In today’s business world, the economy of countries is highly affected by international trade. Hence, governments usually encourage exports to achieve trade surplus.
Trade surplus decreases unemployment, improves free-trade opportunities, lowers government spending and attracts Foreign Direct Investment (FDI). (Brandon Gaille, https://brandongaille.com/25-trade-surplus-pros-and-cons/)
From independence until today, each of 5 Central Asian countries: Kazakhstan, Uzbekistan, Turkmenistan, Kyrgyzstan and Tajikistan defined their strategies regarding international trade.
Let’s first try to guess, which country might have higher potential in global trade?
Tajikistan is the 5th country in Central Asia in terms of exporting, and the 4th importer country. Overall, international sales of Tajikistan worth $1.1 billion, which is 0.02% of the total in Asian exports.
The main goods sold abroad are aluminum and cotton, which is 75% of export. The main trade partners are Russia and China. (Trade Economics)
Concerning purchasing products and services, Tajikistan imported $3.3 billion worth products in 2019. It was more than only Turkmenistan in Central Asia. The amount of imports increased by 5.8% from 2018 to 2019.
The most imported goods of Tajikistan are alumina for aluminium production, petroleum and grain. Import exceeded export by $2.2 billion, resulting in trade shortage.
Locating in the east of Central Asia and bordered with China, Kyrgyzstan occupied the 28th place of top Asian export countries list, and the 4th country in Central Asia.
The country is a member of the Euroasian Economic Union (EAEU) and World Trade Organization (WTO), which are positively affecting the growth of international trade.
The country’s exports amounted $1.9 billion with an increase of 15.9% since 2005. Kyrgyzstan’s export accounts for 0.3% of the whole of Asian exports.
Like Tajikistan and other Central Asian countries, Kyrgyzstan has trade agreements with Russia and China, while the EU is also in the list of top trade partners
Kyrgyzstan imports are increasing faster than exports. The country is experiencing a trade deficit. The country imported $61.6 million more goods than exports in June of 2020. (Trading Economics, https://tradingeconomics.com/kyrgyzstan/balance-of-trade).
The country placed in the 3rd position out of 5 Central Asian countries in imports. The main imports of Kyrgyzstan are Refined Petroleum, Rubber Footwear, and agriculture products. (OEC)
Turkmenistan is the biggest country after Kazakhstan in the region. The country is best known for large gas resources and autocratic regime.
The exports of Turkmenistan increased by 122.56 USD million, from $9.57 billion in 2018 to $9.69 billion in 2019. (Trading Economics, https://tradingeconomics.com/turkmenistan/exports)
Unlike Tajikistan and Kyrgyzstan, Turkmenistan achieved $7.22 billion trade surplus. (Trading Economics, https://tradingeconomics.com/turkmenistan/balance-of-trade)
Turkmenistan imports the least goods compared to other Central Asian countries. The government is reducing imports constantly.
In 2018, the country’s import amounted 5.09B, which is 56.82% less than in 2017. (Macrotrends, https://www.macrotrends.net/countries/TKM/turkmenistan/imports)
According to OEC, Turkmenistan mainly sells Petroleum Gas (about 80% of exports) to China and Afghanistan, while buys harvesting machinery, special purpose ships from Turkey, and China.
Uzbekistan is the most populated country in the region. About 3 out of 7 people in Central Asia live in this country.
From declaring independence, the country made great efforts to increase exports and make international trade agreements.
The sales of goods and services abroad reached $17.9 billion in 2019, which is 15% or $3.9 billion increase from 2018. The precious, semi-precious metals and services account for 48.4% of total exports. (Sof, https://sof.uz/uz/post/ozbekiston-2019-yilda-eng-kop).
The exports are estimated to decrease between 11% to 12% in 2020 due to Covid-19 pandemic
Machinery, construction materials, and equipment are the major imports of Uzbekistan. Like exports, Uzbekistan is expected to decrease imports by around 10% in 2020. The country is buying more goods than it is selling and the trade deficit is increasing considerably, from 7.2% to 9.2%. (Kun.uz, Jan 5, 2020)
The biggest economy and the leader export country in Central Asia is Kazakhstan. It exported $65.83 billion, which is $47.93 billion more than Uzbekistan.
In the global ranking, Kazakhstan was placed to 48th position, while Uzbekistan is on the 85th and Kyrgyzstan occupied 88th place.
The country’s international trade is highly dependant on oil-related products, which covers 73% of total exports. The possible reasons for higher results can be high reserves of oil. (WorldStop Exports, http://www.worldstopexports.com/worlds-top-export-countries/)
The landlocked location causes difficulties to increase exports and win the competition. The prices are highly sensitive to transport costs. According to Astana News, a 1% increase in transport costs increases products’ costs by 5 to 9 percent. (Astana News, https://astanatimes.com/2014/03/kazakhstan-addresses-challenges-international-trade/)
In 2019, Kazakhstan Imported $50.25 Billion worth of products . The main goods bought were Petroleum Gas and Refined Petroleum. (Macrotrends, https://www.macrotrends.net/countries/KAZ/kazakhstan/imports)