Thursday, 20 December 2018 11:53

Turkmenistan's participation in SGC - a major element of diversification

  Caspian Energy (CE):  Your Excellency, as a newly appointed diplomat, how would you assess the current economic relations of Uzbekistan and Turkmenistan, and the dynamics of investment and trade relations of these countries with the EU, Baltic region and Latvia?

Mihails Popkovs, Ambassador Extraordinary and Plenipotentiary of the Latvian Republic to Uzbekistan and Turkmenistan: In my opinion, the current state and prospects of development of economic relations between the Republic of Uzbekistan and Turkmenistan are closely associated with the changes which are generally taking place in the Central Asian region.

In the last two years we have seen a positive dynamics and improvement of mutual cooperation between the region’s countries in the most different fields. It is an activation of the political dialogue between the leaders of the Central Asian states on a wide range of issues, and a rapid expansion of inter-regional economic and business contacts, border trade, humanitarian, cultural relations, etc.

At the same time, we see an increasing willingness and a mutual desire to discuss constructively such sensitive issues, which for various reasons went underground during the long years, both in bilateral relations between the Central Asian countries and in the context of the regional cooperation. It, in particular, includes issues on bringing together efforts in safeguarding regional security, coordination in the field of development of regional transport and logistics projects, issues of joint water management, delimitation and demarcation of certain segments of borders, activation of regional, trade cooperation, including border trade, environmental issues related to the Aral Sea problem and a number of other problems.

It is important to note that these processes take place in the face of economic and administrative reforms implemented by the countries of the region. We are witnessing it particularly clearly in the case of the Republic of Uzbekistan where the public administration system is undergoing active reforming at the initiative of President S.Mirziyev, broad economic and social reforms are being implemented, a program of support for innovations and modern technologies has been declared. The European politicians and experts are, of course, monitoring all these trends. As a country which considers the relations with the Eastern Partnership and Central Asian states one of the priorities of its foreign policy, Latvia is closely following these processes, and we are pleased to note that these positive changes in the Central Asian region are already reflected not only in improvement of the general atmosphere of cooperation between the countries in the region but also in rapid growth of mutual trade.

In the last year and a half, the trade growth between Uzbekistan and its neighbors, including Turkmenistan, has been a good example in this regard as the trade with neighbors is a powerful driver of the economic development, especially the frontier regions.

I would like to highlight that Latvia, which has broad experience in implementation of reforms, provided and keeps lending broad support through our experts and specialists to the Central Asian countries in a variety of areas such as higher and special education, integrated management of border security, administrative and communal reforms, use of green technologies, wastes processing and many more.

These programmes are being implemented in the Central Asian countries both in bilateral basis and with funding from the European Union and other leading international organizations – United Nations Development Program (UNDP), US Agency for International Development (USAID) and a number of others.

CE: What is the main objective of your mission? How to increase  the turnover?

Mihails Popkovs: Briefly, the objective of any diplomatic mission is to advance interests of their country, protect interests of their citizens, promote development of comprehensive and mutually beneficial business relations, cooperation at the agency and expert level, and development of humanitarian and cultural contacts between the peoples.

The Latvian embassy in Tashkent is a regional embassy. In addition to the Republic of Uzbekistan, we have been accredited in the Republic of Tajikistan and Turkmenistan. Accordingly, we are representing interests of the Latvian Republic in these three countries of the region.

The turnover volume of Latvia with individual countries of the region is different. Due to business contacts which were established historically and have been developed in recent years between businessmen, to date, the most active trade cooperation has been maintained with the Republic of Uzbekistan. Uzbekistan is indeed a major foreign economic partner of Latvia in Central Asia, and it is encouraging that our economic cooperation is developing consecutively in the most various fields. It is also a mutually beneficial trade, where the Latvian medications have a higher percentage, different machines and mechanisms, as well as Uzbek textile, vegetables and fruit, including dried fruit. It is also an activity of joint enterprises in such areas as logistics and transport, pharmaceuticals, production of a number of innovative products, for instance, electric cars, etc.

Talking about the trade relations with the Republic of Tajikistan and Turkmenistan, unfortunately, we still have to often use the “untapped potential” word combination, primarily driven by logistical and a number of other particularities. Besides the official ceremonies held on a high level in the course of my accredited visits to Dushanbe and Ashgabat in November of 2018, in order to activate overall contacts we met with representatives of relevant line agencies of these countries -those were ministries of foreign affairs, economy and foreign trade. At these meetings, not only were reaffirmed previously marked areas of potentially promising and mutually beneficial cooperation, but issues of their consistent progress in the very near future were discussed in detail - through substantive discussion by the intergovernmental commissions for economic cooperation, through mainstreaming logistics and transport projects of mutual interest, intensification of contacts between SME representatives, etc.

In particular, upon instructions from the Ministry of Transport of Latvia, in Ashgabat I discussed with the Turkmen colleagues a proposal about creation of the special transport group within the framework of the Intergovernmental Commission for Economic Cooperation. I also passed an invitation to the Turkmen side, addressed to the officials of the transport sector of Turkmenistan and inviting them to visit Latvia in the very near future in order to discuss in detail specific promising lines of cooperation. In particular, a possibility of resuming direct air flight between Riga and Ashgabat, and opening of the direct railway container route.

Given that the Riga international airport, airports of Ashgabat and the city of Turkmenbashi are quite big regional logistical hubs on the Eurasian routes, we think that the matter of direct air cargo transportation is extremely promising.

CE: How would you assess the results of the latest negotiations held between EU, Turkmenistan and Azerbaijan, and dedicated to the TransCaspian gas pipeline? Are the European Union and Latvia interested in construction of the new gas pipeline from Turkmenistan to the EU in parallel to the Southern Gas Corridor? 

Mihails Popkovs: The European Union has, over the years, consistently upheld the concept of diversification of the energy resources supply to its market, and Latvia fully supports such approach as it is a key element to ensure energy security of Europe, leveling objective and perceived risks of dependence on individual suppliers.

It is no coincidence that while discussing a new European strategy of further relationship development with the Central Asian countries, which we expect to be adopted by mid of the next year, we and our EU partners attach such a big importance to accelerated development of transport, logistics, communication, information and other types of communication which should qualitatively improve global integration of the Central Asian region into the world markets. In English it is expressed by a single comprehensive word “Connectivity”. I have no doubt that improvement of such global integration is capable of giving strong momentum to not only the economic development but also strengthening of stability and security of the entire Central Asian region, including geographically close Afghanistan. Meanwhile, it is important to understand that wanting, political will, resources of one or even several countries do not always suffice when implementing projects of this size. Projects of this kind are very expensive. Therefore, their economic viability and payback period should be thoroughly calculated for the long term, taking into account all possible factors and risks. Besides, such projects provide the need to involve leading international companies and financial institutions possessing required technologies and resources. For the EU, development of the Southern Gas Corridor has been one of the priority projects in the field of energy. For a long period the issue concerning possible engagement of Turkmenistan in this project was held back due to the uncertainty of the Caspian status. It is encouraging that the Caspian Convention, which provided legal possibilities to consider the options of involving Turkmenistan with its rich natural gas reserves in the Southern Gas Corridor, was finally signed in August of this year after negotiations which lasted almost 20 years. I think, for Turkmenistan, participation in the Southern Gas Corridor will be an important element of diversification of its export flows.

CE:  Uzbekistan is actively developing transport lines in the direction of Pakistan and the Chinese market. What is the potential of this transport route in terms of inter-regional cooperation?

Mihails Popkovs: I have partially touched this topic, replying to the previous questions. We follow closely the progress of the reforms in the Republic of Uzbekistan and see that improvement of relations with regional neighbors, increase of the investment attractiveness of the country, entry into the new promising trade markets, introduction of innovative technologies and development of modern production are the major priorities of the sustainable development concept adopted and implemented in the country. Like other countries of the European Union, Latvia, for its part, is supporting the process of these reforms as they will not only help Uzbekistan to raise living conditions and welfare of its citizens, but also have a positive and stabilizing impact on the whole Central Asian region, which ultimately serves the purpose of creation and development of reliable and effective Eurasian transport corridors, as well as will serve to ensure regional and global stability and security.

As far as the development of individual projects and transport routes, I am sure that the Government of the Republic of Uzbekistan perfectly understands the importance of increase of the transit potential of its country and is thoroughly analyzing all financial, economic, political and other factors which can contribute into the progress of individual projects.

CE: Do you plan to promote the development of small and medium business? 

Mihails Popkovs: Small and medium business forms the basis of economies and serves as an important guarantee of stable and sustainable development of many developed countries of the world. Latvia is not an exception, where the share of small and medium business in the country’s GDP exceeds 70%.

In my opinion, creation of necessary conditions for successful development of small and medium business plays, in general, a pivotal role not only in the success of economic reforms in particular sectors but also in solution of the employment problem and reforming of social sphere. We have learned that from our own experience, implementing a program of reforms in Latvia. Therefore, when implementing so called development projects which I mentioned at the beginning of the interview, we and our partners from different programs of the European Union, UNDP and others, are playing emphasis on involvement and participation of small and medium business representatives in settlement of those specific practical tasks which must be addressed in certain regions and provinces of the Central Asian states in the frame of concrete projects.

Let’s just say, the Uzbek representative office of the CLEANTEСН LATVIA cluster, which brings together the leading enterprises of Latvia operating in the field of green technologies, held a number of seminars for employees of local governments and entrepreneurs in different regions of Uzbekistan. The seminars were dedicated to matters of more active involvement of small and medium business in the processing of household waste, and introduction of innovative and efficient technologies into this area. Another example relates to the arrangement of the cycle of consultations held for local farmers by the Latvian experts in the field of standardization and certification of agricultural products, and concerning introduction of the European technologies ensuring quality of production, storage, transportation and processing of a number of agricultural products. The consultations were organized with the support of local governments of the Tashkent and Fergan regions.

Besides, speaking of the activity of joint ventures, according to our observation, it is small and medium businesses of Latvia which are often the most active and successful in establishing business contacts and implementing competitive business projects in Central Asia.

CE: Uzbekistan is developing the Silk visa project (similar to the Schengen) together with Kyrgyzstan and inviting other Central Asian and even Caucasian countries into this project. What do Latvia and EU think of this project?

Mihails Popkovs: As far as I know, this initiative is still at a preliminary stage of development. It is still not quite clear whether this is about trying to develop and introduce a single visa or initiators of the idea are ready to go further towards the creation of the single visa zone and abolishment of the border control inside of it just like the EU countries did it in due time within the framework of the Schengen Treaty.

However, the mainstreaming the simplification of the procedure for entry into the region’s countries by a single visa certainly deserves attention as it fits organically into the strategy of the regional integration improvement outlined above.

 Drawing parallels with the experience of creation of the European Schengen zone and introduction of the single Schengen visa, it must be remembered that in addition to achievement of political agreements between the countries participants, preparation and signing of relevant conceptual agreements by them, it was also a long, quite complex, time-consuming technical process which required collective coherence, long painstaking work and clear work coordination among many interested agencies of the Schengen zone member states  - border, migration, consular, judicial, technical and other services.

Meanwhile, I am convinced that introduction of the single visa considerably will promote the development of the tourism industry in Central Asian countries, which has a huge potential, as well as have a positive impact on activation of business and humanitarian contacts, and contribute to the increase of the investment attractiveness both of certain countries and the region in general.

                                                        Thank you for the interview!

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