WILL THERE BE A TURKIC "EUROPEAN UNION"?

A meeting of the participants in the Cooperation Council of Turkic States (CCTS), which ended with the signing of the Almaty Declaration, was held in Kazakhstan in October. It noted the need to expand trade-economic and cultural-humanitarian cooperation. Meanwhile, experts have begun to voice the idea of the countries of the Turkic world creating their own single trade-economic space. To discuss what a deepening of integration between the Turkic-speaking states might lead to, and what obstacles there might be to this, we turned to Barzuhan Turlubekov, head of the Department of Macro-Economic Development and the Social Sphere of the Institute of Economic Research of Kazakhstan.

- What specific conclusions can be drawn after the last forum as regards the development of economic relations between the Turkic states?

- Three leaders have been established among the Turkic countries: Turkey, Azerbaijan and Kazakhstan. The Turkic countries may also be divided into consumers and exporters of energy carriers. At the last summit there was more discussion by the countries of the eastern seaboard of the Caspian of the distribution and rational use of water sources than prospects for the export of Caspian energy carriers. Before the Almaty summit a working group of representatives from Azerbaijan, Turkey and Kazakhstan discussed the broadest range of questions on the agenda. There were some very interesting initiatives put forward at this meeting: for example, the setting up of a pan-Turkic investment agency, a court of arbitration, and so on. But it was decided that it was too early to submit these questions to a plenary session. In our view, cooperation in the sphere of freight transportation is more realistic and long-term, because Kazakhstan, Uzbekistan and the other Turkic countries in the region do not have an outlet to Turkey's leading Black Sea and Mediterranean ports. This is a very important question for us in many respects. All the Turkic countries, whether they are oil-extracting countries or not, have a vested interest in creating a transport corridor from Central Asia and the Southern Caucasus to Turkey.

- In other words, single tariffs, a customs system, and so on could be drawn up?

- Yes.  There shouldn't be any problems here. After all, Turkey and Kyrgyzstan are already members of the WTO, and Azerbaijan and Kazakhstan are at the joining stage. Although Kyrgyzstan has also joined the Customs Union, all the conditions can be discussed and a common denominator reached.

- Pan-Turkic forums have been held for nearly 16 years now, but they haven't gone further than cultural integration. What is stopping the peoples with common ethno-cultural roots creating a most-favoured nation regime?

- To a certain extent factors of a political nature have a negative effect on integration processes. For example, there have been a series of coups in Kyrgyzstan and Turkmenistan remains largely a closed country. There is also the very acute problem of the distribution of water resources. This question is directly linked with the production of electricity and is causing differences between the Turkic states of the Central Asian region. On the other hand, at the moment integration with Russia has had, so to speak, a second wind. This has been helped by the global financial crisis which uncovered all the shortcomings irrespective of the export of raw materials. Along with the crisis came a sharp reduction in the flow of capital, followed by a deficit, and so on.

We were involved in the drawing up of the programme for the Almaty summit, and it was clear that the process of the integration of the Turkic states is in its infancy. Even with a dependence on raw materials no economic ties have been established. Among other factors are the complex natural conditions in South Kazakhstan where there is nothing but a mountainous terrain, and the civil war in Uzbekistan.

- Kazakhstan has joined the Customs Union and supports the idea of creating a single economic space with Russia and Belarus. If that happens how will integration with Azerbaijan and Turkey, which are Europe-orientated, work?

- From a purely legal standpoint, the countries that are looking to join the WTO, by creating a new integrated association, should not restrict their opportunities for trade and economic links with other partners. At the very least things should not get worse. As to whether joining the Customs Union ties its hands, Astana aims to get certain economic benefits by integrating northwards. But in order to kick-start the process of integration with the Turkic countries, certain reciprocal proposals are needed. And such common interests exist in the sphere of pipeline routes for the export of energy resources and transportation of tankers. Kazakhstan is already using the Baku-Tbilisi-Ceyhan pipeline.

- The idea of laying a gas pipeline along the bed of the Caspian - a Trans-Caspian gas pipeline - has been around for many years.  This project would seem to be of benefit to all the gas-extracting countries, especially Kazakhstan and Turkmenistan. What will Astana do if western gas consumers raise the question of this project point-blank?

- This is a very attractive project. But resources are the problem. After all, the logical continuation of the Trans-Caspian gas pipeline should be a major gas pipeline like Nabucco. Kazakhstan exports about 10bn cu m of gas annually. This is a very modest figure. In total Central Asia supplies about 42bn cu m. The Kazakhstan-China oil pipeline is already there. There are plans to lay a Kazakhstan-China gas pipeline and to use it to export Kazakh and Turkmen gas. Of course, there are possibilities for the implementation of other projects, too. In order to pump Kazakh gas to the Trans-Caspian gas pipeline it will have to be transported from the Karachanag field to southern Kazakhstan. But it is Russia's Gazprom that handles the question of exports there. The Russian company has always had the opportunity to stop gas exports to southern Kazakhstan. On the other hand, who will finance the construction of the gas pipeline, bearing in mind the overall difficult world financial situation?