The countries of the Caucasus and Central Asia are uniquely positioned to take advantage of their geographic location, abundant natural resources and the skills of their people to enter a new period of economic growth.
For many countries in the region record low oil and gas prices have brought home the importance of diversifying their economies. “Central to this process,” said Principal Deputy Assistant Secretary for Economic and Business Affairs Kurt Tong in a recent speech, “is increasing trade and investment ties with neighbors in the region, the European Union and United States.”
In order to achieve this, countries across the Caucasus and Central Asia need to make trade and transit through the region as seamless as possible. Azerbaijan, Georgia and Kazakhstan’s recent formation of the International Trans-Caspian Transportation Consortium exemplifies the type of concrete steps governments can take to better coordinate regional trade and transit.
“Taking advantage of the great potential of the Trans-Caspian Trade Route,” said Principal Deputy Assistant Secretary Tong, “will help bring sustainable security and economic development to tens of millions of people across the Caucasus and Central Asia, with positive results both regionally and globally.”
As part of the wider New Silk Road trade corridor, Azerbaijan and Georgia will need to ensure efficient customs clearance, predictable commercial courts and transparent enforcement of regulations. All three are critical to creating a favorable investment climate. In such a competitive global market for investment, poor scores on key indicators – such as rule of law shortcomings and unpredictable enforcement of contracts, problems with payment of taxes, or weak protection of minority investors – could mean that investors will go somewhere else.
The United States is supporting a New Silk Road program throughout the broader Central Asia region, including Afghanistan and Pakistan, focused on advancing regional economic connectivity in four areas: creating a regional energy market; trade and transport; customs and borders; and people-to-people exchanges. The U.S. is working with governments, international financial institutions, aid agencies, civil society and commercial firms on these efforts.
The United States is optimistic that expanded regional connectivity, including through strong cooperation with the region’s private sectors, will spur new economic growth and stability in Central Asia, the Caucasus and beyond.