Remarks at the World Affairs Council
Deputy Assistant Secretary, Bureau of South and Central Asian Affairs
Thank you Jackie, for that kind introduction. I want to take this opportunity to tip my hat to Seattle for all the activity that has taken place here over the years, and up to today, relating to Central Asia and the broader region of what was once the Soviet Union. I experienced this firsthand 19 years ago, literally my second week working at the State Department, when I traveled to Seattle with my then-boss, Ambassador Richard Morningstar, to talk to people in Seattle about developing ties between the U.S. West Coast and the Russian Far East. And I see Carol Vipperman here tonight, who was instrumental in arranging that visit. And I greatly regret that this is my first time back in 19 years! But we are well aware of all the other linkages between Seattle and the region, most notably through the Seattle-Tashkent Sister City relationship, which has been so active over the years, as well as a lot of trade and investment activity through Seattle-based companies.
I also want to say thank you to the World Affairs Council for hosting today’s event, and to express how much we at the State Department appreciate the Council’s great work in promoting substantive foreign policy discussions and solutions. Though there is one important topic that you’ve ignored for far too long: the many reasons why the State Department should move its headquarters to Seattle.
First off, the coffee is much better here, and coffee is the fuel that runs our diplomatic machinery. Although I will admit that I personally am not a coffee drinker, which made me question whether they would let me get off the plane to enter the city!
But an even better reason is that Seattle is a Pacific city. And this is, as we all know, the Pacific Century. The last few decades have seen the global center of economic gravity undergo a long but inexorable shift away from Europe and towards the Asia-Pacific and Indian Ocean region. The math is undeniable: this is an area that, by 2050, will have over five billion people. By the middle of this century, it will account for over half of global GDP. This is clearly a continent on the rise.
And Central Asia should have a, well, central role in this rise.
It actually knows this part well, having played it once before. For millennia, the world’s most sought-after resources came from and moved through the countries of modern-day Central Asia. And it was more than just silks and spices.
Between 800 and 1100 A.D., the region was, to quote the great Central Asia scholar Dr. Fred Starr, “bluntly, the center of the world”. Its contributions to science, mathematics, astronomy, literature, architecture, and philosophy heavily influenced the core civilizations of Europe, the Middle East, and Asia, including India and China. And the region was home to a vast array of religions: Islam, Christianity, Judaism, Buddhism, Hinduism, Zoroastrianism, and even Greek polytheism, giving rise to a remarkable tradition of religious tolerance and scholarship.
Many of the technologies fundamental to the progress of civilization – like irrigation, animal husbandry, gunpowder, and paper – traveled over the trade networks of the Eurasian steppe.
During the last century, these networks were profoundly disrupted by expanding empires, anti-market ideologies, and restricted borders. But today, we are seeing a shift back toward a connected continent, one where the sovereign states of Central Asia can help connect supply with demand, producers with consumers, east with west, and north with south.
Ever since the 17th century, merchants have mostly preferred to ship their goods from east to west by sea – it was safer, cheaper, and faster than sending pack animals across deserts and over mountains. But that calculus may be starting to change. Today, new overland routes can reportedly move commercials goods from western China to Germany in just 14 days. That same trip by sea takes 44 days. Overland may still be more expensive than ocean shipping, but a month can make all the difference for companies that are pushing out their latest product in a furious competition for more market share.
China has already committed tens of billions of dollars to building roads and rails to connect its factories with markets in Asia and Europe. And while it may garner a lot of media attention, China’s One Belt One Road definitely isn’t the only game in town. There’s a long list of parallel efforts. The Trans-Caucasus Central Asia network runs through Azerbaijan, over the Caspian, across Central Asia, and into East Asia. The Central Asia Regional Economic Cooperation network spreads across all the Central Asian nations and branches west into Azerbaijan, south into Pakistan, and east into China. The Silk Wind Route goes through Kazakhstan to China. The Lapis Lazuli Corridor transits Afghanistan, Turkmenistan, Azerbaijan, Georgia, and Turkey.
And the New Silk Road, our own flagship initiative, seeks to connect Central Asia to South Asia, with Afghanistan at the hub. The New Silk Road has four principal lines of effort: (1) building a regional energy market; (2) improving trade and transport routes; (3) streamlining customs and border crossings; and (4) creating linkages between peoples and between businesses.
The regional energy market holds tremendous promise, and we’ve seen a lot of progress lately on the CASA-1000 project, which will help Kyrgyzstan and Tajikistan sell excess summer hydroelectricity to energy-hungry Afghanistan and Pakistan. Just to make sure everyone here understands what this project is about, “CASA” stands for Central Asia-South Asia, and the “1,000” refers to 1,000 megawatts of electricity. Also making progress and complementing the CASA-1000 is TUTAP, backed by the Asian Development Bank, which would create energy linkages between Turkmenistan, Uzbekistan, Tajikistan, Afghanistan, and Pakistan.
Multilateral financial institutions like the World Bank and the Asian Development Bank are providing much of the money and expertise required to move these projects forward. But much more will be needed – nearly one trillion dollars per year for Asia, according to the ADB. So we’re open to financing from new multilateral institutions that can help close the gap, like the Asian Infrastructure Investment Bank, so long as they operate in line with the high standards and best practices established by the World Bank and the other international financial institutions over the past seven decades.
In the coming years, significant resources will be poured into the physical infrastructure to help Central Asia become land-linked. And here I should quote one of our partners in the region, Kazakhstani Foreign Minister Idrissov, who has said more than once that the goal for Central Asia should be “to go to from land-locked to being land-linked!”
But the roads, rails, and power lines already being built or on the drawing board for future construction are just the hardware; they can’t operate efficiently without the right software. A six-lane highway isn’t much use if cargo trucks have to queue single-file and wait for days to get through a border crossing – undergoing numerous customs inspections, paying high tariffs, and, most likely, doling out copious bribes. You also need smart laws, regulations, and agreements between and among governments. This is the soft infrastructure that allows people and goods to move around and across the region for less money, at higher speeds, and in greater quantities. In addition, the closer Central Asia’s countries align on trade policy, the more attractive their markets will look to foreign investors, which can bring not just financing but also new technologies, management techniques, and access to international markets.
So we have provided technical assistance to help develop smart agreements, and we have used our diplomatic assets and convening power to bring all the players to the table.
Basically, all of these efforts require the same fundamental ingredient: cooperation. But we have to remember that these are countries that have not always gotten along. As with all neighboring nations, the interests of one sometimes conflict with the interests of another. In Central Asia, upstream and downstream countries are still working to sort out water rights, while the vestiges of Soviet cartography like ill-defined borders and assorted exclaves do not make life any easier. I want to point out that this slide shows each of these enclaves. My favorite one is Sokh, which appears as “Sox” on the map. It is located entirely within the territory of Kyrgyzstan, administered by Uzbekistan, and the population is predominantly Tajik. So this gives you a sense of how complex the relationships can be. Partly as a result of this history of conflicting national interests, Central Asia is now one of the least economically integrated regions in the world. You can see the effect that has had in this slide. The only two regions with a lower degree of integration are the Pacific Islands – these are small, widely dispersed island nations – and South Asia, where internal trade is limited by tension between India and Pakistan.
But, again, the calculus is beginning to change. With Secretary Kerry’s leadership and some tremendous work by our diplomats in Foggy Bottom and out in the field, we have brought together, for the first time, all five foreign ministers into formalized consultations. The series of photos you are seeing, by the way, were taken during the Secretary’s visit to Samarkand. This past November we held the first C5+1 meeting in Samarkand, and we’ll hold the next one in Washington this summer.
In the meantime, we’re standing up some C5+1 working groups that will focus on economic connectivity, the environment, and security. We intend to get a lot more out of these meetings than just fact sheets and joint statements: we intend to use this diplomatic format to build stronger relationships, break down barriers to trust, and make progress on tough regional problems. And this isn’t just what we want: it’s what the leaders of the five countries say they want as well. We’ll see in the coming months whether we can succeed in making the C5+1 into something that gets results.
The C5+1 may prove itself a great new mechanism for dealing with regional challenges. But I should stress the United States does not view Central Asia as a monolith. Rather, we see a dynamic and diverse group of states with independent and distinct interests.
We see countries with very different comparative advantages:
• Kazakhstan has a burgeoning financial-services sector, not to mention the second-largest oil reserves in the former Soviet Union;
• Uzbekistan has a well-educated population of over 30 million, on top of large uranium and natural gas reserves;
• Turkmenistan has the fourth largest natural gas reserves in the world;
• Tajikistan also likely has large natural gas reserves as well as significant hydropower potential;
• and Kyrgyzstan, which also has tremendous hydropower promise, has put in place resilient democratic structures that are a beacon of democracy in Central Asia.
Obviously, there are economic vulnerabilities as well: recent sharp declines in commodity prices and related currency depreciations are causing real hurt. Tajikistan receives remittances from its migrant workers, primarily in Russia, in an amount equivalent to around 45% of its GDP – more than any other country in the world. Kyrgyzstan gets an equivalent to 30% of its GDP from the same source. As oil prices hit 10-year lows and Russia struggles with a recession, many of the Central Asians who worked in Russia have less employment, and the value of the remittances they are sending home have plummeted, in some cases by as much as 40 percent. Many are returning home, and jobs back home are scarce. Kazakhstan’s currency has depreciated significantly and it has revised its growth rate for this year down to .5 percent – the lowest since the 1990s. Also, it’s worth noting – because this slide does not show it – the significant number of Turkmen citizens working or studying in Turkey: by some estimates as many as 500,000, and this is out of a population of just over 5 million – a significant percentage.
The economic downturn could be a significant source of instability in the years to come, particularly at a time when the region’s governments have taken various steps to limit political participation and human rights, including religious freedoms.
At the same time, the geopolitics of the region is growing in complexity. The states of Central Asia are variously facing the impacts of an increasingly assertive Russia, an economically very active China, a security transition in Afghanistan, and an Iran that is re-entering global markets. Regional and global powers have overlapping and, in some cases, competing interests in Central Asia.
But let me make clear that the United States does not see this region through a “Great Game” lens – as an arena for zero-sum geostrategic rivalry such as the 19th century competition between the British and Russian empires that earned this moniker. Rather, we see a region where everyone can benefit from stronger connectivity, smarter security, and greater trade – especially trade that is inclusive, multi-directional, and rules-based. The bottom line is that when the countries of Central Asia look around the room for partners, they can and should choose as many as they can.
It goes without saying that each country has unique circumstances, and each requires a different approach. So we have distinct, tailored policies for each of the five countries, and we advance these policies through our embassies, through our programming, through high-level diplomatic visits, and through annual bilateral consultations.
To zoom back out for a moment, all of our country-specific policies reinforce our overall regional policy, which is founded on two distinct principles: first, that our own national security is enhanced by a stable, secure Central Asia – an insecure and unstable Central Asia is bad for US security – and, second, that regional stability is best achieved through sovereign, independent Central Asian states with secure borders, linked economies and populations, and accountable governments. Based on those principles, we are promoting three main objectives: security and stability; economic prosperity through more trade and investment and greater connectivity; and good governance, human rights, and internal reform.
On that last point, we make human rights and good governance a central issue in every high-level meeting we hold with our Central Asian counterparts. We consistently communicate to them our view that restricting civil society, peaceful religious practice, and political participation runs the risk of compounding the geopolitical and economic challenges I mentioned previously.
As our policy makes clear, long-term stability and security cannot be achieved without a strong respect for fundamental rights and freedoms. We believe that stronger protections for human rights will make the countries of Central Asia safer and more secure and, by extension, make the United States safer and more secure. We know that no country has a perfect record on human rights, and recognize that our own democracy is still very much a work in progress. But our commitment to protecting and advancing the rights of private citizens has made us a stronger and more resilient nation, and that is a message that we share in all corners of the globe, especially Central Asia.
To wrap up, I just want to underscore how the many developments we are seeing in Central Asia, when taken together, add up to what I believe is a momentous shift in the region’s trajectory. These are relatively young countries that will celebrate their first quarter century of independence later this year. The United States was one of the first countries to recognize the new states of Central Asia, and since then our support for their sovereignty, independence, and territorial integrity has been and will continue to be iron clad – it is a fundamental aspect of our regional policy.
We recognize and welcome that each country is increasingly pursuing multi-vector foreign policies that strategically balance powerful neighbors with distant friends. Each country has committed, in one form another, to working together to advance the common goal of greater regional economic connectivity. And each country is beginning to realize that it can, once again, be at the crossroads of a globalized economy that is increasingly centered in the Asia-Pacific and Indian Ocean region.
It’s still a long way from here to there, and many barriers remain in place. But I believe that with a greater commitment of their governments to accountability and good governance, as well as the continued support of the United States, the dynamic and diverse nations of Central Asia stand to make tremendous gains in the coming decades and beyond. Thank you.