Central Asia and connectivity: a view from Latvia
For Latvia and European countries in general, the strengthening of current economic relations and the search for new trade partners will always be relevant. While the COVID-19 pandemic is forcing re-prioritization, trade continues and is likely to return to pre-coronavirus levels in the near future. One of the most promising directions in Central Asia and, in particular, Uzbekistan. Not only this region in relative proximity to Europe and has a common history with some countries, for example, Latvia, it also has a rapidly growing market. This article examines the main benefits and prospects, issues, and challenges of inter-regional connectivity for both regions, including Latvia and Uzbekistan.
Central Asia, especially Uzbekistan as a “heart of Asia”, is important for the Baltic States. Latvia has been keen on promoting political, economic, and cultural connectivity between the two countries. These priorities were underlined and promoted during Latvia’s EU presidency in 2015. Among a variety of cooperative efforts, transport connectivity has been high on the agenda.
Transport connectivity has already demonstrated some visible progress. The Northern Distribution Network from Riga to Afghanistan has involved Central Asian partners. Although hopes for extensive commercialization did not come to fruition, the interaction made an important contribution to the thinking about potential future cooperation in the field of transportation. On the one hand, it grasped the imagination that transcontinental shipments with a number of stakeholders are possible. On the other hand, it revealed political, logistical, and regulatory challenges to deal with. Hardware is important, but the software is as important.
At the same time, Uzbekistan continues to implement transport projects that provide European countries with more comfortable access to the Central Asian and Chinese markets. For example, under the aegis of the United Nations, a Regional Center for enhancing transport-logistic connectivity was established. Initiated by the President of Uzbekistan Shavkat Mirziyoyev it is aimed at aligning the effort with EU Concept of deepening connectivity of Europe and Asia via developing transport and economic corridors. In addition, Uzbekistan is becoming more open to European tourists. The number of flights between Latvia and Uzbekistan is also growing. And among the European Union states Latvia is one of the largest partners of Uzbekistan in terms of the volume of mutual trade.
Wider global and regional developments, for instance, Belt and Road Initiative and 17+1 format, also influence connectivity between Baltics and Central Asia. Uzbekistan and Latvia as a part of the transportation and supply chain could only gain from this. EU-China Connectivity platform, transport corridor Europe-Caucasus-Asia, The Border Management Programme in Central Asia (BOMCA), and EU-CA Education Platform are examples of successful cooperation efforts between two regions. The development of the Transport Platform may become another step.
An important factor that should encourage Latvia and other European countries to strengthen connectivity with Central Asia is access to the Chinese market. The transit distance from Europe to China through Central Asia is shorter than via other routes. Furthermore, China plans to import goods worth about 30 trillion dollars in the next 15 years. At the same time, Beijing promotes projects, designed to form a corridor for the transportation of goods through Central Asia to the EU and the Persian Gulf.
In addition, the construction of the Uzbekistan-Kyrgyzstan-China railway, which will become one of the shortest routes for the transportation of Chinese goods to European states, has intensified. It may become one of the promising additional routes connecting China with the countries of the Middle East, Turkey, and Europe. The project is intended to become an important link in the regional transport network, providing access to international seaports for the geographically closed states of Central Asia.
Connecting Central Asia through the Caspian with Europe will provide a shorter route for cargo transportation. Central Asian states are actively interacting within the framework of the Baku-Tbilisi-Kars transport corridor, through which, since the beginning of 2020, cargo transit to Georgia via Uzbekistan has been launched. This route will make it possible to establish regular transportation of goods from Turkey and Europe to Central Asia and China and vice versa.
In general, the formation of an extensive transport and communication system with Europe will fully unleash the transport and transit potential of Central Asia. Moreover, it will have a multiplier effect for the sustainable development of the region. This will give a new incentive to the effective use of the Trans-Afghan corridor, which in the future will provide Central Asia with the shortest access to the ports of the Indian Ocean and the Persian Gulf, and will connect South Asia with the European and Chinese markets. Realizing the potential of Afghanistan as a land bridge, in turn, will become an important factor in its sustainable development and restoration of the peaceful economy, which is a key condition for the long-term stabilization of the situation in this country.
Nevertheless, Central Asia still has several problems in the transport and logistics sector. For example, states without direct access to seaports suffer from significant transport and transit costs, which reach up to 70-80% of the value of exported products. In addition, carriers lose up to 40% of the time for the transportation of goods due to imperfect customs procedures. Undiversified transport routes and instability in Afghanistan also hinder the development of the sector.
Potential remains for complementary transport corridor benefits and multimodal opportunities. Riga has become a hub in terms of transportation: the Baltic region is a gateway to Europe, and particularly to Northern Europe. The Baltic ports have always served as an important regional transportation connection, and air transportation is developing as well. For instance, a cargo flight between Tashkent and Riga is planned.
The Rail Baltica also has noticeable prospects. It may provide more opportunities for the South-North transport corridors, improving connectivity between Central Asia and Europe. It will link the Baltic Sea countries with the fast speed train and European standard railway. These states are traditionally at the crossroads in terms of connecting East and West. If you add prospects of the Tallinn-Helsinki tunnel, this will only strengthen interconnectivity.
To conclude, there is a great potential for a closer bilateral engagement between Uzbekistan and Latvia, between Central Asia and Baltic countries, between Europe and the wider heart of Asia. There are also challenges from our own limitations and wider geopolitical developments. Transportation in the end it must be politically feasible and commercially attractive. Transportation provides a chance for a win-win vision in a wider Eurasian space. However, vision and implementation pave the way to ever-increasing mutually beneficial connectivity.
Published 22 October 2020