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Central Asia: Lack Of Transport Links Hamper Trade

A recent study says the Central Asian nations need to focus on upgrading their transport networks if they are to increase trade with each other and southern neighbors Iran, Turkey, and Pakistan.

London, 11 January 2000 (RFE/RL) -- The study says economic links between the Central Asian countries and their southern neighbors are handicapped by the awkward legacy of the Soviet-era transport system.

The five Central Asian nations, Uzbekistan, Kazakhstan, Kyrgyzstan, Turkmenistan, and Tajikistan, are having to struggle with an irrational transport network that was in place when the five former Soviet republics were oriented exclusively toward Russia.

The Central Asian republics' main rail, road and pipeline links lead north to Russia or through the Caucasus. There were no rail or pipeline connections to the south.

Contributing to the problem is the fact that in Iran, Pakistan, and Turkey, transport networks have long been oriented to the south toward ports on the Indian Ocean and Mediterranean Sea.

The study says these physical difficulties have stood in the way of a rapid expansion of intra-regional trade and the development of new outlets for the Central Asians' trade on world markets.

The study, entitled "Central Asia Turns South," is by Richard Pomfret, a professor of economics at Adelaide University in Australia.

Pomfret says that even today the northern orientation of the transport infrastructure influences post-independence trade flows. Oil and gas exports from Kazakhstan and Turkmenistan, for example, continue to flow to the CIS despite unfavorable aspects of this trade.

Where do the main problems lie? The rail network -- the most important part of the old Soviet transport system -- reflects the fact that long-distance lines supported central planners' liking for large production units scattered over the USSR's huge land mass.

The Central Asian republics also are linked to one another and the rest of the USSR by only a few key lines and often republic borders were not taken into account. The railway from Osh, the second largest city in Kyrgyzstan, to Bishkek, the capital, passes through Tajikistan, Uzbekistan and Kazakhstan before re-entering the Kyrgyzstan just before Bishkek.

Like railroads, pipelines are expensive to build and networks tend to be modified slowly. This is another sector with problems.

Turkmenistan, with its huge reserves of natural gas and some oil reserves, was expected to benefit more than any other former Soviet republic from the move to world prices. During the 1990s, however, Turkmenistan was limited by a pipeline network that runs through Russia and left the country dependent on former customers in the CIS who often failed to pay their bills.

Kazakhstan's rich oil reserves were the subject of the biggest foreign investment deal in the history of the former Soviet Union. The contract was eventually signed between newly independent Kazakhstan and energy giant Chevron, but when the oil started flowing from the Tengiz field, the operator found itself dependent on the Russian pipeline company, and receiving poor service.

In 1997, about half of the Tengiz oil was being shipped by train to Baltic ports or across the Caspian Sea by barge and then by train to Black Sea ports. This is an expensive alternative to pipelines.

The poor condition of roads presents another headache although those of Central Asia are better than those of the Caucasus.

The study says that air transport is the mode of travel least bound by history. Still, it notes that, while the new national airlines of the Central Asian countries have established some reciprocal routes, the networks still remain dominated by intra-CIS flights.

The "most dynamic" airline, Uzbekistan Airways, has established an impressive international schedule, but the only destinations among the southern neighbors are Istanbul and Karachi, both of which are served less frequently than London or Delhi.

How to tackle the problems? The study says Central Asian governments need to invest more in the maintenance and upgrading of roads, railroads and pipelines because otherwise the old Soviet infrastructure will slide towards collapse. Improving roads, in particular, will yield the most immediate benefits.