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taking stock of regional trade as kazakhstan and uzbekistan launch new cross-border hub

Taking Stock of Regional Trade as Kazakhstan and Uzbekistan Launch New Cross-Border Hub

Author:Dante Schulz

Apr 23, 2021

On April 10, Uzbek Prime Minister Abdulla Aripov and Kazakhstani Prime Minister Askar Mamin participated in an inauguration ceremony to celebrate the beginning of construction on a trade and economic-cooperation hub on the border between the two Central Asian countries. The hub is located at the Gishtkoprik-Zhibek Zholy border checkpoint. Officials hope that the new hub will facilitate enhanced bilateral communication and trade. The new hub is projected to cover 400 hectares and process up to 35,000 people and 5,000 trucks from each side to cross the border daily. The new transit hub will serve as a template for other initiatives looking to simplify complex and outdated cross-border mechanisms. Still, with no completion date or project details available it remains to be seen if the facility will be able to address the underlying inefficiencies of cross-border travel in Central Asia.

            Central Asia is emerging as an important transit hub as China seeks to implement its Belt and Road Initiative (BRI) in the region. In 2013, Chinese President Xi Jinping launched the initiative to revive ancient trade routes that connected East Asia, the Middle East, and Europe through Central Asia. However, significant delays at Central Asian border crossings have hampered efforts to successfully institute several initiatives. Furthermore, reports of hundreds of trucks sitting idle at border crossings across Central Asia have frustrated business owners and investors operating in the region. Border delays and the unpredictable nature of customs officials have earned Central Asian countries low scores in the “Trading Across Borders” category of the World Bank’s Doing Business 2020 report. Kyrgyzstan received the highest score, ranking 70th, but with the average ranking of the Europe and Central Asia region standing at 54th, it is evident that Central Asia has fallen behind in advancing its cross-border mechanisms. Central Asian countries have struggled to minimize time required for transport, border compliance, and document compliance. Long wait times, corrupt border officials, and complicated procedures result in extensive delays and annulled contracts. Improving the efficiency of border crossings bolsters regional relationships and eases barriers imposed by businesses operating in multiple regional countries.

            Since they gained independence, the Central Asian republics have struggled with the adverse effects of the way Soviet officials delineated their borders. Even 30 years after independence, the countries are still grappling to resolve complex border disputes while promoting regional development. Not only do historical vestiges play a role, but Central Asian countries themselves often restrict cross-border movement to curtail the inflow of illegal substances, Islamic radicalism, and now, the COVID-19 pandemic. In 2004, Uzbekistan imposed more stringent border controls after citing security concerns with Islamic radicalism. In 2006, further restrictions complicated travel routes between the Uzbek cities of Tashkent to Samarkand by requiring domestic travelers to take a longer route after a shortcut through Kazakhstan was sealed off. In 2016, President Shavkat Mirziyoyev assumed the Uzbek presidency and stressed the importance of improving strained relations with its neighbors. Given Uzbekistan’s position as the only Central Asian republic to border the other four, this shift in policy has been consequential. Recent developments shed some light on possible developments in Central Asia’s cross-border mechanisms.

            China’s growing presence in the region has also fostered interest among Central Asian countries in bolstering the efficiency of their border crossings. In January 2021, Kazakhstan and Uzbekistan unveiled a new tourism corridor to connect major pilgrimage sites in both countries. The plan includes simplifying the requirements for cross-border travel to shorten the time tourists have to spend at the border. Officials have also mulled constructing a new railway line connecting the Kazakhstani city of Turkestan to Tashkent by train to support a larger volume of tourists. The new developments align with recent trends in bilateral trade. Kazakhstan is Uzbekistan’s third largest trade partner,  only falling behind China and Russia. The new trans-border hub will advance bilateral cooperation in the industrial, manufacturing, and agro-industrial sectors as well as promote additional projects to sponsor bilateral relations between the two countries by increasing the capacity at border crossings. Outdated procedures and technology limit the flow of vehicles and people, which disrupt the regional economy.

Efforts to link Central Asia with partners in Europe, Asia, and the Middle East will only be successful if the five Central Asian republics are better linked together. Central Asia does not exist in isolation and should support bilateral and multilateral efforts to improve regional engagement and cooperation. Promoting infrastructure projects will enable countries to construct border crossing hubs with the capacity to withstand larger influxes of vehicles and people daily. In addition, modernizing antiquated procedures at this new border hub will eliminate confusing regulations and facilitate a larger exchange of people and vehicles. The new transit hub on the Kazakhstan-Uzbekistan border could contribute to upgraded bilateral relations but further regulatory advancements are needed to support its economic growth.

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