Energy policy, economic cooperation, and sustainable development in Central Asia : the case of Uzbekistan

Abstract

For several decades Central Asia has been secluded from the full-scale contacts with the outside world. At the same, being a part of one of the two global superpowers, namely the USSR, in the past the region was open for substantial intra-Soviet economic relations, mainly as a primary product supplier, such as gold, cotton, precious metals, oil. Central Asia remained further unknown in international relations throughout the 1990s too, as most of the researches on the transformation process were primarily focusing on Russia and the countries of Central and Eastern Europe. Once the political situation in the world began to change in the late 1990s triggered by growing global threats to security in face of religious extremism and fundamentalism, Central Asia was immediately thrust to the forefront of international attention. Moreover, rising oil prices and uncertainties about oil supplies from the Middle East forced to look for additional energy outlets across the globe among which the Caspian and Central Asian region was considered one of the possible alternatives. In the given context, this research deals with a number of issues on the transformation process, sustainable development and regional cooperation in Central Asia. These areas of the research are discussed within the three models of development, i.e. national, regional, and global. Within the new concept on stability and conflict prevention, the author attempted to sort out the economic fundamentals affecting contemporary development of the states in the region. The main focus is made on Uzbekistan which is the most populated country in the region and whose socio-political and economic development has substantial impact on the regional situation. The analysis of the country s progress in domestic economic reforms in the past not only defines some conflict areas of development, but also tries to shape those fields where national strategy is confronted with difficulties on the long and pain-staking way from the plan system towards liberal market economy and democratic society. At the sector-specific level, particular attention is paid to the trends in Uzbekistan s energy sector. Having played an important social and political role in the recent past, this sector continues to be regarded strategic, both in the light of national security and sustainable development, as well as a bridgehead to further industrialization of the country s economy. Simultaneously the work argues that national policy decisions in the energy field go much beyond national borders, and strongly correlated to intra-regional relations, as well as to those heated by geopolitical and geoeconomic considerations of the USA, Russia, Iran, China, the EU, and Turkey. Specifically, while reasons for why regional cooperation in Central Asia remains fragile so far are deeply analized, the choice between various regional development options in the future is also discussed here. Subsequently, the research concludes that Central Asia so far remains mainly as an object of expansion of great geoplotical interests rather than being a sovereign player in international relations. In this regard, sustainable development of the states in the region is expected to depend to a large extent on how the interests of the regional states will be put in line with those of non-regionals. Finally, the research emphasizes that in terms of limited domestic resources, investment and donor activities are desperately needed, both in Uzbekistan and the whole region, to modernize production process, raise efficiency, create jobs and tackle poverty, as well as to facilitate domestic political and socio-economic reforms. Therefore, the countries of the region need a clear-cut investment strategy to face successfully severe competition for investments on the global arena. It is also argued, however, that since foreign investments can hardly resolve all domestic challenges, the main key to sustainable development is hidden in structural and institutional reforms pursued by the regional states themselves.