Uzbekistan and Turkmenistan, two related countries of similar past, culture, and languages, sharing a 1,650km border, have more than quintupled their bilateral trade in recent years to nearly $1bn.
And this is not the limit. The two countries recently agreed to establish a joint trade center, transport energy resources, and share the region's largest (by volume) river, the Amu Darya.
This resulted from a state visit by Turkmen President Serdar Berdimuhamedov to Uzbekistan in mid-July 2022 and his talks with Uzbek President Shavkat Mirziyoyev, who called the water agreement "historic."
"Against the backdrop of crises in world politics and economics, the theme of trust in inter-state relations ... acquires global significance," said Serdar Berdimuhamedov, who is visiting Tashkent for the first time as President.
Uzbekistan is establishing a free trade zone in the border town of Kungrad in Karakalpakstan, while Turkmenistan is building an expensive highway to the north.
Residents of the border areas, where Uzbeks and Turkmens have traditionally formed joint families for decades, are primarily interested in increasing mutual trade operations.
"Trade would go uphill if border crossing procedures were noticeably simplified," said Merdan, 22, who lives in the Lebap region of Turkmenistan. As it turned out, his relatives live on both sides of the Amu-Darya River, and he dreams of an Uzbek wife.
Turkmenistan withdrew from a CIS visa-free agreement in 1999. At the same time, according to various estimates, some 300,000 ethnic Uzbeks live in Turkmenistan, and some 200,000 ethnic Turkmen live in Uzbekistan.
Addressing border issues in inter-state relations has been a priority since 2016 when Mirziyoyev became the head of Uzbekistan. At this stage, draft normative and technical documents on the demarcation of the Uzbek-Turkmen state border have been practically agreed upon.
This is fundamentally important for Turkmenistan, which is washed by the Caspian Sea and has the longest land border with Uzbekistan and borders with Afghanistan, Iran, and Kazakhstan.
It is noteworthy that until recently, Uzbekistan acted as a transit country, as two separate transnational pipelines ran through it, through which Turkmenistan exports natural gas to China and Russia.
However, Uzbekistan is gradually turning from an energy exporter to an importer as the dynamics of industrial development have increased domestic energy consumption.
For this reason, Uzbekistan has begun to buy directly from Turkmenistan not only electricity (from 2019) but also natural gas (from December 2022), which was previously re-exported by Russia's Gazprom. The latter deal has a seasonal format.
The media reported that the Center Economic Research and Reform (CERR), under Uzbekistan's Presidency, was studying the possibility of concluding a long-term gas contract with Turkmenistan in exchange for fixed prices.
Turkmenistan, where foreign exchange earnings are primarily derived from the energy sector, also seeks to diversify its industry. And Uzbekistan, which has a strong car industry dating back to Soviet times, not to mention a modern assembly line of licensed Daewoo, Man, and General Motors, can help.
The region's largest carmaker, Uzavtosanoat, signed a memorandum with the Turkmen government in 2021 to help with the future production of pick-up trucks, trucks, buses, agricultural machinery, and trailers.
"This will allow Turkmenistan to create new jobs, increase the share of industry in the GDP structure, enter export markets, and provide the population with vehicles of international quality," the company said in a press release.
Ashgabat believes the pandemic has greatly accelerated regional integration in Central Asia as it has become apparent that logistics and transit costs with the rest of the world are higher.
Against this background, Turkmenistan has offered to take advantage of the Caspian port of Turkmenbashi, while Uzbekistan, which recently joined the GSP+ preference system, is offering its trade intermediation. As a result, Uzbek enterprises can ship more than 6,000 different goods to Europe duty-free.
Credits: Eziz Boyarov, Ashgabat
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