▶ Amid Central Asia's efforts to enhance its multi-vector diplomacy while maintaining peaceful relations with Russia and China, the most striking area of cooperation is in the field of digital transformation. Digital transformation has become a top priority for Central Asian countries and the most promising area for Korea to gain a foothold in the region.

▶ Central Asia's smart cities are utilizing Chinese and Russian technologies. Although these technologies are solving a number of issues that the governments of these countries are currently facing, it is important to note that it also opens the door to the negative socioeconomic and political side effects of digitalization in the emerging democracies of Central Asia. There are concerns about whether the confidentiality of big data collected by tech giants like Huawei will be guaranteed and whether the facial recognition technology used in smart cities will not pose a serious threat to the protection of privacy.

▶ With the New Northern Policy, Korea has been striving to expand its presence in Central Asia's digital sector. It is necessary to develop a Korean-style smart city model that is suitable for Central Asia, and more active support is needed at the government level such as the "K-City Network". Thanks to Korea's positive image in Central Asia, especially it’s reputation as a technological powerhouse, if the Korean government developed a path for cooperation that reflects the changing context in the region, there is no question that Korea could seize new opportunities in Central Asia's digital sector.

 

The Ukraine War and Changing Context in Central Asia

Although China and Russia have become closer since the start of the war in Ukraine, one area for potential conflict is Central Asia. Despite several factors contributing to instability over the last 30 years, one reason Central Asian countries have prospered is that they have recognized that a balanced relationship between China and Russia is essential to the stability of the region. However, even before the start of the war in Ukraine, there were signs of a fracture in the cooperative division of diplomatic relations - Russia for security and China for economy - and some have argued that the war may accelerate this trend. Questions have emerged as to whether Russia will still have the capacity to serve as a security guarantor in Central Asia following the war in Ukraine, and suspicions have surfaced regarding whether China's growing economic influence may lead to increased military influence. This is the background for the argument that China will replace Russia's influence in Central Asia.

 

However, in the short and medium term, China will not gain sole influence over Central Asia. First, China does not aim to gain hegemonic control or fill a power vacuum in Central Asia. Rather, China seems to be primarily focused on maintaining stability in the areas near western China by strengthening ties with neighboring countries. This will help create a buffer zone to effectively manage the ongoing security challenges in the eastern region of the Asia-Pacific. From China's perspective, Central Asia is perceived as a gap in the United States' Eurasia containment strategy. Therefore, China intends to take advantage of this through cooperation with neighboring countries.

 

Second, Central Asian countries are well aware that excessive Chinese influence in the region is a threat. Nationalist voices in China are as revisionist as their Russian counterparts, raising concerns in Central Asian countries. A Chinese construction project in Kyrgyzstan has been met with protests from residents who were concerned about China's dealings with neighboring Tajikistan. In 2011, Dushanbe ceded 1,000 square kilometers of the Pamir Mountains to China in exchange for debt relief. Central Asia has been actively engaged in diplomatic efforts to strike a balance of power. One key example is Kyrgyzstan, which decided to host a U.S. air base despite being under Russia's sphere of influence. Rather than relying solely on Russia and China, Central Asian countries have employed a multi-vector diplomacy strategy by establishing a 5+1 summit format including the U.S., Japan, the EU, and others. 

 

Third, Russia's influence on the security and economy of Central Asia remains intact. The Russian influence that helped resolve the unrest in Kazakhstan in January 2022 and the recent enclave border disputes between Tajikistan and Kyrgyzstan remains. This is evidenced by the attendance of the heads of state of all five Central Asian countries at the Moscow Victory Day Parade on May 9, 2023, even in the midst of the war in Ukraine.

 

Nonetheless, there is no doubt that China's influence will grow following the Ukraine war. China has recently undertaken summit level talks with Central Asian countries independently from Russia. China conducted its first 5+1 format event in 2020 without Russian participation and held virtual summits with Central Asian countries in 2022. On May 18, 2023, China hosted the China-Central Asia Summit in Xi'an. The China-Central Asia Summit in Xi'an symbolized that China can play a role in the region without Russia. The pledge made at the summit to provide 26 billion yuan (approx. 3.8 billion dollars) in broad financial support was a demonstration of China's commitment to mobilize its influence in the region through economic cooperation. 

 

However, Central Asian countries oppose and fear China's Belt and Road Initiative as much as they fear Russia's imperialist view of history. Therefore, Central Asian countries think that it is the right time to further strengthen their multi-vector diplomacy approach while maintaining peaceful relations with Russia and China. Central Asian countries see this as an opportunity to hedge their political and economic security by further strengthening cooperation with neighboring regional powers, such as India, Turkey, and Iran, and strengthening cooperation with Western powerhouses, such as the EU, along with middle powers in other regions, such as South Korea. While Korea continues to hold ministerial-level talks with Central Asian countries, the EU, India, and Turkey have begun summit-level talks.

 

Amid Central Asia's efforts to enhance its multi-vector diplomacy, the most striking area of cooperation is in the field of digital transformation. This is because digital transformation is a top priority for Central Asian countries and the most promising area for Korea to gain a foothold in the region. Now is the time to gain a better understanding of the changing context in Central Asia following the war in Ukraine and take a diplomatic stance that can respond sensitively to the opportunities and threats of entering the digital sector.

 

The Role of China and Russia in Central Asia’s Digital Transformation

China and Russia - two countries that share the greatest economic and security interests with Central Asia - are also significant and have a considerable role to play when it comes to the region's digital transformation. China especially has played a significantly influential role. The Chinese telecommunications company Huawei dominates major telecom operators in Uzbekistan, Kazakhstan, Tajikistan, and Kyrgyzstan.

 

In 2015, as part of the Belt and Road Initiative, China proposed the "Digital Silk Road," and the initiative was formalized at a meeting of foreign ministers from China and the five Central Asian countries on July 17, 2020. The "Digital Silk Road" has provided an opportunity for Central Asia - a region in the early stages of digitalization that has undergone significant socioeconomic challenges because of the COVID-19 crisis - to quickly improve its digital capabilities through affordable and effective solutions. When it comes to China's Digital Silk Road, the main partners in the region are Uzbekistan and Kazakhstan, and China is currently working on joint projects with these countries across various digital sectors. China's investments in Kyrgyzstan and Tajikistan are mainly targeted at the creation of smart cities and the development of next-generation communication networks, while in Turkmenistan, China is focusing on building fiber optic communication channels under the Caspian Sea.

 

The "Digital Silk Road" has entered Central Asia through the use of public-private partnerships (PPPs). China is attempting to create numerous inroads by designating eight key areas for Chinese companies' digital FDI investments in Central Asia. These areas are e-commerce, telecom infrastructure and 5G, fintech, smart cities, industrial internet of things (IIOT), smart terminals, information technology, and media and entertainment. The Chinese government is actively supporting Chinese ICT companies to continue growing their profits in Central Asia through public-private partnerships. Chinese companies have also had considerable success in Central Asia due to their more competitive prices compared to Western companies. 

 

Within the framework of the "Digital Silk Road," Kazakhstan has been actively promoting the "Digital Kazakhstan" program since 2018, Uzbekistan has introduced the concept of smart cities and is working on bringing that concept to life, and Kyrgyzstan has established an e-government system, which is the first phase of its "Taza Koom 2040" program.

 

Russia is also competitive in Central Asia's digital sector, especially in the area of digital control. Because Russian is spoken all across Central Asia, various internet services and content, including Russian-language portals like Yandex and social media, are widely shared. This is known as the "ru.net" phenomenon. Due to this phenomenon, Russian digital companies have a considerable competitive advantage in Central Asia. In particular, after the start of the war in Ukraine, many Russian ICT companies are relocating to Central Asia, which is expected to lead to an increase in activities of Russian companies in Central Asia's digital sector.

 

Russia and China are particularly influential in Central Asia in the field of surveillance and filtering technologies and programs for digital control. While Chinese companies like Hikvision supply most of the photo and video surveillance technology, Russia has dominated exports of traditional communications surveillance technology to the region. Russian companies like Protei have exported "SORM (COPM: Система Оперативно-Разыскных Мероприятий)," a technical specification for lawful interception interfaces of telecommunications and telephone networks, to all five Central Asian countries. All Central Asian countries share Russian laws, institutions, and technologies in the area of digital control. This is arguably because, similar to Russia and China, Central Asian countries also have elements of authoritarianism that believe the internet could pose a threat to the survival of the regime.

 

Central Asia's smart cities are utilizing Chinese and Russian technologies. Although these technologies are solving a number of issues that the governments of these countries are currently facing, it is important to note that it also opens the door to the negative socioeconomic and political side effects of digitalization in the emerging democracies of Central Asia. There are concerns about whether the confidentiality of big data collected by tech giants like Huawei will be guaranteed and whether the facial recognition technology used in smart cities will not pose a serious threat to the protection of privacy. This is because in new democracies like those in Central Asia, there will be a greater risk of so-called "digital authoritarianism." 

 

Korea’s Diplomatic Stance and a Path Toward Cooperation

With the New Northern Policy, Korea has been striving to expand its presence in Central Asia's digital sector. A significant portion of the ODA going to Central Asia has been allocated to the support of the digital sector, and during the COVID-19 crisis, a significant amount of support went towards digital health programs. When it comes to the private sector, KT entered the Uzbek market in 2007 through investments in East Telecom and iMax, and LG CNS established "LG CNS Uzbekistan" in collaboration with Uzbekistan’s Ministry for Development of Information Technologies and Communications. In Kazakhstan, Hyundai Glovis is in charge of smart logistics for RG Brands. Overall, however, progress has fallen short of expectations.

 

At a time when Central Asian countries are strengthening their multi-vector diplomacy, this article will suggest strategies for strengthening digital cooperation with Central Asia.

 

First, it is necessary to do away with the idea that Central Asia is under Russia's sphere of influence. Since the start of the Yoon Suk-yeol administration, the New Northern Policy has been virtually abandoned due the war in Ukraine, and cooperation with Central Asian countries - which were key partners in the New Northern Policy - has not been replaced with other cooperation initiatives. With not only Russia and China, but also Turkey (Oct. 2023, 10th OTS, Kazakhstan) India (Jan. 2022, Virtual Summit), and the EU (1st, Nov. 22, Kazakhstan/2nd, Jun. 2023, Kyrgyzstan) scraping to secure an advantage in cooperation with Central Asia through recent summit meetings, South Korea's position in Central Asia will inevitably fall behind. From the perspective that Central Asia is under Russia's sphere of influence, it is important to take note of the recent progress on the formation of the Southern Economic Corridor connecting Turkey, Central Asia, and India. India hopes to actively participate in the International North-South Transport Corridor (INSTC) to link the port of Chabahar to Central Asia, and Pakistan is striving to strengthen its competitiveness in logistics from the existing port of Gwadar to Central Asia. The EU is also showing great interest in connecting Europe and Central Asia through the Trans-Caspian International Transport Route (TITR), which does not pass through Russian territory. Rather than a Russia-centric perspective, it is necessary to approach Central Asia from the perspective of the Southern Economic Corridor network, which includes India, Pakistan, Turkey, and Iran.

 

Second, it is necessary to develop a Korean-style smart city model that is suitable for Central Asia, and more active support is needed at the government level. Through the "K-City Network," a Korean-style smart city program, smart technologies from 33 Korean companies have entered 21 different countries over the course of three years. However, in Central Asia, Korea is lagging behind China, which is the leader in the smart city market. Central Asia is characterized by its low urban population densities and weak intercity links. In addition, Central Asia has active village communities grounded in Islamic culture (e.g., mahalla in Uzbekistan). The people of Central Asia believe that Chinese-style smart cities have the potential for undemocratic digital control and mostly rely on price competitiveness despite the relatively inferior content. Considering this, rather than emphasizing large-scale urban cities, Korea should focus on promoting small- and medium-sized people-centered smart cities and develop a variety of content that can improve quality of life, such as support for community activities and digital health.

 

Third, due to the lack of financial capacity in Central Asian countries, there are a growing number of digital infrastructure PPPs. Chinese companies have a long history of winning PPP contracts from Central Asia, so Korean companies are struggling to land these contracts. Korean companies need government support. In particular, it would be feasible for companies to seek entry into infrastructure projects in conjunction with EDCF tied loans. 

 

Thanks to Korea's positive image in Central Asia, especially it’s reputation as a technological powerhouse, if the Korean government developed a path for cooperation that reflects the changing context in the region, there is no question that Korea could seize new opportunities in Central Asia's digital sector. I look forward to the Korean government's new Central Asia cooperation initiative.