Integration can return region to role as intercontinental trade hub

Alibek Kuantyrov

May 15, 2023

Alibek Kuantyrov is Kazakhstan's minister of national economy.

Over the past three years, the global economy has experienced major shocks from both war and COVID-19. The current geopolitical tensions in Europe continue to seriously impact the global economy, affecting transport and logistics links and causing higher prices for energy and food.

Disruptions in supply chains have impacted inflation, increased food insecurity and had other negative impacts on the global economy. Moreover, despite the fact that Russia and Ukraine account for less than 3% of world exports, the military conflict and sanctions have disrupted normal trade routes.

Sharp growth in prices for basic foodstuffs and shortages of goods have plunged millions of people into poverty. The impact has been felt the most in poor countries that are large importers of food, but middle-income nations have also been affected. The World Bank has calculated that an increase of just 1% in food prices pushes 10 million more people into extreme poverty.

According to forecasts by the United Nations, 181 million people in 50 countries will be caught in a food crisis in the near future. If the current reduced level of food exports from Ukraine and Russia falls to zero, another 19 million people will face chronic undernutrition worldwide, particularly in Central Asia, Africa and the Middle East. The scale of the shortfall is such that for several years after the end of geopolitical tensions in Europe, poverty and hunger will remain a major problem in those regions.

Kazakhstan, as an active participant in global solutions, continues to advocate for the peaceful resolution of conflicts. For Central Asia, it is extremely important to work collectively to promote development without the threat of future instability.

Through cooperation and integration, Central Asia can regain its role as a vital trade route connecting the markets of Asia, Europe and the Middle East as it did during the time of the Great Silk Road.

Historically, the Silk Road passed through the vast plains of Central Asia, connecting merchants from the Far East with a growing European consumer market. This network played a decisive role in the economic, cultural and political development of the region.

The strategic importance of trade centers such as Turkistan, Samarkand and Bukhara is evidenced by numerous historical records. Today, the old trade routes still remain relevant, but coordinated efforts are needed to create a reliable economic structure that will stimulate the realization of their full potential.

A number of initiatives aimed at deepening economic cooperation and using the region's comparative advantage in global markets are already being implemented.

Central Asian countries, along with Azerbaijan, have launched the Trans-Caspian International Transport Route, a faster and more efficient alternative to traditional sea routes. The Central Asia Regional Economic Cooperation Program, meanwhile, is bringing together 11 countries to promote regional connectivity, focusing on the priority sectors of transport, energy, trade facilitation and trade policy. At the same time, major new railways are connecting Central Asia with Chinese ports.

Investment in transport infrastructure is necessary for achieving greater regional integration. This will include the construction of new highways, railways and intermodal logistics centers.

Kazakhstan, in particular, aims to become a key logistics center and transit hub that can provide landlocked Central Asian countries with access to global markets. Efforts are also being made to improve border crossing procedures and reduce transit times and costs.

Alongside physical connectivity, we are also working on improving the business environment. Kazakhstan recognizes the importance of a favorable regulatory and legal framework, efficient customs procedures and reliable protection of intellectual property rights for attracting investment and promoting trade. Moreover, we are strengthening our digital connectivity to facilitate e-commerce and digital trade in the post-pandemic world.

In the spirit of creating a new regional political environment prioritizing cooperation and prosperity, Kazakhstan will launch the Astana International Forum next month to bring together politicians, business leaders, scholars and experts from around the world to discuss key issues, including economic development, trade and investment. Within the forum, we will exchange ideas, share best practices, and develop concrete proposals to promote greater integration, not only in Central Asia but also worldwide.

The forum will demonstrate the economic potential of Central Asia to the world, helping to attract interest and investment.

Kazakhstan, as the host country, is proud to be at the forefront of this initiative and will continue to collaborate closely with our neighbors and partners to promote initiatives that strengthen ties in Central Asia. It is in this vein that we are also making use of other dialogue platforms, such as the EU-Central Asia Summit held for the first time in October and this week's inaugural China-Central Asia Summit, each of which can enable work on collaborative solutions.

Despite these efforts, there is still much to be done to fully utilize the advantages of our geographical location. This includes investing in sustainable development and addressing the negative consequences of climate change on our agriculture and water security.

We recognize that economic growth must be inclusive, environmentally sustainable and socially responsible. Therefore, we aim to support programs that contribute to the adoption of sustainable business practices.

Central Asian economic cooperation and connectivity are necessary to unlock the full potential of our region's economies. By strengthening interconnectivity between countries, facilitating trade and investment, and improving the business environment, we can create a more prosperous and integrated Central Asia for the benefit of our people and the world.