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Prospects of trade and economic partnership between Uzbekistan and Turkmenistan

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Turkmenistan is our close neighbor and a time-tested reliable strategic partner, with which Uzbekistan is connected not only by the commonality of centuries-old rich history, similarity of languages, culture, traditions and customs, proximity of spiritual and cultural values, but also by the same positions on almost all bilateral, regional and global issues of our time, writes Obid Khakimov.

A vivid symbol of eternal friendship, unity and cultural closeness of peoples is the opening of the street named after the Turkmen poet, philosopher and classic of literature Makhtumkuli and a bas-relief with his image in Tashkent, the launch of the Ashgabat Park in Tashkent, the establishment of the Uzbek-Turkmen Friendship House and the Ulli Hovli complex in the Khorezm region of Uzbekistan.

In turn, Alisher Navoi Street has been opened in the capital of Turkmenistan, which symbolically intersects with Makhtumkuli Fraga Avenue.

A Republican Turkmen Cultural Center has been established in our country, which unites six Turkmen cultural centers in different regions.

Dr. Obid Khakimov

About 200 thousand Turkmens live in Uzbekistan. They live in peace and harmony with representatives of other nations and nationalities. More than eight thousand children of Turkmen nationality study in 45 schools with the teaching of the Turkmen language, various creative competitions are organized there in order to comprehensively stimulate talented students. The advanced experience of the best teachers conducting classes in the Turkmen language is popularized.

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High dynamics of strategic partnership

Modern bilateral relations are characterized by high dynamics of development of cooperation between the countries, which are based on the provisions of the Treaty on the Further Strengthening of Friendly Relations and Comprehensive Cooperation signed in 2007. In 2022, Uzbekistan and Turkmenistan celebrate the 29th anniversary of the establishment of diplomatic relations.

The established open and trusting dialogue between the leaders of the two countries has become the basis for positive dynamics of cooperation, which demonstrates a new level of Uzbek-Turkmen strategic partnership.

The visit of the President of the Republic of Uzbekistan Shavkat Mirziyoyev to Turkmenistan in 2017 opened a new page in the further development of relations and deepening of multifaceted cooperation.

The countries have positive experience in solving water management issues, which has helped to develop a region-wide position on the effective and rational use of the waters of transboundary rivers in Central Asia, which takes into account the interests of all countries in the region. Both states also support the improvement of the activities of the International Fund for Saving the Aral Sea and express their intention to cooperate in the implementation of the UN Convention to Combat Desertification.

Trade, economic and investment cooperation

There is a noticeable increase in the indicators of economic partnership, the intensification of joint efforts to further increase them.

Despite the global negative consequences of the pandemic, the trade turnover between the countries by the end of 2021 amounted to almost $902 million (an increase of 67.6% compared to 2020) and increased fivefold compared to 2017 ($177 million).

Exports from Uzbekistan to Turkmenistan increased 2.4 times during the period under review: from $79.5 million to $191.9 million (an increase of 52.2% compared to 2020). Imports from Turkmenistan increased 5.3 times: from $129.5 million to $710.1 million ($72.36 million compared to 2020).

Therefore, Turkmenistan is one of the ten major trading partners of Uzbekistan.

In the structure of Uzbekistan’s exports to Turkmenistan in 2021, the main share is occupied by services – $96.8 million, chemical products – $55 million, food products – $14.1 million, non-food raw materials – $9.1 million, industrial goods – $8.8 million, medicines – $2.4 million.

In the structure of Uzbekistan’s imports from Turkmenistan, the main part is accounted for fuel, lubricating oils, similar products – $649.6 million, chemical products – $34.5 million, industrial goods – $13.9 million, machinery and equipment – $2.5 million, services – $6.3 million.

The practical implementation of the signed trade contracts following the results of the high-level events held last fall will allow to increase the trade turnover to one billion dollars.

The growth of mutual trade volumes will also be facilitated by a joint trade center, which is being launched in the newly created border trade zone, as well as agreements on the substitution of imports from third countries with competitive products produced in Uzbekistan and Turkmenistan.

Investment cooperation is developing dynamically. Over the past four years, the number of enterprises with the participation of Turkmen capital in Uzbekistan has grown from 11 to 160.

There are 61 companies operating on the territory of Turkmenistan with the participation of residents of Uzbekistan, including the enterprises of JSC UzAvtoSanoat and UzAgroTehSanoatHolding (export of cars and agricultural machinery, respectively).

There are good foundations for the intensification of industrial cooperation and the creation of complete value chains involving production facilities stationed on the territories of the two countries. In this area, taking into account the potential of Uzbekistan, the textile, construction, chemical, automotive and electronic industries, agriculture are becoming the most important for the parties.

Implementation of joint projects

The Uzbek-Turkmen Interregional Forum held recently in Bukhara, the meeting of the Business Council of Chambers of Commerce and Industry and the exhibition of production capabilities of the two countries are aimed at strengthening interregional cooperation through regular direct dialogue between the border regions. Holding forums of the regions of Uzbekistan and Turkmenistan on an annual basis will become a new driver for the growth of economic cooperation.

This will also be facilitated by an intergovernmental agreement on the mutual establishment of trade missions, which has created a mechanism for expanding cooperation between the economic structures of the two countries, including remotely in real time.

Transport communications

In 2021, international cargo transportation between Uzbekistan and Turkmenistan amounted to almost 2 million tons, an increase of 18% compared to 2020, including by rail – 1.7 million tons, by road – 0.3 million tons.

The transportation of goods to Turkmenistan and in the opposite direction is carried out through the highways of Uzbekistan. Also, a large cargo flow of Uzbek goods is carried out through the territory of Turkmenistan to the borders of Iran, and then to the ports of the Persian Gulf. The parties are working together to maximize the potential of the Uzbekistan-Turkmenistan-Caspian Sea-South Caucasus transport route. This corridor is designed to provide access to the Black Sea ports of Georgia, Turkey, Romania and other countries.

The integration of the communication systems of the two countries allows not only to carry out cargo transportation through our territories, but also to provide the shortest access to the markets of the countries of the Asia-Pacific region, the Middle East, the Persian Gulf and Europe.

This is an international multimodal route “Asia-Pacific countries – China – Kyrgyzstan – Uzbekistan – Turkmenistan – Azerbaijan – Georgia – Europe (via the seaport of Turkmenbashi),” as well as well-known transport corridors: “Russia – Kazakhstan – Uzbekistan – Turkmenistan – Iran – Oman – India; Uzbekistan – Turkmenistan – Caspian Sea – South Caucasus, further – Bulgaria, Romania, Hungary and other European countries; Uzbekistan – Turkmenistan – Iran – Turkey – Bulgaria.”

The implementation of such large-scale infrastructure projects as the Termez-Mazar-i-Sharif-Kabul-Peshawar and Kerki-Akina-Andkhoy railway routes will contribute to the development of the transit potential of the two countries and create favorable conditions for a multiple increase in the volume of cargo transit through Turkmenistan and Uzbekistan to the countries of Southern and Central Europe, the Middle East, South and South- East Asia. This will also be facilitated by the further use of the unique potential of the Turkmenbashi seaport and the full launch of a multimodal transport corridor along the Uzbekistan-Turkmenistan-Caspian Sea route and further through the Black Sea ports with access to Europe.

Our countries attach great importance to the socio-economic development of Afghanistan, implementing transport projects of regional significance and providing electricity to its population. A practical contribution in this regard was the successful operation of the Hairaton-Mazar-i-Sharif railways, the Akina-Andkhoy railway line, as well as the Surkhan-Puli-Khumri, Kerki-Imamnazar-Andkhoy, Serkhetabat-Herat, Rabatkashan-Kalainau and Kerki-Shibirgan power lines. All these vital projects will contribute to ensuring peace and stability in Afghanistan.

The existing extensive system of transport communications between the two countries, the increase in the capacity of border crossing points and the creation of favorable tariff and non-tariff conditions will ensure the growth of continental cargo transportation and strengthen the transport interconnectedness and transit potential of the two countries and the whole of Central Asia.

Strategic direction – energy sector

In this area, along with bilateral cooperation, we also actively participate in multilateral projects. Turkmenistan has been supplying natural gas to China through Uzbekistan and Kazakhstan since 2009. In this context, the Turkmenistan-Uzbekistan-Kazakhstan-China main gas pipeline plays an important role in ensuring regional stability and sustainable development. In addition, both states are partners in a large regional power supply project Turkmenistan – Uzbekistan – Tajikistan- Afghanistan-Pakistan (“TUTAP”).

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Relations between Uzbekistan and Turkmenistan are characterized by a growing convergence of interests in such areas as the development of regional trade, transit, transport and energy potential, as well as ensuring regional security.

In this context, the state visit of President of Turkmenistan Serdar Berdimuhamedov to Uzbekistan becomes a logical continuation of effective and active negotiations at the highest level. It is also aimed at strengthening the achieved level of bilateral relations based on the principles of centuries-old friendship, good-neighborliness, mutual trust and support, constructive political dialogue; expanding trade, economic and investment partnership; deepening cultural and humanitarian ties.

The results of the high-level talks will contribute to the comprehensive strengthening and expansion of strategic partnership relations in the spirit of centuries-old friendship, good-neighborliness and mutual support of the fraternal Uzbek and Turkmen peoples.

Further deepening of bilateral cooperation will serve to strengthen peace, stability and ensure universal prosperity in the Central Asian region.

Obid Khakimov
Director of the Center for Economic Research and Reforms under the Administration of the President of the Republic of Uzbekistan.

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