given the current and projectedglobal and regional dynamics, it should nd coopera-tion with Japan, the EU, Turkey, and India especiallysubstantive and important. This does not suggest that

Tokyo, Brussels, Istanbul, or Delhi will not pursuetheir autonomous global and regional roles; they will.But in their search for those roles, their goals in theregion are more or less aligned with those of the Unit-ed States, whose backing they will need to advancetheir interests. While cooperation with Russia may bestrained in the medium term, China’s global rise willencourage a more cooperative U.S.-Russian partner-ship in the long run. Iran is a wild card. If Washingtonand Tehran pull it off, Washington could rely on Iranas a major bulwark against policies of domination ofother players in Central Asia and beyond.

Japan.

Central Asian countries look up to Japan, an Asianpartner, a resource-poor yet technologically advancedcountry, which commands respect for rebuilding its



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economy after World War II and relying on soft ap-proach to promote its policies in Central Asia. Its role

in advancing global and regional trade is unques-tionable. Nor is its role in providing regional coun-tries with leverage vis-à-vis other powers, especiallyChina, as Central Asia is increasingly integrated withthe dynamically developing Southeast Asia. Japan is amajor global and regional donor, providing assistanceto Afghanistan and Central Asia in areas as critical ashuman development, trade, and transit facilitation, aswell as infrastructure development. China’s rise callson Washington and Tokyo to enhance coordination oftheir regional policies in Central Asia.

The European Union.

Besides being one of the largest trade partners, the

EU is a source of substantial development assistancein a wide range of areas important for the region’seconomic development and integration into the glob-al economy. From governance, public sector reforms,and democratization to border management and con-ict prevention, the EU’s engagement is critical forthe United States, which seeks to advance transpar-ent governments and open societies in Central Asiancountries that require urgent political and economicreforms to advance in the modern world. The EU,United States, and India should nd cooperation ondemocratization especially pertinent, given the heavysecurity and state-led economic roles of Russia andChina in the region. The EU’s relationship with Cen-tral Asia is a must for developing the westward vector

of the region’s external connectivity by focusing onenergy, trade, and transit development.



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Turkey.

Turkey has attained a greater global role overthe last decade, but it still remains a middle-rankedpower. Its regional role and presence is unlikely tomeet strong resistance in Central Asia, and Washing-ton should be mindful of this reality in its approachto the region. Turkey’s expanding trade and economicrelationship with all Shanghai Cooperation Organiza-tion (SCO) countries is a strong indicator of Ankara’sautonomous role as a NATO ally and its interest todevelop economic linkages with actors in the east.Turkey offers lots of positive development experienc-es for the region, which Washington should use whenadvancing its regional policies. Turkey has made sub-stantial progress in advancing its democratization andeconomic development, positioning itself as an energy

and trade hub and an integrator keen on connectingthe energy-rich Caspian and Central Asia with mar-kets in Europe. Further, Turkey has actively sup-ported security efforts in Afghanistan and, as a NATOally sharing cultural and regional knowledge of widerCentral Asia, assumed and pursued effectively NA-TO’s regional role in the region. Moreover, numerousWestern businesses are already relying on Turkey andTurkish rms for operations in Central Asia, mak-ing it a critical conduit for Western investment andtechnology transfers to the region.

India.

India’s “connect” policy is in line with the long-

standing U.S. strategy of reconnecting Central andSouth Asia. India is an important military and eco-nomic partner in rebuilding Afghanistan and, if



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needed, managing China’s rise on both the land andthe high seas. It can be a greater source of counter-

terrorism capabilities for the regional countries. Itsdemocratic political tradition and economic successas a developing nation is an important asset for Cen-tral Asian states, which both Delhi and Washingtonshould utilize to improve regional political and eco-nomic systems. While emerging slowly, India’s re-gional economic presence is set to grow considerablyover the next decades if India keeps similar economicgrowth dynamics. India’s involvement in the regionwill be pronounced in the energy sphere, especiallyif TAPI, CASA-1000, and other projects materialize.The substantial presence of Russia and China in Cen-tral Asia, the uncertainty surrounding the future ofAfghanistan, and the region’s potential to serve as atranscontinental trade, energy, and transit hub point

to the benets of the United States and India work-ing together to advance the region’s stability andconnectivity.

Russia.

On the security front, cooperating with Russia asthe major regional security actor is important for en-suring regional stability, and the United States shouldcontinue advancing cooperation in counterterrorism,anti-drug trafcking, and counterproliferation, whilepromoting condence-building measures as part ofa broader regional security agenda, not least due tothe rise of China. Advancing cooperation on these is-sues will help gradually build mutual condence and

allow Washington to pursue policies toward CentralAsia that are not hostage to Russia’s objections or in-terference. In the current climate of strained ties, do-



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ing so may be more difcult than anticipated. This isespecially so because Moscow views Washington as a

spoiler after a decade of war in Afghanistan that hasleft behind instability and security risks in the form ofexpanded drug trafcking, refugee ows, and cross-border militancy. Russia further objects to the U.S.Central Asia Counternarcotics Initiative, viewing as atool for Washington to augment its regional militarypresence in Central Asia and gather military intelli-gence on CSTO members. But long-term trends andChina’s continued rise as a global economic and, soon,military power suggests more room for a more con-structive partnership between the United States andRussia. On the economic front, Washington shouldwelcome Russia’s participation in regional projectspromoting north-south or south-north connectivity,provided such participation involves multilateral co-

operation and is as less politicized, imposing, or one-dimensional as possible.

China.

Cooperating with China is critical for the globalstability and the future of the broader region, givenBeijing’s rapidly growing economic presence, expand-ing global trade prole, and the need for the UnitedStates to encourage China-led energy, trade, and tran-sit connections in all directions to further shrink Cen-tral Asia’s connectivity gap. China’s economic role isalso important for Afghanistan and Pakistan. China’sgrowing investment in both countries is becoming in-creasingly essential for the long-term stability, devel-

opment, and regional integration of Afghanistan andPakistan. Washington should therefore encourageChina’s push for advancing the regions’ connectiv-



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ity with the global economy. But like in the case withRussia, it should discourage any attempts by Beijing

aimed at pursuing policies of economic dominationin the region and encourage to the extent possible theeconomic engagement of actors as diverse as India,Pakistan, Turkey and, with time, Iran. This wouldprovide Central Asian states with more options androom to maneuver on the regional and global stage,which China’s growing economic and military clout isbound to redene sooner than later.


1. A quote by Yusuf Khass Hajib Balasaguni, a great poet fromBalasaghun, the capital of the Karakhanid Empire, in present-dayKyrgyzstan. Direct, non-literary translation of the quote into Eng-lish (based on a Russian translation of the Turkic-written quote)is provided here.

2. Daniel Wolsh and Gordon Smith, “Governance and Policyin a Multicentric World,” Canadian Public Policy, Vol. 26, No. 2,2006, pp. 51-72.

3. Richard Haass, “The Age of Nonpolarity,” Foreign Affairs, May-June 2008.

4. Robert Kaplan, “The Gift of American Power,” Stratfor ,

May 14, 2014.

5. Pamela Spratlen, “Integrating Central Asia into the WorldEconomy: Perspectives from the Region and the U.S.,” Speech atthe Carnegie Endowment for International Peace, Washington,DC, October 22, 2007.

6. Walter Russell Mead, “The End of History Ends,” The American Interest, December 2, 2014.

7. Lynn Davis, Stacie Pettyjohn, Melanie Sisson, StephenWorman, and Michael McNerney, U.S. Overseas Military Pres-ence: What Are the Strategic Choices? Santa Monica, CA: RANDCorporation, 2012, p. 29.



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8. Charles Wolf, Siddhartha Dalal, Julie DaVanzo, Eric Larson,Alisher Akhmedjonov, et al., China and India, 2025: A Comparative Assessment, Santa Monica, CA: RAND Corporation, 2011, p. 112.

9. Davis et. al., p. xii.

10. Olga Oliker and Thomas Szayna, eds., Faultlines of Con- ict in Central Asia and the South Caucasus: Implications for the U.S. Army, Santa Monica, CA: RAND Corporation, 2003, pp. xxii;240, 299-305.

11. Quoted in Stephen J. Blank, ed., Central Asia After 2014,Carlisle, PA: Strategic Studies Institute, U.S. Army War CollegePress, November 2013, p. 3.

12. Rollie Lal, Central Asia and Its Asian Neighbors: Security andCommerce at the Crossroads, Santa Monica, CA: RAND Corpora-tion, 2006, p. 27.





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CHAPTER 6

CONCLUSION

Central Asian countries largely had been closedto the outside world during the Soviet times. But theopening up of China in the 1980s, the collapse of theSoviet Union in 1991, and the advance of globaliza-tion ever since have enabled them to connect with theglobal economy as independent units. The U.S. mili-tary involvement after September 11, 2001 (9/11) andthe engagement by Japan, the European Union (EU),and Turkey have allowed the regional countries toshrink their connectivity gaps even further. More pro-foundly, it is China’s rapidly growing global and re-gional prole, India’s slow but progressing reconnec-tion with the region, and Russia’s energized efforts to

integrate the former Soviet space that today are shap-ing profoundly the region’s external connectivity.

Central and South Asia are the few remaining areasin the periphery that are rapidly integrating into theglobal economy. In the 21st century, it is Central Asiathat is going to serve as the conduit of the transconti-nental integration in Eurasia, following as it is the inte-grations across the Atlantic and Pacic oceans in pre-vious decades.1 Information, energy, trade, and transitlinks are expanding within and between Central Asia,other parts of Eurasia, and the world. Kazakhstan hasemerged as the economic powerhouse keen on region-al and global integration. Kyrgyzstan has sufferedfrom political instability and a fragile economy, buthas relied on its more democratic prole and re-export

capacity to build its internal and external linkages.Tajikistan, in turn, has seen its efforts hampered bya weak economy, strained ties with Uzbekistan, and



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challenging geographic position that, while constrain-ing its external connectivity in the short term, enables

it to serve as a key inter-regional link with South Asiain the long term. Uzbekistan’s economy has sufferedfrom pervasive state control that limits severely its po-tential for regional and global integration, but it hasbeen a strong performer and has signicant untappedcapacity for more efcient domestic development andextensive connectivity with the broader region. Turk-menistan has suffered from a closed economy, butit has greatly expanded its energy export potential,thereby advancing its external connectivity.

The regional states have a long way to go beforethey emerge from the periphery of the global economy.Intraregional tensions, ineffective political and eco-nomic systems, and the lack of strong will to advancetheir own viable cooperation system in the region all

serve to undermine related efforts. Major technical,economic, and political challenges continue constrain-ing their connectivity. The stalled regional integrationprocesses, the uncertain future of Afghanistan, andthe relative isolation of Iran impede their connectivityeven further.

While Central Asian states remain relatively weakand continue to rely on external forces and dynamicsto shrink their connectivity gaps, they have learnedthe tricks of power politics and demonstrated theirability to balance interests of great powers while seek-ing to protect their newly gained sovereignties amidvarious visions and models offered or imposed fromthe outside. Russia and China are both neighbors andformer imperial masters, with the former maintaining

strong links to the region and the latter emerging asa global and regional “economic powerhouse.” TheUnited States enjoys military links with the region by



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virtue of its operation in Afghanistan, while Turkeyand Iran share cultural and expanding economic ties.

The EU, Japan, and India, in turn, have been payinggrowing attention to Central Asia, 2 driven as they areby their own development agendas and geopoliticalrealities of a rising China, among other factors.

All these countries offer their visions and pro-grams for the region to engage with them and the restof the world, with Central Asian countries at timeseagerly, at times willy-nilly, tagging along. A recentsurvey found that in terms of imports of consumergoods, investments and labor resources, people in Ka-zakhstan view the United States, the EU, and Russiaas the most economically attractive partners. In termsof the most attractive sources of investment, peoplein Tajikistan point to China, in Uzbekistan to Japan.3 According to a survey of perceptions of trust in in-

tra- and extraregional partners, Russia is consideredthe most trustworthy, and China is considered moretrustworthy than the United States. Regional coun-tries received low trust points for each other, with Uz-bekistan ranked the lowest. Kazakhstan is viewed asmore trustworthy in Kyrgyzstan.4 Russian, American,European, Chinese, and Islamic civilizational vectorsof development are all seen as interacting and compet-ing in the region. India is not yet represented, but isbound to play a major geopolitical role in Eurasia inthe mid to long term.

This is not to say that regional countries lack theirown visions and strategies to connect with the world;they do. But they grapple with far too many and com-plex internal, regional, and external challenges, which

they nd more solvable by pursuing extraregionalties with major players rather than by also advancingintraregional collaboration. As they develop, the Cen-



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tral Asian states should keep in mind that intensifyingglobal competition, as well as geopolitical and eco-

nomic changes in Eurasia and the world, offer themimmense opportunities to harness related dynamicsand tie them with their intra- and inter-regional de-velopment strategies, especially given their vast re-sources and the growing interests toward the regionby major actors.

Russia-led Customs Union (CU) and Eurasian Eco-nomic Union (EEU), China’s Silk Road Economic Beltstrategy, India’s “Connect Central Asia” policy, theU.S. Silk Road Strategy, and economic engagementby Japan, the EU, and Turkey all provide importantvectors of connectivity for Central and South Asiancountries. More choices ensures more opportunitiesfor internal and external integration on terms that willwork against exclusive zones, privileged spheres of

inuences, or one-directional connectivity.All of the Central Asian states are already reaping

advantages of the expanding transcontinental tradeand, one way or another, have emphasized their leg-acy and future roles as conduits of trade and integra-tors along the ancient and newly sprawling Silk Roadstraversing Central and South Asia. But, while they areinterested in cooperating with diverse partners and ex-panding trade opportunities, they also treat with cau-tion the choice, and, in some instances, the necessity ofrelying on major powers to enhance their connectivitywith the global economy for fear of undermining theirsovereignties in the process of internal and externalintegration. This is particularly true of Turkmeni-stan and Uzbekistan that shun integration initiatives

of any kind, but engage with major partners bilater-ally on select, strategic projects. In their dealings withoutside actors, Central Asian regimes thus seek to



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pursue multivector policies. Yet, not all of them havesucceeded in pursuing such policies effectively, with

the rapidly developing Kazakhstan, relatively closedUzbekistan, and deliberately “neutral” Turkmenistanbeing arguably more successful than Tajikistan andKyrgyzstan that depend heavily on Russia and China.

Russia enjoys the predominant military and secu-rity presence in the region and is now advancing theCU and EEU initiatives in the post-Soviet space, inlarge part in response to the rapidly expanding geo-economic and geopolitical role of China in the heart ofEurasia. Beijing’s role, in turn, will soon entail a muchmore assertive political and military engagement byChina to protect its continental interests. China’s grow-ing inuence in light of the region’s imperial historyis thus viewed with caution in Central Asian capitals,in Moscow that seeks to reassert its regional inuence,

and in Washington whose global and regional inu-ence is on the decline.

Central Asian states will increasingly require morediplomatic nesse to manipulate related dynamics.They would need to benet from the involvementof outside actors to expand their connectivity, whileeasing associated challenges to their newly gainedsovereignties. This is especially true considering thelong-term rivalry between China and India, the tra-ditional interest of Russia to maintain its inuence,and the uncertain U.S. military and economic rolesin the region. As Central Asia increasingly becomesa point of rivalry over resources, transit routes, bases,and business opportunities, it is facing enhanced pros-pects of connectivity with the world, as well as related

risks that can slow down, derail, or even reverse suchconnectivity.

Central Asian states perceive Russia’s integra-tion initiatives and China’s economic expansion as a





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ing regional orders—calls for an engaged, long-term,and concerted U.S. global and, more importantly,

regional strategy in Central Asia, which serves as aplatform for grand strategies of the major powers.The United States should solidify its regional mili-tary role without provoking militarization; advancethe external and inter-regional integration of Centraland South Asia by cooperating with established andemerging powers and boosting its own economic roleand presence; cooperate and, where necessary, com-pete with other actors to ensure the regional countrieshave more choices of collaboration as they seek link-ages with the global economy; address the risks of in-tra- and interstate conicts in Central and South Asiathat could threaten or reverse the connectivity of theregions; and leverage the desires, sometimes neces-sities, of local countries, in expanding the U.S. long-

term role and presence in the greater region.As Washington calibrates its ends and means, its

assessment of the importance of Central Asia willhinge on security trends in Afghanistan and Pakistan.Whether Central Asia remains a major pillar of itsgrand strategy remains unclear. But the U.S. declaredgoals of supporting sovereignty, democratization,and inter-regional links in the broader region offersome hope.


1. Johannes Linn, “Connecting Central Asia and the Caucasuswith the World,” Paper prepared for the First Eurasian EmergingMarket Forum, Thun, Switzerland, January 23-25, 2010, pp. 1-2.

2. Dmitri Trenin, “Contemporary Issues in International Se-curity: Central Asia,” Stephen Blank, ed., Central Asian SecurityTrends: Views from Europe and Russia, Carlisle, PA: StrategicStudies Institute, U.S. Army War College, April 2011, p. 40.



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3. Aleksandr Shustov, “Integratsia: za i protiv. Resultatyoprosa na postsovetskom prostranstve okazalis vesma neojidan-nymi” (“Integration: Pros and Cons. The Survey Reveals QuiteUnexpected Results for Post-Soviet Space”) Stoletie, October18, 2013.

4. David Kerr, “Central Asian and Russian Perspectives onChina’s Strategic Emergence,” International Affairs, Vol. 86, No. 1, January 2010, p. 136.



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APPENDIX

The charts in this Appendix are from the DHL2012 Report on Global Connectedness.1 They includeKazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan,Pakistan, India, China, Russia, Turkey, Japan, and theUnited States. Charts for Turkmenistan, Afghanistan,and the European Union are not available.

ENDNOTES - APPENDIX

1 . Pankaj Ghemawat and Steven Altman, DHL Global Con-nectedness Index 2012: Analyzing Global Flows and Their Powerto Increase Prosperity, DHL, 2012.



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Central Asia's Shrinking Connectivity Gap: Implications for U.S. Strategy