Economics as the mainspring of
Central Asian destabilization
Gael Raballand
Central Asian leaders always highlight religious extremism as the
main threat to stability of their states. But economic factors are central to explaining
the current fragile situation. The drastic deterioration of the economic situation since
1992 has created a predatory logic that is crucially related to the high share of primary
exports, high level of corruption, development of narcotics trade, and high unemployment
as much as they will determine the political future of the region. Analysis of the link
between economy and politics leads to the conclusion that further political
destabilization is probable before the situation can turn around.
BACKGROUND: Security issues are regularly discussed in Central
Asia. For example, security was once again on the agenda of the Astana Summit held in
early January. Religious extremism and terrorism were ineluctably put forward during these
high-level meetings as the main threat to the Central Asian states. Yet, various economic
factors probably contribute equally to the current situation of these countries. Central
Asia has been struck by a dramatic deterioration of economic conditions since 1992. These
include an economic recession, a drastic decrease of the income per capita, a rise in the
levels of indebtedness, a continuous depreciation of national currencies, an unemployment
boom, a development of the non-official economy, etc.
According to several well-known economists, these trends have been
aggravated by certain government policies leading to a predation logic that rules these
economies. The predation of natural resources is the main stimulus for rebellions
according to Paul Collier and Anke Hoeffler. Using the data for 161 countries between 1960
and 1999, they have demonstrated that certain economic factors have a very strong impact
on the development of rebellions. They advance the idea that there is a correlation
between a high share of primary exports and the likelihood of rebellion.
Predatory activity related to drug production and narcotics trafficking
is another destabilization factor for the region. The high level of corruption in Central
Asia is another factor in fostering this predation logic. Moreover, the recruitment cost
for rebels is much lower than it was previously. With extreme poverty on the rise,
outcasts from the official economy are more prone to join rebel movements. Therefore, the
continuous decrease of income per capita in the region is a major concern along with the
rapid increase in the unemployment rate.
IMPLICATIONS: The most worrying sign for Central Asia’s future
resides in the fact that Central Asia fulfils all of the economic conditions for further
political destabilization. Indeed, a high share of primary exports and high concentration
of the exports characterize the Central Asian states. Cotton and gold provide Uzbekistan
with more than half of its exports revenues. Kyrgyzstan is in the same situation with gold
production that made up more than 55 % of the export revenues in 1999. Turkmenistan is
dependent on gas revenues and to a lesser extent on cotton fibers. These countries are
consequently vulnerable to fluctuations in global commodity prices and leave it vulnerable
to attack by rebel movements. The high level of corruption in Central Asia is further
strengthening the mismanagement of these revenues. It provides incentives for rebels to
take over aspects of tax collection in these economies.
Central Asian countries are ranked at the bottom of the world’s
ladder for corruption. According to Transparency International, among 90 countries,
Kazakhstan was ranked 66th and Uzbekistan 79th respectively with regard to a corruption
perception index. It is worth noting that the most corrupted countries in Central Asia,
according Transparency International, collect the most important taxes. Drug trafficking
and transit are also more and more problematic in the region. According to the UN
Undersecretary-General for drug control and crime prevention, 75% of the drugs smuggled to
Europe originate in Afghanistan. For several years, Central Asian states, like Kyrgyzstan,
have become traditional transit routes. Last October, Kyrgyz authorities stated that
annual profits of drug smugglers from Afghanistan via Kyrgyzstan could reach over US$ 1
billion. Turkmenistan and Uzbekistan are also faced with such drug transit problems. These
revenues related to drug traffic often compensate the loss of previous traditional
revenues especially in poor regions like in Afghanistan, Badakshan in Tajikistan or in
South Kyrgyzstan.
The decrease of the average GNP per capita is another indicator
symptomatic of the generalized impoverishment of the populations in Central Asia. For
instance, in 1997, Tajikistan and Kyrgyzstan had the lowest GNP per capita in the whole of
the OSCE.
At the same time, Central Asian states are confronted with the highest
birth rates and youth indicators. In 1998, Tajikistan, Uzbekistan, Turkmenistan and
Kyrgyzstan had the highest birth rates and youth indicators which is calculated by the
difference between the number of inhabitants under 15 years old and the number of
inhabitants over 64 years old in the OSCE. It means that even with a steady unemployment
rate, Central Asian economies have the need to have a high job creation ratio for
demographic reasons.
CONCLUSIONS: Even if a sound economy is not the absolute
safeguard against political destabilization, it has a major role to play. It is crucial
for Central Asian leaders to tackle more efficiently these economic deficiencies. Until
now, national solutions turned out to be globally inefficient. The best remaining option
has to be regional. As it has been demonstrated empirically, preferential trade
arrangements, such as like free trade areas, custom unions and common markets greatly
inhibit the likelihood of conflict.
It is an ideal time for Central Asian countries to be involved directly
in regional economics. At a time when military solutions against rebels seem to prevail,
it is not an ideal to settle regional instability. Should Central Asia’s economy not
improve and the present economic situation continue to deteriorate, Central Asia will
continue to produce larger and larger numbers of new rebel armies.
AUTHOR BIO: Gaël Raballand specializes in the study of
economies in transition. In 1999, he served as an OSCE economic/environmental officer in
Kyrgyzstan. He is currently a doctoral candidate in economics at the Sorbonne University.
"Central Asia-Caucasus Analyst", February 28,
2001
http://www.cacianalyst.org/Headline_4.htm
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