Hazar Raporu - Issue 02 - Winter 2012

demand-led development path that does
not seek external FDI, but it too promises
to contribute to the future hub vision of
Central Eurasia.
There is no doubt that the chief engine
of growth in the region has been
the abundant natural resources of
Azerbaijan, Kazakhstan, Uzbekistan,
and Turkmenistan. The governments
of these states, particularly Azerbaijan
and Kazakhstan, have been mindful
of the perils of resource dependence
and have tried to implement policies to
minimize potential risks. They also have
a strategy as far as development of their
energy sectors is concerned. Azerbaijan
and Kazakhstan, for example, have used
Production Sharing Agreements (PSAs)
to attract foreign energy companies and
inject the most needed investments into
their economies. It was this energy strategy
that allowed Azerbaijan and its Western
multinational partners to reach agreement
on the “Contract of the Century” in
1994 and subsequently to construct the
Baku-Tbilisi-Ceyhan oil pipeline in 2005
and the Baku-Tbilisi-Erzurum natural
gas pipeline in 2006. Azerbaijan’s energy
sector alone has attracted more than $35
billion in FDI. Moreover, the revenues
from these two pipelines account for the
lion’s share of Azerbaijan’s current state
budget and constitute a significant portion
of the South Caucasus region’s economy.
In short, the resource-rich states are
reaping the fruits of energy strategies they
conceptualized in the 1990s.
Today, Azerbaijan, Georgia and Turkey
have embarked on a new journey that
will shape the future energy strategy of
the Caspian region and beyond. Whether
resource rich or resource poor, however,
all countries of Central Eurasia share the
same future, and they are bound to find
new synergies that will give their region
a prominent place on the economic and
political map of the twenty-first century.
Indeed, each country in the region has its
own destiny, and each has reason to hope
that one day it will become a prosperous
and developed state in its own right, like
no other state but itself. To achieve this
goal, however, each of them would need a
clear vision of itself as an individual state
and also as a member of a broader regional
framework that could economically, and
even politically, unite them by 2030.
They will have to cooperate, integrate,
and adapt to the rapidly changing world
around them and forge a common
vision for the years ahead. What is the
common vision that one day these mostly
landlocked countries might share Will
it be a vision that will make the region a
periphery for another central power Or a
geopolitical playground for powers aiming
to control the region’s riches Or will the
ancient Silk Road be revived, with the
region reclaiming its status as a vibrant
commercial hub between major economic
blocs such as Europe, East Asia, South
Asia, and the Middle East Whatever the
answers to these questions, one thing is
clear: international trade will play a central
role in the transformation of the region.
CASPIAN REPORT
107 105