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Win-Win or Zero-Sum Game: Relationship of China and Kyrgyzstan

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In the context of the economic relationship between China and Central Asian countries, mostly Chinese officials emphasize relations as a win-win cooperation. In the context of the win-win cooperation, Central Asian countries export their products and raw materials to China and attract investment and financial assistance from China for improving their infrastructure. In return, China exports its products to these countries, gain new market, diversify its export-import and energy routes and expand its economic influence through Central Asia. With regard to the Sino-Kyrgyz relations, we analyze their economic relations in order to see whether the two countries’ relations bases on win-win cooperation or zero-sum cooperation. If both of them relation basis on win-win cooperation, we may see that in the long term, two countries benefit from economic relations, increase their interdependency and improve their economy. In contrast to win-win, if the basis of the relations on zero-sum cooperation, we see that one side benefits from economic relations in the long term and increase its economic influence, but other side increase its dependency to another side and only benefit economic relation in the short term rather than the long term.

Since gaining independence in the 1990s, economic relations with China play an important role in the Kyrgyzstan economy. Kyrgyzstan was the first country among Central Asian countries that it was a member of WTO. Membership of WTO created a range of opportunities to country improve its economic relations with China. When China became a member of WTO in 2001, two countries’ trade flows increased quickly (Omuralieva, 2014: 81). Kyrgyzstan located strategic geography for China because it plays an important role in diversifying China’s export-import routes and provide a wholesale market for Chinese goods. Chinese officials always argue that Sino-Kyrgyz relations are mutually beneficial and base on win-win cooperation. In this essay, we especially pay attention to China-Kyrgyz economic relations in the context of trade, investment, and aid policy in order to explain the relations between two countries whether base on win-win or zero-sum cooperation.

Trade

Trade and economic cooperation play important role for the development of Kyrgyz-Chinese relations. Cooperation in this direction is carried out in the framework of the signed intergovernmental Agreements on trade and economic cooperation in 1998 and the establishment of the Kyrgyz-Chinese intergovernmental Commission on trade and economic cooperation in 1994.  China is the main trade and investment partner of Kyrgyzstan. China took the first place in trade and investment in the economy of Kyrgyzstan at the end of the 2016 and 2017. Trade between China and Kyrgyzstan is inherently unbalanced. Trade turnover between China and Kyrgyzstan was accounted for 1.597 billion US dollars in 2017. Export was 97.5 million US dollars, import – 1.500 billion US dollars(Embassy of the Kyrgyz Republic in the People’s Republic of China, 2018).Chinese exports to Kyrgyzstan consist of cloths, agricultural products, and light machinery while Kyrgyzstan’s exports toChina agriculture products and natural resources(Reeves, 2015: 122).

Besides, Chinese merchants play a dominant role with the trade network of Kyrgyzstan. Both Dordoi and Kara Suu bazaar are the large wholesale and retail market in Bishkek. Both bazaars due the low taxes and location plays key role for Chinese merchants. 75% of the goods of Dordoi bazaar and 85% of goods of Kara Suu bazaar come from China. Kyrgyzstan import China’s goods and re-export these goods to other regional countries. The monthly turnover of both Dordoi and Kara Suu bazaars were 331 million US dollars and 90 million US dollars respectively in 2012. We may say that these bazaars are the main motor of the Kyrgyzstan’s economy (Omuralieva, 2014: 86-87). Furthermore, China’s import of Kyrgyz products and raw materials also help to Kyrgyzstan to alleviate the impact of inflation (Tian, 2018).

In the context of the trade between two countries, despite the Kyrgyzstan’s gains as an importer and transporter of goods, Sino-Kyrgyz relations consist of the asymmetrical trade relationship. Firstly, last years, Kyrgyzstan textile and apparel sectors grow so fast and China play a key role in these sectors (Reeves, 2015: 122). Because cotton and wool are produced in Kyrgyzstan and export mainly China. In addition, due the lack of modern standards low quality clusters, Kyrgyzstan do not export these goods to developed countries or cannot compete other regional exporters such as China, Turkey and Korea but export to less developed western China’s cities, predominantly (Birkman, 2012: 24-25). Secondly and more importantly, Kyrgyzstan relies on China’s good for its commercial service sector because Kyrgyz traders has developed its commercial sector around the China’s imports which they re-export these goods to other regional countries, that is why, without Chinese imports, country’s service sector would collapse or lose its main sources for economic growths (Reeves, 2015: 122-123). According to Marlène Laruelle and Sébastien Peyrouse, Beijing has transformed Kyrgyzstan into a China-dependent economy that can survive mainly by re-exporting Chinese products (Omonkulov, 2020: 76).

Investment and Finance

China also play dominant role in Kyrgyztan economy in terms of investment and finance. Since 2001, China was the main source of the all FDI investment (Reeves, 2015: 123). Between 2006-2017, cumulative gross of Chinese FDI flow as equal to 2.3 billion US dollar and for this period China provided 25-50% of total FDI of Kyrgyztan, which is equivalen to 2-7% of the country’s GDP (Mogilevskii, 2019: 09).

Since 1990s, China mostly has been preferring to invest Kyrgyztan’s mining and oil sector. For example, in 2011, a Chinese company namely Zijin Mining purchased mine, which is located in Talas province in Taldy- Burak region and Chinese Full Gold Mine Company operated Ishtamberdy mine in Jalalabad province in the south part of Kyrgyzstan in the summer of 2011(Omuralieva, 2014: 90-91). In 2012, Chinese company purchased old paper factor and 20 hectares of land in order to construct oil refinery. The company will invest 70 million US dollars for constructing factories.  Furthermore, Chinese companies operate some 10 medium-sized mines producing gold-copper concentrate which is exported for refining to China(Mogilevskii, 2019: 10). In addition to mining sector, China also invests oil sector in Kyrgyzstan. For example, China financed two refineries in Kyrgyzstan, namely Kara-Balta and Tomok oil refineries. These refineries are supplied by CNPC-operated oil fields in neighboring Kazakhstan and produce 1.35 million refined products per year (Pradhan, 2018: 10). Moreover, China announced that it would provide $1.4 billion in FDI for constructing Kyrgyzstan-China oil pipeline (Reeves, 2015: 123).

In the context of the Belt and Road Initiative (BRI), China also prefers to invest infrastructure and energy project in Kyrgyzstan. In terms of infrastructure projects,the planned China-Kyrgyzstan-Uzbekistan railway and the North-South Highway, for which China’s Exim Bank has lent 400 million dollars for the construction of its first phase, are considered as one of the most ambitious transportation projects in Beijing’s Kyrgyzstan (Omonkulov, 2020: 72; Toktomushev, 2016: 02). By the help of the China-Kyrgyzstan-Uzbekistan railway, China has a chance to diversify its export and imports routes and also secure its energy routes. For Kyrgyzstan side, officials in the country hope that attract Chinese investment. In addition, Kyrgyzstan will gain 261 million US dollars per year as a transit country. However, the project has been postponed for years due to government debt and domestic political concerns in Kyrgyzstan. That is why, China and Uzbekistan introduced combined road-rail corridor – freight from China will be unloaded in Kyrgyzstan to reach the Uzbek section of the railway by road (CHOICE, 2021).Apart from railway project, China gave 60 million Yuan unreturned credit to Kyrgyzstan for the construction of China-Kyrgyzstan-Uzbekistan highway in 2011(Omuralieva, 2014: 83-85).

With regard to the energy projects, China has financed the construction of the Datka electricity substation and the 405-kilometer Datka-Kemin transmission line. These projects help to improve country’s energy system and reduce its dependence from regional countries (Toktomushev, 2016: 02; Mogilevskii, 2019: 09). For securing its energy security, China also try to diversify its energy routes. From this perspective, Kyrgyzstan play a strategic role for China. In the context of the China-Central Asia gas pipeline energy project, China decided to construct one of the routes, namely gas line D, through theKyrgyzstan. Construction of the gas line started in 2018. By the way of the this project, Kyrgyzstan take a benefit as a transit country (Akıncı, 2019: 88; Omuralieva, 2014: 88).

China’s investment in Kyrgyzstan have both positive and negative effects to country’s economy. From the positive sides, firstly, some of the Chinese project is under the construction and some of the is completed recently, that is why we cannot expect major impact on the countries production capacity but  we see these projects effects via comparison of the average annual GDP growth rates. A comparison of the average annual GDP growth rates in 2011-2017 and in 2000-2010 shows some increase from 4.2% per annum (2000-2010) to 4.8% per annum (2011-2017)(Mogilevskii, 2019: 12).There is no doubt that other factors also contribute the GDP growth but most Chinese investment increases share gross domestic products in Kyrgyzstan and affect positively to GDP. Secondly, improving the relationship with China contribute to Kyrgyzstan’s developing country’s total factor productivity (TFP) and help to country to develop an export-oriented economy, better market linkages. Moreover, China’s investment creates new jobs for local people.Furthermore, China’s investment inindustry of Kyrgyzstan inject energy to landlocked country’s economy and promote flexible and innovative entrepreneurial development in Kyrgzystan. One of the example is emerging sewing industry in Bishkek (Tian, 2018).Finally, Chinese investment contribute to improve Kyrgyzstan’s infrastructure.

Aid and Loan policy

Most of China’s assistance to Central Asian countries mostly consist of the soft loans (i.e. concessional or low-interest loans below market rates, which do not contain grant elements – and government- backed or subsidized investments in infrastructure and natural resources). Compare to the Western assistance, China’s assistance gives a great advantage to donor such asincreased access to energy resources and lucrative contracts for Chinese companies. Due the bad governance, poverty and instability, Kyrgyzstan is one the country that receive largest share of Chinese assistance. China is the one of the most important for Kyrgyzstan in terms of concessional loans and grant aid. China is the largest concessional loans provider to Kyrgyzstan which is account for more than 60% of the country’s planned funding between 2013 and 2016. Most of China’s loans and aid design to improve infrastructure projects, such as North-South highway or China-Kyrgyzstan-Uzbekistan railway. For example, China pledged 3 billion US dollar loans for infrastructure development. China is also main sources for the Kyrgyzstan in the context of the aid. For instance, China gives 16 million US dollar to Kyrgyzstan between 2000-2007 (Reeves, 2015: 123-124). In addition to the assistance for improving infrastructure, China also sends aid for building school and hospital, as a result of which, new and existing schools and hospitals benefit from improvement and upgrading of specialist equipment, technology and logistics. Finally, China also sends aid to Kyrgyzstan for reconstructing of the residential areas of Southern Kyrgyzstan which were affected violent ethnic riot in 2010 (Bossuyt, 2019). 

Firstly, China’s aid to Kyrgyzstan help to country improve its infrastructure and break landlocked geography. Furthermore, improving of infrastructure also create a chance to Kyrgyzstan diversifies its export and import routes. Secondly, sending aid for modernizing or building new hospital and school may increase people’s lifestyle and contribute to education of younger people. Finally, China’s aid also helps to country upgrade its electricity generation plants and transmission line. Developing electricity system contribute to the energy independence of Kyrgyzstan.

The fast development of Kyrgyz infrastructure by the way of the massive inflow of resources resulted in the growth of Kyrgyzstan’s debt burden. China also main creditor of Kyrgyzstan. Kyrgyzstan’s debt to China reached 1.7 billion dollars or 44% of its total foreign debt (3.8 billion dollars) as of February 2018. At the same time, Kyrgyzstan borrowed a total of $ 4.5 billion from China’s credit line under the Belt-Road Project (Omonkulov, 2020: 75). Despite the positive impact of aid on Kyrgyzeconomy, growing debt also increase country’s dependency on China and lead vulnerable position versus China.

Conclusion

In the context of the Sino-Kyrgyz trade relations, despite Kyrgyzstan’s gains as an importer and transporter of Chinese goods, Sino-Kyrgyz relations consist of an asymmetrical trade relationship. Kyrgyzstan export mainly textiles and raw materials to China and import technological and manufactured products. Maybe Kyrgyzstan benefits from trade relations in the short term but, in the long term, Kyrgyzstan’s dependence on China increases. In addition, exporting mostly export raw materials to China, Kyrgyzstan does not improve its human capital and high skilled labor force. With regard to the trade relations, Sino-Kyrgyz relations seem to bases on zero-sum cooperation in the long term rather than win-win cooperation.

With regards to the investment, despite the contribution of Kyrgyzstan’s annual GDP growth rates and improve the total factor productivity and export-oriented economy, Chinese investment has different negative effects on the Kyrgyz economy. One of the main purposes of the Chinese investment in the mining, oil, and infrastructure sector is to increase the country’s extraction and export of natural resources. This creates a range of problems for the Kyrgyz economy. Firstly, these sectors provide fewer employment opportunities to the local population and increase short-term employment in the country, and most of the time Chinese companies prefer to use their own people for working compared to the local people.  Besides, the job creation of China’s companies is limited and they mostly avoid technology transfer to the country. This situation also prevents the improvement of domestic industry. Secondly, extraction of the natural resource improves the certain sector and contribute corruption and unequal distribution of the wealth in the country. Furthermore, Chinese companies also violate the environmental standard. Finally, these sectors vulnerable the external shocks and increase the state’s dependency on China. As trade relations, in the long term, China’s investment affects Kyrgyzstan negatively and only let to improve the specific sector, especially mining and oil sectors, and this situation prevent the country to diversify its industry. With regard to the investment, as a trade relation, Sino-Kyrgyz relations seem to the basis of zero-sum cooperation rather than win-win cooperation. 

Finally, in terms of the aid and loan policy, despite China’s aid and loans help to improve Kyrgyzstan’s infrastructure and develop its industry, it used to try to secure access to mining sites such as gold, ore deposits, and rare earth elements. Furthermore, it tries to involve in the exploration and development of gold deposits in the country. Despite the high unemployment rate in Kyrgyzstan, Chinese loans also promote Chinese firms for using Chinese equipment and laborers. Besides, China’s cheap and handy loans increase Kyrgyzstan’s dependency and vulnerabilities on China. This situation also causes to enhance China’s political and economic influence.

To sum up, in the context of the trade, investment, and aid and loan policy, despite the different positive impacts, Sino-Kyrgyz economic relations basis on asymmetrical economic relations and in the long term give the advantage of China over Kyrgyzstan in the context of the economic influence. As a result, take the example of the trade, investment, and aid and loan policy, we think that two countries’ economic relationship basis on zero-sum cooperation in the long term, rather than win-win cooperation, in contrast to China’s officials’ claims.

Reference

  • Birkman, Laura. (2012), “Textile and Apparel Cluster in Kyrgyzstan”, Boston: Harvard Business School.
  • Embassy of the Kyrgyz Republic in the People’s Republic of China. (2020), Trade and Economic Cooperation, https://mfa.gov.kg/en/dm/Embassy-of-the-Kyrgyz-Republic-in-the-Peoples-Republic-of-China/Menu—Foreign-/–uslugi/Trade-and-Economic-Cooperation/RC
  • Mogilevskii, Roman. (2019), “Kyrgyzstan and the Belt and Road Initiative”, University of Central Asia Institute of Public Policy and Administration, No. 1, p. 1-25.
  • Omonkulov, Otabek. (2020), “China-Central Asia Relation in the Context of the Belt and Road Initiative”, BölgeselAraştırmalarDergisi, Vol. 4, No. 1, p. 45-115.
  • Omuralieva, Alia. (2014), China-Kyrgyzstan Relations, Hacettepe University Institute of Social Sciences, Master’s Thesis, Ankara.
  • Pradhan, R. (2018). The Rise of China in Central Asia: The New Silk Road Diplomacy. Fudan Journal of the Humanities and Social Sciences, 11(1), 9-29. doi:10.1007/s40647-017-0210-y
  • Reeves, Jeffrey. (2015), “Economic Statecraft, Structural Power, and Structural Violence in Sino- Kyrgyz Relations”, Asian Security, Vol.11, p. 116-135.
  • Toktomushev, Kemel. (2016), “Central Asia and the Silk Road Economic Belt”, University of Central Asia Institute of Public Policy and Administration, No. 1, p. 1-5.
  • Emil Avdaliani. (2021, January 20). How China is Breaking Central Asia’s “Geographic Prison”. Retrieved January 29, 2021, from https://chinaobservers.eu/how-china-is-breaking-central-asias-geographic-prison/
  • Tian, Hao. (2018). “China’s Conditional Aid and Its Impact in Central Asia”, (Laruelle, M.), China’s Belt and Road Initiative and its impact in Central Asia. Washington, D.C.: The George Washington University, Central Asia Program, p. 21-34.
  • Bossuyt, Fabienne. (2019). The EU’s and China’s development assistance towards Central Asia: Low versus contested impact. (n.d.). Retrieved January 30, 2021, from https://www.tandfonline.com/doi/full/10.1080/15387216.2019.1581635

Yunis Sharifli graduated with a Bachelor of Arts degree in International Relations from the Azerbaijan State Economic in 2020. At the moment, he is studying at the University of Bologna for his Master's Degree. He was an intern at the Topchubashov Center. He is currently an intern at the Caucasian Center for International Relations and Strategic Studies (QAFSAM). His areas of expertise cover China’s foreign policy in the context of the Central Asia and South Caucasus and also the Belt and Road Initiative.

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Central Asia

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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