Trade and Transport in Central Asia

Abstract

Until 1991 Central Asia was part of the integrated economic space of the Soviet Union without borders and with a relatively efficient transport network, but oriented toward the needs of the Soviet economy. The role of the Central Asian republics in the Soviet division of labor was as providers of raw materials, primarily cotton, minerals, and energy products; roads and railways led north or west to the Russian republic, and eastern and southern borders were effectively closed to trade. Since independence the Central Asian countries have continued to exploit their comparative advantage in raw material exports, but their trade has been hampered by poor transport facilities and by failure to improve the soft infrastructure of trade. Being landlocked exacerbates these weaknesses, but location could be turned to advantage as Central Asia is adjacent to the world’s most dynamic large economies. To benefit from this the hard and soft infrastructure of transport and trade need upgrading, and regional cooperation to facilitate transit is needed to stimulate intra- and extra-regional trade.