An article by Cabar Asia Unlocking Regional Connectivity through Boosting Trade Digitalization in Central Asian States reveals interesting lessons for Turkmenistan.
Central Asia, a landlocked region, faces significant challenges in terms of physical and digital connectivity. Its remoteness from global fiber-optic routes and the diverse trading regimes among its five member states have hindered regional cooperation, the movement of labor and capital, and the exchange of goods and services.
Turkmenistan, in particular, has been isolated due to its non-membership in key regional trade blocs like the Commonwealth of Independent States (CIS) free trade zone, the Eurasian Economic Union, and the World Trade Organization (WTO). Turkmenistan plans to join the WTO by 2030. This could enable Turkmenistan to liberalize its trade policy and expand its trade at relatively low cost by gaining better market access to many countries that are already members of the WTO, including its main external partners such as China, Russia, and the EU.
The digitalization of trade offers a promising avenue for overcoming these obstacles. By reducing trade barriers, increasing efficiency, promoting transparency, and fostering innovation, digitalization can contribute to regional economic integration. A recent United Nations Global Survey on Digital and Sustainable Trade Facilitation revealed that Central Asian countries have made strides in trade facilitation, with the average implementation rate increasing from 38% in 2017 to 67% in 2023. However, Turkmenistan lags behind its regional counterparts, scoring the lowest at 49% in the survey. It was the first time that Turkmenistan was included in this survey.
Source: Cabar.Asia 2023.
Turkmenistan’s limited participation in regional initiatives further underscores its isolation. While neighboring countries have been actively working together to promote regional trade, Turkmenistan has primarily observed these efforts. In contrast, Uzbekistan, a regional leader in trade facilitation, has strengthened bilateral relations with all Central Asian states, including Turkmenistan. The trade turnover between Turkmenistan and Uzbekistan surpassed $1 billion in 2023, demonstrating the potential for increased economic cooperation. Some of the lessons Turkmenistan could learn from Uzbekistan include deepening multifaceted strategic partnership and alliance relations with all Central Asian countries, achieving free movement of citizens, goods, services and capital as well as creating a common tourist space in the region.
To unlock its potential for regional integration and sustainable development, Turkmenistan must prioritize trade digitalization. A “Digital Agenda for Central Asia” that involves all five countries can serve as a platform for developing common policies and standards for digital technologies. By embracing digitalization, Turkmenistan can reduce the human factor in cargo operations, transform the customs sphere into a corruption-free system, and foster innovation.
In conclusion, Turkmenistan’s digital divide and limited participation in regional trade initiatives have hindered its economic development. By adopting a digital-first approach and actively engaging in regional cooperation, Turkmenistan can overcome these challenges and unlock its potential for growth and prosperity.
