There is no questioning the exciting investment opportunities in Central Asia. The five nations that make up the area – Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan – have been sovereign nations for only a brief time and only recently have foreign investors had the opportunity to come into the countries to make money. But what is it that makes investors salivate over these countries? Certainly the abundance of natural resources is enticing, but there is an even simpler explanation; its location.
Anyone with a map can see the opportunity in this area. It borders Russia and China, and is only a stone’s throw away from India. These three nations alone make up over 35 per cent of the world’s population and continue to be three of the fastest-growing markets in the world. The more economic influence the east continues to demonstrate on the world economy, the more the west wants to have a stake in it. This has led to an influx of trade between the two regions. Central Asia is right in between the east and west, and with the idea of the New Silk Road being put on the table, all that trade will be running right through the heart of the region.
A concern that is often expressed about Central Asia’s location is that it’s landlocked. Though this is true, the scale of natural resources available in the area prevents it from having the same issues as other landlocked nations, such as lack of access to the rest of the world. Other nations and corporations will invest in the technology to export the resources to other regions. This allows constant investments from foreign agencies. ONGC Videsh, India’s international petroleum company, has a 15 per cent stake in Kazakhstan’s Alibekmola oil field.
ONGC has announced a $1.5 billion investment in the Russian-Kazakh Kurmangazy oil field in the Caspian Sea. Meanwhile, SINOPEC, China’s largest state-owned oil company, has discussed investing in energy resources in Kazakhstan, Turkmenistan and Uzbekistan. With economies as successful these investing in the Central Asian region, it seems clear there is an untapped potential to make money in the area.
Though Central Asia generally refers strictly to Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan and Turkmenistan, often, Azerbaijan is considered part of the region due to what its location can offer to the other five countries. Azerbaijan is located on the opposite side of the Caspian Sea, as opposed to Central Asia, which is entirely on the east. This makes Azerbaijan a gateway to this region. The only way Europe can access the central part of Asia is through Azerbaijan – this makes it very important for both Europe and the area.
The opportunities for wealth in Central Asia are numerous. It’s an undeniably exciting time for the region, and if a foreign investor can take advantage of all the emerging markets, they can look forward to enjoying great success. The New Silk Road will create an entirely new perception of the region, and it will soon be one of the most important parts of the world in this era of globalisation.