Japan initiates change: What awaits Central Asia?
In early August 2024, Japanese Prime Minister Fumio Kishida will visit Central Asia with an ambitious economic aid package designed to strengthen ties between Tokyo and this strategically important region and significantly impact global trade routes and energy policy. The Japanese initiative aims to create a new trade route that will connect Central Asia with Europe, bypassing Russia via the Caspian Sea. Analysts believe this move could shift the balance of power in the region and set a new direction in geopolitical and economic relations.
Central Asia, situated between East Asia and Europe, is a key region rich in natural resources such as oil and gas. Traditionally, this region has been within the sphere of influence of major world powers: Russia and China. Russia, as the former metropolis of the Soviet republics, maintains deep ties with Central Asia, especially in security and economic fields. China, in turn, is actively expanding its influence through the "One Belt, One Road" initiative, investing in infrastructure and trade. However, Russia's invasion of Ukraine has caused some Central Asian countries to distance themselves from Moscow. In this context, Japan's initiative appears as a strategic step aimed at strengthening Tokyo's position in the region and diversifying economic ties.
A key element of Japan's program is the creation of a new trade route that will provide a reliable and stable connection between Central Asia and Europe, bypassing Russia via the Caspian Sea. This will not only contribute to the region's economic independence but also improve logistics and trade flows. The new route is expected to reduce transportation costs and increase the competitiveness of Central Asian goods in the European market.
Energy investments are an integral part of the economic package. Japan plans to promote decarbonization using technologies and loans from Japanese companies to improve natural gas processing and reduce carbon dioxide emissions. This is an important aspect given global trends towards sustainable development and combating climate change.
Japanese companies have established themselves in environmentally friendly technologies, and their implementation in Central Asia could bring significant environmental and economic benefits to the region. In return, Japan intends to attract skilled workers from Central Asia, providing an additional incentive for knowledge exchange and technological development.
Geopolitical risks accompany this plan alongside opportunities. Russia, already expressing concern about Japan's increasing influence in the region, may attempt to strengthen its presence or increase pressure on Central Asia. China, which is also active in the region, may view Japan's initiative as competitive pressure on its projects and an expansion of its sphere of influence.
On the other hand, such an economic aid package could be an important step for Central Asia towards improving the economic situation and increasing the level of independence from foreign policy influences. New trade routes and energy investments could play a key role in developing infrastructure and strengthening the economic positions of the region's countries on the international stage.
In an interview with News.Az, transport and logistics expert Rauf Agamirzayev noted that Japan's activity in Central Asia and the Caucasus has been observed since these countries gained independence. He emphasized that Japanese companies participated in the "contract of the century."
"Financing and control of the construction of the bypass road in Kutaisi, Georgia, were carried out by the Japanese agency JICA and other Japanese companies. We have observed active actions in Kazakhstan, Uzbekistan, and Turkmenistan. Recently, the Japanese side conducted a feasibility study for the modernization of the Turkmenbashi-Turkmenabat railway, connecting the east and west of Turkmenistan, and was one of the stakeholders in the construction of this road. Japan's activity is a long-term process," the expert noted.
Agamirzeyev also emphasized that new infrastructure projects create opportunities for shorter routes to deliver goods to the region and exit through it to Europe. "Recent events, especially problems in the Red Sea, lead to increased transit time, and each country is considering serious alternatives. If there is an effective alternative, even with insufficient volume levels, there are still prospects."
"Developing the region requires targeted actions. If volumes are based on contracts, this will lead to the development of a new roadmap or adjustment of the existing one, allowing for more efficient work. China and Japan are interested in the region, and South Korea is likely to join them. This will lead to a rejection of dependence on the sea and active use of land routes for corridor diversification. Europe also shows interest in this corridor but may have a slightly different approach."
At the same time, Armenia, which has remained on the sidelines over the years, can offer new routes. However, until relations with Azerbaijan are established, routes will not open from either Azerbaijan or Turkey. An alternative is the construction of the Araz corridor, logically continuing the Baku-Tbilisi-Kars railway. Armenia, taking an unconstructive position, risks being left out of regional projects. However, if it reaches an agreement with Azerbaijan and fulfills the requirements presented, it will be able to join regional projects and receive dividends. The region's transport network will be able to handle more cargo through diversification."
The expert noted that Azerbaijan is a crossroads of two regions. Central Asia and the South Caucasus have exceptional significance on the Eurasian map, and this is a new diversification. Central Asian countries, which until today had access to the world only from south to north, now have a serious alternative to the west through Azerbaijan, which increases the importance of not only Azerbaijan but also the entire South Caucasus.
"Complex events in this region increase the interest of world powers. We observe this in numerous statements. China, Japan, the USA, Russia, Iran, Turkey, and the EU—all show interest. The presence of infrastructure is very important. Simply being in a good location is not enough. You must have modern infrastructure to attract a portion of the large cargo flow. Azerbaijan is actively working in this direction. Work continues in the direction of diversification. I believe our goal is correct. Depending on how events develop, the speed may change, and new opportunities will arise," the expert said.
Central Asia, situated between East Asia and Europe, is a key region rich in natural resources such as oil and gas. Traditionally, this region has been within the sphere of influence of major world powers: Russia and China. Russia, as the former metropolis of the Soviet republics, maintains deep ties with Central Asia, especially in security and economic fields. China, in turn, is actively expanding its influence through the "One Belt, One Road" initiative, investing in infrastructure and trade. However, Russia's invasion of Ukraine has caused some Central Asian countries to distance themselves from Moscow. In this context, Japan's initiative appears as a strategic step aimed at strengthening Tokyo's position in the region and diversifying economic ties.
A key element of Japan's program is the creation of a new trade route that will provide a reliable and stable connection between Central Asia and Europe, bypassing Russia via the Caspian Sea. This will not only contribute to the region's economic independence but also improve logistics and trade flows. The new route is expected to reduce transportation costs and increase the competitiveness of Central Asian goods in the European market.
Energy investments are an integral part of the economic package. Japan plans to promote decarbonization using technologies and loans from Japanese companies to improve natural gas processing and reduce carbon dioxide emissions. This is an important aspect given global trends towards sustainable development and combating climate change.
Japanese companies have established themselves in environmentally friendly technologies, and their implementation in Central Asia could bring significant environmental and economic benefits to the region. In return, Japan intends to attract skilled workers from Central Asia, providing an additional incentive for knowledge exchange and technological development.
Geopolitical risks accompany this plan alongside opportunities. Russia, already expressing concern about Japan's increasing influence in the region, may attempt to strengthen its presence or increase pressure on Central Asia. China, which is also active in the region, may view Japan's initiative as competitive pressure on its projects and an expansion of its sphere of influence.
On the other hand, such an economic aid package could be an important step for Central Asia towards improving the economic situation and increasing the level of independence from foreign policy influences. New trade routes and energy investments could play a key role in developing infrastructure and strengthening the economic positions of the region's countries on the international stage.
In an interview with News.Az, transport and logistics expert Rauf Agamirzayev noted that Japan's activity in Central Asia and the Caucasus has been observed since these countries gained independence. He emphasized that Japanese companies participated in the "contract of the century."
"Financing and control of the construction of the bypass road in Kutaisi, Georgia, were carried out by the Japanese agency JICA and other Japanese companies. We have observed active actions in Kazakhstan, Uzbekistan, and Turkmenistan. Recently, the Japanese side conducted a feasibility study for the modernization of the Turkmenbashi-Turkmenabat railway, connecting the east and west of Turkmenistan, and was one of the stakeholders in the construction of this road. Japan's activity is a long-term process," the expert noted.
Agamirzeyev also emphasized that new infrastructure projects create opportunities for shorter routes to deliver goods to the region and exit through it to Europe. "Recent events, especially problems in the Red Sea, lead to increased transit time, and each country is considering serious alternatives. If there is an effective alternative, even with insufficient volume levels, there are still prospects."
"Developing the region requires targeted actions. If volumes are based on contracts, this will lead to the development of a new roadmap or adjustment of the existing one, allowing for more efficient work. China and Japan are interested in the region, and South Korea is likely to join them. This will lead to a rejection of dependence on the sea and active use of land routes for corridor diversification. Europe also shows interest in this corridor but may have a slightly different approach."
At the same time, Armenia, which has remained on the sidelines over the years, can offer new routes. However, until relations with Azerbaijan are established, routes will not open from either Azerbaijan or Turkey. An alternative is the construction of the Araz corridor, logically continuing the Baku-Tbilisi-Kars railway. Armenia, taking an unconstructive position, risks being left out of regional projects. However, if it reaches an agreement with Azerbaijan and fulfills the requirements presented, it will be able to join regional projects and receive dividends. The region's transport network will be able to handle more cargo through diversification."
The expert noted that Azerbaijan is a crossroads of two regions. Central Asia and the South Caucasus have exceptional significance on the Eurasian map, and this is a new diversification. Central Asian countries, which until today had access to the world only from south to north, now have a serious alternative to the west through Azerbaijan, which increases the importance of not only Azerbaijan but also the entire South Caucasus.
"Complex events in this region increase the interest of world powers. We observe this in numerous statements. China, Japan, the USA, Russia, Iran, Turkey, and the EU—all show interest. The presence of infrastructure is very important. Simply being in a good location is not enough. You must have modern infrastructure to attract a portion of the large cargo flow. Azerbaijan is actively working in this direction. Work continues in the direction of diversification. I believe our goal is correct. Depending on how events develop, the speed may change, and new opportunities will arise," the expert said.
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