Speech by Minister of State Cornelia Pieper at the fourth Central Asia Economic Conference: “Germany and Central Asia – Progress through Cooperation”

23.04.2013 - Speech

-- Translation of advance text --

Distinguished heads of delegation from Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan and Mongolia,
Dr Schweitzer,

Fellow members of the German Bundestag,
Ladies and gentlemen,

I’m delighted to welcome you to the second day of the fourth Central Asia Economic Conference here at the House of German Business.

Both for Germany and for Europe the Central Asian countries of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan and Mongolia are important partners.

Partners in many different ways, politically, economically and in the cultural realm.

Trade has a long and remarkable history in Central Asia. The Silk Road passed through the region, spurring the development of the civilizations en route, including our own. It might be thought of indeed as the mother of globalization. Already in Marco Polo’s day it was a broad corridor between Orient and Occident, a highway that connected Europe via Central Asia with the Chinese heartlands.

The wares transported along this network of caravan routes were not just silk, precious stones, spices and glass. They also included new technologies, philosophies and cultural ideas. It was via the Silk Road that paper manufacture and later also printing reached Europe – innovations that revolutionized the way in which information was collected and disseminated – much as the Internet has done in this day and age.

Today of course it’s not caravans that ply this ancient trade route, it’s pipelines, lorries and railway cars transporting raw materials such as oil and gas or consumer goods.

And to my mind trade and economic exchange are still very much the drivers of modernization and development. Close economic ties can also help create an environment conducive to regional stability and security.

As the example of Europe shows, economic integration goes hand in hand with societal integration. It’s a process that’s brought our continent peace, freedom, security and prosperity.

This is why we believe the right course for Europe is to build on its economic integration at home and with the wider world to expand and strengthen its economic links with other regions.

Here Central Asia has a special role to play. For one thing, by reason of its strategic location between Europe and East Asia. For another, because Central Asia has raw materials which German industry urgently needs. With Kazakhstan and Mongolia Germany has forged its first raw materials partnerships.

Expertise and technical solutions provided by German entrepreneurs are making a valuable contribution to the diversification and modernization of Central Asian economies.

A large number of German investors are already active in Central Asia and Mongolia. Direct German investment in 2010 stood at the sizeable sum of 330 million euros. The lion’s share –some 254 million euros – went to Kazakhstan. These investors include large companies with offices and branches in the region, but also small and medium sized enterprises.

Thanks to their entrepreneurship and courage, they’re successful in markets where conditions – and this is something I think needs to be said here, ladies and gentlemen – are not always easy.

Without legal certainty, administrative decisions that can be relied on and better market access, new investors will be reluctant to venture into Central Asia.

Anti corruption programmes need to be followed through on the ground. Streamlining bureaucracy is also important in this connection. Complicated and impractical customs regulations, for instance, are not only a hindrance to trade and investment but also a standing invitation to grease someone’s palm.

The non convertibility of some of the region’s currencies is another major impediment to investment.

In this context respect for property rights and equality before the law are crucial. Everyone must have the right to bring an action in court, obtain a ruling on their case and enforce it. If the legal systems in the region provide no redress for German entrepreneurs deprived of their investments or unpaid for their services, this is something totally unacceptable.

I’m sure we’re going to see progress here and this will certainly give our economic relations with Central Asia a considerable boost.

One purpose of this conference is to enable our partners from Central Asia to explain to interested companies what opportunities await investors there. Another is to allow German companies to make their wishes known and explain what will help them do good business in the region.

Besides legal certainty, one of the things I know regularly crops up on their wish lists is well trained manpower.

With its dual system of vocational training, Germany has a great deal to offer here. It’s a model that boosts competitiveness and productivity, so it’s clearly good for business. It’s also one of Germany’s top exports.

Obviously the system in place in Germany can’t be transferred lock, stock and barrel to other countries.

What can be transferred, however, is the core principle, the combination of theory and practice. This means, ladies and gentlemen, that it can’t function without your input, whether as entrepreneurs or as distinguished representatives of government!

That’s something you’ll be discussing later on in the Thematic Working Group on vocational training. I greatly look forward to the outcome of this discussion and the new prospects for cooperation it will open up.

A number of other working groups today will be devoted to specific sectors – sectors where we see considerable potential for intensified economic cooperation, sectors whose development will help diversify the economies of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan and Mongolia and which will tangibly improve, moreover, the quality of life of people in the region.

I’m thinking here particularly of sectors such as the health care industry or energy efficiency and innovative power generation. German companies are leading the way in these areas. They have innovative technical solutions which could also be of benefit to Central Asia.

Agriculture, ladies and gentlemen, is another sector where cooperation can open up new horizons. The world population is growing. Yet harvest failures caused by climate disasters are becoming increasingly common. Demand is rising all the time, your agriculture can help supply the world’s food. With the use of modern technology, agricultural products could account for an even greater share of your export revenue.

There’s obviously a close link, ladies and gentlemen, between exports and transport. In the days of the Silk Road goods were transported across desolate wastes by camels and other pack animals. Today modern modes of transport have made travelling and transportation faster as well as more convenient and comfortable.

“He who sows roads, will reap traffic.” French top manager and former Volkswagen board member Daniel Goeudevert once remarked. Sow railways and you reap rich and long term rewards, I would add, in the form of freight transport and economic exchange.

With no direct access to the world’s oceans, Central Asia is dependent on road and rail links. And transport links are of course a lifeline! Better transport infrastructure creates new trade and investment opportunities. For companies will only invest in places whose infrastructure they consider good.

Something they regard as very important in this connection is transboundary harmonization and optimization of the legal and technical parameters under which they operate. So what’s needed here are government initiatives and intergovernmental agreements that will ensure a fast and unhindered flow of goods both along existing transport routes and those still to be built. Even the best routes have little point, after all, if freight gets stuck at customs borders, frontiers and so on.

In other areas, too, regional cooperation is vital. Transboundary challenges clearly require a joint response, whether what’s at issue is trafficking in narcotics, arms or human beings, the management and use of water resources or energy security. Germany is supporting the region, also through the European Union’s Strategy for Central Asia, in its efforts to meet these challenges.

The Federal Foreign Office’s Central Asia Water Initiative – the so called Berlin Process – is one of the ways Germany is contributing to this EU Strategy.

Last March I had the great pleasure to attend the “Water Diplomacy for Central Asia” conference here in Berlin. One of the outcomes was a joint Declaration in which the countries of Central Asia and Germany undertook to continue their cooperation on water-related issues. Companies keen to know more about this may be interested in an event taking place this afternoon under the auspices of WASSER BERLIN INTERNATIONAL. The event has been organized by the Committee on Eastern European Economic Relations and the German Water Partnership in cooperation with the Federal Foreign Office.

I hope today’s discussions will generate not only new ideas for advancing economic integration across Central Asia and with German business but also the drive needed to give them practical effect. I greatly look forward to hearing the views of the entrepreneurs present and their suggestions for promoting and further expanding economic cooperation between their countries and Germany as well as the EU.

Let me quote at this point an Uzbek proverb: “If you set out on a journey, take a companion with you!” We hope we can make this journey together, a journey aimed at creating mutually beneficial economic synergies between Germany and Central Asia.

Thank you very much for your attention.

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