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What is the impact of Kumtor on Kyrgyzstan’s Gold Mining Sector?

Nationalization talks have started again in Kyrgyzstan about the ownership of Kumtor Gold Mine. Kumtor Gold Mine, operated and jointly owned by Canadian Centerra Gold via Kumtor Operating Company (KOC) and the Kyrgyz government, has always been a point of tension in the country. Marred by protests, both anti-Kyrgyz government and anti-Centerra, environmental controversy, and being the center of internal Kyrgyz political and social struggles, Kumtor remains Kyrgyzstan’s largest and the most profitable investment project and the country’s main economic asset.

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The Kumtor Gold Mine, the largest gold mine in Kyrgyzstan located in the Issyk Kul Province, is located 350 kilometers southeast from the capital of Bishkek and 80 km south of Issyk-Kul Lake. The mining operation is open-pit which uses surface mining to extract rocks and minerals. The mine has been in operation since 1997; the lifespan of the mine has been extended to 2023.

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The mine which is currently 100% owned by Canadian Centerra Gold (operated through Kumtor Operating Company or KOC) is a joint-stock company (JSC) which Kyrgyzstan via Kyrgyzaltyn owns “33% of the common shares or 77,401,766” and “as of March 1, 2012, Kyrgyzstan’s interests are estimated at $1.546 billion.”[i] Kumtor currently employs 2,617 Kyrgyz citizens (95% are full-time) out of 3,190 total employees. Kumtor accounts for 20% of Kyrgyzstan’s industrial sector and output and accounts for 8% of its GDP. With current dividends, Kyrgyzstan receives 11.3 million USD per year and KOC pays 108 million USD in taxes to the Kyrgyz government.[ii]

Ata-Meken has submitted a draft law on the nationalization of Kumtor. The last round of talks/negotiations about Kumtor took place 10 December 2014. Calls for nationalization emerged out of the failure to establish a joint-venture of the mine: “due to populism we have lost the chance to set up a joint venture [for Kumtor],” Kyrgyz President Atambayev said in a 1 December 2014 interview.[iii] The currently discussion would have Kyrgyzaltyn swap 33% of its holdings for 50% ownership of the joint venture company operating Kumtor, making ownership 50/50. Alternatively, the Kyrgyz nationalist political parties (Ata-Meken and Respublika) suggest Kyrgyzaltyn own 67% while Centerra holds 33% or Kyrgyzaltyn control 100% of the mine as advocated by Respublika.[iv]

The assertiveness of the Kyrgyz when negotiating mining contracts is due to the feeling that foreign companies operating the mines are not investing in local communities and are not promoting development in the region. This is partly because of past environmental accidents.

In May 1998, a truck toppled releasing 1700-1800 kg of toxic sodium cyanide into the Barskoon River. After the accident, local villagers reported illness (some deaths were reported by never fully linked to the cyanide spill—this is speculative) as the river is used for drinking and for irrigation. After the accident and the lackluster response by both Centerra and the Kyrgyz government, locals blockaded the roads to Kumtor and demanded that the contract be cancelled. This prompted more environmental safeguards such as immediate notification of a spill was to be implemented. Another incident occurred on January 20, 2000 where a KOC truck “carrying 1,500 kilograms of ammonium nitrate, used as an explosive at the mine, crashed, [and] spilling its contents.”[v] Kyrgyz authorities were not immediately notified of the spill.

Because of these accidents, there is concern about the use of land. The Kyrgyz Republic’s “Law on Subsoil” introduced in 1997 “governs relationships arising between the government and individuals and legal entities, and other states while using subsoil” and regulates mineral recovery (extraction), mineral deposits of economic significance, ownership of the subsoil and there within minerals.[vi] The Law states that subsoil is the exclusive property of the Kyrgyz Republic is under protection by the state. This law has been used to regulate mining activities and has been used to justify violations of environmental regulations including operations at Kumtor.

The “Law on Glaciers”—to prevent the degradation of glaciers that supply drinking water to many local villages—was passed by Parliament in April 2014, but was sent back by the President for revisions. The new law would require companies to pay for damages to the glaciers. The glaciers affected would be Davidov, Lysyi and Sarytor as KOC has put rocks on top of glaciers and removed parts of glacial ice violating environmental provisions of the project; Centerra has adjusted their operations to stop the acceleration of water.[vii] Lake Petrov is also in danger.

It is unclear whether or not the environmental laws on glaciers or subsoil are genuine attempts to preserve the environment or are a way for the Kyrgyz government to extract concessions from foreign companies to increase their profits or holdings in a company.

There are also concerns how the mining and the chemical usages to mine the gold will affect the historic freshwater Issyk-Kul Lake. The Issyk-Kul Development Fund became part of the Kumtor operation and KOC/Centerra is required to provide 1% of its gross revenue to socio-economic development of regional sectors aligned with spending is based on government priorities. The fund was started in 2009 and since then 25 million USD was provided to the fund; 4.638 million USD was provided to the fund in 2012 alone. The fund has helped build schools, kindergartens, sports clubs, and irrigation infrastructure which has been impacted by the mining.

To mitigate any significant economic effects of the nationalization of Kumtor, additional gold mining operations exist at Ishtamberdy, Bozymchak and Taldybulak Levoberezhnyi mines. Ishtamberdy is Chinese operated, protested by Kyrgyz locals, and has experienced some controversy including Full Gold Mining JSC threatening to cease operations in September 2013. The mine was to begin production in the second quarter of 2013 creating 600 permanent jobs.[viii]

Bozymchak mine would produce mainly ore and would produce 0.8 to 0.9 tons of gold. Kazakhstan’s Kazakhmys incurred an impairment charge in 2012 of $162 million USD against Bozymchak which reveals a higher operating risk in Kyrgyzstan as the company had to reduce its goodwill.[ix] The first shipment of the concentrate from Bozymchak to Kazakhstan was expected to occur in November 2014.[x] The mine was said to have completed construction in late 2013 providing 600-700 permanent jobs. Taldybulak Levoberezhnyi, an Open Joint Stock Company, is expected to be in operation until 2026: 60% belongs to Altynken (purchased by Chinese Superb Pacific Limited Company in Sept 2011) and 40% belongs to the Kyrgyz government. At the Taldybulak Levoberezhnyi, production was not expected until June 2014 according to AKIPress. In October 2012, locals picketed the headquarters of the mine in Orlovka, Kyrgyzstan. The protesters disputed the “Chinese company’s illegal sacking of Kyrgyz citizens and polluting of the local environment.”[xi]

There are also gold deposits that could be exploited including Makmal and Togolok but they are not as profitable. The Makmal gold mine was once extremely profitable. Operations at Makmal began in 1986 and excavated until 1996 producing 21.47 tons of gold. The mine is in past producer stage and its life has been extended to 2016. Geological reserves after 1996 were estimated at 20 tons of gold. [xii] Mining operations at Togolok will produce 800 jobs and its probable reserves are estimated at 86 tons in the mine deposit and the surrounding area.[xiii]

There are multiple promising gold deposits/sites are Karator, At-Bashy in the Naryn region, containing 5.5 gold reserves and the “Buchuk” gold reserve of 15-20 tons. Shambasei gold resource, a low-risk high-margin project, in Southern Kyrgyzstan has an estimated defined gold reserve of “2.5 million [tons] at 3.4g/t, or 277,000 ounces of gold.”[xiv] Karakazyk in the Chon-Alay district in the Osh region would produce 200-300 kg per year producing 100-120 jobs for the local workforce. These identified sites combined produce less gold and revenue than Kumtor and would provide fewer jobs.[xv]

The nationalization of Kumtor must be mitigated by the countries’ other mineral sectors such as copper, ore, silver, iron and tungsten. To remain economically competitive within the Eurasian Economic Union, Kyrgyzstan must develop sustainable economic and mining practices as the Kyrgyz economy is susceptible to many supply shocks; reliance on Kumtor is too heavy. By developing other sectors of the economy, Kyrgyzstan is shielding itself from a possible economic meltdown. If nationalization were to occur, would the Kyrgyz government be able to support the projects developed by the Issyk-Kul Development Fund? Poor development in the financial sector has led to poor governance of the situation prompting protests that have shut down or suspended operations.

Kumtor protests were rooted in the need to address environmental concerns, contributions to the community, and perceived unequal revenue distribution and fueled by renewed nationalism and the assertiveness of the new post-Bakiev government. South African investors (Talas Gold Company) and Australian investors (Z-Explorer of Manas Resources) have met the same challenges as Canada’s Centerra. If these issues are not resolved, can cause widespread damage to Kyrgyzstan’s gold mining and damage Kyrgyzstan’s reputation as a reliable foreign business partner. Corruption in Kyrgyzstan is also a concern. According to Transparency International 2014 Corruption Perception Index rankings, Kyrgyzstan has a rank of 27 (0 is the most corrupt to 100 which is the least corrupt).

Kyrgyzstan would most likely be unable to run the mine itself: “[KOC] does not earn money on a daily basis. It receives financial support from Centerra for most of the year until it can sell gold and pay back all of its loans.” [xvi] Pay out would not be immediate and the government would have to put the money upfront to benefit the costs. Most of the workers that Kumtor employs would most likely stay unless the nationalization of the mine were to affect their wages and Kyrgyzstan lacks the workforce to replace Centerra’s sector specialists. If nationalized, there would be higher operating costs decreasing revenue. Other companies (or countries) might be interested in developing the mine, but would most likely face the same issues as Centerra Gold leading Kyrgyzstan to become more of a high political risk country.

 


[i] Kumtor Gold. 2013. FAQ: Kyrgyzstan and Centerra. http://www.kumtor.kg/en/about/faq/centerragold-and-kyrgyzstan/ (last accessed 29 December 2014).

[ii] Gullette, David and Asel Kalybekova. 2014. Agreement under pressure, Gold mining and protests in the Kyrgyz Republic. Friedrich Ebert Stiftung. http://library.fes.de/pdf-files/id-moe/10927.pdf (last accessed January 3, 2015). Page. 15.

[iii] Kg.24. 2014. Kyrgyz moves towards Kumtor nationalization. The Times of Central Asia. http://www.eng.24.kg/bigtiraj/173638-news24.html (last accessed 29 December 2014).

[iv] Gullette, David and Asel Kalybekova. 2014. Agreement under pressure, Gold mining and protests in the Kyrgyz Republic. Friedrich Ebert Stiftung. http://library.fes.de/pdf-files/id-moe/10927.pdf (last accessed January 3, 2015). Page. 15.

[v] Norlen, Doug. 2000. The Kumtor Gold Mine: Spewing toxics from on high. Pacific Environment and Resouces Center, September 2000. Bankwatch Web site. http://bankwatch.org/documents/kumtor_toxics_09_02.pdf (last accessed January 4, 2015). Page 2.

[vi] United Nations Economic Commission for Europe (UNECE). Law of the Kyrgyz Republic on Subsoil. United Nations Economic Commission for Europe Web site (UNECE). http://www.unece.org/fileadmin/DAM/hlm/prgm /cph/experts/kyrgyzstan/documents/law.on.subsoil.pdf (last accessed January 5, 2015)

[vii] Centerra Gold. 2012. Environmental and Sustainability Report 2012. Kumtor Gold. http://www.kumtor.kg/wp-content/uploads/2014/01/Eco2012_en.pdf (last accessed January 3, 2015). Page 28-29.

[viii] The State Agency on Geology and Mineral Resources of the Kyrgyz Republic. 2014. The mines of the Kyrgyz Republic. http://www.geology.kg/index.php?option=com_content&view=article&id=200&Itemid=242&lang=en (last accessed Jan 2, 2015).

[ix] Kazakhmys. 2013. KAZAKHMYS PLC HALF-YEARLY REPORT FOR THE PERIOD ENDED 30 JUNE 2013. KAZAKHMYS WEB SITE. http://www.kase.kz/files/emitters/GB_KZMS/gb_kzms_reliz_220813_en.pdf (last accessed January 3, 2015).

[x]The Times of Central Asia. 2014. Kazakhmys to start shipping concentrate from Bozymchak in Kyrgyzstan in November. http://www.timesca.com/news/9961-kazakhmys-to-start-shipping-concentrate-from-bozymchak-in-kyrgyzstan-in-november (last accessed December 30, 2014).

[xi] Trilling, David. 2012. Kyrgyzstan: Chinese Respond to latest mine attack. Eurasianet.org Web Site. http://www.eurasianet.org/node/66121 (last accessed January 2, 2015).

[xii] Kyrgyzaltyn. 2011. Makmal Gold Mining Combinate. Kyrgyzaltyn Web site. http://www.kyrgyzaltyn.kg/en/filialy/63-kombinat-makmalzoloto (last accessed December 29, 2014).

[xiii] The State Agency on Geology and Mineral Resources of the Kyrgyz Republic. 2014. The mines of the Kyrgyz Republic. http://www.geology.kg/index.php?option=com_content&view=article&id=200&Itemid=242&lang=en (last accessed Jan 2, 2015).

[xiv]Proactive Investors. 2014. Manas Resources updates Shambesai gold resource to latest standard

http://www.proactiveinvestors.com/companies/news/58591/manas-resources-updates-shambesai-gold-resource-to-latest-standard-58591.html (last accessed January 3, 2015).

[xv] The State Agency on Geology and Mineral Resources of the Kyrgyz Republic. 2014. The mines of the Kyrgyz Republic. http://www.geology.kg/index.php?option=com_content&view=article&id=200&Itemid=242&lang=en (last accessed Jan 2, 2015).

[xvi] Gullette, David and Asel Kalybekova. 2014. Agreement under pressure, Gold mining and protests in the Kyrgyz Republic. Friedrich Ebert Stiftung. http://library.fes.de/pdf-files/id-moe/10927.pdf (last accessed January 3, 2015). Page. 10.

Samantha M. Brletich is a researcher and writer specializing in Central Asia and governance, security, terrorism, and development issues. She possesses a Master’s in Peace Operations Policy from George Mason University in Virginia, United States. She works with the virtual think tank Modern Diplomacy specializing in Central Asia and diplomatic trends. Her work has appeared in multiple publications focused on diplomacy and Central Asia respectively. She is currently an employee of the U.S. Federal Government.

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China and Russia Build a Central Asian Exclusion Zone

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Last month, State Councilor and Foreign Minister Wang Yi hosted the China+Central Asia Foreign Ministers’ meeting in the Chinese city of Xi’an. This is the second such meeting, which increasingly focuses (with Kazakhstan, Uzbekistan, Kyrgyzstan, Turkmenistan, and Tajikistan) on geopolitical issues. More broadly, it signals China’s lack of concern for what Russia considers its vital economic and political interests in the region. Top of the agenda was Afghanistan, as China worries about possible spillover to Central Asia and its eastern provinces as U.S. and allied troops prepare to evacuate in September.

Yet the greatest issue in Central Asia’s changing geopolitical landscape is economics and trade. China promised a number of new projects during the Xi’an gathering. Increased cooperation was pledged in agriculture, health and education, trade, energy, transportation, and even archaeology. More importantly, China vowed to help Kyrgyzstan to alleviate its debt pile and pressed it to approve a railroad linking China to Uzbekistan. Set to play a major role in connecting China with the Middle East and South Caucasus, the project has seen constant delays. Partly, that is due to economic and political troubles in Kyrgyzstan, but Russia too is partly responsible, fearing the corridor would divert a significant portion of transit cargo from its railroad tracks. Regardless, the direction of travel is clear: each economic agreement makes the region more closely aligned to China.

China has recognized that large and unwieldy summits often fail to provide the expected results and now increasingly favors small meetings. It does the same with other regions, including South-East Asia. This is far more efficient and as by far the biggest power in the room, it can dominate the agenda and outcome.

Naturally, these developments have a significant effect on Russia, the traditional powerbroker in Central Asia, and invites the question of whether it has been eclipsed. It certainly maintains significant military capabilities — recently improved — through bases in Tajikistan and Kyrgyzstan, and intermittent military cooperation with the region’s other countries. Russia is also a powerful economic player: it is a major trade partner for the five states, a vital source of investment, and a significant source of remittances from Central Asian migrant workers. Furthermore, Russia has joint security and economic initiatives in the region such as the Eurasian Economic Union and the Collective Security Treaty Organization. Last but not least, the region is close culturally to Russia through the use of Russian as the lingua franca.

China has taken aim at every sphere of Russia’s influence, and it would be surprising if these developments did not cause grievances. Certainly, there is a growing narrative in the West about an impending geopolitical showdown between the two sides in Central Asia.

The reality, however, might be more nuanced and the analysis mere wishful thinking.

To understand the nature of the China-Russia competition in Central Asia it is crucial to look into the evolving world order and what non-liberal powers seek to achieve. One of the peculiarities of the post-liberal order is the extreme regionalization of geopolitically sensitive areas. Large powers neighboring the region seek to exclude third powers. Russia pursues it successfully in the South Caucasus where together with Turkey and partially Iran, it seeks to dislodge the collective West. A similar process is underway in Syria and can be applied to the South China Sea, where China tries to settle territorial problems directly with its neighbors and without U.S. involvement.

Appearances might be deceptive. Russia and China are competitors, but they are unlikely to turn into rivals. The West should reconsider some fundamental aspects of its thinking in regards to this Central Asian partnership.

Engagement with Central Asia could certainly help, and its absence would simply hand over Central Asia to the two powers. The region is in a dire need of rebalancing, and more room to maneuver. Both Russia and China are appreciated and feared in Central Asia. The West’s position will be critical though, and it must formulate a coherent strategy for economic and political engagement with Central Asia, or be locked out.

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Kazakhstan under President Tokayev – transformation in all spheres

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Around two years ago, a change of leadership took place in Kazakhstan, when Kassym-Jomart Tokayev took over as Head of State following presidential elections. Since then, numerous reforms have been implemented in the country. Prior to these elections, Nursultan Nazarbayev was the president for almost three decades until 2019 and built a foundation that enabled Kazakhstan to become the biggest economy and top investment destination in the region. Under Nazarbayev, Kazakhstan also managed to build good relations with all its neighbours, as well as with Europe and the United States.

There has been a shift in focus after 2019. President Tokayev is concentrating not just on economic reforms and foreign relations, but also on political changes in the country. Prior to change in leadership, the country primarily focused on economic development and investment attraction. Indeed, Kazakhstan still has the ambition to become one of the top 30 most developed countries in the world.  Yet according to Kazakhstan’s current president, political changes are necessary to achieve economic development. One may wonder why these reforms matter outside of Kazakhstan. Yet the country is the top trading partner in Central Asia for the European Union and plays a key role in facilitating trade between China and the rest of the world through the Belt and Road project. Kazakhstan is also a founding member of the Eurasian Economic Union and is an active member of the international community, supporting the United States, Russia and other global powers in the resolution of conflicts in Syria and Afghanistan. Ultimately, the political and economic course of Kazakhstan impacts not only the country itself, but also the wider region and beyond.

One of Tokayev’s most significant changes is bringing the population closer to politics, and establishing what he calls “a listening state” – a government that listens to the feedback and criticisms of the population. To enhance dialogue between the government and the people, a National Council of Public Trust was established by Tokayev in 2019. Its aim is to develop specific proposals for reforms and legislation, taking into account the suggestions of civil society and the wider public. Making the national and local government more accountable improves its effectiveness and enables it to better fight long-lasting problems, such as corruption. In this regard, the country’s legal system has been transformed by transitioning it to a service model of work, which calls for a more active and responsible role for law enforcement personnel.

Public administration also required substantial reform as it is plagued by serious bureaucracy. As such, Tokayev instructed the government to reduce the number of civil servants by 25% while also hiring younger cadres. The President, who himself frequently uses social media, also made it a priority to digitise government services to increase efficiency.

In addition to political reforms, Tokayev has prioritised diversifying the economy to avoid excessive dependence on natural resources. For this reason, despite the lure of focusing on oil, gas, uranium and other raw materials that Kazakhstan exports, Tokayev has instructed the government to maximise the potential of agriculture, especially due to the fact that Kazakhstan neighbours China and other rapidly developing Asian countries, which require vast amount of seeds, grains and livestock.

Social reforms have also been realised. Tokayev recently stressed that “economic reforms are justified and supported only when they increase the income of a country’s citizens and ensure higher standards of living”. In practice this means protecting the most vulnerable, as well as individuals and companies that depend on loans to start a business. As such, Tokayev is aiming to expand the amount of bank loans, and direct them to companies that increase value by means of innovation, while reducing the number of inefficient enterprises run by the state. To support those that suffered the most from the economic consequences of the pandemic, the president offered his support to cancel penalties for bank loans.

Another interesting social measure that is likely to have long-term effect is Tokayev’s attempt to gradually revert the idea that higher education should be the ultimate goal of every student. Instead, Tokayev aims to reduce the number of universities to promote vocational centres and colleges that teach specific technical skills. The belief is that this is necessary in order to adapt to the needs of the market, which requires a variety of specialists.

Overall, while it is too early to assess the long-term impact of Tokayev’s presidency and his reform programme, it is clear that he is trying to fight old demons domestically, by shifting Kazakhstan away from old Soviet thinking and system of governance. The interplay between the domestic and external challenges aggravated by the test of COVID-19 and its consequences, will demonstrate whether Tokayev’s reforms are strong enough to help the country cope with the new era.

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The Turkish Konrul: How Ankara Uses the Turkic Council to Re-Engage in Central Asia

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The countries of Central Asia — Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan — are divided between the remaining influence of Russia, the heir of the Soviet Union, which plays a considerable cultural and military role (e.g., within the Collective Security Treaty Organization) in the region, and the growing economic influence of China. Nevertheless, this apparent bipolar balance is incomplete, as the weight of a third country, Turkey, needs to be taken into consideration when we speak about the future of Central Asia.

Although Ankara is not in close geographical proximity to the region or has no nuclear arsenal, and therefore cannot be considered a superpower like Moscow and Beijing, it has managed to maintain its influence in Central Asia for several centuries—thanks to religion (Islam) and the Turkish language, whose significant impact is still felt in the region. Therefore, whereas China is now the first economic partner in the area, while Moscow is in charge of regional security, it is Turkey that has the most considerable soft power, an asset Erdogan is trying to reinforce through the Cooperation Council of the Turkic-Speaking States (the Turkic Council) to increase its global influence.

While it offers an alternative to the vision of a Central Asia under the bipolar influence of Moscow and Beijing, the Turkic Council is no less imperfect, as this article aims to show, but it has potential for development that might open up Central Asia and bring it closer to the Middle East, while allowing Turkey to reconnect with the glorious history of the Ottoman Empire.

In the end, it is through the Turkic Council that Ankara could become a global power again and, like the Konrul (a Turkish version of the Western phoenix), assert itself as a great power on the international scene, without having to resort to obtaining any nuclear arsenal.

The Turkic Council in the spotlight

The Turkic Council is an international organization founded on October 3, 2009 in Nakhchivan in Azerbaijan, comprising some of the Turkic countries—states which are Turkic-speaking, of Turkic origins, or both—consisting of Turkey, Uzbekistan, Azerbaijan, Kazakhstan and Kyrgyzstan, so to say most of Central Asia.

It is noteworthy that the idea for the Council did not come from Turkey, which at the time was mainly focused on EU integration, but emerged from Kazakh President Nursultan Nazarbayev in 2006, the same political leader who proposed the idea of a Eurasian Union, which became a reality in 2015.

The premise was simple enough at the time. Countries, like Kazakhstan, needed to find a way to be connected to the rest of the world. While the Eurasian Union could increase the economic and military relations with Russia, the Turkic Council would represent the cultural and religious interests of the Central Asian countries.

As many of Nursultan Nazarbayev’s projects, the Eurasian Union and the Turkic Council have moved on. The Eurasian Union has turned into a solely economic co-operation, and the Turkic Council is struggling with integrating states such as Turkmenistan, which is currently not a member of the Council because of its neutral status.

Nevertheless, the Council is among the fastest growing international organizations, and on 30 April 2018 it was announced that Uzbekistan would join. The country attended the summit of the organization before officially applying for membership on 12 September 2019.

Interest is growing and since the end of 2018, Hungary has had observer status and could potentially apply for full membership. Furthermore, in 2020, the Ukrainian Deputy Foreign Minister, Emine Ceppar, stated that Ukraine wanted to be an observer like Hungary. Meanwhile, on 3 May 2021, Afghanistan officially applied for observer status. Overall, the potential is impressive as Turkish influence in the world remains substantial and could interest some countries with Turkic minorities, such as Gagauzia in Moldova, and possibly states, such as Germany, due to the Turkish diaspora (3-7 million people of Turkish origin currently live in Germany).

Differences between the participating states are evident, and while the Central Asian states are interested in membership to avoid dependence on Russia and China, some countries, such as Azerbaijan, are doing so to strengthen the relationship with Turkey and gain more support in the Nagorno-Karabakh conflict. In its turn, Hungary is prospecting alternatives to the European Union.

The projects are clustered into six cooperation areas: economy, culture, education, transport, customs and diaspora. Examples of projects include the establishment of the Turkish University Union and the drafting of a common history textbook. The Turkic Council is also working on ways to stimulate economic development and functions as an umbrella organization for cooperation mechanisms such as:

– Parliamentary Assembly of the Turkic Speaking Countries (TURKPA) in Baku;

– International Organisation of Turkic Culture (TURKSOY) in Ankara;

– International Turkic Academy in Nur-Sultan;

– Turkic Cultural Heritage Fund;

– Center of Nomadic Civilisations in Bishkek;

– Turkic Business Council in Istanbul.

Unlike many other international organizations, the Council presents itself with labels of ‘family’ and ‘brotherhood,’ emphasizing the difference with the Western world. As such, the ties between members are rooted in blood and Islam, certainly a more emotional component than in the case of the EU or the Eurasian Economic Union.

FinTech and crypto-currencies: A missed opportunity

In 2021, there are no plans to establish a digital currency or to adopt a common crypto-currency for all Council members. This approach may come as a surprise, as each member country has its own currency with significant fluctuation rates, which hinders the implementation of common projects and exchanges, in fine leading to the adoption of the U.S. dollar for large-scale projects.

The adoption of a new or existing crypto-currency (e.g., Stellar), whether centralized or decentralized, by all the states of the Turkic Council would strengthen economic cooperation between the members. Turkey’s recent attitude on this issue in the spring of 2021 could nonetheless delay the adoption of this technology.

A Turkish or Central Asian institution?

Looking at all elements, one can argue that Ankara is the main country interested in the Council because it remains the largest military, economic and demographic power there. Moreover, it reinforces Turkish influence, as joining the European Union is not a target to Ankara anymore.

Nonetheless, from the Central Asian states’ perspective, the Council seems to be more of a Kazakh project because it avoids the containment of Central Asia and provides an alternative to the two surrounding giants, Moscow and Beijing. As such, Central Asian states strengthening their ties with Turkey aims to ensure respect for Muslim values and develop new partnerships to export gas abroad, with Turkey being a large market. The Turkic Council thus seems to represent the variety of interests in the region, with each country having an interest in joining it.

A modern view of Islam?

Another interesting element is that the Turkic Council promotes a different view of Islam, which can be seen as a ‘soft’ Islam. The member states of the Turkic Council are less fundamentalist than the countries in the Middle East and there is no ban on alcohol consumption, while many families are monogamous. This is crucial as it could have an impact on the practice of Islam amongst prospective new member states, such as Afghanistan.

While Western organizations often enter into confrontation with the Muslim world (e.g., Iran-United States relations), the Turkic Council might present a better way to engage with other Muslim countries, as it is a softer version of Islam that nevertheless shares the same religious beliefs.

Opportunities and challenges of the Turkic Council

Although it has ambitions, the Council remains a complementary alliance and cannot substitute for security organizations (NATO for Turkey and the CSTO for the Central Asian states). Moreover, while it strengthens economic partnerships, China remains the main actor in Central Asia, and it is not possible for the Council to become an alternative to establishing commercial ties with Beijing.

The same is true for Azerbaijan, and while Baku has received support from the Muslim world in the Nagorno-Karabakh conflict, the main decision-maker on the outcome of this conflict remains the Kremlin, as Russia is a nuclear superpower.

Another limitation of cooperation is that Beijing may want to strengthen its soft power in Central Asia in the coming years. So far, China has accepted to remain a mere economic power (with an attempt to strengthen its military power in the Wakhan corridor). Nevertheless, Beijing is expected to take a more active soft power approach by increasing its investment in promoting Confucianism and the Chinese language around the world, and more so in its neighborhood.

The Turkic Council has carried out many valuable projects, particularly in the field of education, and while its potential remains substantial, the Council’s members must ensure that it will work in line with Chinese interests in Central Asia and the Middle East to avoid a confrontation.

Ultimately, the Turkic Council is a valuable tool for building up Turkish religious approach and soft power in Central Asia, but the economy and the implementation of cutting-edge technologies are likely to remain in Chinese hands, while Russia and the Eurasian Economic Union are complementary and might contribute to the emergence of a tripolar order in the region.

From our partner RIAC

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