Arab Gulf wants economic alliance with Central Asia

The Arab Gulf states and Central Asian republics are poised to catalyse mutual economic growth while charting a course towards enhanced cooperation. Esteemed experts gathered for a discussion, convened by the Middle East Institute in Washington, to delve into the burgeoning prospects underpinning this unprecedented drive for economic integration, aptly titled “Gulf States, Central Asia, and the South Caucasus: Is an unprecedented push for economic integration underway?”

The landmark summit in July, hosted by Saudi Arabia, served as the inaugural collective meeting between the Gulf Cooperation Council member states (comprising the Kingdom, the UAE, Bahrain, Qatar, Kuwait, and Oman) and the C5 group of Central Asian nations (Uzbekistan, Turkmenistan, Tajikistan, Kyrgyzstan, and Kazakhstan). This historic confluence was orchestrated with the explicit aim of bolstering trade and economic cooperation between these geographically distant yet increasingly interconnected regions.

Akbota Zholdasbekova, an associate professor of international relations at L.N. Gumilyov Eurasian National University in Kazakhstan, underscored the pioneering role played by Saudi Arabia and the UAE among Gulf nations. They have emerged as vanguards in the realm of investment within energy-rich Central Asia, reflecting their strategic intent to diversify investment portfolios and cultivate fresh avenues for export.

Ms. Zholdasbekova elucidated how Central Asian nations stand to gain significantly from such investments, as they not only catalyse economic growth but also foster new channels for bilateral trade and investment. Indeed, Saudi Arabia and the UAE have already channeled hundreds of millions of dollars into energy enterprises across Kazakhstan and neighbouring countries, thereby enriching the economic landscape of the region.

In June, Saudi Arabia and Kazakhstan solidified an agreement to establish a comprehensive framework for cooperation in the energy sector. This move underscores the Kingdom’s commitment to advancing its global energy alliances, envisaging collaboration encompassing petroleum, gas, refining, petrochemicals, electricity, and renewable energy.

Mohammed Al-Sulami, the head of Rasanah, the International Institute for Iranian Studies in Riyadh, illuminated the parallels between the two regional blocs. As Gulf states actively pursue economic prospects, they have rekindled their recognition of Central Asian states as valuable allies sharing common values and objectives.

Moreover, Gulf nations are keenly interested in investing in agriculture, supply-chain projects, and skilled labor—a fertile terrain Central Asian markets are uniquely positioned to provide.

Crucially, Mr. Al-Sulami underscored that Gulf nations have refrained from taking sides in the ongoing conflict between Russia and Ukraine, despite external pressures. The Gulf states steadfastly uphold a policy of serving as bridges in the global geopolitical landscape, eschewing the burden of partisan alliances.

Fariz Ismailzade, representing ADA University in Baku, Azerbaijan, highlighted a perceptible shift in the nation’s approach. Traditionally oriented towards Europe for trade and bilateral ties, Azerbaijan now embraces the belief that the Gulf region offers more substantial value. Consequently, Azerbaijan is redirecting its focus “in our neighbourhood” to explore enhanced options for economic growth and development.

Mr. Ismailzade articulated the exponential surge in trade between Azerbaijan and Gulf states over the past five years, affirming that the Gulf region is now deemed a strategic partner. This strategic partnership is driven by the allure of valuable investments, burgeoning tourism prospects, and sustainable economic expansion. Notably, Azerbaijan has entered into significant contracts with ACWA and Masdar, prominent energy companies in Saudi Arabia and the UAE, ushering in transformative investments that enable Azerbaijan to export clean and renewable energy to Europe—an initiative poised to galvanise economic progress within the nation.

In conclusion, the evolving economic ties between the Gulf states and Central Asian republics herald a new era of collaboration that promises to unlock economic potential and expand horizons for both regions. These strategic alignments underscore the capacity for nations to foster mutual growth and prosperity through global partnerships and shared objectives.