Central Asian renaissance - an opportunity for the South Caucasus

On the 8th August 2024, the Kazakhstanskaya Pravda newspaper ran a policy article by the President of the Republic of Kazakhstan, Kasym-Jomart Tokayev. Entitled "Renaissance of Central Asia: Towards Sustainable Development and Prosperity", the article is of interest as it notes trends affecting not only the region of Central Asia (historical Turkestan), but also the closely related region of the South Caucasus.

The following section will analyse some of the key arguments put forth by Kasym-Jomart Tokayev in his article. In particular, it will examine how he assesses the potential of the countries of Central Asia (Turkestan).

"At the present time, as a consequence of the collective endeavours of the countries within the region and the considerable economic potential that they collectively represent, Central Asia is becoming a space of considerable opportunity with regard to trade, investment, science and innovation.

The total territory of our states is 3,882,000 square kilometres, with a population of more than 80 million people and a combined gross domestic product of $450 billion. Approximately 20% of the world's uranium reserves, 17.2% of oil and 7% of natural gas are concentrated in the region. In terms of coal production and electricity generation, Central Asia occupies the 10th and 19th positions, respectively, in the global rankings.

It transpires that the countries of the South Caucasus are situated in close proximity to the most resource-rich region, which, along with the South Caucasus, forms part of the Middle Corridor that connects the two leading economic poles of the contemporary era: China and the European Union.

Additionally, in his article, the President of Kazakhstan underscored the region's primary resource: its human capital.

The most significant and valuable resource in Central Asia is its younger generation of intellectuals. Central Asia is one of the most youthful regions in the world. The mean age of the population is 28.7 years. According to calculations by the United Nations, the average age of the region's residents is projected to decline further, reaching 28.3 years by 2040. This is considerably lower than the anticipated age distributions for other regions, including North America (41.5), Europe (46.8), and China (48). This constitutes a distinctive competitive advantage, offering considerable potential for economic and social advancement across all five Central Asian countries. "The younger generation can act as a catalyst for change in economic, technological and cultural arenas." This is the view of the President of Kazakhstan, Kasym-Jomart Tokayev. In this context, the President of Kazakhstan makes an indirect reference to the demographic crisis in China, where depopulation has recently been observed, and suggests that this could potentially lead to a demographic catastrophe. This does not yet pose a threat to historical Turkestan.

Central Asia is undergoing a period of dynamic development, including in the field of high technology, with the younger generation playing an important role in this process. President Kasym-Jomart Tokayev makes the following observation:

„It is of great consequence that our economies undergo technological development. It is imperative that there be a gradual transition away from a reliance on finite resources. In this context, the processes of digitalisation and the creative industries, which encompass media, cinema, music, design, education and information technology, have the potential to become points of economic growth. The countries of the region demonstrate considerable potential for the creation of collaborative projects in this field. The proliferation of digitalisation and creative industries will facilitate a gradual transition from a reliance on raw materials to a focus on intellectual production.“

In his remarks, Mr. Tokayev underscored the significance of Central Asia as a transit corridor, highlighting the Middle Corridor traversing the South Caucasus and the North-South Corridor branch traversing Central Asia.

The region has the potential to become a significant global hub for transportation, logistics, and transit.

Central Asia is undergoing a rapid process of transformation, becoming an increasingly pivotal node in the global network of transport communications. First and foremost, this is the Chinese initiative, "One Belt, One Road," which encompasses the international transport corridor, "North-South." This project has the potential to facilitate economic growth and connectivity across the region, with varying degrees of involvement from different countries. Additionally, our countries are currently promoting other prospective initiatives for the establishment of novel transport corridors. In collaboration with its partners, Kazakhstan is actively developing the Trans-Caspian International Transport Route (Middle Corridor), which has the potential to accommodate five times the current volume of traffic within the medium term. The development of Kazakhstan's maritime infrastructure, exemplified by the ports of Aktau and Kuryk, is creating new opportunities for the transportation of goods from China and Central Asian countries to the South Caucasus, Turkey, and ultimately, Europe. The transport corridors being developed through the territory of Afghanistan will provide access to promising markets in South Asia and Indian Ocean ports. This is in the interest of the entire region.

It is also noteworthy that the North-South corridor will facilitate logistically convenient access to the markets of South Asia and Indian Ocean ports from the countries of the South Caucasus in the near future. In particular, upon completion of the Resht-Astara railway, cargo flows will be able to access the Indian Ocean and India via Georgia, Azerbaijan and Iran, and will also be able to travel in the opposite direction via Iran, Azerbaijan and Georgia to Europe. Nevertheless, it is unlikely that there will be competition between the North-South corridor branches between the South Caucasus and Central Asia, given the considerable demand for them. It would be prudent to develop the North-South corridor infrastructure in parallel in both Central Asia and the South Caucasus.

In general, both the South Caucasus and Central Asia (Turkestan) currently possess the requisite conditions for the development of transport and logistics infrastructure. Consequently, the countries of both regions, connected by the Caspian Sea, are currently engaged in the implementation of investment projects aimed at the construction of new roads, railways and seaports. It is of paramount importance that infrastructure projects in Georgia are successfully implemented, as this will facilitate the development of the Middle Corridor and cargo transit through the South Caucasus and Central Asia. Notably, this includes the Baku-Tbilisi-Kars railway and the construction of the Anaklia deep-water port.

Elbrus Mammadov
Director of the Azerbaijan-Georgia-Turkey
Strategic Partnership Information Support Centre

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