Abstract
There are at least four key issues in play for this region: the global
financial crisis, water, oil and Russia.
Even though none of the countries
in Central Asia –Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan
and Uzbekistan – has any significant exposure to the global capital
market, the fallout will still impact
their economies. The access to FDI
and the slowing of remittances from expatriate workers back into
Central
Asia will have an economic impact. (In Kyrgystan and Tajikistan, remittance
flows from workers
abroad accounts for 20-25% of nominal GDP).
While
the focus in the West has been on oil, the long-term strategic asset in this
region is more likely to
be water. Both Turkmenistan and Uzbekistan are
major producers of cotton, a crop that demands large
and reliable supplies
of water. Tajikistan has little by way of mineral or oil resources, but it
does hold 40-
60% of the water supply in Central Asia. Tajikistan wants to
use this resource (including the ability to
generate hydro-electric power)
as its leverage to gain economic benefits. This strategy has clear risks.
Attempting to maximise the value of its water resources may bring it into
conflict with its oil rich
neighbours.
Russia is the dominant economic
and military power in the region. While all five countries are moving
towards being less dependant on ties with Russia, each is aware of the need
not to antagonise the bear in
the process. By invading South Ossetia,
Russia made very plain its willingness to take whatever action it
deems
necessary to protect (or assert) its interests.
Central Asian countries
are linked economically and strategically, but are also diverse and far
from
united. Politically, none is democratic and most are governed by
long-term authoritarian regimes that pay
no more than lip service to
political and human rights reform. The area was strategically unimportant
for
many years. In recent times it has become important as a junction
between the Russian, Chinese and US
spheres of influence. It also sits
alongside the “war on terror” hotspots of the Middle East. In
addition, it
has become a major route for the transhipment of heroin and
comes under the influence of major drug
operators.
2009
considerations, however, are more likely to be dominated by economic
matters.
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