Policy Papers - Mapping

Policy Paper No. 5 – Economic relations and trade – Mapping Central Asia’s relations with other Asian states

Trade with India, Iran, Japan, South Korea and Turkey hold an underlinable economic relevance for the Central Asian republics. The way in which each of these Asian powers affect their economies, however, varies greatly from one another.

Whereas bilateral trade between the five Central Asian countries and the other aforementioned countries is clearly in favour of the latter ones, the weight of hydrocarbons trade aids at balancing to a certain extent for the benefit of the Central Asian countries.

The trade relationship with Turkey is arguably the most balanced one among all the listed countries, based on the energy and the construction sectors, and it also holds the highest number of labour migrants from Central Asia, although a majority of them illegally. Economic relations with South Korea and Japan are characterised by direct investment from those countries into the region, particularly on aid opportunities. India’s economic ties with the region are mainly based on the gas and oil sector, especially in Kazakhstan, while the trade relations with Iran are strongly constrained by the sanctions on Iran.

Additionally, in 1985 Iran, Turkey and Pakistan founded the Economic Cooperation Organization (ECO), which now includes the whole region and has its headquarters in Tehran. Nonetheless, so far it has done little to be emphasized.

Did you know?

At the end of 2016 a trade dispute arose between Iran and Turkmenistan, after Turkmengaz demanded from the neighbouring country to pay a debt of USD 1.8 billion for the use of Turkmen gas

Currently, about 300,000 Uzbek migrants work in Turkey, most of them illegally

In Tajikistan there are around 900 Indians, of which 700 are medical students.

Japan was the seventh largest donor of official development assistance to Tajikistan (more than 5 % of the total) and the eighth largest donor of official development assistance to Kyrgyzstan (almost 4 % of the total).

South Korea is working with Kazakhstan to build green growth and energy. In 2011, the two countries held a cooperation seminar between the Seoul Initiative on Green Growth and the Astana Green Bridge Initiative.