A discussion hosted by the Central Asia Caucasus Institute (CACI) at SAIS on Tuesday, January 8, 2008, in Rome Auditorium.

Audio of the event is available by clicking this link.

The event featured Mr. Johannes F. Linn, Senior Fellow and Executive Director at the Wolfensohn Center for Development, The Brookings Institution and Special Advisor to CAREC.

Mr. Grant Smith, Former Ambassador to Tajikistan and nonresident senior fellow at the Central Asia-Caucasus Institute introduced Mr. Linn to the audience.

In his presentation Mr. Linn gave a broad overview of the context of Eurasian integration and Central Asia cooperation as well as the Central Asia Regional Cooperation Program’s (CAREC) role in the process.  Defining the region in broad terms, he asserted that Central Asia is situated in the heart of one of the most dynamic regions in the world, surrounded by a ring of quickly developing economies, and is quickly becoming an important arena for Eurasian economic integration.  As he sees it, CAREC is ideally positioned to assist in the integration process despite certain challenges.

Mr. Linn’s main assertion was that there is no better time than the present for Central Asia to play a role in Eurasian economic integration.  Influential evidence of this is the transition in thinking about Central Asia and Eurasian integration that has occurred since the 1990s.  Central Asia’s landlocked location was previously viewed as a liability.  However, with increasing trade across Eurasia the region is increasingly viewing its geographical location as an asset instead liability, the regions location is increasingly being seen as an asset instead of a burden.  Indeed, Central Asia is poised to integrate the economies of its various neighbors from Europe to China, and Russia to South Asia.

In order to achieve regional integration Central Asia is faced with attaining a number of benchmarks to assure success.  Most important among these requirements, according to Mr. Linn, is stability.  Additionally, increased cooperation within the Central Asian republics is essential and is in the best interests of all parties involved.  Cooperation will also be facilitated by regionally coordinated policies, investments, and institution building.

The key for promoting a stable and prosperous Central Asia and the goal of regional cooperation is the facilitation of trade.  In his presentation Mr. Linn provided numerous examples of the benefits of improved trade routes and reasons for cooperation.  Reduced transportation costs and balancing of the electricity market within the region were chief among the reasons.  The local population is also in favor of opening borders to trade as shown in his slide of a bridge that was re-opened by the local population on the border between Uzbekistan and the Kyrgyz Republic.

The second half of the presentation was devoted to explaining the history and mission of the Central Asian Regional Cooperation Program (CAREC).  According to Mr. Linn, CAREC was initiated in 1997 by the Central Asian countries with the support of the Asian Development Bank.  The current member countries include Afghanistan, Azerbaijan, Kyrgyz Republic, Mongolia, Tajikistan, Peoples’ Republic of China, Kazakhstan and Uzbekistan.

Two countries, Turkmenistan and Russia, have been invited to join CAREC but have not yet joined.  Mr. Linn noted that Turkmenistan has been showing positive interest in CAREC membership after recent political developments within the country and predicted that the country has a good chance for membership.  Russia, on the other hand, has not shown an active interest in membership.  For Mr. Linn, Russia’s attitude toward CAREC remains an unanswered question.  Yet he expressed hope that a new Russian president after the upcoming elections will lead to more Russian cooperation.

Mr. Linn then went on to explain that CAREC’s main goal is development through cooperation, leading to accelerated economic growth and poverty reduction in Central Asia.  The organization uses four main pillars of engagement which include knowledge/capacity building, infrastructure networks, trade and business promotion and regional public goods.  Through these pillars of engagement CAREC has seen some moderate success, especially in the areas of transportation, energy and trade facilitation.

Of all the areas in which CAREC is currently engaged, the integrated transport and trade facilitation strategy is the most advanced and making the most difference in the lives of Central Asians.  According to Mr. Linn, the key element in developing this strategy is to focus on six different transport and trade corridors.  This strategy seeks to encourage the free movement of goods and business people as well as enhance the transparency of laws, regulations and procedures.

A major obstacle, as was pointed out during the discussion, is the inherent difficulty in streamlining movement of goods and business people as well as enhancing the transparency of laws and regulations in Central Asia.  Cultural and historical realities make such a process difficult and leave travel in the region cumbersome.  However, by focusing on the six transport corridors instead of all transportation problems in the region Mr. Linn believes it is possible to take small steps toward achieving the overall goals of enhanced movement of goods and people.  The key to the plan is to incrementally institute a verification process to ensure that improvements are carried out equally along each corridor.

Perhaps the most important aspect of liberalizing the transport corridors is the fact that Uzbekistan has so far supported the initiative.  As one of the most important countries in the region and one that is not likely to support the opening of all its borders the six corridor plan allows Uzbekistan to improve its border crossing regulations only at the specified corridors and more importantly, allows Uzbekistan to make improvements on its own terms instead of being coerced by outside forces.

In conclusion Mr. Linn highlighted some of CAREC’s strengths and challenges for achieving regional integration.  Key among the strengths is a clear focus on key areas such as transport, trade and energy.  CAREC also enjoys a track record of interest and engagement from member countries and has a clear action plan for its key sector strategies.

Despite its strengths CAREC faces a number of challenges in its goal of regional integration.  Chief among these is a lack of organizational capacity within member countries and within CAREC itself.  Low visibility and a lack of high level political support are hampering its work.  One of the reasons for the low level of political support is the low level of its operation.  That is to say, other regional organizations operate at the summit level while CAREC operates at the ministerial level, generating a low level of political attention.

The Central Asia-Caucasus Institute was founded in 1996 and has grown to be the primary institution in the Washington area for the study of the Caucasus, Central Asia and the Caspian Region. The Institute forms part of a Joint Center with the Silk Road Studies Program at the Institute for Security and Development, Stockholm. The Institute sponsors impartial research on the region, acts as a forum for policymakers both in Washington and abroad, shares information concerning the region and provides access for its sponsors in business to relevant expertise on the region. Additional information about the Institute is available at www.silkroadstudies.org.