Georgia-Central Asia ties to strengthen

Turkish Transportation Minister Binali Yildirim (front C), Azerbaijani Transportation Minister Ziya Mammadov (front L) and Georgia’s Economy Minister Giorgi Kvirikashvil (front R) hold a press conference in Istanbul, Turkey, on March 1, 2013. Turkey, Azerbaijan and Georgia signed an agreement in Istanbul on Friday in a bid to speed up construction of an 826-km long railway line connecting the three countries. (Photo : Xinhua Photo)

Being located on the cross-roads of Eastern and Western civilizations and serving as a bridge between Europe and Asia, Georgia naturally enjoyed trade and cultural exchange with many other nations, especially during the historical Silk Road times.

Back in 1118, the Georgian King David IV the Builder, struggling with continuous Seljuk invasions, established an alliance with Cuman/Kipchak Khan Otrok (Atraka, son of Sharaghan, of the Georgian chronicles) and married his daughter, princess Gurandukht (Turandot). Kipchaks, who were spread in most of the Central Asian steppes surroundings the Don River and even some parts of Eastern Europe, were known as brave and skilled warriors. Therefore, King David invited 40,000 Cuman-Kipchak families to settle in Georgia. Each family was contributing a fully armed horseman to the King’s army, creating a 40,000 cavalry. David mediated peace between the Cuman-Kipchaks and Alans to secure a free passage for the Cuman-Kipchaks to Georgia.

Some of the Kipchaks eventually moved back to their homeland – current Kazakhstan and other areas of Central Asia, but many stayed and together with another wave of so called “new kipchaks” (who settled in Georgia or served as the mercenaries after King David’s death) played an important role in the country’s life until the early 13th century.

The alliance mentioned above, which helped King David repel enemy invasions and unite
Georgia, could be considered as the first documented type of cooperation, though only military, between Georgian and (Central) Asian peoples. Almost a millennium later, in October 2005, President of Kazakhstan Nursultan Nazarbaev emphasized these historic ties while visiting Georgia and discussed new directions for cooperation with his Georgian counterpart. Georgian politicians also like to stress that cooperation between Georgia and Central Asian countries, particularly with Kazakhstan, has not started during the Soviet times, but has much deeper roots.

Today, Kazakhstan is one of Georgia’s major trade and economic partners. In terms of trade, it is in the top 10, being the second largest trade partner in Asia right after China. Bilateral cooperation has been dynamically developing since the establishment of diplomatic relations in July 1992. Over 60 intergovernmental and inter-ministerial treaties have been signed, including such important economic agreements as free trade, cooperation in oil and gas fields, investment promotion and protection, avoidance of double taxation and prevention of fiscal evasion, visa free movement, etc.

The relations between Georgia and Kazakhstan are based on mutual respect, the principles of partnership and friendship. On the institutional base, a number of intergovernmental mechanisms regulate and stimulate the development of mutually beneficial cooperation. The two Ministries of Foreign Affairs annually conduct political consultations, where the issues of bilateral relations and international cooperation are discussed. Along with this, the Joint Intergovernmental Economic Commission effectively sets guidelines for bilateral trade and economic activities, while an inter-parliamentary friendship group works in its respective field. All this gives the opportunity to timely respond to the problematic bilateral matters and at the same time coordinate activities on an international level.

The solid legal base and institutional support allows increasing cooperation and strengthening of B2B ties. Being one of the most active investors in the Georgian economy, Kazakhstan has obtained a diversified investment portfolio including natural gas distribution, tourism, construction, healthcare, logistics, port facilities, real estate and other fields. In 2006-2012, Kazakhstan has invested more than 170 million USD. Except for big players like KazMunayGas (and its subsidiaries KazTransOil and Rompetrol), BTA (Bank Turanalem) and Halyk Bank, about 28 joint ventures and 23 companies established in the Kazakh capital are currently registered in Georgia. Most of them successfully carry out commercial activities and implement joint projects.

Georgia’s major economic partner

Kazakhstan is active in developing respective port infrastructure in Georgia. In fact, it holds the majority share in Georgia’s Batumi port on the Black Sea, which gives Kazakhstan good opportunities to upgrade existing facilities and use them for stocking grain and oil for further exports. Another Georgian Black Sea port Poti is also involved in transportation of Kazakh grain and bulk cargo. Georgia’s transit capacity (including railways and access to the Black Sea) and Kazakhstan’s will to diversify export markets and supply routes match well, providing huge potential for cooperation, which might also become the issue of increased interest of the other Central Asian countries.

Georgia and Kazakhstan together with the other involved parties have permanent dialogue on the issues of increasing the flow of goods through the Caucasus transport corridor. Among others, this issue was on the agenda of the Joint Economic Commission meeting held in June 2013 in Astana.

In this regard, it also has to be mentioned that other Caucasian and Central Asian countries have started cooperation long ago with the aim to restore the historical Silk Road. In the early 1990s with the support of the EU, the project of Transport Corridor Europe-Caucasus-Asia (TRACECA) was initiated. The corridor starts in Eastern Europe (Bulgaria, Romania, Ukraine) and also crosses Turkey.

There is a route passing the Black Sea to the ports of Poti in Georgia, further using the transport network of the Southern Caucasus, and a land connection towards this region from Turkey. From Azerbaijan by means of the Caspian ferries (Baku – Turkmenbashi, Baku – Aktau), the TRACECA route reaches the railway networks of Central Asian states of Turkmenistan and Kazakhstan. The transport networks of these states are connected to destinations in Uzbekistan, Kyrgyzstan, Tajikistan, and reach the borders of China and Afghanistan.

Throughout the years of independence, the Central Asian states have developed new strong cooperation ties with the other Asian countries and have become more integrated in regional developments. Yet, they also managed to keep and strengthen relations with traditional partners (former Soviet republics). Given the economic achievements and the development pace, Kazakhstan is obviously, a leader among the region’s five states. Its importance as energy resource and other strategic commodities supplier, together with its rapidly developing infrastructure and transit potential, and internationally expanding businesses, is among the key factors allowing the country to play an all increasing role in the regional (Asia) and global economic processes.

Though Kazakhstan is the biggest trade partner for Georgia in Central Asia, Georgia enjoys good relations with all countries of the region. Each of them is unique and therefore there is much potential for mutually beneficial cooperation with all of them.