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Turkmenistan on the (rail) way to global integration

Two railways projects are under construction in Turkmenistan. They could contribute to integrate the country regionally and worldwide� if the government opens to the world

The third decade of independence of the Central Asia Republics could be the one of their global integration. Since 22 years, they are fighting to end their geographical isolation. Sometimes it's a success, as in Kazakhstan, when their leaders are not afraid to open their country and their businesses to the world. Sometimes it's a failure, as in Uzbekistan or Turkmenistan, when theirs leaders choose to curl up on themselves and create obstacles to investments, local or foreign ones.

About the latter, Turkmenistan, we have to admit that President GurbangulyBerdymukhamedov has opened a lot his country since he came to power in 2007. A lot remains to be done, because by keeping a dictatorship rule he de facto maintains many obstacles to create favorable conditions for a genuinely vivid economy. But it is true that he restored much better relations with the neighbors, after years of isolationist policy lead by SaparmuradNiazov. This opening can potentially change the face of the country, and make wealthier the 5.1 million Turkmens as the State itself. "But we should be cautious, this kind of projects yield often a different result than the ones announced.Usually, in this region, the goal expected is the integration in the world market but in reality the concrete result is more about unifying the national territory", says Julien Thorez, a French geographer specialist of Central Asia.

Central Asia is on the way between two of the very most important economical poles of the world: Europe and China. Bilateral trade between China and the EU 27 countries increased from 4 billion euros in 1978 to 432 billion in 2012. Most of it goes through marine transport, much cheaper than inland transportation. But for some goods or when there is a need to get the delivery quicker, clients may choose the land transportation. Some experts think that 10% of the trade between China and Europe will be transported inland in 2020. That means that Central Asia has a big chance to catch part of it. Kazakhstan recently implemented a real strategy to channel Chinese goods through its territory. 2,3 million tons of those were carried through Kazakhstan in 2007, 2,8 in 2011. That's almost 20% increase within 4 years.

Turkmenistan's geographical location gives hope that it could catch part of this freight. Ashgabat is aware of that and signed a trilateral intergovernmental agreement in 2007, with Kazakhstan and Iran, to build up a railway line as part of the"North-South Transport corridor". Train should soon run from Novyi Uzen (Zhanaozen) in Kazakhstan, via the Karakum desert in the Caspian region of Turkmenistan, and join Iran railway network in the mountainous Gulistan province at Gorgan. 700 of the 900 kilometers of the "North South" lines run through the Turkmen territory. It is expected to carry between 5 and 12 million tons a year.

Thus, the North-South project should connect Turkmenistan to Russia, Kazakhstan, China and the Persian Gulf (Bandar Abbas port), that is with the rest of the world. It is especially true as Iran also seeks de-isolation. The Islamic Republic built 2.000 km of railroad in 2011 and plans to add 15.000 km more in the coming years, with the help of Chinese finances among others. The main traffic is expected first to be oil products and Kazakh grain, but also Chinese goods produced in western China and sold to Iran, or via Iran.

What about Turkmen goods? "Turkmenistan can certainly export its oil and cotton production through the North-South railway. But this new line should be a stimulator toproduce more added value in the country and launch a real industrialization phase", argues Jan ��r, a Research Fellow at the Department of Russian and East European Studies of the Charles University, in Prague.While Turkmens faces problems in exporting their gas through alternative pipeline routes through Afghanistan(TAP) and to the Caspian Sea, they could even expect to export petrochemicals products via railway. But that might be possible for too marginal volumes. "Moreover, these petrochemical products could face problems to be exported via the neighboring countries as these ones could be competitors",warns Julien Thorez.The second railroad that Ashgabat is building is the one connecting Turkmenistan with Afghanistan and Tajikistan. Originally, the idea was supported by Americans in the frame of the "New silk road" strategy, in order to sustain regional stability through trade relations among the neighboring countries and economical development. Ashgabat financed its part of the railroad and expects to export oil and agricultural products.

With these two railroads, Turkmenistan is creating the conditions for its regional and global integration. That should boost the industrialization of the country and the development of many services businesses created alongside the freight crossing its territory. But many challenges are ahead: speeding services, eradicating corruption, lowering the bureaucracy, complying with international standards. Many alternative routes exist. No one is waiting for Turkmenistan. "That's why the most important challenge for the Turkmen leadership today is to dare to reform its political culture", says Jan ��r.

Régis Genté

Source: TIHR