European Union and Central Asia discussed interconnectivity and cooperation
Geopolitical Report ISSN 2785-2598 Volume 25 Issue 7
Author: Silvia Boltuc
In the context of the Ukraine conflict and the Brussels- Moscow confrontation, the European Union attempts to expand its activity and presence in Central Asia by improving connectivity projects and cooperation.
On November 17th -18th, 2022, Samarkand hosted the EU-Central Asia Connectivity Conference: Global Gateway. EU High Representative for Foreign Affairs and Security Policy and Vice President of the European Commission, Josep Borrell, the President of the European Bank for Reconstruction and Development (EBRD), Odile Renaud-Basso, and the Vice President of the European Investment Bank, Teresa Czerwińska, attended the conference.
The conference’s purpose was to develop an intra-, and inter-regional dialogue to achieve sustainable connectivity under the European Global Gateway strategy, launched on December 1st, 2021, and present Team Europe cooperation initiatives in Central Asia.
The event also included separate panel sessions on three topics of the conference agenda. As part of the business forum held on the sidelines of the Samarkand conference, the representatives of the European Bank for Reconstruction and Development and the European Investment Bank confirmed their further interest in financing projects in the Central Asian countries in such sectors as green energy, transport and logistics, digitalisation, ecology, and security environment.
Josep Borrell announced two initiatives mainly focused on supporting the ecological transition and the digital connection. For the first case, the EU and Central Asia should focus on developing an integrated regional electricity market, managing transboundary water resources, and promoting climate change issues in the regional policy dialogue on water, energy, and the environment.
The EU-funded technical assistance will help the countries of Central Asia to manage and allocate their limited water and energy resources sustainably and equitably while balancing upstream hydropower production needs with downstream water needs for agricultural production.
Regarding digital connection, World Bank studies show that a 10% increase in broadband penetration adds about 1% to economic growth in Central Asia, and a 1% increase in Internet access corresponds to a 4.3% growth in exports. Therefore, the EU will promote reforms in digital governance, including the telecommunications sector, the field of personal data protection, and cyber security and respect for human rights.
This initiative will also be the first concrete implementation of the Digital4Development Hub in the Asia-Pacific region. The EU will finance both technical assistance for governance and investment in infrastructure, with an investment of at least 40 million euros, with additional contributions from member states and international financial institutions.
Geopolitical Analysis
Central Asia has a strategic value due to its geographical location in the Eurasian geopolitical chessboard, which makes the region a ‘bridge’ between Europe and Asia. Since the collapse of the Soviet Union, Russia and the West has competed to include the region in their area of influence.
Moscow has a privileged relationship with Central Asian republics thanks to the recent historical past. Indeed, the Kremlin considers Central Asia as part of its blizhnee zarubezhe (near abroad) and lebensraum (vital space), where the Russian Federation has attempted to extend its political, economic, and military ties through the Eurasian Economic Union (EAEU) and the Collective Security Treaty Organisation (CSTO).
In October 2022, Astana hosted the first “Central Asia – Russia” summit, where the participants agreed to intensify and deepen economic contacts between their countries and emphasised the importance of cooperation on a mutually beneficial basis. The event highlighted Russia’s interests in assuring its leadership in Central Asia and exploiting the region as a geopolitical leverage in the confrontation with the West.
Since the Belt and Road Initiative (BRI) launch, China has raised its role in Central Asia by investing huge financial funds into local markets and infrastructural projects. Therefore, Central Asian republics have developed a substantial economic dependence on China since Beijing owes a significant share of regional republics’ GDP and external debt. For instance, Tajikistan has a debt of 81,2 billion dollars to China (17% of GDP and 40% of external debt), while Kyrgyzstan’s debt to Beijing amounts to 82,2 billion dollars (20% of GDP and 45% of external debt).
With the desire to diversify its import-export partners and contrast the Western sanctions’ impact on the national economy, Iran has looked at Central Asia. Indeed, over the years, the Islamic Republic of Iran has consolidated its relations with the countries of Central Asia, exploiting either the Persian common ethnic-cultural element or proposing itself as a logistic hub for the energy sector and trade corridors.
For central Asian republics, Iran offers many valuable assets such as corridors and energy transport infrastructures. Furthermore, Tehran might supply technology and establish trade exchanges. The country has relaunched itself as a primary Eurasian energy hub, connecting, among others, its electricity grids with those of many regional entities. In addition, the Islamic Republic of Iran has entered the main regional economic corridors: the International North-South Transit Corridor (INSTC) and the BRI. In this context, Iranian ports have an essential role.
Even though in the past NATO closed its office in Central Asia and currently Washington seems more interested in the Asia-Pacific, the United States has never abandoned the idea of exploiting soft power to enhance its presence in the region and contrast Russia, China, and Iran.
Certainly, Washington has promoted a strategy based on improving economic relations with local Central Asian governments and assisting them in stabilising their country through military support and equipment, especially after the U.S. troops’ withdrawal from Afghanistan allowed the Taliban to take power in Kabul.
Considering the consequences that the Ukraine conflict and Western sanctions have caused in the energy and transport markets, whose repercussions have also hit the EU, Brussels cannot lose ground in Central Asia due to the regional interconnectivity’s role. The EU-Central Asia Connectivity Conference demonstrated Brussels’ strategy in the region, whose primary purpose is to create a free, modern, and open market where European countries and enterprises might invest and do business.
On the other hand, the EU should not only pay attention to interconnectivity, ecological transition and digitalisation in Central Asia, but Brussels should also consider security threats coming from neighbouring Afghanistan, where the Islamic State Vilayat Khorasan (ISKP) and other terrorist groups have based their training camps and conducted several violent attacks.
In this context, contrasting terrorist activities and jihadist propaganda and supporting local government in improving their democratic values and the political system might be essential to guarantee regional security and avoid local crises as happened in Kazakhstan, Gorno-Badakhshan, and Karakalpakstan in 2022.