20.04.2020-26.04.2020 • No: 256

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RECENT DEVELOPMENTS IN EXPORTS OF CENTRAL ASIAN COUNTRIES TO CHINA China, which has invested billions of dol- with a 14.7% increase in 2018 and $2.519 2019. As it is known, Kazakhstan and lars and provided loans to Central Asia, billion with an 8.4% increase in 2019. Turkmenistan constitute the largest part continues to be one of the most important We can see a similar situation in the trade of the total trade volume between Central trading partners of the countries in the re- of Kyrgyzstan and Tajikistan with China. Asia and China. It can be observed that gion. According to the 2019 data, China Although exports of Kyrgyzstan and Ta- the exports of both countries to China in- is the top trading partner for Kyrgyzstan, jikistan to China are very low compared creased significantly in the reported pe- Uzbekistan, and Turkmenistan, the sec- to their imports, there has been a general riod. In 2017, the bilateral trade volume ond largest for Kazakhstan, and the third increase in the exports of both countries between Kazakhstan and China increased largest for Tajikistan. to China in recent years. For example, the by 37% to $17.943 billion compared to Kyrgyzstan-China bilateral trade volume the previous year. Then it rose by 10.7% As it is known, the trade volume between equaled $5.424 billion in 2017, which is a to $19.857 billion in 2018 and by 10.7% the Central Asian countries and China 4% drop compared to the previous year, to $21.991 billion in 2019. In particular, showed a general downward trend in and then increased by 3.3% to $5.601 bil- Kazakhstan’s exports to China increased 2014-2016 and began to grow again in lion in 2018 and by 13.3% to $6.346 bil- by 32.8% to $6.379 billion, by 33.7% to 2017. For instance, the total Central Asia- lion in 2019. Meanwhile, Kyrgyzstan’s $8.530 billion and by 8.6% to $9.262 bil- China trade volume increased by 18.7% exports to China increased by 22.2% to lion, respectively. In 2017, the Turkmen- to $36.412 billion in 2017 compared to $87.055 million in 2017. However, it de- istan-China bilateral trade volume the previous year. Then it boosted by clined by 37.6% to $54.359 million in amounted to $6.943 billion, an increase of 14.4% to $41.663 billion in 2018 and by 2018 and gained an upward momentum 17.6% compared to the previous year, 12.2% to $46.749 billion in 2019. If we again in 2019 with $66.009 million, an in- while in 2018, it increased by 21.5% to look at the Central Asian-Chinese trade crease of 21.4%. The Tajikistan-China bi- $8.436 billion and by 8.1% to $9.117 bil- data in 2017-2019, we can see a signifi- lateral trade volume, which fell by 23.2% lion in 2019. On the other hand, Turkmen- cant increase especially in Central Asia’s to $1.348 billion in 2017, reached $1.503 istan’s exports to China increased by exports to China. For example, in 2017, billion with an 11.5% increase in 2018 18.2% to $6.575 billion, by 23.5% to the total exports of the Central Asian and then $1.674 billion with an 11.4% in- $8.119 billion and by 7% to $8.686 bil- countries to China amounted to $15.114 crease in 2019. Accordingly, Tajikistan’s lion, respectively. billion, which is a 21.2% increase com- exports to China increased by 49.5% to Furthermore, the United States-China pared to the previous year. This figure $46.737 million, by 64.3% to $76.804 trade war, which escalated in March then grew by 26.4% to $19.104 billion in million, and by 10.2% to $84.620 million, 2018, provided additional opportunities 2018 and by 7.9% to $20.618 billion in respectively. for the Central Asian countries to increase 2019. It can be stated that the increasing When evaluated in terms of external rea- their exports to China. In particular, trend in the total exports of the Central sons, the increase in the Central Asian China’s additional tariffs of 5% and 25% Asian countries to China has the internal countries’ exports to China in 2017-2019 on many U.S. agricultural products turned and external factors behind these figures. was due to the positive developments in the attention of Chinese importers to Cen- First of all, the concrete steps taken by the the global energy market in recent years. tral Asia. Therefore, there has been signif- Central Asian countries in the past few The fact that global oil prices started to icant growth in the export of agricultural years to diversify their economies, im- increase again in 2017 allowed the Cen- products of the Central Asian countries to prove their foreign trade structures and in- tral Asian countries to recover their econ- China in the last two years. For example, crease their exports have had a positive omies that depend on energy exports. in 2018, Uzbekistan’s exports to China of impact on their exports. Uzbekistan is the From this point of view, we can see that fruits and vegetables alone increased by best example of such a positive develop- energy exports of the Central Asian coun- 1.66 times to $46.2 million. In 2018, Kyr- ment in Central Asia. The economic lib- tries to China increased significantly in gyzstan’s exports of agricultural products eralization efforts following the change of 2017-2019. For example, from 2010- to China amounted to $13.15 million. In power in September 2016, together with 2016 through Kazakhstan-China Oil the same year, Kazakhstan’s exports of the improved investment and foreign Pipeline 10 million tons of oil annually agricultural products to China increased trade conditions, as well as the liberaliza- transferred to China, whereas in 2017 by 37.7% to $280 million compared to 12.277 million tons and in 2018 13 mil- 2017 and continued its rise by 38.6% to tion of monetary policies contributed sig- lion tons of oil were shipped to China, $388 million in 2019. nificantly to the development of the na- while in the first half of the 2019 5.59 mil- In summary, the increasing trend in the tional economy and the increase in for- lion tons of oil were transported through exports of the Central Asian countries to eign trade. These developments have led the same line. Moreover, the amount of China in 2017-2019 is very significant for to an increase in trade relations with gas transferred to China through the Cen- the countries in the region. In general, we China, one of the most important trade tral Asia-China Gas Pipeline increased by can say that the emphasis placed by the partners of Uzbekistan. The Uzbekistan- 13.37% to 38.738 billion cubic meters in countries of the region on the economic China bilateral trade volume, which 2017, and it grew further by 22.6% to diversification and expansion of their ex- amounted to $4.754 billion with an 11.8% 47.493 billion cubic meters in 2018 and ports along with the global economic de- increase in 2017 compared to the previous by 1% to 47.9 billion cubic meters in velopments have led to an increase in the year, reached $6.266 billion with a 31.8% 2019. Given that energy products make exports of the Central Asian states to increase in 2018 and $7.621 billion with a up the bulk of Central Asia’s exports to China. Moreover, the gradual develop- 21.6% increase in 2019. In 2017, Uzbek- China, it should not be overlooked that ment of cooperation in transportation be- istan’s exports to China increased by Kazakhstan and Turkmenistan played an tween China and the Central Asian coun- 13.5% to $2.026 billion compared to the important role in increasing the exports of tries in recent years has also contributed previous year, reaching $2.324 billion Central Asia to China between 2017- to the increase of their exports to China.

Written by Omirbek Hanayi, Eurasian Research Institute, Kazakhstan

Politics, Foreign Affairs, and Security Economy, Finance, and Energy Society and Culture • The foreign ministers of the guarantor • The COVID-19 pandemic has nega- • The International Turkic Academy offi- states of the Astana Process, Iran, Rus- tively affected migrant remittances, cially announced the opening of the sia and Turkey, held their seventh meet- which are vital for many low-income “Year of Tonyukuk” dedicated to the ing via teleconference. The parties dis- countries. According to the latest fore- 1300th anniversary of Bilge Tonyukuk’s cussed recent developments in Syria, in- cast by the World Bank, remittances are monument. On this occasion, the acad- cluding ongoing political processes, the expected to drop by 20% in 2020 and emy held an international videoconfer- return of refugees, and the situation in this would be the largest single-year de- ence on “Civilization of the Great Idlib and east of Euphrates. The minis- cline in the past century. The Central Steppe: Tonyukuk’s Legacy and Mod- ters agreed that international organiza- Asian countries are predicted to experi- ern Turkic World”. Conference organiz- tions should step up the provision of hu- ence the most negative impact due to the ers presented a publication, which con- manitarian assistance to the Syrian ci- combined effect of coronavirus and the tains the translations of the monument’s vilian population, especially in the con- falling oil price, which affected major text in 12 languages (TWESCO, text of the fight against the COVID-19 destination countries for migrant work- 24.04.2020). outbreak (MFA of Turkey; MFA of ers such as Russia (Quartz, 22.04.2020). • The seventh meeting of the Steering Russia, 22.04.2020). Committee of the EU project “Assis- • According to forecasts of possible sce- tance to the Education System in Turk- • Upon Turkey’s initiative, the Executive narios for the development of Kazakh- menistan” was held in the online mode Committee of the Organization of Is- stan’s economy after the coronavirus at the National Institute of Education in lamic Cooperation (OIC) held an ex- crisis, some oil projects in Kazakhstan Ashgabat. The project aims to assist the traordinary foreign ministerial meeting may be temporarily suspended, while Turkmen government in creating a via teleconference to discuss the impli- the mining of gold, precious metals and modern education system in accordance cations of coronavirus on the health sec- uranium will continue. At the same with international standards and labor tor and financial stability in the OIC time, the situation may provide oppor- market needs. The project has two com- member states. The parties agreed to en- tunities for small and medium-sized en- ponents: 1) strategic planning – institu- hance their cooperation in stemming the terprises if they launch domestic pro- tional capacity management; and 2) the spread of the virus and underlined the duction of consumer goods, promote lo- development of general secondary and importance of scaling up national re- cal tourism and develop agricultural vocational education programs (Turk- sponse measures (MFA of Turkey; OIC, business (Kazakh TV, 23.04.2020). menportal, 23.04.2020). 22.04.2020). • To help Uzbekistan support its economy • The Astana Opera Theater in Nur-Sul- • Secretary General of the Turkic Council during the coronavirus pandemic, the tan launched an online project dedicated Baghdad Amreyev participated in a vid- European Bank for Reconstruction and to the 175th anniversary of great Kazakh eoconference meeting with the ambas- Development (EBRD) will provide fi- poet Abay Kunanbayev. The project is sadors of the member countries and nancial assistance of $150 million to named after one of the poet’s most pop- Turkmenistan to the United States. The Uzbek banks. The funds will be made ular songs – “Bright moon on a quiet Secretary General informed the ambas- available under the EBRD’s Trade Fa- night”. Under the project, well-known sadors on current priorities of the organ- cilitation Program to three financial in- artists of the theater and musicians of its ization and the outcomes of the Turkic stitutions – Asaka Bank, Ipoteka Bank, symphony orchestra performed the Council’s extraordinary summit. The and UzPromstroybank. The assistance works of Abay in self-isolation (Sput- parties exchanged views on the efforts package will help Uzbek exporters and nik, 21.04.2020). to mitigate the negative impact of the importers mitigate coronavirus-related • The U.S. government committed, coronavirus pandemic on socio-eco- trade and supply chain disruptions (The through the U.S. Agency for Interna- nomic development of their countries Asset, 22.04.2020). tional Development (USAID), an addi- (Turkic Council, 24.04.2020). • Officials from Turkmenistan’s Ministry tional 348 million tenge ($800,000) to • Turkmenistan and Afghanistan held po- of Foreign Affairs and State Customs mitigate the spread of the COVID-19 litical consultations at the level of for- Service held a meeting via videoconfer- outbreak in Kazakhstan. With this addi- eign ministers via videoconference. The ence with representatives of the UN tional commitment, the United States parties exchanged views on regional Conference on Trade and Development provided a total of 713 million tenge and international issues, focusing on the (UNCTAD). The parties focused on the (more than $1.6 million) to help Ka- importance of interaction and mutual main vectors of cooperation between zakhstan respond to the pandemic. assistance. The ministers also discussed Turkmenistan and UNCTAD, including Technical specialists from the U.S. Cen- ways to intensify the implementation of the implementation of joint projects un- ter for Disease Control and USAID con- the agreements in the field of transport, der Turkmenistan’s Concept for the De- tinue to share expertise with Kazakh- construction, and energy, in particular velopment of the Digital Economy such stani experts to combat the disease (U.S. the TAPI gas pipeline and TAP power as the introduction of the single window Embassy in Kazakhstan, 22.04.2020). line projects (MFA of Turkmenistan, system for exporters and importers • A new hospital complex partially 22.04.2020). (MFA of Turkmenistan, 22.04.2020). opened in Istanbul’s Basaksehir district to receive patients with COVID-19. The • The foreign ministers of Armenia and • To protect the economy from the risk of medical facility is expected to be the Azerbaijan held consultations via vide- recession resulting from the coronavirus largest in Europe in terms of the capac- oconference, joined by the co-chairs of pandemic, Ukraine’s Central Bank cut ity of intensive care units. When com- the Minsk Group. The ministers dis- its main interest rate for the seventh pleted, the complex will host a general cussed the impact of the global health time in a row – from 10% to 8%. The hospital, a cardiovascular disease hospi- crisis on the region, including the post- bank estimates that the current lock- tal, an orthopedics and neurology hospi- ponement of previously agreed human- down will cause the economy to con- tal, a children’s hospital, a maternity itarian measures. They also considered tract by 5% in 2020, the first such drop hospital, an oncology hospital, a psychi- next steps in the Nagorno-Karabakh set- since 2015. At the same time, the bank atry hospital and a physical medicine tlement process in line with their joint expects the economic growth to revive and rehabilitation hospital (Daily Sa- statement issued in Geneva in January to 4% in 2021 (Reuters, 23.04.2020). bah, 20.04.2020). 2020 (OSCE, 21.04.2020). • President of Belarus Alexander • According to the 2020 World Press • As stated by Russian Foreign Minister Lukashenko met with government offi- Freedom Index published by the Re- Sergey Lavrov during a video confer- cials to discuss priority measures to en- porters Without Borders, Kyrgyzstan ence with members of the Alexander sure the sustainable operation of the took the lead among the Central Asian Gorchakov Public Diplomacy Fund, economy and the social sector amid the states, ranking 82nd among 180 coun- Moscow is ready to discuss the restora- global epidemiological crisis. Accord- tries. Uzbekistan and Kazakhstan are tion of diplomatic relations with Geor- ing to Lukashenko, the decision by Bel- placed next to each other on the 156th gia since Russia “did not initiate the sus- arus not to stop the work of key and 157th positions, respectively. In the pension of the relations”. According to branches of its economy was justified: same list Tajikistan become 161st Lavrov, the Russian government can while the country’s GDP decreased by whereas Turkmenistan with 179th rank- discuss the opening of a trade represen- 0.3% in the first quarter of 2020, real in- ing listed among the countries that are tation in Georgia if Tbilisi makes such comes of the population grew by 7.1% positioned at the end of the list (The an offer (Agenda.ge, 21.04.2020). (BelTA, 23.04.2020). Tashkent Times, 21.04.2020).

Prepared by Dauren Aben and Kanat Makhanov