Kazakhstan Institute for Strategic Studies

under the President of the Republic of Kazakhstan

The Address to the People of Kazakhstan by President

of the Republic of Kazakhstan – Kassym-Jomart Tokayev

“Constructive Public Dialogue – the Basis of Stability

and Prosperity of Kazakhstan”

Only through a constant dialogue between the Government and society

can a harmonious state be built in the context of modern geopolitics.

 

 

Abstract. Trade and economic relations between the countries of Central Asia and the Islamic Republic of Pakistan have significant potential and prospects. However, at the present stage, the intensity of our relations is not very high and there is considerable potential for their further development. The main factors limiting the cooperation between Central Asian countries and Pakistan include the underdeveloped transport infrastructure in the region, the orientation of the Central Asian countries towards the export of raw materials mostly, specificities of the Central Asia geographical location, namely, the lack of direct access to international maritime routs and, therefore, the relatively high share of transport costs in the price of the goods. At the same time, a number of positive factors are recorded - the absence of serious political disagreements between Pakistan and the countries of Central Asia, a number of multilateral international platforms, including Pakistan and the countries of Central Asia as members (SCO, CICA, OEC, OIC, etc.), common perceptions of threats to international security and others that provide opportunities for capacity building in mutual collaboration.

 Key words: Central Asian countries, Pakistan, economic cooperation, transport corridors, infrastructure.

 

ОРТАЛЫҚ АЗИЯЛЫҚ ЕЛДЕРІ ЖӘНЕ  ПАКИСТАН РЕСПУБЛИКАСЫ АРАСЫНДАҒЫ ЭКОНОМИКАЛЫҚ ЫНТЫМАҚТАСТЫҚТЫҢ ӘЛЕУЕТІ МЕН  БОЛАШАҒЫ

Аңдатпа. Орталық Азия мен Пәкістан Ислам Республикасы арасындағы сауда-экономикалық қатынастар айтарлықтай әлеует пен  перспективаға ие. Алайда, қазіргі кезеңде біздің қарым-қатынастарымыздың қарқындылығы аса жоғары емес және одан әрі даму үшін елеулі әлеует бар. Орталық Азия елдері мен Пәкістан арасындағы ынтымақтастықты тереңдетуге кедергі келтіретін негізгі факторларға аймақтағы дамымаған көлік инфрақұрылымы, Орталық Азия елдерінің шикізат экспорты бағытына бағдарлануы, географиялық ерекшеліктер, атап айтқанда теңізге тікелей қол жетімсіздік және, осыған орай жүк тасымалы құнының салыстырмалы түрде жоғары болуы. Сонымен қатар, Пәкістан мен Орталық Азия елдері арасында елеулі қолайлы шарттар да бар, ол саяси қайшылықтардың болмауы,  Пәкістан мен Орталық Азия елдері үшін (ШЫҰ, АӨСШК, ЭЫДҰ, ИКҰ және т.б.) бірқатар халықаралық көпжақты платформалардың ортақ болуы, халықаралық қауіпсіздік қауіп-қатерлеріне қатысты жалпы ұстанымдар және т.б. бұл әлеуетті күшейту мүмкіндіктерін анықтайды.

Түйінді сөздер: Орталық Азия елдері, Пәкістан, экономикалық ынтымақтастық, көлік дәліздері, инфрақұрылым

ПОТЕНЦИАЛ И ПЕРСПЕКТИВЫ ЭКОНОМИЧЕСКОГО СОТРУДНИЧЕСТВА МЕЖДУ СТРАНАМИ ЦЕНТРАЛЬНОЙ АЗИИ И ИСЛАМСКОЙ РЕСПУБЛИКОЙ ПАКИСТАН

Аннотация. Торгово-экономические отношения между странами Центральной Азии и Исламской Республикой Пакистан имеют значительный потенциал и перспективы. Однако, на современном этапе интенсивность наших отношений не очень высокая и имеется значительный потенциал для дальнейшего развития. В качестве основных факторов, препятствующих углублению сотрудничества между Центральноазиатскими странами и Пакистаном, выделяются такие как слаборазвитая транспортная инфраструктура в регионе, ориентация стран Центральной Азии на экспорт сырья, особенности географического расположения, а именно, отсутствие прямого выхода к морским акваториям и, в связи с этим, относительно высокая стоимость грузоперевозок. При этом фиксируется ряд позитивных факторов – отсутствие серьезных политических разногласий между Пакистаном и странами Центральной Азии, наличие ряда многосторонних международных платформ, включающих Пакистан и страны Центральной Азии (ШОС, СВМДА, ОЭС, ОИС и др.), общее восприятие угроз международной безопасности и другие, что определяет возможности для наращивания потенциала сотрудничества.

 Ключевые слова: страны Центральной Азии, Пакистан, экономическое сотрудничество, транспортные коридоры, инфраструктура

Relations with the Islamic Republic of Pakistan have a great importance for Central Asian countries. It is not just about the international weight of this country and its strategic location at the crossroads of several regions. Pakistan and Central Asian countries connect cultural ties that go deep into history. Today we can rightly say that bilateral relations between Central Asian states and Pakistan are traditionally friendly. They are not aggravated by complex/negative historical experience, as well as ideological and religious differences. This creates prerequisites for further development of political ties and strengthening our relationship at all levels and spheres. And today we can say that not only Pakistan is a country of opportunities for the Central Asia, but Central Asia is a region of opportunities for Pakistan.

The article analyzes the factors contributing to the development of bilateral relations between Kazakhstan and Pakistan, as well as the factors limiting or impeding this development.

As well-known that the Central Asia is composed of five states such as Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan which emerged on the political map in 1991 after the breakup of the Soviet Union. It should be noted that Central Asia is not a certain monolith. These are five countries that differ significantly in their models of economic development and in their export and import capacities.

Speaking about the factors contributing to the deepening of trade and economic relations between the countries of Central Asia and Pakistan, it can be marked the following:

  1. There are no serious political disagreements and contradictions among Pakistan and Central Asian countries. Moreover, it’s noted that cooperation is increasing by the due to the entry of Pakistan into the Shanghai Cooperation Organization in June 2017. Pakistan and the countries of the region regularly exchange visits at the highest level. For instance, the President of Kazakhstan, Nursultan Nazarbayev, twice visited Pakistan - in 1992 and 2003, the leaders of Pakistan made reciprocal visits in Kazakhstan during 1990th and 2000th years;
  1. The development of cooperation is facilitated by a number of multilateral international platforms, which simultaneously include both the Central Asian countries and Pakistan. In addition to the Shanghai Cooperation Organization (SCO), already mentioned, it is the Conference on Interaction and Confidence Building Measures in Asia (CICA), the Economic Cooperation Organization (ECO), the Organization of Islamic Cooperation (OIC), the Central Asia Regional Economic Cooperation Program and others;
  1. Central Asian countries and Pakistan have a similar understanding of key contemporary challenges and risks to international security. First of all, it is about attitudes towards struggle against terrorism, smuggling of drugs and weapons, illegal migration and etc.;
  1. The Central Asia has a great importance in terms of natural resources (raw materials) which the region possesses. It’s enough to say that Central Asia is on the second place in the world in terms of fuel and energy resources. At the same time, there are impressive reserves of uranium, gold, copper, hard coal, iron ore, etc. The hydropower potential is high. The region is one of the most promising in terms of human capital development. More than 70 million people live here, while all adult population is literate and well educated.

One of the key bases expanding the cooperation between the Central Asia and Pakistan is the intensification and deepening of relationship among the countries of the region itself. Undoubtedly, the change of Uzbekistan policy towards region, which began in 2017, have given impetus to political climate improvement in Central Asia and to the solution of some controversial issues, accumulated for the past two decades. In February 2017 Uzbekistan adopted and started to implement "The Action Strategy on Five Priority directions on Development of the Republic of Uzbekistan for the period of 2017-2021".1 One of the key directions of this strategy is to set up a zone of "security, stability and good-neighborliness" in Central Asia. Recently, in March 15, 2018, a Consultative meeting of the Leaders of Central Asian countries was carried out in Astana.2 It was the first meeting in the "regional" format over the past 13 years. Outcomes of the meeting allow us to hope that in the mid-term perspective, our five countries will be able to speak as a regional integrity in trade and economic interaction with neighboring countries.

 

* * *

Despite all factors, pointed out above, obviously, the level of interaction and cooperation between the Central Asian countries and Pakistan cannot be considered as absolutely satisfactory because we have potential for their further development. This applies primarily to trade and economic relations. But there are some factors that limits or impedes cooperation. I would like to pointed out some most important:

First of all, it lacks a sufficiently developed regional transport infrastructure in Central Asia:

  • there is no unified railway system, effectively integrated into the outside regional railway networks;
  • in a number of Central Asian countries, the quality of railways and motorways (highways) remains unsatisfied (low) with a high degree of depreciation;
  • logistic hubs and some other institutional mechanisms are not working efficiently.

Until recently, the development of interstate infrastructure was limited by some tensions or even conflicts between the countries. So, the transportations between Uzbekistan and Kyrgyzstan, Uzbekistan and Tajikistan was seriously restricted. At present, these issues are in the process of negotiation and taking a proper decision, which encouraging a sort of optimism and setting up a space for cooperation with extra-regional actors, such Pakistan is.

National infrastructure development projects have been adopted. For example, the government of Kyrgyzstan approved “The Main Directions of Rail Transport Development for 2014–2020”.3 Kazakhstan approved the development strategy of National Company “Temir Zholy " for 2015-2025.4

The Central Asian countries are interested in and are building (mainly with the help of international donors’ institutions) international railway transport corridors. So, in 2011, the intergovernmental agreement was signed with purpose of to create a transport corridor "Uzbekistan - Turkmenistan - Iran - Oman - Qatar", which allow to connect the countries of Central Asia and the Persian Gulf countries. In 2014, the construction of the Kazakhstan-Turkmenistan-Iran railway was completed. Currently, the projects of transport infrastructure under the Chinese "Belt and Road" Initiative are being actively discussed. However, these initiatives and projects are not directed towards South Asia. One of the key infrastructural problems in this direction is the situation in Afghanistan - instability in this country seriously limits the possibility of developing transit corridors from the Central Asian countries to South direction, including towards Pakistan.

Second, the Central Asian countries economies are oriented mainly on the export of raw materials. The basis of Kazakhstan's export, for example, is mineral resources, which account for 65.7% of total exports. It’s mostly oil and gas. The export of high-tech products is one of the key current tasks for Central Asia and for Kazakhstan as well. We have potential for this development. For example, Uzbekistan is ready to export products of the own car industry and advanced processing agriculture products. Kyrgyzstan, Tajikistan, partly Uzbekistan have advantages in the field of hydropower industry. Kazakhstan has a great potential to export some technologies in spheres of smart and renewable energy, agriculture, building construction and etc.

Third, the Central Asia is facing of some complexities in trade development dealing with or depending on geographical location of the region. It’ s a lack of direct access to international maritime routs and high share of transport costs in the price of the goods.

All these factors negatively affect to the competitiveness of our economies and trade cooperation with other countries, including Pakistan.

* * *

In the same time, it is obviously, that these factors are not only restrictors or obstacles, but also directions for capacity building of further cooperation in Central Asia. I am talking about the challenges that can became new opportunities for us.

Thus, it can be argued that the relations between the Central Asian countries and Pakistan are mostly political, but we have a good potential for further development the trade and economic segment. In the case of Kazakhstan, the Intergovernmental Kazakhstan-Pakistan Joint Commission on Trade and Economic, Scientific and Technical, and Cultural acts as an instrument for the transition of cooperation to the economic sector. Priority areas of cooperation are the spheres of the mining industry, non-ferrous metallurgy, machine building, energy, light industry, transport and communications. The Pakistani delegations very active to participate in different international events which conduct in Kazakhstan such as the Central Asian Trade Forum (5th, 28-29 October 2015, Almaty), Central Asian International Exhibition titled “WorldFoodKazakhstan" (18th, 4-6 November 2015, Almaty). I would especially like to note the participation of Pakistan in International Specialised Exhibition EXPO-2017 in Astana. Pakistani Pavilion was one of the most visited and interesting.

At the same time, the main task for the moment is to transit of interstate relations to the "technical level", the interaction level between business communities and societies of our countries. What is important directions for Kazakhstan in developing cooperation with Pakistan? It has to be mostly highlighted next priorities:

To increase export of Kazakhstani high quality end products such as diesel locomotives, aircrafts and helicopters, (if possibly - to involve Pakistani business in investing the producing of these goods);

- To use the Baikonur cosmodrome in various aspects on jointly basis;

- To develop jointly and exchange technologies in the field of digitalization of the economy (Official Program “The Digital Kazakhstan”);

- To attract Pakistani investments and companies for implementing the Nurly Zhol New Economic Program of Kazakhstan;

- To conduct research projects and introducing innovative technologies in the agricultural sector, energy sector ("green" energy technologies);

- To cooperate in the sphere of Islamic finance (banking) within the framework of the International Financial Center "Astana".

Finally, Islamabad may have in an interest in promoting its products in the markets of the countries of the Eurasian Economic Union (EEU), can strengthen its cooperation with Kazakhstan in this direction.

In conclusion, considering the quality of human capital in Central Asian countries, it is promising to cooperate with Pakistan in the development of knowledge-based sustainable national economies. Thus, President of Kazakhstan expressed readiness for cooperation with the OIC member countries within the framework of the Nazarbayev University and the Park of Innovative Technologies at the plenary session of the First Summit of the Organization of Islamic Cooperation in Science and Technology (September 10, 2017).

References

 

  1. Президент Республики Узбекистан. Указ от 7 февраля 2017 года «О Стратегии действий по дальнейшему развитию Республики Узбекистан»// Официальный сайт Президента Республики Узбекистан. – 2017. – 7 февраля // http://president.uz/ru/lists/view/231
  2. Участие в Рабочей (консультативной) встрече глав государств Центральной Азии// Официальный сайт Президента Республики Казахстан. – 2018. - 15 марта// http://www.akorda.kz/ru/events/uchastie-v-rabochei-konsultativnoi-vstreche-glav-gosudarstv-centralnoi-azii
  3. Постановление Правительства Кыргызской Республики от 30 сентября 2014 года № 558 «Об утверждении Основных направлений развития железнодорожного транспорта Кыргызской Республики на 2014-2020 годы»// https://online.zakon.kz/Document/?doc_id=31613734#pos=1;-286
  4. Стратегия развития акционерного общества «Национальная компания «Қазақстан темір жолы» до 2025 года// https://www.railways.kz/upload/docs/strategiya_razvitiya_ktzh_do_2025_goda_kratkiy_obzor.pdf

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