Taiwan: Economic Development in Central Asia

The USG Open Source Center summarizes Taiwanese reports on the economies and politics of Central Asia in the context of projects of the US Agency for International Development and Chinese, Russian and American geopolitical competition in the region.

Highlights: Development in Central Asia
Taiwan - OSC Summary
Tuesday, August 21, 2007

Special Report on Developments in Central Asia

According to a Chung-kuo Shih-pao report of 6 August 2007 by Chang Hui-ying entitled " Taiwan's Foreign Aid Comparatively Too Politically-Oriented," the US Agency for International Development (USAID) has a wide range of aid programs, including coaching high school students to start businesses; improving the quality of justice by introducing the recording of trials; training media to conduct investigative reporting; and assisting in policy design. In 1992, USAID provided nearly NT$1.5 billion in aid to Central Asia. In 2000, it helped some women in Tajikistan file a lawsuit over a land dispute, and the women got their land back this year. If there was any ideology involved, it was a belief in the value of democracy, liberty, and equal human rights. This is not only so for the governmental aid-provider but also for the non-government organizations (NGOs). They refused to serve special political interests and be used as a political tool, which might just be what Taiwan's foreign aid program needs.

According to a Chung-kuo Shih-pao report of 6 August 2007 by Chang Hui-ying entitled " US-Russia-China Wrestle for Energy," Central Asia, since its independence, has been the battleground for the United States, Russia, and China for several runs. The first took place from 1991 to 2001 when the US got involved in Central Asia after the dissolution of the USSR and provided economic aid to secure gas and oil sources, to expand NATO and to propagate the ideas of democracy and human rights. The second took place from the terrorist attack on 11 September 2001 to 2005 when anti-terrorism was the top priority for the United States which built eight military bases in the region. The third took place from 2005 until now when revolution shocked the Central Asian leaders who asked the US bases and inter-governmental organizations (IGOs) to get out of Central Asia. China and Russia have collaborated in the containment of the United States by means of Shanghai Cooperation Organization. The three big states are all after energy. In the competition, the United States and the European Union apparently were defeated by Russia, which has reached agreements with Turkmenistan and Kazakhstan on the renovation and construction of oil pipelines. Culturally and sentimentally, Central Asia felt closer to Russia, which has also been the main trading partner with Central Asia. People in Central Asia do not like the United States and were unhappy about China because of the influx of cheap goods made in China and illegal Chinese workers. Central Asia has retained a degree of autonomy and balance in terms of foreign policy. At the end of the day, national interests remained the most important.

According to a Chung-kuo Shih-pao report of 8 August 2007 by Chang Hui-ying and Chen Yi-shan entitled "' Switzerland of East' Has Democracy But Is Poor," Kyrgyzstan, often called the "Switzerland of the East," has been the most democratized of the five countries in Central Asia, which unfortunately has not brought about economic prosperity. Its economy has been seriously affected by the "Tulip Revolution" in 2005. Although Kyrgyzstan opened up to US military bases and was the first in Central Asia to join the WTO, former president Akayev had to resort to the old route of totalitarian rule for more effective government. Weak government and unstable political leadership impeded the opening-up policy from being carried through. In the World Bank evaluation, Kyrgyzstan ranked 90th in terms of the degree of easiness to engage in trade, and cross-border trade ranked 173rd, leading to the serious problems of smuggling, lack of investment in infrastructure construction, and reduced attraction to foreign investors. Poverty has been Kyrgyzstan's greatest problem since its independence. Poverty also led to the drug problem and terrorism in the southern part of the country that neighbors Afghanistan. However, Ken McNamara, deputy director of USAID in Kyrgyzstan, was optimistic about development there. In his view, Fergana can become an agricultural strip like California and even the breadbasket of Central Asia.

According to a Chung-kuo Shih-pao report on 8 August 2007 by Chen Yi-shan entitled " Four Girls' Dream of Entrepreneurship," BIG consulting firm of Kyrgyzstan is a success case of USAID's Entrepreneurship Project; it was able to stand on its own feet after the project stopped financial aid this year. The female founders of the firm were representatives of the new generation elite of Kyrgyzstan. One of the founders benefited from the USAID project and was an exchange student in the United States for one year. Another founder studied law in Singapore. The international experience and connections, along with the assistance of USAID, helped BIG land clients, such as the European Development Bank, the Asian Development Bank, and foreign businesses. The girls had high hopes for Kyrgyzstan. In their view, the greatest advantage of Kyrgyzstan is its educated, peace-loving, and hard-working people.

According to a Chung-kuo Shih-pao report of 9 August 2007 by Chen Yi-shan and Chang Hui-ying entitled " Big Brother All Over Gold, Cotton-Producing Country," Uzbekistan is a totalitarian state without freedom of press or speech, free and fair elections and a political opposition. The government has controlled the people through a tightly knit social network. People have learned not to talk about politics in public. Since independence, Karimov conducted some economic reform toward a market economy without a political opening-up. The Islamic Movement of Uzbekistan and Hizb-e Tahrir gave the government a good excuse for iron rule. After independence, Uzbekistan first allied with the United States and accepted US bases and economic aid. However, after the Andijan riot in 2005, it turned toward Russia. Uzbekistan's economy relied too much on raw materials, such as cotton, gold and natural gas. Gold has earned the country foreign exchange. Yet, cotton production has declined. A businessman from Switzerland said the government did not really care about the people's livelihood and infrastructure. Uzbekistan ranked 22nd in Foreign Policy 's failed state index in 2007, the worst in Central Asia.