The EU and Central Asia: From Vision to Implementation

An often overlooked region in world affairs, Central Asia is gradually become more important for the EU. While the EU has engaged with the Central Asian region since the years of independence, it has only in recent times gradually increased its presence in the region, widening areas of dialogue and cooperation.

A first EU strategy for the region was adopted in 2007, which after 12 years was updated this year, and will guide development cooperation programming in the region under the new Multiannual Financial Framework 2021-2027.

The new EU strategy takes better into account the new regional dynamic and reflects the new realities on the ground, as well as the evolving needs for the Central Asian countries. It is more focused and results-oriented than its predecessor, responding to the needs of all sectors of society. In short, the EU positions itself as a reliable partner in the transformation of the region, having a strong interest in seeing Central Asia develop as a stable, rules-based and connected area rather than one of competition and rivalry. The new strategy hence aims to forge a “stronger, modern and non-exclusive partnership with Central Asia”.

The new Strategy rests on three pillars:

  • Partering for Resilience: the EU will partner Central Asia in addressing their socio-economic challenges and enhancing their ability to reform and modernise.
  • Partnering for Prosperity: the EU will assist countries in unlocking their growth potential, and an enabling environment for the flourishing of the private sector; unlocking barriers and constraints to intra-regional trade and investment and promote sustainable connectivity.
  • Working Better Together: The EU will work together with the countries of Central Asia to strengthen the architecture of the partnership, intensifying political dialogue and opening up space for civil society participation.

All these pillars constitute solid building blocks towards achieving the 2030 Sustainable Development Goals.

It is hoped that the new EU Strategy will likewise be accompanied by a proportional increase in funding. For the period 2014-2020, development assistance to the region was worth EUR 1.1 billion, 62% up from the previous programming period. Funding is likely to grow again in 2021-2027, if the European Commission’s proposal to raise total funding for its external action across the globe by 30% is approved.

At the same time, Central Asian countries are equally committed to upgrading relations with the EU. Currently, there is an ongoing process of upgrading existing Partnership and Cooperation Agreements (PCAs) to next-generation Enhanced Partnership and Cooperation Agreements (EPCAs) — finalised with Kazakhstan and under negotiation with Kyrgyzstan and Uzbekistan. In addition, in July this year the EU announced the opening of a fully-fledged delegation in Turkmenistan, the only country in Central Asia which did not have one thus far.

Furthermore, the EU is supporting Central Asian efforts to be integrated into the global economy through accession to the World Trade Organisation (WTO). EU expertise helped Tajikistan and Kazakhstan to become WTO members in 2013 and 2015 respectively, and this year a project was launched by the European Commission, in cooperation with the International Trade Centre, to help the Uzbek accession process. Accession to WTO enables structural economic transformation transition to free market structures and a liberal trade regime compliant with international standards.

The strategy builds on the positive economic and political developments of the region in the recent past. Central Asian economies are slowly integrating into the global economy, trade and investment flows and global value and supply chains through the modernisation, diversification and liberalisation of their economies.

Uzbekistan, in particular, has surprised many pundits by the speed and scope of the large-scale domestic economic reforms and opening-up that it has carried out under President Shavkat Mirziyoyev, who came to power in December 2016 after the passing of Islam Karimov. More conciliatory foreign policy approaches have eased regional tensions and opened the door to cooperation between formerly hostile neighbours. At the same time, Central Asian countries are becoming more interested in engaging with Afghanistan.

The Strategy will also help tackle the region’s challenges in the years to come.

Central Asia’s population will increase over the next decade — this puts pressure on countries to widen employment opportunities and the need to provide the growing population with quality social services, notably health and education. Central Asia has a predominantly young population of around 70 million (half of which are under 30) which is expected to grow to 95 million by 2050.

In addition to its landlocked geographical position, the regional economy and trade structure present a series of structural shortcomings: over-dependent on commodities (energy, minerals) and labour remittances. There is a strong need for the countries of the region to focus on economic diversification strategies and to introduce more sustainable economic development models, including through reducing dependence on commodity revenues and privatisation of major state owned enterprises.

Strengthening the private sector is critical in the context of the structural transformation process that countries in the region are undergoing. It is also important for promoting economic diversification and moving from traditional sectors (such as natural resources) into more sophisticated production activities (high value-added manufacturing and services). Furthermore it is critical to have a robust private sector in order to contribute to the creation of new jobs per year for the young growing population and returning migrants.

The region is highly vulnerable to the effects of climate change and the depletion of freshwater resources. Increases in average annual temperature of about 2 degrees Celsius across the region by 2050 are likely. Climate change may reduce production of food reduction of agricultural productivity. Furthermore, temperature rises are shrinking at a fast speed the glaciers in the mountains of Kyrgyzstan and Tajikistan that feed Central Asia’s main rivers (Amu Darya and Syr Darya). According to a World Bank forecast, total crop yields in Central Asia are expected to decrease by 30 percent by 2050 due to changing climate patterns.

Hence, the EU will pay particular attention to support the transition of countries towards green and climate-resilient economies, less reliant upon hydrocarbons and more on renewable sources of energy with which the region is richly endowed (hydropower, solar and wind). More efficient energy use is essential for mitigating climate change.

The countries of Central Asia are developing national strategies to transition to low-emission and climate-resilient economies (Kazakhstan, for example, aims to produce half of the total electricity through renewable sources by 2050 — up from just under 1 percent in 2013). Furthermore, the EU has made water and the improvement of water efficiency one of the main priorities of its development aid for the region. Because water has always been a contentious issue in Central Asia — due to the transboundary nature of such challenges — more unity in the region is needed to be able to respond to them effectively.

Lastly, let us not forget the role of cultural diplomacy and the increased participation of Central Asian countries in EU education programmes like Erasmus+ which can also play an important role in furthering EU objectives in the region.

In conclusion, the region of Central Asia lies at a critical juncture. Expectations are high, and the momentum of reforms and opening-up needs to be kept. For the EU, now is the time to move from vision to implementation.

Alberto Turkstra