November 19, 2013 6:57 pm JST

Russia, China, Turkey vie for clout in booming central Asia

Turkmenistan has the world's fourth-largest amount of proven natural gas deposits.

TOKYO (Nikkei) -- Abundant natural resources are transforming five former Soviet republics in Central Asia into a thriving new economic bloc. Russia has long held sway in the region, but Turkey and China have moved in to create a three-way race to tap the booming infrastructure investment and consumer spending there. 

     In dealing with the countries -- Kazakhstan, Uzbekistan, Turkmenistan, Tajikistan and Kyrgyzstan -- Russia is playing up the security benefits it can provide, while China's is touting its deep pockets andTurkey is trying to leverage its strong ethnic tries.

Speaking their language

"I am extremely satisfied with the project that Polimeks is undertaking," Gurbanguly Berdimuhamedow, the president of Turkmenistan, reportedly told Turkish Prime Minister Recep Tayyip Erdogan during the latter's visit to the Central Asian state in August.

     Polimeks, a construction company, is one of the many Turkish companies that have significantly increased their presence in Central Asia recently. Last May it completed the construction of the world's largest indoor Ferris wheel, as certified by the Guinness World Records, in the Turkmen capital of Ashgabat. In January, the company won a roughly 2.3 billion dollar contract to build an international airport in Ashgabat.

     Turkish construction companies have already won contracts worth a total of 57.2 billion dollars in the region, according to the Turkish economy ministry. Most of the projects are related to building infrastructure. It was a Turkish contractor that built a large shopping mall in the shape of a giant tent in the capital of Kazakhstan.

     Turkey has strong ethnic ties with the region, where all of the countries but Tajikistan speak Turkic languages. In 2009, some of these nations joined other Turkic-language-speaking states in launching an organization designed to bolster mutual cooperation. Senior Turkish government officials have played a key role in bolstering economic ties with these states, helping Turkish companies win a number of infrastructure-related contracts.

Growth trajectory

The five countries gained independence from the Soviet Union in 1991. Though they all went through a period of turmoil afterward, they have embarked on nation building in earnest in recent years.
With the exception of 2008 and 2009, when the global economy was rocked by the financial crisis, Kazakhstan and Turkmenistan have posted annual economic growth rates ranging from 5% to more than 10% since 2000.

     The fast-growing five Central Asian states are catching up with other Asian countries in per capita gross domestic product. Per capita GDP in resource-rich Kazakhstan is projected to grow to 13,050 dollars this year, roughly 2,600 dollars more than Malaysia's. Turkmenistan is expected to surpass Thailand and the Philippines in per capita GDP. 

     The area's high growth is being driven by its vast natural resources. Turkmenistan has the world's fourth-largest amount of proven natural gas deposits, while the Kazakh economy is being driven by a rush of oil-field development projects. Natural gas and uranium ore are plentiful in Uzbekistan, and rare-earth metals are produced in Kyrgyzstan and Tajikistan.

It's a gas

China, which neighbors these countries, is strengthening moves to deepen economic ties with them. Chinese President Xi Jinping attended a ceremony in the Kazakh capital of Astana on Sept. 7 marking the launch of a pipeline carrying natural gas to China. Two days earlier, he attended a ceremony in southeastern Turkmenistan celebrating the launch of production in what is estimated to be the world's second-largest gas field.

     China plans to import 65 billion cubic meters of natural gas annually from Central Asia by 2020, an amount that equals nearly half the gas consumed in China in 2012.

     Russia is also pulling out all the stops to regain the kind of dominant influence it once had there. Its strategy involves offering a combination of national security cooperation and economic aid. This is underscored by Moscow's decision to supply 1 billion dollars in arms to Kyrgyzstan and about 200 million dollars in arms to Tajikistan.

     Russian President Vladimir Putin has made comments suggesting the countries could benefit from Russia's protection against terrorism. It remains to be seen whether the security card that Moscow is playing will trump China's ample cash reserves or Turkey's ethnic ties.

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