On July 3, in the city of Astana, President of the Republic of Tajikistan, Emomali Rahmon, met with the President of the Republic of Kazakhstan, Kassym-Jomart Tokayev, on the sidelines of the meeting of the Council of Heads of State of the Shanghai Cooperation Organization.

At the meeting, various aspects of bilateral cooperation between Tajikistan and Kazakhstan, issues on the agenda of the next meeting of the Shanghai Cooperation Organization and separate regional and international issues were discussed. Caspian Energy Media reports with reference to the official website of the President of Republic of Tajikistan.

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3 июля в городе Астане Президент Республики Таджикистан Эмомали Рахмон в рамках саммита Шанхайской Организации Сотрудничества встретился с Президентом Республики Казахстан Касым-Жомартом Токаевым.

На встрече были рассмотрены различные аспекты двухстороннего сотрудничества Таджикистана и Казахстана, вопросы повестки дня очередного саммита Шанхайской Организации Сотрудничества, а также отдельные международные и региональные темы.

Об этом сообщает Caspian Energy Media со ссылкой на Официальный сайт Президента Республики Таджикистан.

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Caspian Energy (CE): Latvia, the Baltic States and the EU have a common energy policy, what is its peculiarity in Latvia and what does it have in common with the EU as a whole?

Kaspars Melnis, Minister for Climate and Energy of the Republic of Latvia: One of the most important features of Latvian (and Baltic) energy markets in the context of the EU energy policy is that historically energy systems and policy planning (power grid, natural gas network, as well as heating systems) were not integrated with the European Union countries and were operated in line with different principles.

For example, the power grid and natural gas transmission network were built as a part of the united grids of the former Soviet Union and thus until relatively recent history there were no physical connections with neighboring countries other than Russia and Belarus. Thus, to become fully integrated participant of the Common European energy market, Latvia and other Baltic countries had to build new power and natural gas infrastructure, and adapt to new, more liberalized market rules.

In principle the energy market of Latvia and other Baltic countries operates quite similarly to that of the rest of the European Union, with the exception of the fact, that in power sector the systems of Baltic countries do not operate in synchronous mode with European or Scandinavian countries, but until early 2025 will continue parallel operation with grid of Russia and Belarus.

After successful disconnection from BRELL grid, and start of synchronous operation of grids, Baltic countries will become fully integrated with European Union energy markets. In the heating sector Latvia and Baltic countries is different from many other European countries with the fact that Baltic countries have relatively large centralized heating systems, which we consider an advantage.

CE: How effective is the EU’s energy security policy today? What risks affect the economic growth of the EU and the Baltic countries?

Kaspars Melnis: The energy price crisis of year 2022 and decision-making process about new initiatives in the power and gas sector has proved that in general the EU energy security policy is quite effective.  Despite the fact that energy price shocks in mid-2022 were unprecedented, European Union countries by late 2022 were able to start the heating season and meet winter without any significant worries about the security of supply.

It was possible mainly due to liberalized and competitive energy markets, which gave market participants the necessary flexibility to quickly adjust to the new situation, to agree on effective use of infrastructure. Also, the share of renewable energy, especially wind energy, combined with energy resource saving initiatives also allowed European countries to reduce consumption of fossil fuels and thus stabilize the market.

Also, one significant advantage of the decisions made in European Union was the principle that impact of any crisis measures on functioning of the market must be minimized and negative effect on competition should be reduced as much as possible. This principle was significant to avoid uncertainty regarding investment decisions. Of course, significant growth of energy prices in the European Union has slowed down economic growth of European economy, but, at the same time, it is remarkable, how quickly energy markets, for example, natural gas market has recovered and returned to pre-war prices.

It is also important to mention that at this point the economic performance of European countries and Latvia is mostly related with other factors, and not so much with energy prices. It is also obvious, that the price crisis of 2022 also contributed to energy sector positively, because it has facilitated new investments in energy sector, and especially renewable energy, and has reignited debate about other energy production sources, for example, nuclear energy.

The Ministry of Energy and Climate is planning to develop a “RePowerEU funding programme”. The “green light” from the European Commission we received just at the end of 2023. Financial resources are planned to be used for the electricity synchronization project – purchasing of a battery, modernisation of the electricity transmission and distribution system, construction of biomethane input point. The amount of funding is about 134.4 million-euro, absorption period until 2026.

CE: Is there a panacea for climate change today, or shall countries and societies have to prepare only for mitigating the consequences?

Kaspars Melnis: There is no miracle to reduce Greenhouse gases (GHG), there are two ways to reduce emissions, either by replacing fossil resources with renewable ones or by spending less on existing resources, boosting energy efficiency.

Latvia is currently actively working on the updated National Energy and Climate Plan to determine additional measures to reduce emissions and move towards achieving of GHG targets in 2030. The final version of the plan must be submitted to the European Commission by the end of June 2024. 

Emissions are divided into two parts: the first is called emission trading system (ETS), which is coordinated by the EU. In Latvia, the ETS sector is relatively small – only 19% of the total national emissions in 2021. ETS emissions refer to large industry and energy facilities with installed capacity of more than 20 megawatts.

If these companies use fossil fuels, then they must buy emission allowances. There are initially free allowances that can be sold on the market to raise funds for decarbonisation. With each period, free allowances become less and their price increases, making it more expensive for companies to operate on fossil energy, instead of being “greener” that make you more advantageous.

Each ETS company is itself responsible for ensuring that the system is followed, and their decarbonisation at EU level is also seen very well. Compared to other EU Member States, there are few industrial plants in Latvia and the share of renewable energy in the total energy consumption is 42.1%.

The other sector, non-ETS (Effort Sharing Regulation/ESR sectors), is the rest of the economy (transport (37%), agriculture (27%), small energy and industry (20%), waste management (7%), etc.) for which each EU Member State is responsible. The non-ETS sector creates 81% from total GHG emissions in Latvia. In this sector, our three big whales are transport, agriculture, and small energy, which mainly is the energy efficiency of buildings. In other EU Member States, the proportion between the ETS and the non-ETS is different.

There are some examples of measures for GHG reduction that are included in the Plan project.

Transport sector:

We are moving towards the efficiency and development of public transport and increasing electrification of the transport sector by ensuring less use of fossil fuels in the transport sector and therefore lower GHG emissions. To implement this, the Plan envisages several measures for the transformation of the sector. Incentives are also offered – for example, State aid programmes for purchase of electric vehicles:

1. Optimizing the public transport system;

2. Ensuring a competitive and environmentally friendly rail network;

3. Purchase new electric trains, new batteries for electric trains;

4. Increase the number of charging stations/points;

5. Install hydrogen refueling points;

6. Enable liquefied or compressed methane filling points;

7. Promote micromobility,  etc.

The agricultural sector:

1. Encourage organic dairy farming (low-emission dairy farming);

1. Support for fertilization planning;

2. Promote consumption of livestock products produced in Latvia;

3. Encourage and support direct soil application of organic fertilisers;

4. Contribute to improving the quality of feed;

5. Maintenance and modernisation of land-based amelioration systems;

6. Promoting the production of biogas and biomethane and the use of biomethane;

7. Increase in the share of organic agricultural land relative to total agricultural land;

8. Promoting the conservation of grassland, etc.

Small energy or promotion of energy efficiency in the building sector:

1. Improve the energy efficiency of public sector, multi-apartment buildings, private houses;

2. To oblige all new residential and non-residential buildings to comply with the conditions of the zero-emission building;

3. Change decision-making procedures for renovation or connection of buildings to an efficient district heating system, etc.

CE: What is the attitude towards nuclear energy in Latvia? Does its high emergency hazard cause a phase-out?

Kaspars Melnis: Both Poland and Estonia have been analyzing the construction possibilities of nuclear power plants for several years - in Poland since 2016, but in Estonia this solution was updated in 2019. A large proportion of electricity in both countries is produced from local fossil fuels (lignite in Poland, shale in Estonia), which won’t be used in the future. Both Poland and Estonia have different energy production portfolio compared to the situation in Latvia, which motivates them to move more rapidly towards renewable energy resources, diversifying them.

Each country has different starting positions, which explains why all Baltic states also have different development strategies. Estonia is a few steps ahead of Latvia and Lithuania in the development of atomic energy – the end of the use of shale for electricity production until 2035.

Latvia’s position among the three Baltic States is the best. Of course, this is largely due to the historical heritage – three hydroelectric power plants provide a high share of renewable energy sources in Latvia’s electricity production balance. Each year, our hydroelectric power plants generate between 2 and 3 terawatt hours of electricity, covering 30-40% of our consumption and often cover up to half of the energy we generate.

In addition, we have natural gas thermal power plants (TEC) that we can “make the green” in the future by using biomethane and adding hydrogen to the gas. At the same time, we still see a strong interest in developing wind and solar electricity production in Latvia, with which will replace electricity imports in the future and strengthen the competitiveness of our economy.

Answering to the question – when there will be space for nuclear energy in Latvia’s production? The answer is the price of electricity production comparing to other alternatives. Currently, electricity generation in small modular nuclear power plants remains relatively expensive. Firstly, their purchase and installation require sufficient investment, but it is important to recognize that the nuclear energy is determined not only by economic considerations, but also by the willingness to invest in the education system and to facilitate the availability of specialists for the construction and operation of the plant.

In the nearby future, we will develop competitive wind and solar energy in Latvia, but at the same time, we closely follow technological developments and work with our neighbors to find the best solutions for our region in the long term. Latvia has prepared an informative report on the prospects for development of atomic energy in Latvia, which has been directed in inter-ministerial conciliation. We are expecting to have intense debates within the Parliament.

CE: Is the possibility of supplying Caspian gas to Latvia and the Baltic States as a whole being considered? Does such diversification of gas exports serve as a solution for reducing the burden of high energy prices on the EU economy?

Kaspars Melnis: Regarding potential supply of natural gas from the Caspian region, Latvia also notes that the Latvian natural gas market is fully liberalized and thus natural gas market participants are free to obtain natural gas from any country or commercial entity, which are not subject to international or European Union sanctions, and in principle Latvia warmly welcomes active participation and competition of Caspian natural gas producers in global markets, which could be beneficial to diversify LNG supplies and routes globally.

Government policy does not envisage interference in commercial trade of natural gas large consumers, traders or other qualified buyers. However Latvian government would welcome bilateral negotiations about potential partnership in line with principles of common European gas market among companies from our region and Caspian region.

CE: Is it beneficial for the Baltic States to create a Russian-Turkish gas hub?

Kaspars Melnis: Regarding the gas hub, it would be however important to note that Latvia welcomes increased activity and participation in the global natural gas market of Türkiye and other Caspian region countries who share their foreign policy principles with the European Union and are willing to cooperate with European countries in line general principles of the Common EU natural gas market.

Latvia together with other EU member states believe that competitive global environment in the natural gas market is beneficial to both consumers and producers of energy resources.

CE: Does Latvia have geothermal energy reserves or methane hydrates in the Baltic Sea? Is the possibility of using these natural resources being explored?

Kaspars Melnis: There are no considerable, currently commercially viable geothermal energy reserves or methane hydrate in the Baltic Sea. According to publicly available research papers, the Baltic Sea is considered too shallow for methane hydrates and thus there are no foreseeable plans for further research in this field. Shallowness of the Baltic Sea should be also considered in relation with exploration of other offshore activities.

Regarding the geothermal energy potential, research papers suggest that in the future geothermal energy can be potentially used for application in low temperature district heating systems. However, it would require significant increase of price for other energy sources such as fossil fuels and biomass.

At this point other available, and competitive technologies, such as air source heat pumps or ground or water source heat pumps also lay doubt on future prospects of more intensive usage of geothermal energy in the future. The project of National energy and climate plan we are expecting to promote the production of biogas and biomethane and the use of biomethane from the agriculture sector.

Thank you for the interview

3 июля в Астане состоялась трехсторонняя встреча между Президентом Азербайджанской Республики Ильхамом Алиевым, Президентом Турецкой Республики Реджепом Тайипом Эрдоганом и премьер-министром Исламской Республики Пакистан Мухаммадом Шахбазом Шарифом. Об этом сообщает Caspian Energy Media со ссылкой на president.az.

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В Астане началась встреча Президента Азербайджанской Республики Ильхама Алиева с председателем Китайской Народной Республики Си Цзиньпином. Об этом сообщает Caspian Energy Media со ссылкой на president.az.

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Caspian Energy (CE): In June last year, you were in Azerbaijan on an official visit. How important was the trip in helping cement ties between OPEC and Azerbaijan?

H.E. Haitham Al Ghais, Secretary General of OPEC: Azerbaijan has been a key part of the Declaration of Cooperation (DoC) over the last seven plus years, and my visit in June last year was an opportunity to review the excellent work of the DoC, which remains core to global oil market stabilization efforts. This formed a key part of the excellent talks I held with the President of Azerbaijan, His Excellency Ilham Aliyev, as well as the Minister of Energy, Parviz Shahbazov and the President of the State Oil Company of the Azerbaijan Republic (SOCAR), Rovshan Najaf.

It is important to recall that President Aliyev was one of the key voices in bringing together OPEC and non-OPEC back in 2016, and today, the country’s leading and responsible approach is a measure of its commitment to the DoC. All of this resonates with the historical role that Azerbaijan has played in the evolution of our industry, for which it is often referred to as ‘the cradle of the modern oil industry’.

The meetings were also an opportunity to discuss other key issues, including the investment challenges facing the industry and the need for energy security and redu­cing emissions to go hand-in-hand. In this regard, we offer our full support to Azerbaijan in its holding of COP29 later this year.

The visit to Baku further cemented the bonds of friendship and partnership bet­ween Azerbaijan and OPEC. I very much look forward to my next visit.

CE: How important for market stabi­lity are collective actions taken by oil producers? Does OPEC and the broader DoC group remain cohesive?

Haitham Al Ghais: OPEC has always placed great faith in consensus building and taking collective decisions in the interest of its overarching objective – global oil market stability. It has served the Organization well over many decades, and this simple legacy of embracing unanimity as its decision-making mechanism has deli­vered much success.

These principles have also supported the DoC process since its establishment in December 2016. This has been emphatically underlined on many occasions, such as in April 2020, when the DoC initiated the lar­gest ever-voluntary production adjustments as a means of pulling the industry back from the precipice on which it stood, which also proved hugely beneficial for the global economy.

This sense of cohesiveness remains central to our actions today. Every OPEC member, and every partner in the DoC, remains fully focused on our common goal of a balanced and stable market, which is in the interests of both producers and consumers. 

What the DoC also inspires is the value of dialogue and cooperation, which was a key tenet in the establishment of the Charter of Cooperation (CoC) in 2019. The CoC aims to facilitate dialogue and exchange views regarding issues such as global oil and energy market developments, energy security, energy transitions, environmental issues, policy developments, technological options and investment opportunities.

The CoC is open to all producers, with leading oil producer and global energy provider Brazil joining at the start of 2024.

CE:  How has OPEC evolved over the last six decades? What has been central to its longevity and its success?

Haitham Al Ghais: When OPEC was created back in September 1960 at the First Meeting of the OPEC Conference in Baghdad, it was a seminal event. The five Founding Members: Iran, Iraq, Kuwait, Saudi Arabia and Venezuela, joined around the premise of cooperation to help secure their indigenous natural resources.

There were many who expected that OPEC would not last its first decade, but over six decades later the Organization has evolved into an established part of the international energy community, the global multilateral system, and is known for its robust energy analysis and data.

The success of any inter-organizational body is linked to the strength and solidarity of its members, and OPEC is no exception. Cooperation, dialogue, transparency, fairness and unity still underpin all of our work and actions today.

Looking ahead, I foresee a bright and promi­sing future for the Organization. Indeed, I have no doubt that OPEC’s best days remain ahead of it, especially given the determination and excellent leadership of its Member Countries.

CE: Given that some voices talk of oil demand peaking in the near future, what is behind OPEC’s oil demand growth forecasts out to 2045 in its World Oil Outlook? 

Haitham Al Ghais: OPEC strongly believes that all forms of energy, including oil, gas, renewables and others, will be needed in the years and decades ahead, supported by all available and potential technologies. For oil, in particular, we forecast that it will retain the largest share in the global energy mix by 2045 at almost 30%, with global oil demand reaching 116 mb/d by then.

It is important to place this in the context of energy demand. In view of expectations for the global economy to double in size and the world’s population to rise to over 9.5 billion by 2045, global energy demand is set to rise by a significant 23%, adding annually on average 3 million barrels of oil equivalent per day.

Yes, some forecasters suggest that oil demand will peak by 2030, and stress there is no need for investment in new oil projects. I firmly believe this is wrong, and it is evident that some outlooks are ideologically driven. We see significant oil demand growth of 4 mb/d across 2024 and 2025, and we are not expecting to see oil demand peak by the end of this decade, the end of the next decade, or even by 2045 for that matter.

Oil demand trajectories underscore the importance of industry investment requirements. OPEC sees cumulative investment of $14 trillion in oil’s upstream, midstream and downstream sectors to 2045, or around $610 billion each year. It is vital that all stakeholders across the globe work together to ensure a long-term, investment-friendly climate, one that works for both producers and consumers.

At OPEC, we also recognize that alongside investments to help meet global oil demand, the oil industry needs to invest further to help reduce emissions. This is why our Member Countries are investing in carbon capture, utilization and storage, direct air capture and the circular carbon economy, as well as other energy sour­ces, such as hydrogen, renewables and nuclear.

Overall, OPEC believes that the world should embrace an inclusive ‘all-peoples, all-fuels and all-technologies’ approach to ensure a sustainable energy future for all.

Thank you for the interview

3 июля в Астане с участием Президента Азербайджанской Республики Ильхама Алиева и Президента Республики Казахстан Касым-Жомарта Токаева состоялась церемония обмена Договором акционеров, подписанным между «Азербайджанским инвестиционным холдингом» и Акционерным обществом «Фонд национального благосостояния «Самрук-Казына».Об этом сообщает Caspian Energy Media со ссылкой на president.az.

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3 июля в Астане состоялась встреча Президента Азербайджанской Республики Ильхама Алиева с Президентом Республики Казахстан Касым-Жомартом Токаевым.

Об этом сообщает Caspian Energy Media со ссылкой на president.az.

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Dünya birjalarında neft bahalaşıb.

Caspian Energy Media AZƏRTAC-a istinadən xəbər verir ki, Londonun ICE (“InterContinental Exchange Futures”) birjasında “Brent” markalı neftin bir barelinin qiyməti 0,42 dollar artaraq 86,66 dollar olub.

Nyu-Yorkun NYMEX (“New York Mercantile Exchange”) birjasında “Light” markalı neftin bir barelinin qiyməti isə 0,36 dollar artaraq 83,17 dollar təşkil edib.

“Turkic World Vision–2040” outlines a plan for economic cooperation and development among Turkic States. In a glo­bal landscape marked by conflicting forces of globalization and fragmentation, the debate emerges regarding the necessity and feasibility of economic integration within the Organization of Turkic States (OTS).

The emerging global economic landscape marks a transformative era, propelled by globalization, the shifting balance of power towards emerging economies, technological progress, and climate change. As the world grapples with these shifts, it becomes imperative for OTS countries to adeptly respond and seize the opportunities unfolding in this new era. Through embracing innovation, fostering inclusivity, and adopting sustainable practices, we can forge a future that is both prosperous and equitable for all. Similar to how certain organisms survived the Cretaceous–Paleogene extinction event some 66 million years ago by adapting to their environment, economies must also evolve to meet the demands of the changing global economic terrain. By promoting economic cooperation, advancing technology and innovation, championing sustainable development, fostering cultural exchange, and facilitating political collaboration among member states, OTS’s endeavors could significantly contribute to the adaptation and resilience of member economies in this new world order (Figure 1 and Figure 2)

The escalating competition among major global po­wers has had a detrimental impact on the efficacy of formal collaborations involving multiple nations. This trend is also observable in less structured forums like the G7, G20, and BRICS. However, amid these challenges, new dynamics have surfaced worldwide. For example, official documentation underscores that the OTS operates through various principal organs, including the Council of Heads of State, the Council of Foreign Ministers, the Council of Elders, the Senior Officials Committee, and the Secretariat. The organization’s activities are further reinforced by affiliated institutions such as the Parliamentary Assembly of Turkic Speaking Countries (TURKPA), the International Organization of Turkic Culture (TURKSOY), the International Turkic Academy, the Turkic Culture and Heritage Foundation, the Turkic Business Council, the Turkic University Union, and the Turkic Chamber of Commerce and Industry.

The core inquiry concerning Turkic states revolves around their simultaneous use of existing integration platforms while also exploring new integration pathways within the Organization of Turkic States. This phenomenon corresponds to what O’Reilly and Tushman define as ambidexterity. By highlighting this aspect, the challenges encountered by Turkic states have spurred us to undertake this research, which is supported by reputable think tanks from all OTS members. The ultimate outcome of Turkic states’ efforts to achieve economic competition, a blend of cooperation and competition, remains uncertain. The fact that rivals are increasingly collaborating to balance risks and rewards adds an intriguing dimension. Nonetheless, there are numerous potential advantages to bolstered economic cooperation, rendering it a priority issue for policymakers in the foreseeable future.

Pankaj Ghemawat asserts that globalization has brought people, countries, and markets closer together to an unprecedented extent, leading us to believe that national borders are now obsolete remnants of the past (Ghemawat, 2007). However, upon a meticulous examination of the data, it becomes apparent that the world is far less integrated than previously believed. A recent document from MGI reveals that the growth in global flows is currently propelled by intangible assets, services, and talent. The prevailing geopolitical dynamics are presenting considerable obstacles to global cooperation, which typically serves as a safeguard against global risks. As per the Global Trends 2040 report by the US National Intelligence Council, it is unlikely for any single nation to dominate all regions or domains, and a wider array of actors will engage in competition to advance their ideologies, objectives, and interests. The world, depicted as Separate Silos, appears fragmented into several economic and security blocs of varying sizes and strengths, with a focus on self-sufficiency, resilience, and defense. These blocs revolve around key powers such as the United States, China, the European Union (EU), Russia, and a few regional players.

In this context, regional organizations like the Organization of Turkic States assume crucial responsibilities. By promoting resilience at the regional level, they can have a cascading effect on enhancing global resilience within the multilateral system, which operates based on a rules-based order. “Turkic World Vision–2040” announces: “We are living in an age that requires a strategic vision to re­cognize and address the rapid changes worldwide and their impact on us.” Raghuram Rajan, a professor of finance, said security considerations had become “a front for all kinds of protectionism”.

The growth rate of the KOF Globalisation Index, which assesses the economic, social, and political aspects of globalization, has experienced a deceleration over the past decade. Among the members of the Organization of Turkic States (OTS), Hungary emerged as the most globalized economy, scoring 83.83 on the KOF Globalisation Index and securing the 17th position in 2019. It was followed by Türkiye (56th), Azerbaijan (72nd), Kazakhstan (81st), Kyrgyzstan (91st), Uzbekistan (131st).

Diverse preferences regarding globalization stem from factors such as geo-economics, geo-politics, and the va­ried affiliations of OTS members with different regional structures. As globalization continues and overlaps with membership in various blocs, the OTS itself is growing stronger, fostering intensified direct relations among member states. Initially established in 1991 as a summit for the heads of Turkic states, the organization was founded as the Cooperation Council of the Turkic Speaking States in 2009 and transitioned from a council to an organization in 2021. With its headquarters in Istanbul, OTS aims to promote comprehensive cooperation among Turkic states.

Akinci mentioned that in the middle of Eurasia, which has been under foreign rule/influence for the past 200 years, the historical Turkic Belt stretching from the Mediterranean to the Pacific has revived again. Turkic Belt is situated in the Mackinder’s Heartland laying at the center of the world island, covering more than 4.8 million km2, in other words, bigger than EU’s territory.

If the OTS were considered a country, with its population of 174 million, GDP of $1.4 trillion, and trade turnover of $856 billion, it would rank among the top ten.

Huntington (2000), Sachs (2000), Porter (1990) argues how culture influences development. Common historic and cultural ties are a key factor not only in developing relations among the Turkic people, but also in the cooperation of other nations that share kinship ties throughout the modern world.

A graph theory is used to identify pairwise relations between Turkic States, which are made up of nodes that are connected by edges: Azerbaijan represents a node with higher degree centrality in terms of inflowing and outflowing foreign direct investment, while Turkey represents a node with high degree centrality in terms of foreign trade. High degree centrality resembles the red apple («Kızıl Elma»), which represents the main goal that OTS members pursue.

This theory is a versatile tool for studying economic networks, including trade and financial networks. Social network analysis and graph theory are applied to analyze FDI and trade networks in the Turkic World, where nodes represent countries and edges represent investment or trade connections. This approach employs centrality measures such as degree centrality (input and output), closeness centrality, betweenness centrality, and eigenvector centrality. These measures facilitate the evaluation of node influence, distance, bridging roles, and relative effects within the networks. The parameters of the network according to different types of centrality by country are given in Table 1.

The results reveal the centrality measures of Turkic States in both FDI and trade networks. Azerbaijan emerges as the primary FDI hub, followed by Kazakhstan and Kyrgyzstan. In trade relations, Turkey stands out as the central node, exhibiting high degree centrality indicative of a diverse range of exported goods. The analysis also underscores the relationship between centrality and the relative comparative advantage index in trade.

According to results of the model Azerbaijan, Kazakhstan and Kyrgyzstan are the countries with the highest value in terms of eigenvector centrality measure in the FDI network (Figure 3).

Furthermore, a gravity model is introduced as a function of the trade among OTS members geographic distance, countries’ econo­mic size and sharing border: More distance as proxy of transport costs negatively impacts on trade among OTS countries, while GDP and sharing border are positively correlated with trade. Although the gravity theory is applied to explain various hypotheses, research has revealed that common language, as a potent factor, has the most significant impact on trade compared to others. The model analyzes the determinants of trade among six countries while employing panel data analysis approach over the period 2000-2021

The bilateral exports and imports flow (ave­rage) of six countries are demonstrated in Table 2. The table is divided into two parts, the upper part shows the exports flow from country i to country j, and the lower part demonstrates the imports inflow of country i from country j.

It is worth to note that, all the variables of interest were estimated with the expected sign and the estimates for the gravity equation’s “traditional” variables are consistent with previous studies in the academic literature, demonstrating that the sample is representative. Estimation results deliver relatively low fit with an R-square of 0.59. This suggests that 59% of the variations in the dependent variable are explained by independent variables. F statistics given in Table 3 also indicates that the model is significant at the level of all variables of estimates.

The study concludes that GDP for importer and exporter, popu­lation for importer and exporter, destination countries were significant and signed positively. Furthermore, the distance bet­ween countries has a negative impact on bilateral trade flows whereas common border increases significantly trade between countries.

Radziyevska mentioned that the general number of regional agreements had increased quite significantly, from 445 in 2011 to 669 in 2018. The World Bank Group also encourages regional integration through trade, investment and domestic regulation; transport, ICT and energy infrastructure; macroeconomic and financial policy; the provision of other common public goods (e.g. shared natural resources, security, education). Based on the logic of the World Bank, the members of the Organization of Turkic States within the regional integration could gain substantial economic gains, such as: Improve market efficiency; Share the costs of public goods or large infrastructure projects; Decide policy cooperatively and have an anchor to reform; Have a building block for global integration; Reap other non-economic benefits, such as peace and security. Satisfactory harmonizing policies and institutions may lead to efficient output, outcome and impact in terms of environmental, social and governance issues. 

Located at the heart of Eurasia, the Middle Corridor holds the potential to enhance regional value chain (RVC) driven development by aligning context-specific RVCs with the national deve­lopment strategies of OTS members. In this way, “Turkic World Vision–2040” can help OTS members to maximize their participation in Global Value Chains (GVCs). According to the World Bank, many diverse policy areas affect the success of GVCs. They include, among others, trade policy, logistics and trade facilitation, regulation of business services, investment, business taxation, innovation, industrial development, conformity to international standards, and the wider business environment fostering entrepreneurship.

There is enough potential to boost Turkic states intraregional trade share and global and regional value chain participation rates. Since regional value chains in the area covered by OTS covers simple networks, development towards value chains in high value added sectors is possible. Investment and trade agreements among OTS members and aligning them along the Middle Corridor and lowering regulatory burden promote effective regional value chains (Figure 4).

Consequently, effective regional value chains would help mitigate and adapt to risks arising from supply shocks and facilitate sustainable economic development. Agreements within the OTS appropriately reflect investments in green industries, environmental goods and services, as well as efforts to enhance resource efficiency and reduce carbon footprint in alignment with the Sustainable Development Goals (SDGs).

In this regard, the cooperation of the Turkic-speaking countries in the transport sector through the joint creation of international transport corridors and international transport infrastructure in the region will contribute to reducing risks and transport costs in the supply of export products to world markets. In particular, the joint implementation of the Maza­ri-Sharif–Kabul–Peshawar railway project will significantly reduce the time and cost of cargo transportation between the countries of South Asia and Europe through Central Asia.

 This railway will provide access to the Pakistani seaports Karachi, Qasim and Gwadar and will connect the South Asian railway system with the Central Asian and Eurasian railway systems and significantly increase the transit potential of the countries of the region. In addition, the implementation of this project will significantly increase the volume of transit traffic through the countries of the region, which will increase their income from providing transit of goods through their territories.

According to preliminary estimates, the length of this railway will be about 670 km. The project implementation period can be up to 5 years. It is planned to attract $4.8 billion of credit funds to implement the project. An important joint project in the transport sector that meets the interests of Uzbekistan and Kyrgyzstan is the construction of the Uzbekistan–Kyrgyzstan– China railway.

The creation of the shortest joint transport corridors for the export/ import of goods to/from China will reduce the time and costs of their delivery. In particular, the construction of the Uzbekistan–Kyrgyzstan–China railway, in comparison with the routes currently used, will reduce the distance for the delivery of goods to/from China by 900 km and the travel time by 7-8 days. Uzbekistan, together with Kazakhstan, plans to build a railway and a highway along the Uchquduq-Kyzylorda route as well as a high-speed railway Turkestan–Shymkent–Tashkent. The expansion of cooperation between Uzbekistan and Kazakhstan in the transport sector on the formation of through transport routes in the North-South direction and back with a single tariff policy can significantly increase the transit potential of the two countries.

Business remains highly concerned about the persistent obstacles encountered within supply chains. The turmoil caused by recent disturbances after COVID-19, the growing intricacy of supply networks, and the rapid progress in data analytics have expedited the requirement for a fresh perspective on comprehensive planning from start to finish. Turkic states could frequently encounter difficulties in aligning their decision-making processes with the evolving dynamics across the entire value chain.

Empirical assessments show that deeper financial integration of OTS members would convert and allocate more savings into investments. Hence, there is an opportunity to enhance regulations concerning financial interconnectedness and macroprudential arrangements. With investment frameworks increasingly ambitious in their climate policies, economies could consider adopting a model agreement or an «opt-in» mechanism a multilateral agreement allowing economies to flexibly join and amend old agreements. This model agreement would incorporate substantive standards on environmental protection and provide access to investor–state dispute mechanisms in climate-related cases.

Islamic finance could serve as a catalyst for economic development and integration among Turkic states by providing a framework that aligns with Islamic values, mobilize savings, promote financial inclusion, support trade and investment, develop capital markets, and encourage collaboration. Its principles and practices contribute to sustainable and inclusive economic growth, while preserving cultural and religious identities within the region.

Following an examination of social constructivism, encompassing the functions of international organizations in norm emergence, norm creation, and standard-setting, Yesevi contended that the OTS has effectively served as an educator and norm creator. Consequently, Turkic identity has evolved into a collective identity, with the principles of collaborative culture and collective action becoming ingrained.

Based on the Organization of Turkic States (OTS) Strategy for 2022-2026, economic cooperation among OTS members primarily focuses on trade facilitation. This includes measures such as exploring potential Free Trade Agreements in Services and Investment, digitizing trade procedures, ensuring transparent rules and regulations, and facilitating trade-related information exchange. OTS aims to collaborate with regional and international organizations to enhance trade facilitation, establish Turkic Trade Houses, and organize Turkic World Trade Exhibitions. The strategy places significant emphasis on private sector cooperation, with key objectives such as strengthening the role of the Turkic Chamber of Commerce and Industry (TCCI) in advancing economic opportunities, enhancing the institutional and legal frameworks of national chambers of commerce and industry, hosting Turkic Business Forums and business-oriented events, establishing sectoral assemblies, and promoting large-scale investment opportunities. The strategic vision for industrial development entails engaging in policy dialogues to modernize and diversify the industrial structure, promoting green transformation, cooperating with regional and international organizations in the field of industrial development, and establishing Engineering and Technology Centers. The OTS strategy also recognizes the importance of small and medium-sized enterprise (SME) development and outlines modalities for promoting SMEs in specific sectors.

Financial cooperation within OTS involves the establishment of the Turkic Investment Fund, increasing the usage of national currencies in trade among member states, reducing costs associated with sending and remitting money to maximize the benefits of remittances, accelerating intra-regional investments in the banking sector, fostering cooperation among financial markets, creating a favorable environment for private sector participation in financing key infrastructure projects, and enhancing collaboration among financial institutions.

The strategy places a strong emphasis on investment promotion, including improving the investment climate in member states, boosting intra-regional investment, initiating the development of joint regional brands/products in priority sectors, and encouraging the relocation of value chains or production from third countries to member states. Participation in Global Value Chains (GVCs) is also deemed significant. To facilitate the integration process, the strategy focuses on improving the labor market, promoting human capital development, and supporting intra-regional mobility of professionals.

Nowadays, remarkable steps are being taken by leaders of Turkic states focusing on the institutional basis and arrangements that shape their economic landscape within the framework of the Turkic World Vision 2040. The economic impact of the Zangezur Corridor on the Central Asian and South Caucasus region will be decisive in speeding up trade relations and connectivity considering its potential to enhance economic relations between these regions and the European Union. Furthermore, we are witnessing the current dynamics of foreign direct investment within the Turkic region, which are shaping the interconnectedness and flow patterns of investments (Figure 5).

The economies of Azerbaijan, Kazakhstan, Kyrgyz Republic, Türkiye, Uzbekistan, Turkmenistan, and Hungary, along with a comprehensive analysis of economic factors such as trade trends, investment patterns (with a focus on net FDI), fiscal and monetary policies, GDP, GDP per capita, GDP based on PPP, GDP growth, and the transport and logistics industry, indicate a promising future for the Turkic world. The economic landscapes of the Turkic states, their significance within the Turkic world, and the opportunities for cooperation and development both within and beyond the region are crucial considerations.

Taking everything into account, competition emerges as a valuable strategy for attaining economic integration and development among the Turkic states. By collaborating towards shared objectives while also engaging in competition in select domains, these states can capitalize on their strengths and mitigate their weaknesses. Nonetheless, meticulous planning and management will be necessary to maintain a balanced distribution of benefits from both cooperation and competition, ensuring that all member states derive advantages from this arrangement.

Resources

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