Dr. Johannes Linn of the Wolfensohn Center in the Global Economy and Development Program at the Brookings Institution was kind enough to share with neweurasia his thoughts on a diverse range of topics related to Central Asia. Dr. Linn is currently the Executive Director of the Wolfensohn Center where he serves as Special Advisor to the Asian Development Bank‘s Central Asia Regional Economic Cooperation Program, and he was formerly the Vice President of the World Bank for Europe and Central Asia. His recent publications include “New Impetus towards Economic Integration between Europe and Asia” in Asia Europe Journal, Volume 4, Number 1 / April, 2006, the 2006 UNDP Human Development Report for Central Asia, and even some more personal thoughts on the region for neweurasia.

The interview transcript below includes discussion of themes such as economic development; regional integration; Russia and regional geopolitics; human rights; development prospects for Kazakhstan and Tajikistan; and potential paths forward for Turkmenistan.

neweurasia: Can you tell us a little bit about your experience as Vice President of the World Bank for Eurasia? How is Central Asia unique from a development perspective?

Johannes Linn: First of all, Central Asia presents a paradox. In terms of human capacities it is very well developed in comparison, for example, with Africa and other low-income countries. The human capacity is just much greater in terms of education and other indicators such as health and longevity. So in that sense you have a contradiction between the large number of people in poverty and with low incomes in countries like Tajikistan, Kyrgyz Republic, Uzbekistan and so on, and the aforementioned human capital development indicators.

You also have an interesting comparison with many other developing countries, in that you have a colonial or quasi-colonial heritage since a large, neighboring imperial power, took control and ultimately dominated the economic, social, cultural, and security development of what are now independent countries; previously they were all occupied and conquered by Russia. On the one hand this is similar to the history of many other developing countries with a colonial heritage, but on the other hand, when you talk to many Central Asians and mention this issue of colonial heritage, they tell you not to look at this as a colonial or post-colonial issue. They tell you that they absorbed Russian cultural, social, and economic heritage, and that this is not a matter of colonial heritage. To me this is a very interesting question, and one to which I don’t really have an answer actually. Is it colonial, or not? Is it now post-colonial? Now, you can argue that is all a matter of words anyway, but what I think it means is that many of the institutional weaknesses you now see in Central Asia, be it weak government structures, pervasive corruption, authoritarian regimes, these symptoms are quite similar to those you see in many other post-colonial countries. In that sense, you have a fundamental similarity with other developing countries.

A third point is that Central Asia is special because of its landlocked status, which is much more severe than anywhere else in the world, simply in terms of distances. Now Africa also has a number of landlocked countries, but the distances are not so great, even though the transport conditions may actually be worse than in Central Asia. This is an important factor to keep in mind when discussing development in Central Asia.

Finally, now Central Asia is at the core of the Eurasian super-continent, with very dynamic and big neighbors: Russia, China, India, Europe, the Middle East. Central Asia is at the center of an incredibly dynamic continental economy that is integrating very rapidly. The question for Central Asia will be: will it be able to benefit from this, in terms of its own development, or will it become a barrier to integration and to peaceful and prosperous development in Eurasia as a whole because you may have a core of weak, or in some cases maybe even failing states.

ne: Can you talk a little bit about the new partnership between the Wolfensohn Center for Development at Brookings and the Asian Development Bank? It sounds like the initiative is designed to promote exactly that: continental integration and regional cooperation. You are a Special Advisor to this project. What exactly is this project aimed to accomplish?

Linn: A little background first. As you know, I led the UNDP Human Development Report for Central Asia, which focused specifically on regional integration and cooperation. It hoped to demonstrate that there are great benefits to Central Asians from working together and working with their neighbors in a number of key areas, whether its trade, transport, energy, water, and even areas like education, health, and natural disaster preparedness and preparedness. In the UNDP report we try to quantify the potential benefits and explore the constraints in terms of the political realities on the ground, the different interests of different players in the region. Fundamentally, our conclusion was that Central Asian governments, civil society, regional organizations, and neighboring powers, and the international community ought to work together in making Central Asian integration with each other and the rest of the world a reality. We concluded that there would be great benefits for everyone concerned in doing this.

When the report was published, the main messages were incorporated into the thinking, strategy, and ultimately the action plan of CAREC (the Central Asia Regional Economic Cooperation Program) at a series of senior official and ministerial meetings beginning in November of 2005 in Bishkek. As the comprehensive action plan was developed, it turned from being just a report into what I saw as an effective program of action that was endorsed by the governments participating in CAREC [Azerbaijan, Afghanistan, China, Kazakhstan, Kyrgyz Republic, Mongolia, Tajikistan, Uzbekistan].

In September of 2006, the Asian Development Bank (which houses the secretariat of CAREC) asked me to join their efforts, and more generally CAREC’s efforts, in promoting the agenda of CAREC, which is regional cooperation in three principal areas: transport, trade, and energy. The function that I was asked to take on is threefold. First, it is to reach out to senior policymakers in the region, but also to policymakers in the surrounding countries, such as China, Russia in particular, and in the broader donor community – the European Union, the United States, Japan – to explain to them what CAREC is, why it is an important forum for various stakeholders to get together to support Central Asian regional cooperation and to give greater prominence and recognition to CAREC’s role.

My second function is to assist CAREC in the further development of its strategy for regional cooperation in monitoring and adapting the comprehensive action plan. The third area is to support what is called the “CAREC Institute.” This is an effort by the CAREC to strengthen participating countries’ capacity through training and improved research, and through outreach to explain to stakeholders within the countries why cooperation and integration is important. The CAREC Institute will not be a big new institutional structure; it will basically be one or two people who organize, coordinate, and contract for research, training, and outreach through institutions within the region, mostly. My role will be to help develop the approach CAREC takes to carry out these functions.

The advisor role is important to me because it gives me an opportunity to build on the findings of the Human Development Report. I want to make sure this report is not like many other reports just sitting on a shelf, but that its findings, lessons, and insights are being put into action on the ground, and there I see CAREC as a very good vehicle.

I forgot to mention that I will also support CAREC’s efforts to work with other regional organizations, in particular the Shanghai Cooperation Organization and the Eurasian Economic Community in making sure that CAREC supports those organizations, especially in technical and financial areas, as appropriate.

ne: What do you think the biggest barriers are to regional integration in Central Asia? Physical infrastructure? Political buy-in? Economic development?

Linn: Let me start by telling you what I don’t think it is. I don’t think it is traditional tariff and trade barriers – quotas, restrictions, and so on – the sort of things trade economists tend to look at. That’s not where the biggest problem is. The single biggest problem is the institutional weakness in facilitating trade at the border in terms of the many different requirements that people who want to cross the border and who want to trade across the border face. This includes many barriers – you have problems with getting passports, difficult visas regimes, multiple inspections, not just customs, but also health, phyto-sanitary and other inspections. All these create a lot of problems and a lot of delays at the borders. In some countries you even have borders that are effectively closed for much of the time and for many who wish to trade. Uzbekistan and Turkmenistan in recent years for various reasons have physically closed their borders.

In addition you now have what are called “behind the border” problems, which relate to the management of transit trade. For instance, when you enter a country you have to organize convoys of trucks that are supervised by a police escort from one border to the next border. So you actually have to wait, organize, and pay for such a convoy. This practice relates to the fact that many countries are not in compliance with what is called T.I.R.; this is the international transport clearance and regulation system, which allows trucks from one country to transit to other countries and get to their final destinations with minimal problems. In addition, in many countries you now have local traffic control posts, where the police will check traffic going through. As I have experienced myself, you have to pay what amount to bribes at these posts to the police to let you cross and not cite you for one infraction or another, real or spurious.

These obstacles cost both time and money. It is useful to compare the overland routes to ocean transport, where there are now no such impediments, and if there were they would essentially amount to piracy. The great disadvantage of land transport in such a fractured landscape is that with so many barriers, trade becomes terribly costly and inefficient.

ne: So in a sense Central Asian countries actually need to have better and more efficient regulations than countries elsewhere in the world.

Linn: Exactly. In order for Central Asia to compete internationally, if anything has to do better than other regions. It doesn’t just have to improve the roads and railroads. From my perspective the most important thing to realize is that it isn’t just the physical infrastructure that needs to be improved; it’s the border crossings and the behind-the-border conditions that impede or facilitate trade. Those long distances to the international and regional markets make this sort of reform crucial.

ne: Is it just Central Asian internal policies that stand in the way of integration? Or are international powers part of the problem as well? It was remarked at a Brookings conference on this topic last year that countries outside the region have much less to gain from Central Asian integration than Central Asian countries themselves.

Linn: First of all, I think to have Central Asia prosper and be stable is of great interest to all of Central Asia’s neighbors – which means Russia, China, Pakistan, India, Europe – and to the US as well, because the US has a great interest in avoiding failed states that provide havens for terrorists.

It’s the immediate neighbors, however, who have the greatest interest for obvious regions. Unstable and failing states in the immediate vicinity can spill over into bordering countries. China, for example, is particularly interested in supporting the economic development and political stability in Central Asia simply because it doesn’t want failing states in its backyard.

There is also a larger issue of Eurasian integration. For Korean business, European business, and actually even American business, being able to transship commodities from Hamburg to Seoul, or from Beijing to Moscow, or from Moscow to Delhi, will become increasingly beneficial and important, but that requires that you have good transport routes and good trading facilities – basically what I’ve just been talking about – so that you don’t lose a lot of time and money in transit. The ultimate goal would be trucks crossing Eurasia the way they do North America. I was visiting Hyundai in Korea recently, and they actually showed me a map illustrating the potential time and money saving of shipping by railroad from Seoul to Hamburg through North Korea, Kazakhstan, and Russia. It is clear from their perspective that a good, reliable transport overland would be much preferable and economical to sea transport. Even the US firms are interested in establishing when and how they can start using a transcontinental shipping route. There is great interest commercially in overland transport, and Central Asia is at the hub of all this.

Now, of course, in terms of broader foreign policy, Central Asia is not the first priority for either the US or Europe; I think that is quite clear, given the other pressing political and security issues they face. On the other hand, you can also see that Europe is paying some attention since it is developing an new strategy for engaging Central Asia. There are very senior people who do make Central Asia their priority. So I wouldn’t say that Europe and the US neglect Central Asia, it just isn’t as high on their list of priorities as certain other areas.

ne: What do you think the increasing animosity between Russia and the US means for Central Asia, both in terms of regional integration and more broadly? Do you think the proposed Azerbaijan deal could help or hurt integration?

Linn: The recent deterioration in Russia-US relations didn’t really involve Central Asia. There was an earlier time when the Shanghai Cooperation Organization (SCO) called for the removal of foreign – meaning, US — bases that led to tension between Russia, China, and the US. These days the principal causes of tension are not related to Central Asia.

I don’t see any obvious reasons why the Russia – America relationship would have an impact on Central Asian integration. I suppose the SCO could continue to push for the removal of the American base from Kyrgyzstan, but I don’t predict that this will happen – it would just further aggravate relations – but there is a possibility.

More generally, what I am concerned about is the revival of Cold War rhetoric around traditional Cold War issues – missile treaties, defense, etc. The new antagonistic tone you find here in Washington, but also in Moscow, where the other side is defined as the enemy or a hostile force, concerns me greatly. The US and Russia – and for that matter, China and India as well – have a lot of common problems that they should solve together rather than competing over what I would regard in a broader sense as secondary issues. So I think it is unfortunate that we fall back into Cold War rhetoric.

Regarding the Azerbaijan deal proposed by Mr. Putin, my reaction was that it was a positive step, rather than continuing the antagonistic dialogue that has characterized his statements in the past, such as the Munich Security Conference and other occasions. I think that his stepping back from that antagonistic tone and putting a constructive proposal on the table was very helpful. The initial reaction from the United States was also constructive. Whether this will work in the long term as a solution for what the Americans and the Europeans are trying to do – to set up a security shield against rogue states – I don’t know, I’m not enough of a technical expert to know whether a radar screening in Azerbaijan is an adequate defense or not. What I do like is that Mr. Putin has presented this as a solution for everybody, including Europe. I think by implication he has made it clear that he regards a nuclear Iran as a threat to Russia. His approach shows a willingness to consider the risks of a nuclear Iran and show himself as on the same side of the fence as Europe and the US, and to some extent this can help in the current stalemate with regard to the situation in Iran.

ne: What impact will President Nazarbayev’s strategy of “economic reform first, political and democratic reform later” have on development, poverty reduction, and regional integration?

Linn: I think there are two potential scenarios. One is the Indonesia scenario, where you have a generally benign ruler, as was in my view Suharto, who wants good things for his country and for his people. Suharto ran into increasing trouble when a leader’s family and the group of elites surrounding him basically abuse the system for their own benefit, exploiting big rents from the oil and gas sector, and corrupting not only the political system, but also the economic system. This prevents the effective distribution of natural resource revenue to broad sectors of the population; I think Indonesia is a good example of what can happen under these circumstances, where sooner or later both the economic and political spheres end up seriously unstable.

The alternative scenario can be characterized as the Singapore scenario, or maybe the South Korean scenario, where you have an authoritarian leadership over an extended period of time, that is combined with very rigorous and effective control of the civil service to distribute the benefits of economic growth widely, in terms of improved social services, in terms of improved economic opportunities. At least in the case of Korea, Singapore perhaps less so, this was accompanied by a gradual, determined approach to increased political liberties.

The latter of these two approaches can in fact be a successful transition process. The problem is that the people in power have to be extremely disciplined, not only in terms of their personal integrity and behavior, but also disciplined with their families and immediate circle of people in power, because if they are not, they in effect lose control of state processes.

Which direction is Kazakhstan going? I think it is difficult to say – the country has the potential to go either way. The most recent constitutional changes increase the risks of long-term instability because the less competition you have in the political arena, the less accountability you have not only of the president, but also of the civil service to manage and distribute state resources efficiently and equitably.

ne: You used the word “transition.” Sixteen years after independence, is that word still an accurate way to describe these countries?

Linn: Well, I think the transition in economic systems has been completed in Kazakhstan more or less. In a different way, the transition from central planning to a market economy is in a sense also completed in Kyrgyzstan and Tajikistan with varying degrees of success, I would argue. In Uzbekistan and Turkmenistan, I think the economic transition has not yet been completed. Maybe it will never be completed in the foreseeable future. Maybe for a long time you will have a very state-dominated economy in Uzbekistan and Turkmenistan. That is definitely a possibility. In a sense, the transition has been prematurely stopped, or at least slowed down tremendously.

In the political area, if you think about transitions from the socialist, centrally planned political system to a democratic system along traditional European and US lines, there is clearly a long way to go – if that is the trajectory the countries wish to take. Obviously sitting in Europe and the US that is the goal you would hope the Central Asian countries are aiming for. If you sit in China, or Russia, or among the governing elites in Central Asia, it’s not necessarily clear that’s the goal they have in mind. So what is the end point of the political “transition”? The word presupposes that you are going from one place to another with both points clearly defined. I think in the economic sphere the picture is much clearer than in the political. It is not clear to me that the countries themselves have a clear goal in mind for their political systems.

ne: If you had to give development advice to a small, land-locked Central Asian country like Tajikistan, what would it be? What development models would be applicable in a place like that?

Linn: My advice would be to, first of all, keep control of your energy resources. Try to secure different markets for those energy resources, and to not become dependent on one market only. Energy in places like Tajikistan and Kyrgyzstan is the one big resource that you have, so being able to sell at the best possible price and retain the earnings is terribly important. In practice this means that Tajikistan needs outlets for its energy not only to Russia and Europe, but ultimately to Afghanistan, China, Iran, Pakistan, and India; it is very important for Tajikistan to retain those options and the rent that comes from that.

Secondly, ensuring effective management of trade with your neighbors is crucial. Uzbekistan doesn’t have an open border, but Tajikistan’s borders with Kyrgyzstan and Kazakhstan are open and can be managed effectively. This is increasingly true of neighbors like China and Afghanistan as well.

Finally, making sure that the agricultural sector is properly managed is extremely important. There are a lot of problems in some sectors like cotton. So there are three sectors that need immediate attention.

ne: International Financial Institutions generally dedicate themselves to non-political goals. In Central Asia, where so many problems are in fact political, can it be frustrating to only approach the symptoms of the problem rather than the cause? Also, some NGOs, especially human rights organizations, have come under increasing criticism – especially in Russia, but also in the US – for being overly political and actually hurting development efforts on the ground by getting groups kicked out of places like Uzbekistan. What is your perspective on this? Is there a tension between human rights related issues and development?

Linn: I think it is always important for people with dissident views in authoritarian countries to have a sense that they have not been left alone by the international community. For us sitting in Washington, or people sitting in Europe, it is important that we as individuals or through NGO and governmental channels are talking with authoritarian governments and other stakeholders about potential benefits and reduction of long-term risks that come from improved openness, accountability of government agencies, human rights, and free press. These are not only human rights; they affect potential long term economic growth.

That does not mean that I think that every institution needs to make the human rights or political agenda its principal objective of dialogue. The World Bank, for example, is specifically prohibited by their statute from making political conditionality in their interventions. Therefore, I think institutions like the World Bank should focus on their traditional areas of development support, and concentrate on areas that you can improve even in the authoritarian context – basic education, access to water, access to better sanitation, basic health, prevention of epidemics, natural disaster preparedness,open borders and regional cooperation, and so on. There are lots of areas where you can help that will bring benefits to the people without strengthening the authoritarian government in any particular way, so long as you channel the aid to the people who need the help.

When I was at the World Bank, the most positive example was working with NGOs in the Ukraine and Belarus in the 1990s. By not talking about political issues, but by focusing on basic social development, we were able to give them an opportunity to deal with international agencies that gave them a sense of having connections and hope that they would eventually have political freedom as well, even if they didn’t have it at the time of our engagement.

I personally do not think total disengagement is the answer. I think you cut off hope, you cut off contact, and you cut off the basic dialogue both with people who are of of the same opinion as you – dissidents and liberals within the society – but also with people who hold different opinions. We need to engage, talk, and try to help however we can. I am a firm believer that engagement is important. This doesn’t mean we throw a bunch of money at governments that aren’t going to use it well.

ne: The best known example of this sort of tension is, of course, the Andijon massacre in Uzbekistan. Was international condemnation of Uzbekistan the right course of action, given that a lot of NGOs were ultimately kicked out of the country? Or would continued engagement have been worth a more moderate response?

Linn: In terms of the sanctions by Western governments like the EU – I’m not sure about their impact, good or bad. But then I don’t think the EU made its decisions regarding sanctions based on the likely impact on the ground in Uzbekistan. Rather, I think it made its decision principally based on its own human rights values. It’s not a matter of punishing Uzbekistan, it’s more – given the EU’s own values – that it doesn’t want to deal with and support countries that don’t share its values. You wouldn’t invite people into your house that you don’t get along with; likewise, you don’t allow them visas into your countries.

My sense is that in the end it is less a matter of the carrot and the stick and more an issue of whether or not we should do political business with partners who are just not sharing your values. The question of efficacy in improving development on the ground in Uzbekistan is of course there, but it is less a driver of policy as I see it.

ne: What do you think about Berdymukhamedov so far? Is he going to be a reformer, or will we see more of the same? Obviously Turkmenistan faces more challenges than probably any other Central Asian country.

Linn: To be honest, I’ve not followed carefully what he’s done internally. What I have seen is that there is a much greater willingness to engage internationally, particularly within the region. I was at a senior officials’ meeting in Manila in March for CAREC where a deputy minister from Turkmenistan made a very good presentation. This was the first signal that Turkmenistan might want to become a member or regular participant of CAREC. Similarly, at a recent conference organized by the UNDP and the German government recently in Bishkek, there were representatives from Turkmenistan present. Turkmen participation at these events used to be very restricted and very rare. So I have personally seen Turkmenistan reaching out, and from my perspective that is very positive because I think it provides some hope that Turkmenistan will engage seriously in the regional context. This will be important in water management, trade, security, even health management and education in the longer term. I think there is a real hope that Turkmenistan will become much more open and less isolated than it has been.

The “Ask the Expert” series is intended to be part of a dialogue between the online community and Central Asia specialists from policy and academia. If you there are any questions you would like to see asked in future conversations, please email info[at]neweurasia[dot]net. Previously, neweurasia interviewed Martha Brill Olcott as part of this series.