2025-04-30 17:21:00

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Last month, against the backdrop of increasing U.S. protectionist policies and Russia's continued focus on the Ukraine conflict, the European Union and Central Asian nations convened a high-level summit in Samarkand, Uzbekistan. While not the first diplomatic engagement between these regions, this summit represented the most ambitious collaboration to date. During the proceedings, the EU announced a substantial 12 billion euro investment package under its Global Gateway initiative. This significant commitment comes during a period of geopolitical uncertainty, with the EU actively pursuing cooperation with Central Asia across three critical domains: renewable energy development, alternative trade corridor promotion (specifically the Middle Corridor), and access to critical minerals. Central Asian countries’ growing appetite for renewable energy presents new opportunities for EU companies to enter emerging markets and generate new revenue streams. Meanwhile, the disruption of the Northern Corridor – Russia’s key land route for China-EU trade – has elevated the strategic importance of the Middle Corridor. This alternative route offers a more stable, sanctions-free path that reduces dependence on Russia while sustaining overland trade between China and Europe. Most importantly, the EU has prioritized access to Central Asia’s critical mineral resources as part of its broader effort to diversify partnerships, lessen dependency on China, and enhance resilience against external shocks or the potential weaponization of mineral supply chains. Despite the positive developments and renewed commitments by the EU, a range of challenges could hinder meaningful cooperation between the two sides. The risk is that last month's summit becomes yet another high-level declaration without substantial follow-through. A significant obstacle facing the EU-Central Asia Samarkand summit was the non-binding nature of its agreements. The majority of documents signed were memoranda of understanding (MoUs) rather than legally enforceable contracts. These instruments primarily express intentions without establishing concrete enforcement mechanisms, potentially limiting their practical impact. The absence of detailed project specifications, implementation timelines, and binding commitments raises questions about whether these agreements will translate into tangible outcomes. Without these elements, the summit's deliverables may function more as diplomatic gestures than actionable roadmaps for cooperation. This concern is particularly valid given the EU’s notoriously complex bureaucratic structure. Recent precedent reinforces these doubts. The 2022 gas export agreement between the EU and Azerbaijan demonstrates how MoUs can yield limited practical results. Despite its formal signing in 2022, that agreement has struggled to gain traction, with European and international financial institutions hesitating to provide necessary funding. Experience suggests that moving beyond diplomatic formalities to concrete implementation will represent a substantial challenge for the ambitious 12 billion euro investment package announced at the Samarkand summit. Notably, the promise of 12 billion euros heavily depends on private sector investments rather than direct EU budget allocations. This blended finance approach presents considerable complexities for European businesses, which often possess limited information about Central Asia's regulatory environment and perceive the region as high-risk. European companies generally demonstrate less risk appetite and lack the comprehensive economic packages characteristic of their Chinese counterparts. Without robust de-risking mechanisms – such as credit guarantees, political risk insurance, or dedicated EU investment banks – private sector participation may remain constrained. Regarding sectoral challenges, despite the EU’s focus on accessing critical minerals to diversify supply chains, substantial barriers to investment exist in this domain. European private sector entities must comply with stringent environmental, social, and governance (ESG) standards, which can create hesitation since ESG compliance typically proves more challenging in developing countries than in developed economies. In contrast, Chinese firms operate under less restrictive ESG compliance requirements, as they are not similarly bound by commitments to frameworks like the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct. This regulatory disparity creates competitive advantages for Chinese companies expanding into Central Asia's critical mineral sector. Most critically, while the EU can offer technological expertise for processing certain minerals such as copper or cobalt, its capabilities in rare earth processing remain limited. China dominates this field, controlling approximately 85 percent of global purified light rare earth elements production and 100 percent of heavy rare earth elements. The EU remains heavily dependent on China for these crucial processing technologies and capabilities. Consequently, while the EU may support mining, extraction, and initial processing of rare earth minerals, it cannot yet play a transformative role in advanced processing of these materials in Central Asia. In this competitive context, despite the EU’s growing focus on critical minerals, China maintains significant advantages. Without financial support to mitigate risks and encourage European private sector investment, development of indigenous technological capacity for advanced mineral processing, stronger state backing, and addressing risk-averse corporate behavior, China will likely continue to outcompete EU companies in Central Asia's strategic mineral sector. Beyond the promises of the summit, a key challenge lies in the EU’s fragmented strategy toward the region. Notably, the sidelining of Turkiye – a vital player due to its cultural, linguistic, and growing economic ties with Central Asia – could undermine the EU’s efforts. Given Turkiye’s central role in the Middle Corridor, any attempt to exclude Ankara from regional strategy risks slowing the EU’s connectivity ambitions. The inclusion of the Cyprus issue in the EU-Central Asia relationship further illustrates how the EU, instead of adopting a pragmatic approach to engage Turkiye and leverage its regional influence, has at times positioned itself in opposition to both China and Russia without consolidating its own regional footing. In summary, the Samarkand summit was a positive step toward rebalancing the EU’s strategic presence in Central Asia. However, without a unified and coordinated approach by the EU and its member states, the summit risks becoming merely another high-level diplomatic event rather than a catalyst for long-term engagement. To enhance its presence, the EU must establish sustained communication channels with regional governments to institutionalize its role and align with local development goals. Additionally, the EU should offer concrete support to the private sector to mitigate investment risks and foster deeper economic ties. Most importantly, the EU’s strategy should extend beyond Central Asia to incorporate key regional actors such as Azerbaijan, Georgia, and Turkiye. A broader, more inclusive regional approach is essential for ensuring the EU’s long-term presence and for effectively advancing alternative corridors. Failing to address these issues may leave the EU once again in a weakened position compared to other regional powers.