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Eurasianet

Eurasianet

Eurasianet is an independent news organization that covers news from and about the South Caucasus and Central Asia, providing on-the-ground reporting and critical perspectives on…

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U.S. Launches Economic Initiative to Boost Trade in Central Asia

  • The B5+1 initiative marks a shift from promoting rule of law to boosting economic ties in Central Asia, emphasizing private sector-led growth and regional cooperation.
  • The inaugural forum in Almaty gathered Central Asian government officials and business leaders to discuss economic integration, innovation, foreign investment, and trade.
  • Challenges include overcoming the region's authoritarian political traditions and lack of cooperation, but the initiative has generated interest among Central Asian governments and the private sector, suggesting potential for meaningful economic reform and regional unity.
Central Asia

With Russia embroiled in Ukraine, and China’s economy cooling, the United States is pressing ahead with an initiative to bolster its influence in Central Asia. The catalyst is an economic mechanism fostering connectivity among states in the region and encouraging stronger public-private connections to enhance trade.

This new-look American initiative, with its clear emphasis on commerce, marks a departure from past US efforts to promote rule of law in the region. It embraces bottom-up tactics, rather than top-down methods that were the hallmark of US diplomacy in the region following the collapse of the Soviet Union in 1991.

Success of what is being called the B5+1 process is far from a sure thing. The new-look vision rests on the ability of US diplomacy to encourage local entrepreneurs and corporate leaders to work more effectively and efficiently with governmental officials in forging well-regulated economic systems. The private sector is expected to drive the process. Success is also contingent on a greater level of cooperation among the five Central States to break down trade barriers. The initiative applies a formula that has worked in the past, in which widening economic opportunity spreads prosperity that, in turn, fosters buy-in for a law-governed economic system. If the B5+1 process shows results, the expectation is that broader US investment will follow.

The inaugural B5+1 forum bringing together Central Asian government officials and regional business leaders convened under US auspices on March 14 in Almaty, Kazakhstan. The desired outcome of the two-day gathering is for regional governmental officials, business leaders and entrepreneurs “to commit to working towards a common agenda focused on strengthening economic integration and resilience, and promoting better access to innovation, foreign investment, and international trade flows,” according to a statement issued by B5+1 conference organizers. 

Describing the B5+1’s goals as ambitious, but achievable, US Ambassador to Kazakhstan Daniel Rosenblum, in remarks at the pre-forum reception, described the Almaty gathering as the start of a “long-term [US] commitment” to create a “more favorable business environment” in Central Asia. 

Opening the event, Nicholas Berliner, a special assistant to President Biden and senior director for Russia and Central Asia on the National Security Council, called attention to the geopolitical upheaval that has hit the region in the wake of Russia’s unprovoked attack on Ukraine in 2022, adding that “with changes come opportunities.” 

The United States wants to be “a constructive partner” in empowering citizens “to shape their own futures,” Berliner said. 

Event organizers and US diplomats say they are clear-eyed about the obstacles standing in the way of the B5+1 process. Central Asia has a strong authoritarian political tradition that would seem to limit the private sector’s ability to lobby for changes enabling a more predictable, level and efficient operating environment. Likewise, the Central Asian governments lack a strong tradition of cooperation on political and economic matters. Russia and China are unlikely to be bystanders.

Speaker after speaker at the forum delivered a similar message: regional unity, combined with strong private-sector input into policymaking, can break the region’s comparative trade isolation, secure sovereignty and make it an attractive investment destination. 

Russia’s belligerent behavior and wariness about China’s growing economic influence appear to be rendering Central Asian leaders more amenable to the B5+1 agenda. The fact that strong governmental delegations from all the Central Asian states, including Turkmenistan, attended the forum suggests that regional governments are at least intrigued by the B5+1 concept. Likewise, global warming is providing powerful impetus for closer regional cooperation on several issues, especially water resource management.

Kyrgyz Deputy Economics Minister Ainura Usenbekova expressed hope that B5+1 meetings will become an annual “tradition,” going on to announce Bishkek is ready to host a gathering next year.

The B5+1 process is an outgrowth of a US-Central Asian cooperation platform, known as the C5+1. It likewise builds on a meeting held in September 2023 inNew York involving President Biden and the presidents of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. 

In preparing the ground for the Almaty forum, the main conference organizer, the Center for Private International Enterprise (CIPE), an affiliate of the US Chamber of Commerce, sought input from hundreds of regional experts, entrepreneurs and business organization representatives. Working groups drew up reform proposals covering various economic sectors, including transport, e-commerce, tourism, green energy and agribusiness. 

Many of the private-sector suggestions aired on the forum’s first day focused on the need for stronger inter-governmental cooperation to forge clear-cut rules covering cross-border trade, as well as simplified customs regimes. Muktar Djumaliev, a former Kyrgyz envoy to the United States who headed the transport-sector working group, highlighted a need for a regional mechanism to resolve trade disputes and a need for greater digitization of customs procedures. He also said Turkmenistan needed to remove visa requirements for citizens of other Central Asian states.

At this stage, the extent to which regional governments are receptive to private-sector reform ideas remains to be seen. The comments offered up by governmental speakers at the forum tended to emphasize general principles about connectivity and were short on specifics about getting a public-private dialogue started. However, Turkmenistan’s economics minister, Serdar Jorayev, surprised many in the room, making a speech that focused on the Turkmen government’s efforts to facilitate public-private economic initiatives. Turkmenistan is routinely ranked by rights watchdog groups as having one of the most repressive governments in the world.

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Noticeably absent from the first day of discussion was detailed talk about how to tackle the region’s shadow economy. Proponents of the B5+1 process quietly suggest that strong regional trade mechanisms need to be in place before the shadow economy can be brought out into the open. 

B5+1’s immediate aim, according to Eric Hontz, director of CIPE’s Center for Accountable Investments, is to identify “concrete, achievable, short-term wins” to keep the process’ momentum going.

By Eurasianet.org

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  • DoRight Deikins on March 16 2024 said:
    Sounds like they're barking up the wrong tree, but at least it seems they may have entered the right field.

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