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C5 and ASEAN: Two Stories of Regional Integration

C5 That Wasn’t
Among the many aspects of the rising importance of Central Asia to the global economy and trade, one notable feature is that for over 30 years after obtaining independence the five neighboring countries have not created a cohesive intergovernmental organization for the entire region. The short-lived Central Asian Union had never grown beyond its three founding members - Kazakhstan, Kyrgyzstan, and Uzbekistan - and attempts at revitalizing the organization have so far brought little practical result.

To some extent, the lack of a formal regional body could be explained by the remaining post-Soviet structures that brought the newly independent Central Asian countries together immediately after the dissolution of the Soviet Union. Examples of such structures include the Commonwealth of Independent States uniting twelve former Soviet republics (without three Baltic states) and the Collective Security Treaty (aka Tashkent Pact), which included four Central Asian countries (except Turkmenistan).

However, the treaties of the early 90s could not foretell the very different political and economic trajectories that the Central Asian countries would take in the coming decades. While Uzbekistan and Turkmenistan pursued, to varying degrees, isolationist economic and foreign policies, Kazakhstan opened its market to the global investors and MNCs, and pursued pragmatic multilateralism in foreign policy. Kyrgyzstan survived three consecutive revolutions, each of which changed the country’s political course, and Tajikistan descended into a civil war that lasted five years and involved military forces from Russia and the neighboring countries in the conflict.

The resulting weakening of the early post-Soviet arrangements created space for new platforms focused on specific aspects of cooperation between countries. Eurasian Economic Union (EEU), of which Kazakhstan and Kyrgyzstan are members, allowed for the movement of goods and services between five member countries, including Russia, Armenia, and Belarus. In turn, regional security arrangements were gradually delegated to the Russia-led Collective Security Treaty Organization (CSTO) of which Kazakhstan, Kyrgyzstan, and Tajikistan are current members (Uzbekistan suspended its membership in 2012).

The changing geopolitical and economic landscape also drove greater cooperation between Central Asia and emerging powers, such as China and Turkey. Kazakhstan, Kyrgyzstan, and Tajikistan were among the founders of the Shanghai Cooperation Organization (SCO), and Uzbekistan became the first country to be officially invited to join the club. Kazakhstan and Kyrgyzstan, along with Turkey and Azerbaijan, were instrumental to the Organization of Turkic States (OTC). C5+1, the latest addition to the existing range of international platforms, as well as its business counterpart B5+1, was initiated by the US Department of State. China, in turn, held the inaugural China-Central Asia Summit in Xian in 2023, and the first EU-Central Asia Summit is scheduled to take place this year.

Source: Ibrahim Mammadov, Cabar Asia

All of those organizations for all their implied multilateralism, however, are inevitably linked to the often conflicting interests of larger geopolitical players. Thus, the question of whether Central Asia may benefit from creating a cohesive regional organization to put the countries’ own interests first remains open. In this sense, some parallels and observations could be drawn from the lasting success of ASEAN, another regional block of the vast Eurasian continent.
ASEAN: From Security to Trade
ASEAN is an organization uniting 10 countries with over 600M people in Southeast Asia. Founded by Indonesia, Malaysia, Philippines, Singapore, and Thailand in 1967, ASEAN was initially born out of the geopolitical turmoil, when conflicts stemming from the global ideological confrontation and colonial powers withdrawal threatened to engulf the entire region. However, ASEAN transcended the end of the Cold War to refocus on economic integration, development, and trade, and its expansion included the former ideological rivals.

While ASEAN’s founding countries’ leaders preferred to sort their differences out during a game of golf rather than through formal processes, and hence kept the organizational structure somewhat loose, since the early 90s ASEAN became instrumental in institutionalizing free trade and regional integration. For instance, the ASEAN Free Trade Area (AFTA) created in 1992, over time reduced the trade tariffs between members effectively to zero, making ASEAN itself the largest market for exports of goods from the trade bloc countries, and the second largest market for its own imports.
Notably, with most countries in ASEAN being export-oriented economies, the organization allows individual members to pursue their own trade agreements, and member countries, in fact, trade with external partners more than they do with each other. However, ASEAN’s collective bargaining power, as the third largest economy in Asia, and fifth globally, played an important role in negotiating free trade agreements with larger non-member countries, such as India and China, as well as within the Regional Comprehensive Economic Partnership RCEP, the largest trade bloc in history.
C5 and ASEAN
Comparing ASEAN to Central Asia’s C5 directly would, of course, be a stretch. Beyond being an order of magnitude bigger in terms of population and GDP, ASEAN is also better integrated into the global economy with over 25% of global trade passing through a narrow Malacca Strait between Indonesia, Malaysia, Thailand and Singapore. 11 million tons of goods projected to transit through the Middle Corridor by 2030 pale in comparison with over 500 million tons shipped through the Strait annually.

Nonetheless, some similarities could be seen - both C5 and ASEAN represent the developing and growing economies. Both regions are increasingly drawn into the economic and trade orbit of China, their immediate neighbor, while balancing economic relations with other major trade partners, including US and Europe. Countries in both areas are widely diverse in terms of their economic development, and both regions remain in focus of large economic players seeking to diversify their trade and secure alternative supplies of critical materials, from hydrocarbons and rare earth minerals to agricultural produce and labor resources.

From this standpoint, the key learning from ASEAN for Central Asia would be that regional connectivity not only helps to transit goods and negotiate better deals - it enables intraregional trade and investments, supports economic growth and diversification, and, no less importantly, builds lasting human connections between the peoples.

The C5 governments' ambitions of integrating Central Asia, one of the least connected regions in the world, into global trade via the Middle Corridor will require a continuous effort to reduce intraregional trade barriers ranging from infrastructural bottlenecks to unresolved issues of tariffs and visas. The ASEAN Model, where countries retain their full sovereignty over security, trade, and domestic politics, and where agreements between members are based on persuasion and consensus, rather than a decision of a centralized governing body, might be attractive for the Central Asian governments to accomplish just that.

Probably even more importantly, the ASEAN example proves that intergovernmental organizations allow countries to agree on and pursue common economic and political interests, and rediscover their own agency in the global geopolitical and geoeconomic arenas.