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Central Asia: Investors Show New Realism About Region

London, 26 May 1998 (RFE/RL) -- A leading western authority on Central Asia, Shirin Akiner, says potential western investors are showing a new realism about the region, regarded a few years ago as a "new Eldorado" of money-making possibilities.

Akiner spoke to a business conference in London that focused on the investment climate in the newly-independent states of Central Asia -- Uzbekistan, Kazakhstan, Kyrgyzstan and Turkmenistan (leaving aside Tajikistan which has been torn apart by civil war).

The Central Asian region is sparking a lot of interest among potential western investors because it is the location of great hydrocarbon wealth, as well as gold and other minerals.

The littoral states of the Caspian Sea are the site of extensive oil and gas reserves, regarded as some of the most important outside the Middle East and Russia, and crucial to world energy supplies.

However Akiner -- while seeing the long-term potential of Central Asia as "exciting" -- cautions that the region is less developed than the Central/East European countries and Russia in terms of its economic reform and investment opportunities.

Her message to the conference was: the capital markets of Central Asia are still in a rudimentary stage and it will be some years before they offer the promise of "boom" conditions for investors.

Akiner, who lectures on Central Asia at the School of African and Oriental Studies, London University, says there have been three phases in relations between the Central Asians and the West since these new states won independence after the 1991 breakup of the Soviet Union. The immediate post-independence period from 1992-93 was marked by what she called "acute anxiety" on both sides, largely because of ignorance about each other.

Akiner says it subsequently proved that the leaders of the Central Asian nations (except Tajikistan) had managed to achieve an "extraordinarily high level of political stability." As contacts with the outside world increased, so did the level of anxiety decrease.

Akiner said this period of euphoria lasted until the about 1995. Since then, she said, a more sober mood has set in, and there is a new awareness on both sides that the "relationship is not going to be easy, that it will have to be carefully managed."

Still, her message was an upbeat one: in the long-term, Central Asia offers interesting opportunities for investors, not least because of its rich physical and human resources.