Energy security and corruption in Central Asia as the main challenges for the European Union energy diversification policy

doi:10.21203/rs.3.rs-2980959/v1

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Research Article

Energy security and corruption in Central Asia as the main challenges for the European Union energy diversification policy

https://doi.org/10.21203/rs.3.rs-2980959/v1

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Journal Publication

published 19 Aug, 2023

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Background

The main goal of the paper is to define, analyze and assess the basic security, development and institutional challenges faced by the Central Asian countries after 2022. Following the Covid-19 pandemic, and with the outbreak of the Ukrainian crisis, Europe faced the need to find other sources of energy supply outside the Russian Federation. The Central Asian region is rich in energy resources and is therefore of special importance, but at the same time it is also a region of special geopolitical interest of often conflicting parties - the region for which there are limited information and insufficient academic literature about development, various aspects of security, internal specificities and future challenges.

Methods

The research included qualitative and quantitative analyses carried out for Kazakhstan, the Kyrgyz Republic, Turkmenistan, Uzbekistan and Tajikistan. Data processing was performed on the basis of 16 selected indicators in the fields of economy, energy, governance and climate change, for the time period from 2011 to 2021. Data processing was performed using the correlation and regression analysis (ANOVA).

Results

The results showed that energy policy and corruption represent one of the biggest problems faced by the countries of Central Asia, which strongly affects the energy security and sustainable development, not only of the countries of Central Asia, but also of all countries that are supplied with energy products from this region, or plan to do so. Correlation analysis shows that the countries of Central Asia have certain similarities when it comes to economic and social policy. Energy security is positive only in the case of Turkmenistan. Regression analysis shows that Kazakhstan reported the best positive trend for most indicators. Data for Germany show consistent values over the observed period.

Conclusions

The main conclusions of the paper indicate that the countries of Central Asia have made little progress when it comes to overall sustainable development, with energy security, corruption and government efficiency being the biggest problems. The European Union and Europe as a whole must find ways and mechanisms to overcome these and many other impediments if they are to get energy products from the aforementioned region.

Energy security

Corruption perception

Governance effectiveness

Central Asia

Germany

The beginning of the third decade of the 21st century placed a large number of complex challenges before humanity. In addition to the existing problems of sustainable development, primarily reflected in the fight against climate change, environmental pollution, inefficient and excessive use of fossil fuels, and different determinations and commitment of individual countries and regions to sustainable development [1], the two major crises, unprecedented in recent history, have occurred. The Covid-19 pandemic has led to a severe stagnation in the world economy, created problems in supply chains and caused financial difficulties both in certain countries and at the global level [2], thus forcing individual countries to reassess their own priorities and set some new ones for the future [3]. The Ukrainian crisis broke out in February 2022 and rapidly exceeded the boundaries of the regional conflict, thus becoming a multidimensional global problem accompanied by a worrying increase in energy poverty that had existed even before the Ukrainian crisis [4]. Different countries of the world reacted differently to the Ukrainian crisis, but the introduction of the tenth and the announcement of the eleventh package of sanctions by the European Union against the Russian Federation, caused complex economic, financial, security, geopolitical and numerous other changes at the global level [5].

Bearing in mind the above, the majority of countries are looking at their own plans for sustainable development, since the financial crisis certainly limited, and in some places even gradually prevented, the financing of certain measures and activities aimed at the implementation of particular sustainable development goals [6]. When it comes to the 2018 EU Green Deal and the 2022 Recovery plan, these underwent a revision that included changes in every sense, with the diversity of views of the road to decarbonization that exist among theoreticians and practitioners [7]. However, the EU’s determination for sustainable development, energy transition and decarbonization until 2050, remained unchanged [8].

During the Ukrainian crisis, the EU decided to stop the supply of natural gas from the Russian Federation and replace it with other sources of supply. Bearing in mind: that natural gas from the Russian Federation is an environmentally acceptable energy product, that the Russian Federation has been supplying the European Union with natural gas for several decades at favorable prices [9], that there are small available quantities of liquefied natural gas on the world market, while numerous infrastructure and investment problems stand in the way of the introduction of liquefied natural gas as an alternative [10], and taking also into account the lack of uranium in countries that are not involved in the conflict in Ukraine [11], it is not possible to assess with a real degree of certainty the further developments and the position of the European Union when it comes to the supply of this energy product. Moreover, with the aim of reducing the impact on their own economies, certain countries of the European Union express different attitudes and implement different activities when it comes to coal, renewable energy sources, nuclear energy, as well as the continued supply of natural gas from the Russian Federation [12]. Bearing in mind that the European Union imports about 55% of all necessary energy products, and that disagreements exist within the European Union on this issue, it is realistic to expect challenges in all spheres, including the ability of the European continent to reach the status of a carbon-free continent by 2050 [13].

The European Union and the EU candidate countries are in a situation where they have to find and enable a stable supply of natural gas from other sources, which is certainly a challenging task because in 2020 the European Union imported about 85% of natural gas from other countries, whereby the Russian Federation was the largest supplier [14]. Taking into account the geographical location and infrastructure limitations, there are extremely conflicting opinions on whether the EU can be supplied with natural gas and oil from the USA in the long term, and how this will affect its competitiveness [15]. In addition, geopolitical tensions make it much more difficult to establish supplies from Saudi Arabia and other Gulf countries. The unstable internal situation, turmoil and conflicts that often border on war, have been going on in Venezuela and Libya for decades, so it is completely impossible to supply the EU from these countries. With this in mind, it is reasonable to expect the EU to intensify efforts to establish quality relations with a region that is rich in energy resources, but with which the EU has not developed cooperation on any basis so far. That region is Central Asia.

Central Asia is a region made up of five countries: the Kyrgyz Republic, Kazakhstan, Uzbekistan, Tajikistan and Turkmenistan. These countries underwent a complex historical development for which there are insufficient reliable data. However, it can be said that, due to a high degree of isolation and natural and climatic conditions, the countries of this region have progressed at a relatively slow rate compared to other countries in the immediate surroundings. A big change occurred when these countries became part of the USSR, because they had no system of economy that would resemble the economies of other countries at the given historical moment, characterized by rapid industrialization and the beginning of progress of the society in every sense. However, it should be taken into account that the consequences of the Soviet period are interpreted differently in academic literature [16], both in terms of the number of publications and the conclusions contained therein [17]. From that moment, the countries of Central Asia began to develop according to the principles of a centralized economy. A strong industrial, economic and social progress of this region was recorded in that period [18].

The countries of Central Asia are rich in energy resources that have not yet been sufficiently explored or used, and there are long-standing disputes over their use, especially when it comes to water resources and hydropower plants [19]. The USSR era saw a rapid development in the energy sector, primarily related to the production of electricity from newly built hydropower plants, as well as the exploitation of uranium as the basic fuel for nuclear power plants around the world. The production of energy from renewable sources in the countries of this region is negligible, although since 2010, the first strategic initiatives have been recorded and the accompanying legal regulations have been adopted, with the aim of enhancing both the production of energy from renewable sources and investment in this area. However, no significant progress in the field of climate change has been made, and the information regarding this matter are extremely scarce and unreliable [20].

Due to their geostrategic position and wealth of natural resources that remained after the dissolution of the USSR in 1992, the countries of Central Asia became a region of interest for the USA. Moreover, since the 2013 Silk and belt initiative of the People’s Republic of China, the influence of China has been growing rapidly, primarily in the field of investment in the energy sector of this region [21]. With the outbreak of the Ukrainian crisis, the Central Asian region once again became the focus of US interest, primarily for security reasons and due to the Russian Federation’s continued influence on the region [22]. The Central Asian region was not of strategic importance for the EU until the outbreak of the Ukrainian crisis, but the need to find new sources of energy changed this situation and led to the necessity to alter the European Union’s approach to Central Asia [23].

Lack of information and analysis in the academic literature makes it hard to provide an accurate and reliable insight into the specificities of the countries of this region. However, it is certain that these countries have traditionally been closed and that, after the collapse of the USSR, they have entered into a profound recession in which energy resources have continued to be exploited, but under conditions of weak states and a growing corruption [24]. On the other hand, the attempts of Western countries to strengthen cooperation with countries of this region are often unsuccessful, and the reasons for this failure are still to be determined, although it is reasonable to assume that they are rooted in diametrically different approaches and perceptions [25]. Even 30 years after the dissolution of the USSR, the countries of Central Asia have not reached the level of development they recorded before the dissolution of the USSR, and since they have been developing differently from other countries of the former USSR [26], it would be ungrateful to predict the region's future [27]. Moreover, the governments of the countries of this region show insufficient willingness to introduce substantial changes in the spheres of government [28] regarding corruption and measures that could lead to changes in this area, which is of particular importance for the countries that aspire to more intensive cooperation with the Central Asian region [29].

The research presented in this paper aims to contribute to the limited corpus of academic literature on the specificities of the development of this region. This will provide more information that can be significant both for planning the further development of these countries and for predicting the possibility of international cooperation, taking into account the fact that EU is primarily interested in a stable supply of energy from this region.

The research methodology is defined in accordance with the goal of the research: reviewing the basic indicators of economic, energy, social and institutional development while defining the key advantages and problems faced by the countries of this region, which represent and can represent factors of importance both for these countries themselves and for all the countries aspiring to more intensive cooperation with Central Asia in the future.

Bearing in mind the basic priorities and challenges faced by the EU after 2022, it is necessary to provide insight into the data of importance for EU policy and decision-making. The research aims to:

Look at historical development indicators for each of the 5 countries of the region individually;

Gain insight into statistical indicators of interest;

Determine the values and indicators of sustainable development for Germany; and

Compare the results obtained for Central Asian countries with Germany.

The research covers the period from 2011 to 2021. Table 1. shows the indicators used in the research.

Table 1

Indicators, units and sources
Indicator	Unit	Source
GDP-PPP per capita	Current international $	World Bank
Public debt	Central government debt, total, % of GDP	World Bank
Foreign debt	External debt, % of GDP	World Bank
Foreign-exchange reserves	Total reserves (includes gold, current US$)	World Bank
Inflation	Consumer prices (annual %)	World Bank
Budget deficit	% of GDP	World Bank
Unemployment rate	Unemployment, total (% of total labour force)	World Bank
Poverty rate	Poverty gap at $3.20 a day (2011 PPP) (%)	World Bank
Energy imports	Net (% of energy use)	World Bank
Health expenditure	% of GDP	World Bank
GINI	Index	World Bank
Governance effectiveness	Index	Worldwide Governance Indicators
The consumer price index	Index (2010 = 100)	World Bank
Corruption Perception Index	Index	Transparency International
Carbon emission	Metric tons per capita	World Bank
World Risk Index	Index	Bündnis Entwicklung Hilft

Statistical analysis methods were used in data processing and interpretation. The significance and level of acceptability of individual indicators was determined in addition to the analysis of time series, measures of marginal and central tendencies, and standard deviations. In order to observe the possible regularities of data change in individual indicators, the paper analyzed the correlation and covariance of indicators between each country.

GDP per capita

Kazakhstan and Turkmenistan have GREATER GDP growth than Kyrgyzstan, Uzbekistan and Tajikistan. As of 2012, Kazakhstan and Turkmenistan have reported five-digit values for this indicator, the same as Germany, while the values have been significantly lower for the remaining countries, as shown in Table 2.

Table 2

GDP per capita in Central Asian countries and Germany (2011–2021)
Country	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021
Kyrgyz Republic	3297,36	3618,15	4042,89	4281,82	4214,83	4681,17	5046,69	5255,78	5480,29	4985,03	5725,38
Kazakhstan	20779,44	22032,17	24504,77	24726,47	23224,12	23818,82	24862,97	26154,60	27463,97	26750,45	27798,94
Uzbekistan	5844,81	6061,95	6302,65	6494,86	6680,18	6796,90	6840,71	7252,14	7658,27	7746,43	7907,58
Tajikistan	2496,58	2750,36	3027,81	3303,10	3150,43	3114,90	3252,93	3496,89	3732,56	3854,19	3926,42
Turkmenistan	9811,70	11295,00	12057,20	13491,00	13690,60	13862,30	14205,00	15200,00	16194,20	16804,55	17503,08
Germany	42541,53	43359,61	44993,89	47011,55	47609,78	50579,68	53071,46	55235,37	55652,89	54844,55	58461,27

There is a very high correlation in GDP per capita between all 6 countries. The lowest correlation value of this indicator, which is still greater than 0.9 (90%), is between Germany and Kazakhstan, i.e. Germany and Tajikistan. Correlation values are given in Table 3.

Table 3

GDP per capita correlations in Central Asian countries and Germany (2011–2021)
Country	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Kyrgyz Rep		0.95	0.98	0.98	0.98	0.98	Correlation
Kazakhstan	1858595		0.99	0.97	0.94	0.91
Uzbekistan	585933	1666249		0.97	0.99	0.96
Tajikistan	380185	1129807	354752		0.98	0.92
Turkmenistan	2153722	6129519	1985721	1314898		0.95
Germany	5311905	14393990	4691187	3024574	17385435
	Covariance

The coefficients of the regression line (Table 4) for individual countries show the similarity in the GDP per capita change in Kazakhstan and Turkmenistan, as well as in the Kyrgyz Republic and Uzbekistan. The lowest GDP per capita growth is reported for Tajikistan, while Germany, on the other hand, has incomparably high annual GDP per capita growth when compared to all other observed countries.

Table 4

GDP per capita regression analysis in Central Asian countries and Germany (2011–2021)
	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Intercept	-463067	-1267390	-422243	-262477.7	-1538453	-3666870.2
Coefficient	232	641	213	132	770	1844

Other characteristics of the observed sample are:

	+Germany
min	2496,582	2496,58
max	58461,27	27798,94
stdev.p	16634,11	8069,034
mean	17301,74	10700,97
significance	0,05	0,05
sample size		55
confidence		2132,496
		0,076711

Public debt

Public debt values are shown in Table 5.

Table 5

Public debt in Central Asian countries and Germany (2011–2021)
Country	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021
Kyrgyz Republic	45,00	47,00	44,40	53,60	67,10	59,10	58,90	56,00	54,10	68,10	66,11
Kazakhstan	8,80	10,50	10,84	12,65	19,31	16,77	15,77	17,33	17,88	17,07	20,20
Uzbekistan	6,70	7,70	7,40	8,40	9,60	11,60	19,50	29,20	30,80	40,40	37,44
Tajikistan	35,90	32,40	29,20	27,50	34,30	42,00	50,40	47,90	43,10	47,77	50,77
Turkmenistan	10,05	18,07	19,99	16,81	22,10	25,10	30,60	31,40	32,80	30,90	36,85
Germany	86,10	88,60	84,10	83,90	79,80	77,00	72,40	69,10	67,50	78,70	67,83

As for Public debt, the correlation value is lower compared to GDP per capita, but it is still very significant. It is noticeable that Germany has a negative correlation with all the observed Central Asian countries that, on the other hand, have mutual correlations of 0.59 and higher. There are significant correlations between Turkmenistan and Kazakhstan, Uzbekistan and Tajikistan, Kazakhstan and the Kyrgyz Republic, as well as between Tajikistan and Uzbekistan. The correlation values are shown in Table 6.

Table 6

Public debt correlations in Central Asian countries and Germany (2011–2021)
Country	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Kyrgyz Rep		0.88	0.62	0.59	0.66	-0.53	Correlation
Kazakhstan	12		0.68	0.66	0.84	-0.81
Uzbekistan	96	106		0.82	0.87	-0.76
Tajikistan	40	45	84		0.84	-0.81
Turkmenistan	41	52	85	54		-0.90
Germany	-28	-43	-68	-48	-51
	Covariance

The coefficients of the regression line for individual countries show that only Germany has reported a negative growth, and that public debt of Central Asian countries is growing. The similarity in the public debt change is reported for the Kyrgyz Republic and Tajikistan, but also for Turkmenistan, although to a slightly lesser degree. The lowest increase in the Public debt indicator is recorded for Kazakhstan, as shown in Table 7.

Table 7

Public debt regression analysis in Central Asian countries and Germany (2011–2021)
	Kirgiz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Intercept	-3896.27	-2005.31	-7425.56	-4256.17	-4766.76	4068.19
Coefficient	1.96	1.00	3.69	2.13	2.38	-1.98

Other characteristics of the observed sample are:

	+Germany
min	6,7	6,70
max	88,6	68,10
stdev.p	23,7449611	17,43194
mean	38,88	31,11
significance	0,05	0,05
sample size		55
confidence		4,60694
		0,06765

Foreign debt

Foreign debt values are shown in Table 8.

Table 8

Foreign debt in Central Asian countries and Germany (2011–2021)
Country	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021
Kyrgyz Republic	89,61	90,51	93,15	99,02	115,34	116,26	105,52	98,39	94,92	112,27	110,88
Kazakhstan	62,00	65,00	66,00	70,00	71,00	108,00	120,00	100,00	90,00	85,00	108,33
Uzbekistan	9,87	10,11	13,81	14,77	15.78	17,89	26,34	33,89	42,04	57,75	16,74
Tajikistan	32,50	28,50	25,70	22,70	27,90	32,70	40,30	38,90	36,00	37,50	39,64
Turkmenistan	15,80	12,60	14,70	19,00	20,00	18,90	15,40	8,00	14,10	13,78	13,46
Germany	163,08	165,86	150,74	153,55	151,18	152,22	146,20	144,92	144,72	165,10	147,76

As for Foreign debt, the correlation value is not significant in most cases. The highest correlation is between Kazakhstan and Tajikistan (0.78), while the correlations between Kazakhstan and the Kyrgyz Republic, and Tajikistan and Uzbekistan, are at the limit of significance. Other correlations are less than 0.5, but there is also a large number of negative correlations indicating inversely proportional trends in the cases of those countries. The values of the correlation analysis are given in Table 9.

Table 9

Public debt correlations in Central Asian countries and Germany (2011–2021)
Country	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Kyrgyz Rep		0.53	0.36	0.28	0.40	-0.19	Correlation
Kazakhstan	206.0147		0.31	0.78	-0.19	-0.59
Uzbekistan	77.61873	71.70021		0.54	-0.33	-0.08
Tajikistan	9.283172	26.02753	47.26092		-0.54	-0.30
Turkmenistan	4.232876	-2.0633	-14.8699	-10.1823		0.08
Germany	-10.6701	-33.9963	-9.82111	-13.169	2.033201
	Covariance

The coefficients of the regression line for individual countries show that negative increase in foreign debt was recorded for Germany and Turkmenistan, while it is increasing in the case of other Central Asian countries. When looking at the coefficients of the regression line, it is evident that similarities are almost non-existent, so the growth of foreign debt values is very different for the observed countries. This argument is in line with the significantly lower correlation of this factor between all 6 observed countries. The results of the regression analysis are given in Table 10.

Table 10

Foreign debt regression analysis in Central Asian countries and Germany (2011–2021)
	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Intercept	-3336.27	-8943.30	-6544.66	-2668.5	663.0679	2350.651
Coefficient	1.71	4.48	3.26	1.34	-0.32143	-1.09

Other characteristics of the observed sample are:

	+Germany
min	8	8,00
max	165,9	120,00
stdev.p	50,88	37,3129
mean	69,66	52,64
significance	0,05	0,05
sample size		54
confidence		9,95198
		0,08293

Foreign-exchange reserves

The values of this indicator are shown in Table 11.

Table 11

Foreign-exchange reserves in Central Asian countries and Germany (2011–2021)
Country	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021
Kyrgyz Republic	1,83E + 09	2,07E + 09	2,24E + 09	1,96E + 09	1,78E + 09	1,97E + 09	2,18E + 09	2,16E + 09	2,43E + 09	2,81E + 09	2,53E + 09
Kazakhstan	2,92E + 10	2,83E + 10	2,47E + 10	2,93E + 10	2,79E + 10	2,96E + 10	3,07E + 10	3,1E + 10	2,9E + 10	3,56E + 10	3,29E + 10
Uzbekistan	2,25E + 10	2,25E + 10	2,25E + 10	2,42E + 10	2,43E + 10	2,63E + 10	2,81E + 10	2,71E + 10	2,93E + 10	3,49E + 10	3,27E + 10
Tajikistan	5,19E + 08	6,31E + 08	6,61E + 08	5,13E + 08	4,93E + 08	6,45E + 08	1,29E + 09	1,28E + 09	1,47E + 09	2,24E + 09	1,87E + 09
Turkmenistan	1,93E + 10	2,02E + 10	2,24E + 10	2,26E + 10	2,26E + 10	1,09E + 10	2,49E + 10	2,02E + 10	2,02E + 10	2,01E + 10	2,01E + 10
Germany	2,34E + 11	2,49E + 11	1,99E + 11	1,93E + 11	1,74E + 11	1,84E + 11	2E + 11	1,98E + 11	2,24E + 11	2,68E + 11	2,18E + 11

As for the Foreign-exchange reserves indicator, the value of the correlations between Turkmenistan and Germany is not significant in most cases. On the other hand, Tajikistan has high correlations with Uzbekistan, Kazakhstan and the Kyrgyz Republic, and Uzbekistan has high correlations with Kazakhstan and the Kyrgyz Republic. No significant negative correlations have been reported between the considered countries. Correlation analysis is shown in Table 12.

Table 12

Foreign-exchange reserves correlations in Central Asian countries and Germany (2011–2021)
Country	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Kyrgyz Rep		0.63	0.85	0.93	0.07	0.60	Correlation
Kazakhstan	4.54E + 18		0.86	0.81	-0.11	0.49
Uzbekistan	1.37E + 19	1.38676E + 19		0.96	-0.06	0.38
Tajikistan	3.16E + 17	2.76441E + 17	2.24E + 18		0.08	0.52
Turkmenistan	8.15E + 17	-1.26672E + 18	-7.5E + 17	1.54E + 17		0.01
Germany	4.5E + 20	3.71758E + 20	4.23E + 19	8.29E + 18	7.72E + 17
	Covariance

The coefficients of the regression line for Foreign-exchange reserves show that this indicator has a very negative growth for Turkmenistan, while the growth of Foreign-exchange reserves is exceptionally positive for Uzbekistan, Germany and Kazakhstan. For Tajikistan, but especially for the Kyrgyz Republic, the growth of this indicator is significantly lower - Table 13.

Table 13

Foreign-exchange reserves regression analysis in Central Asian countries and Germany (2011–2021)
	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Intercept	-1.4E + 11	-1.2E + 12	-2.36E + 12	-3.3E + 11	1.18E + 11	-1.8E + 12
X Variable 1	7.1E + 07	6.07E + 08	1.186E + 09	1.63E + 08	-4.9E + 07	9.83E + 08

Other characteristics of the observed sample are:

	+Germany
min	4,93E + 08	493391433
max	2,68E + 11	35638096635
stdev.p	7,51E + 10	12450175116
mean	4,88E + 10	16026226067
significance	0,05	0,05
sample size		55
confidence		3290350827
		0,092326783

Inflation

The inflation values in the observed period are shown in Table 14.

Table 14

Inflation in Central Asian countries and Germany (2011–2021)
Country	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021
Kyrgyz Republic	16,64	2,77	6,61	7,53	6,50	0,39	3,18	1,54	1,13	6,33	0,30
Kazakhstan	8,42	5,10	5,85	6,71	6,67	14,55	7,44	6,02	5,25	6,75	7,17
Uzbekistan	4,60	4,10	4,15	6,40	5,50	5,60	9,50	17,60	14,51	12,98	15,99
Tajikistan	6,69	3,37	2,04	4,40	2,80	6,41	6,65	3,87	7,80	8,59	7,52
Turkmenistan	5,28	5,31	6,81	6,01	7,40	3,65	8,04	13,30	5,09	7,58	8,65
Germany	2,08	2,01	1,50	0,91	0,51	0,49	1,51	1,73	1,45	0,51	0,77

As for the Inflation indicator, the correlation values do not exceed the significance threshold of 0.5, except in the case of Uzbekistan and Turkmenistan, but there is a large number of negative correlations of lesser significance. When looking at the covariance, a high dynamic of inversely proportional changes in the value of this indicator is observed for Uzbekistan and the Kyrgyz Republic. Covariance also shows a significant but proportional change in the Inflation value for Uzbekistan with Turkmenistan and Uzbekistan with Tajikistan, as shown in Table 15.

Table 15

Inflation correlations in Central Asian countries and Germany (2011–2021)
Country	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Kyrgyz Rep		-0.07	-0.50	-0.08	-0.22	0.28	Correlation
Kazakhstan	-0.41192		-0.25	0.27	-0.40	-0.41
Uzbekistan	-12.166	-6.00268		0.49	0.66	-0.11
Tajikistan	-0.37731	1.217724	5.171455		-0.16	-0.23
Turkmenistan	-1.28436	-2.36479	7.93661	-0.83474468		0.10
Germany	0.094704	-0.13677	-0.31649	-0.28753215	0.140365
	Covariance

The coefficients of the regression line for Inflation show that the Kyrgyz Republic reported a significant deflation in the observed period, while Germany and Kazakhstan reported a slight growth of this indicator due to negative influence. Uzbekistan had the highest inflation, while positive growth, recorded for Tajikistan and Turkmenistan, was below 0.5, as summarized in Table 16.

Table 16

Inflation regression analysis in Central Asian countries and Germany (2011–2021)
	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Intercept	1822.74	45.21	-2739.18	-820.7	-652.2	186.1
Coefficient	-0.90	-0.02	1.36	0.41	0.33	-0.09

Other characteristics of the observed sample are:

	+Germany
min	0,302574	0,30
max	17,6	17,60
stdev.p	4,059266	3,824141
mean	5,825456	6,75
significance	0,05	0,05
sample size		55
confidence		1,01065
		0,057423

Budget deficit

The values of this indicator are shown in Table 17.

Table 17

Budget deficit in Central Asian countries and Germany (2011–2021)
Country	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021
Kyrgyz Republic	-4,70	-5,90	-3,70	-3,10	-2,50	-5,80	-3,70	-0,60	-0,10	-3,30	-1,22
Kazakhstan	5,80	4,40	4,90	2,50	-6,30	-4,50	-4,30	2,60	-0,60	-7,00	-6,26
Uzbekistan	5,10	5,90	2,20	1,90	-0,20	0,80	1,20	2,00	0,60	-2,50	-1,89
Tajikistan	0,90	0,60	-0,90	0,80	-2,00	-9,00	-5,70	-2,70	-2,10	-4,30	-5,81
Turkmenistan	2,40	5,30	1,20	0,70	0,60	-2,10	-2,30	-0,20	-0,30	-0,10	-2,16
Germany	-0,90	0,00	0,00	0,60	1,00	1,20	1,30	1,90	1,50	-4,30	-0,05

As for the Budget deficit indicator, the considered Central Asian countries reported no correlation with Germany. There is a very strong correlation of changes in this indicator for Uzbekistan and Kazakhstan, and further for Tajikistan and Turkmenistan (greater than 0.8). There are also significant correlations between Turkmenistan and Uzbekistan, i.e. Turkmenistan and Kazakhstan, as well as between Tajikistan and the same two countries. In conclusion, it can be pointed out that a significant correlation for the Budget deficit indicator exists in all Central Asian countries except in the Kyrgyz Republic, as shown in Table 18.

Table 18

Budget deficit correlations in Central Asian countries and Germany (2011–2021)
Country	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Kyrgyz Rep		-0.20	-0.50	-0.01	-0.40	0.25	Correlation
Kazakhstan	-4.61365		0.86	0.75	0.69	0.18
Uzbekistan	-2.92886	5.079461		0.63	0.75	0.26
Tajikistan	-0.09058	6.921795	4.599919		0.82	-0.07
Turkmenistan	-1.80946	3.113413	3.862584	5.285152		-0.20
Germany	0.652983	0.47267	1.028373	-0.35178	-0.68836
	Covariance

The coefficients of the regression line for the Budget deficit indicator show negative growth in all cases except for the Kyrgyz Republic. Although this country reported a budget surplus in the observed period (table X), its value is permanently decreasing from year to year. The lowest negative increase in Budget deficit is reported for Germany. The summarized results are shown in Table 19.

Table 19

Budget deficit regression analysis in Central Asian countries and Germany (2011–2021)
	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Intercept	-780.22	2202.14	1316.05	1233.73	982.62	101.62
Coefficient	0.39	-1.09	-0.65	-0.61	-0.49	-0.05

Other characteristics of the observed sample are:

	+Germany
min	-9	-9,00
max	5,9	5,90
stdev.p	3,2813	3,484883
mean	-0,80586	-1,01
significance	0,05	0,05
sample size		55
confidence		0,92099
		0,1561

Unemployment rate

The values of this indicator are shown in Table 20.

Table 20

Unemployment rate in Central Asian countries and Germany (2011–2021)
Country	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021
Kyrgyz Republic	8,53	8,43	8,33	8,05	7,56	7,21	6,89	6,89	6,92	8,71	7,08
Kazakhstan	5,39	5,29	5,20	5,06	4,93	4,96	4,90	4,85	4,80	4,89	4,69
Uzbekistan	5,00	4,90	4,90	5,10	5,20	5,20	5,80	5,84	5,85	7,04	6,54
Tajikistan	10,24	9,58	8,91	8,23	7,55	6,90	6,95	7,01	7,06	7,58	6,15
Turkmenistan	4,09	4,09	4,11	4,14	4,14	4,17	4,20	4,23	4,27	4,95	4,57
Germany	5,820	5,380	5,230	4,980	4,620	4,120	3,750	3,380	3,140	3,810	2,85

The correlations of the Unemployment rate indicator between the observed countries are significant and differ in their nature. Specifically, there are significant negative correlations between Germany and Uzbekistan, i.e. Germany and Turkmenistan, as well as between Uzbekistan and Tajikistan, i.e. Uzbekistan and Kazakhstan. On the other hand, there are strong positive correlations between Tajikistan, Kazakhstan, Germany and the Kyrgyz Republic. Turkmenistan has a strong positive correlation with Uzbekistan - Table 21.

Table 21

Unemployment rate correlations in Central Asian countries and Germany (2011–2021)
Country	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Kyrgyz Rep		0.73	-0.20	0.80	0.12	0.54	Correlation
Kazakhstan	0.03		-0.73	0.97	-0.54	0.88
Uzbekistan	-0.09	-0.33		-0.63	0.93	-0.84
Tajikistan	1.16	1.41	-0.51		-0.43	0.85
Turkmenistan	0.01	-0.03	0.16	-0.13		-0.69
Germany	0.67	0.85	-0.49	1.05	-0.13
Covariance

The negative coefficient of the regression line shows that the growth of the Unemployment rate indicator is negative in all countries except Turkmenistan. The biggest changes in this indicator are reported for Tajikistan and Germany. They are more moderate for Uzbekistan and the Kyrgyz Republic, and negligible for Kazakhstan. Details of the analysis can be seen in Table 22.

Table 22

Unemployment Rate regression analysis in Central Asian countries and Germany (2011–2021)
	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Intercept	252.66	128.77	-382.89	685.81	-116.19	581.10
Coefficient	-0.12	-0.06	0.19	-0.34	0.06	-0.29

Other statistical measures of the observed sample are:

	+Germany
min	2,85	4,09
max	10,24	10,24
stdev.p	1,66	1,60473
mean	5,77	6,07
significance	0,05	0,05
sample size		55
confidence		0,4241
		0,04141

Poverty rate

The values of this indicator for the research sample can be seen in Table 23.

Table 23

Poverty rate in Central Asian countries and Germany (2011–2021)
Country	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021
Kyrgyz Republic	2,9	3,5	4,2	2,4	3,5	2,4	2,5	1,8	1,6	2,9	1,9
Kazakhstan	0,10	0,1	0,1	0	0	0	0,1	0,1	0	0,10	0,05
Uzbekistan	0	0,1	0	0,1	0	0,1	0	0,1	0	0,1	0,1
Tajikistan	4,4	4,4	4,5	4,5	4,5	4,5	4,4	4,4	4,4	4,4	4,4
Turkmenistan	0,2	0,2	0,2	0,2	0,2	0,2	0,2	0,2	0,2	0,2	0,2
Germany	0	0	0	0	0	0	0,1	0	0	0	0,02

Regarding the Poverty rate indicator, there are no significant correlations between the observed countries. The only correlation that is statistically significant is the one between Kazakhstan and Tajikistan: it is a negative correlation (-0.56). It is interesting that the correlation of the poverty rate indicator for Turkmenistan with other observed countries is close to zero, as can be seen in Table 24.

Table 24

Poverty rate correlations in Central Asian countries and Germany (2011–2021)
Country	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Kyrgyz Rep		0.32	-0.24	0.41	0.00	-0.14	Correlation
Kazakhstan	7.1E-04		-0.01	-0.56	0.00	0.26
Uzbekistan	-5.6E-04	-1.9E-05		-0.02	0.00	-0.32
Tajikistan	9.1E-04	-1.3E-03	-3.7E-05		0.00	-0.28
Turkmenistan	-2.0E-50	0.0E + 00	1.8E-34	0.0E + 00		0.00
Germany	-1.2E-04	2.2E-04	-4.4E-04	-3.9E-04	-8.8E-36
	Covariance

For the Poverty rate indicator, the regression line is almost parallel to the X-axis (the coefficient of the regression line is close to zero). The exception is the Kyrgyz Republic where this indicator reported a negative growth in the observed period - Table 25.

Table 25

Poverty Rate regression analysis in Central Asian countries and Germany (2011–2021)
	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Intercept	321.59	4.95	-6.06	14.21	0.19	-3.65
Coefficient	-0.16	0.00	0.00	0.00	0.00	0.00

Other statistical measures of the observed sample are:

	+Germany
min	0	0,00
max	4,5	4,50
stdev.p	1,7477181	1,81707
mean	1,2416162	1,49
significance	0,05	0,05
sample size		55
confidence		0,480218
		0,106715

Energy imports

Input data are shown in Table 26.

Table 26

Energy imports in Central Asian countries and Germany (2011–2021)
Country	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021
Kyrgyz Republic	51,05	57,70	55,47	49,54	48,44	53,33	51,22	52,78	54,89	55,09	53,39
Kazakhstan	-104,13	-107,235	-122,883	-107,342	-116,89	-111,65	-118,78	-115,46	-114,56	-116,66	-118,76
Uzbekistan	-18,55	-21,04	-17,50	-26,16	-24,65	-22,39	-23,49	-22,91	-24,48	-25,11	-25,96
Tajikistan	29,50342	28,73741	33,71686	36,2455	35,667	35,989	34,008	35,098	34,701	35,005	36,92627
Turkmenistan	-164,212	-166,233	-191,918	-191,511	-205,365	-216,123	-226,882	-237,64	-248,399	-259,157	-269,915
Germany	60,56451	60,69546	62,09378	60,87591	61,40017	61,22218	61,22218	61,22218	61,22218	61,22218	61,3777

As for Energy imports, the general conclusion is that significant positive and negative correlations of changes exist in this indicator between the observed countries. The positive correlations are weaker, and only the correlations between Turkmenistan and Uzbekistan, i.e. Turkmenistan and Kazakhstan, are significant. Significant negative correlations exist between Germany and Kazakhstan (very large), Tajikistan and Turkmenistan, Uzbekistan and Kazakhstan. In addition, there is a notable value of covariance between Kazakhstan and Turkmenistan, implying a great similarity in the dynamics of change in the value of the Energy imports indicator in these two countries. The details of the analysis are shown in Table 27.

Table 27

Energy imports correlations in Central Asian countries and Germany (2011–2021)
Country	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Kyrgyz Rep		-0.11	0.32	-0.37	-0.09	0.13	Correlation
Kazakhstan	-3.46		0.10	-0.53	0.60	-0.91
Uzbekistan	2.40	0.73		-0.68	0.65	0.10
Tajikistan	-2.37	-3.39	-4.76		-0.71	0.51
Turkmenistan	-105.56	697.37	60.69	-61.51		-0.37
Germany	0.02	-0.14	0.11	0.50	-4.94
	Covariance

The coefficient of the regression line shows a distinct trend of negative increase in the Energy imports indicator for Turkmenistan. The values of this parameter in other observed countries range in value around zero, implying a slight increase in this indicator in all other countries (the regression line is almost parallel to the X-axis). The complete results of the regression analysis for this indicator are shown in Table 28.

Table 28

Energy imports regression analysis in Central Asian countries and Germany (2011–2021)
	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Intercept	-108.16	1791.76	1198.04	-1087.17	21472.94	-13.45
Coefficient	0.08	-0.95	-0.61	0.56	-10.76	0.04

Other statistical measures of the observed sample are:

	+Germany
min	-269,92	-269,92
max	62,09	57,70
stdev.p	101,8082	101,2784
mean	-34,126	-53,19
significance	0,05	0,05
sample size		55
confidence		26,766
		0,463902

Health expenditure

Indicators by country are shown in Table 29.

Table 29

Health expenditure in Central Asian countries and Germany (2011–2021)
Country	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021
Kyrgyz Republic	7,11	8,51	8,19	7,36	7,15	6,41	6,19	5,01	4,49	4,46	4,09
Kazakhstan	2,60	3,04	2,66	2,97	3,04	3,42	3,05	2,82	2,79	2,71	2,93
Uzbekistan	5,14	5,46	5,66	4,67	4,99	4,97	5,08	5,30	5,62	5,51	5,37
Tajikistan	5,86	5,98	6,53	6,67	6,91	7,00	7,23	7,24	7,11	7,11	7,58
Turkmenistan	4,90	4,78	5,15	5,50	6,30	6,62	6,94	6,61	6,57	7,33	7,62
Germany	10,78	10,85	11,00	11,02	11,18	11,24	11,33	11,45	11,70	11,70	11,81

There is a very different degree of correlation of the Health expenditure indicator between the observed countries. It is interesting that the Kyrgyz Republic has negative correlations with all the others (except Kazakhstan), whereby the correlations with Germany, Tajikistan and Turkmenistan are very significant. In addition, there is a significant negative correlation between Kazakhstan and Uzbekistan. On the other hand, there are strong positive correlations of the Health expenditure indicator between Germany, Tajikistan and Turkmenistan. Moreover, there is a significant value of covariance between Tajikistan and Turkmenistan, implying a great similarity in the dynamics of change in the value of the Energy imports indicator in these two countries, as shown in Table 30.

Table 30

Health expenditure correlations in Central Asian countries and Germany (2011–2021)
Country	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Kyrgyz Rep		0.12	-0.24	-0.79	-0.87	-0.94	Correlation
Kazakhstan	0.0061		-0.53	0.24	0.21	-0.02
Uzbekistan	-0.0210	-0.0464		0.03	0.05	0.33
Tajikistan	-0.2040	0.0624	0.0038		0.94	0.89
Turkmenistan	-0.7629	0.1875	0.0146	0.4465		0.92
Germany	-0.1064	-0.0020	0.0327	0.1519	0.2898
	Covariance

Regression analysis indicates a negative increase in the Health expenditure indicator for the Kyrgyz Republic, almost no increase for Uzbekistan, and especially for Kazakhstan, and slightly positive increase for other countries - Table 31.

Table 31

Energy imports regression analysis in Central Asian countries and Germany (2011–2021)
	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Intercept	886.83	-4.54	-41.35	-291.25	-560.82	-201.53
Coefficient	-0.44	0.00	0.02	0.15	0.28	0.11

Other statistical measures of the observed sample are:

	+Germany
min	2,60	2,60
max	11,81	8,51
stdev.p	2,61641	1,619043
mean	6,459405	5,50
significance	0,05	0,05
sample size		55
confidence		0,427883
		0,050282

GINI

GINI index values are given in Table 32.

Table 32

GINI in Central Asian countries and Germany (2011–2021)
Country	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021
Kyrgyz Republic	27,8	27,4	28,8	26,8	29	26,8	27,3	27,7	29,7	29	28,72
Kazakhstan	28	28,2	27,1	27	26,8	27,2	27,5	27,8	27,70	27,60	27,43
Uzbekistan	0,57	0,57	0,57	0,57	0,57	0,57	0,57	0,57	0,57	0,57	0,57
Tajikistan	0,53	0,54	0,54	0,53	0,53	0,54	0,55	0,55	0,55	0,55	0,55
Turkmenistan	0,61	0,61	0,61	0,61	0,6	0,61	0,62	0,62	0,62	0,62	0,62
Germany	30,8	31,1	31,5	30,9	31,6	31,6	31,2	31,7	31,7	31,7	31,85

As for the GINI indicator, there are only three significant values in the correlation matrix. The highest correlation is between Turkmenistan and Tajikistan, while Germany has significant correlations with the Kyrgyz Republic and Tajikistan. Looking at the values of the covariance, a significant similarity in the dynamics of change in this indicator was observed for Germany and the Kyrgyz Republic, as shown in Table 33.

Table 33

GINI correlations in Central Asian countries and Germany (2011–2021)
Country	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Kyrgyz Rep		-0.06	0.00	0.32	0.17	0.59	Correlation
Kazakhstan	-0.01042		0.00	0.32	0.43	-0.22
Uzbekistan	-3.4E-47	6.76E-47		0.00	0.00	0.00
Tajikistan	2.37E-05	2.38E-05	-1.3E-32		0.90	0.66
Turkmenistan	7.15E-06	1.86E-05	1.12E-33	5.12E-05		0.37
Germany	0.069571	-0.02624	-5.7E-31	0.001955	0.000835
Covariance

Regression analysis indicates small increase in the GINI indicator for most of the observed countries. The exceptions are Germany and the Kyrgyz Republic, with a slightly positive increase. When looking at the measured values of this indicator for these two countries, it is evident that they are many times higher than for other countries. The exception is Kazakhstan, whose GINI indicator values are similar to those of Germany and the Kyrgyz Republic. In all other cases, the regression line of this indicator is almost parallel to the X-axis. The results of the regression analysis are shown in Table 34.

Table 34

GINI regression analysis in Central Asian countries and Germany (2011–2021)
	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Intercept	-224.82364	48.25576	0.59618	-3.97861	-2.44079	-142.07515
Coefficient	0.12545	-0.01030	-0.00001	0.00224	0.00152	0.08606

Other statistical measures of the observed sample are:

	+Germany
min	0,53	0,53
max	31,9	29,70
stdev.p	14,3	13,341
mean	14,8	11,46
significance	0,05	0,05
sample size		55
confidence		3,5258
		0,1187

Government effectiveness

The values of this indicator for the sample countries are shown in Table 35.

Table 35

Government effectiveness in Central Asian countries and Germany (2011–2021)
Country	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021
Kyrgyz Republic	29,86	29,86	30,81	17,79	18,27	17,79	23,08	29,33	25,00	32,69	25,43
Kazakhstan	42,18	40,28	35,55	53,37	50,48	50,48	52,40	54,33	57,69	60,10	62,16
Uzbekistan	29,38	18,48	18,96	27,20	26,92	31,73	32,21	33,65	34,13	34,13	36,87
Tajikistan	17,06	18,01	14,69	22,12	19,71	13,94	12,98	12,50	14,42	24,52	16,92
Turkmenistan	3,32	9,48	9,00	18,75	19,23	11,54	10,10	10,10	11,06	12,02	13,50
Germany	91,00	91,94	90,52	93,75	92,79	93,75	93,75	92,31	92,79	88,94	92,06

Only a few values in the correlation matrix for the Government effectiveness indicator are significant. The strongly positive correlation between Kazakhstan and Uzbekistan, and the significantly negative correlation between the Kyrgyz Republic and Turkmenistan, i.e. the Kyrgyz Republic and Germany, stand out. In addition, the value of covariance between Kazakhstan and Uzbekistan indicates a great similarity in the dynamics of change in the Government effectiveness indicator in these two countries, as shown in Table 36.

Table 36

Government effectiveness correlations in Central Asian countries and Germany (2011–2021)
Country	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Kyrgyz Rep		-0.23	-0.13	0.02	-0.68	-0.84	Correlation
Kazakhstan	-14.67		0.88	0.21	0.44	0.13
Uzbekistan	-4.54	29.70		-0.08	0.07	0.11
Tajikistan	0.30	2.78	-1.79		0.45	-0.42
Turkmenistan	-12.19	7.88	1.70	7.09		0.39
Germany	-1.74	0.28	0.94	-2.22	2.36
	Covariance

The regression analysis shows a significant positive increase in the Government effectiveness indicator in the case of Kazakhstan, and somewhat lower increase in the case of Uzbekistan. The increase in the value of this indicator is almost negligible in the case of the Kyrgyz Republic, Tajikistan and Germany, and slightly positive in the case of Turkmenistan, as detailed in Table 37.

Table 37

Government effectiveness regression analysis in Central Asian countries and Germany (2011–2021)
	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Intercept	32.29	-4520.49	-2971.24	43.01	-736.35	124.71
Coefficient	0.00	2.27	1.49	-0.01	0.37	-0.02

Other statistical measures of the observed sample are:

	+Germany
min	3,32	3,32
max	93,75	62,16
stdev.p	27,76	14,62
mean	37,74	26,86
significance	0,05	0,05
sample size		55
confidence		3,864
		0,062

The consumer price index

The values of this indicator for the given period are shown in Table 38.

Table 38

The consumer price index in Central Asian countries and Germany (2011–2021)
Country	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021
Kyrgyz Republic	963,21	1019,03	1070,34	1135,38	1201,02	1272,04	1365,03	1417,48	1527,91	1659,01	963,22
Kazakhstan	246,26	258,86	273,95	292,35	311,80	357,18	383,72	406,84	428,17	457,28	246,27
Uzbekistan	111,24	112,45	125,83	140,55	153,31	166,29	180,96	206,07	242,18	277,36	111,24
Tajikistan	112,43	118,99	124,95	132,58	140,15	148,57	152,06	155,44	158,99	160,04	171,35
Turkmenistan	112,00	108,50	109,00	105,50	105,50	105,50	108,00	108,00	108,00	108,00	106,57
Germany	102,08	104,13	105,69	106,65	107,20	107,73	109,35	111,25	112,85	113,43	114,69

As for the Consumer price index indicator, correlations are positive, while the negative ones are statistically negligible. There are very strong correlations between Uzbekistan, the Kyrgyz Republic and Kazakhstan, as well as between Tajikistan and Germany. Tajikistan and Germany have moderate correlations with Uzbekistan, the Kyrgyz Republic and Kazakhstan. High values of covariance between Uzbekistan, the Kyrgyz Republic and Kazakhstan indicate a great similarity in the dynamics of change in the Consumer price index indicator in these three countries. Detailed values are shown in Table 39.

Table 39

The consumer price index correlations in Central Asian countries and Germany (2011–2021)
Country	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Kyrgyz Rep		0.99	0.99	0.57	-0.16	0.60	Correlation
Kazakhstan	5347.727		0.97	0.60	-0.15	0.60
Uzbekistan	2814.679	2773.537		0.58	-0.10	0.63
Tajikistan	186.525	193.62	562.2792		-0.48	0.97
Turkmenistan	-0.54145	-0.51036	-10.219	-15.7189		-0.38
Germany	8.855382	8.921796	129.6561	67.40136	-2.66159
	Covariance

Regression analysis indicates positive increase for Uzbekistan, the Kyrgyz Republic and Kazakhstan. A particularly high positive increase stands out for the Kyrgyz Republic (the coefficient is 42.37). In addition, Tajikistan has a positive increase, while Turkmenistan and Germany record insignificant increase compared to other countries - Table 40.

Table 40

The consumer price index regression analysis in Central Asian countries and Germany (2011–2021)
	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Intercept	-84185.61	-28207.91	-21228.76	-11193.02	559.76	-2331.04
Coefficient	42.37	14.16	10.61	5.62	-0.22	1.21

Other statistical measures of the observed sample are:

	+Germany
min	102,08	105,50
max	1659	1659,01
stdev.p	415,73	439,91
mean	349,08	397,16
significance	0,05	0,05
sample size		55
confidence		116,26
		0,0701

Corruption Perception Index

Input data for this indicator are presented in Table 41.

Table 41

Corruption Perception Index in Central Asian countries and Germany (2011–2021)
Country	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021
Kyrgyz Republic	23	24	24	27	28	28	29	29	30	31	32,1
Kazakhstan	27	28	26	29	28	29	31	31	34	38	39,0
Uzbekistan	16	17	17	18	19	21	22	23	25	26	26,7
Tajikistan	21	22	22	23	26	25	21	25	25	25	25,7
Turkmenistan	16	17	17	17	18	22	19	20	19	19	20,6
Germany	77	79	78	79	81	81	81	80	80	80	81,3

The Corruption Perception Index indicator shows significant correlations. All values in the correlation matrix are positive, and the most pronounced are those between Uzbekistan, the Kyrgyz Republic and Kazakhstan, as well as between Germany on the one hand, and the Kyrgyz Republic and Turkmenistan on the other hand. Turkmenistan has slightly smaller but significant positive correlations with the remaining countries of Central Asia. Covariance shows a great similarity in the dynamics of change in the Corruption Perception Index indicator between Uzbekistan, the Kyrgyz Republic and Kazakhstan - Table 42.

Table 42

Corruption Perception Index correlations in Central Asian countries and Germany (2011–2021)
Country	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Kyrgyz Rep		0.88	0.95	0.72	0.73	0.82	Correlation
Kazakhstan	15.04		0.94	0.54	0.53	0.53
Uzbekistan	12.86	12.66		0.64	0.72	0.68
Tajikistan	2.39	1.81	4.32		0.64	0.66
Turkmenistan	2.17	1.57	4.55	2.03		0.80
Germany	1.40	0.92	3.29	1.57	1.81
Covariance

Regression analysis indicates that all observed countries report positive increase in the Corruption Perception Index indicator. The increase in this indicator is slightly higher in the case of Uzbekistan, the Kyrgyz Republic and Kazakhstan, and it is significantly lower in the case of Turkmenistan, Tajikistan and Germany, as shown in Table 43.

Table 43

Corruption Perception Index regression analysis in Central Asian countries and Germany (2011–2021)
	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Intercept	-1743.90	-2369.96	-2300.48	-770.48	-787.80	-531.16
Coefficient	0.88	1.19	1.15	0.39	0.40	0.30

Other statistical measures of the observed sample are:

	+Germany
min	16	16,00
max	81,3	39,00
stdev.p	21,2	5,3764464
mean	33,6	24,38
significance	0,05	0,05
sample size		55
confidence		1,42089527
		0,03643321

Carbon emission

The values of this indicator are shown in Table 44.

Table 44

Carbon emission in Central Asian countries and Germany (2011–2021)
Country	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021
Kyrgyz Republic	1,38	1,79	1,64	1,66	1,72	1,60	1,52	1,78	1,56	1,56	1,62
Kazakhstan	14,82	14,57	15,26	12,10	10,87	11,36	11,90	11,85	11,46	11,46	10,26
Uzbekistan	4,38	3,80	3,70	3,41	3,17	3,30	3,38	3,41	3,48	3,48	3,16
Tajikistan	0,33	0,38	0,40	0,55	0,58	0,70	0,83	0,95	1,01	1,01	1,15
Turkmenistan	12,42	12,65	13,10	13,09	13,06	13,19	12,95	12,70	12,49	12,26	12,13
Germany	9,30	9,45	9,62	9,09	9,09	9,07	8,86	8,54	7,91	7,91	7,90

The correlation matrix for the Carbon emission indicator shows great differences between individual countries. Apart from strong positive correlations between Kazakhstan and Uzbekistan, i.e. Kazakhstan and Germany, another positive correlation is reported between Turkmenistan and Germany. Tajikistan has a strong negative correlation with Germany and Kazakhstan, and a slightly weaker negative correlation with Uzbekistan and Turkmenistan, as detailed in Table 45.

Table 45

Carbon emission correlations in Central Asian countries and Germany (2011–2021)
Country	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Kyrgyz Rep		-0.10	-0.45	-0.01	0.28	0.14	Correlation
Kazakhstan	-0.277		0.84	-0.80	0.14	0.73
Uzbekistan	-0.050	0.092		-0.64	-0.20	0.45
Tajikistan	-0.001	-0.061	-0.058		-0.50	-0.94
Turkmenistan	0.034	0.018	-0.023	-0.048		0.68
Germany	0.053	0.267	0.090	-0.157	0.147
	Covariance

Regression analysis shows small incremental changes in the Carbon emission indicator. A more significant negative increase is reported for Kazakhstan, and almost negligible for Uzbekistan and Turkmenistan. It is absent in the case of the Kyrgyz Republic, and slightly positive only for Tajikistan. The details of the analysis are shown in Table 46.

Table 46

Carbon emission regression analysis in Central Asian countries and Germany (2011–2021)
	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Intercept	0.99	858.60	148.01	-173.07	117.53	368.13
Coefficient	0.00	-0.42	-0.07	0.09	-0.05	-0.18

Other statistical measures of the observed sample are:

	+Germany
min	0,33	0,33
max	15,26	15,26
stdev.p	4,96	5,323987
mean	6,62	6,19
significance	0,05	0,05
sample size		55
confidence		1,407031
		0,092187

World Risk Index

The values of this aggregate index are shown in Table 47.

Table 47

World Risk Index in Central Asian countries and Germany (2011–2021)
Country	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021
Kyrgyz Republic	7,96	7,94	7,86	7,69	7,56	7,47	7,49	7,42	7,43	7,33	7,21
Kazakhstan	3,94	3,90	3,96	4,08	3,90	3,86	3,89	3,82	3,64	3,59	3,65
Uzbekistan	8,18	8,14	8,12	8,10	8,09	8,01	7,95	7,74	8,05	7,95	7,86
Tajikistan	6,31	6,24	6,16	6,13	6,09	6,17	6,29	6,36	5,85	5,85	5,97
Turkmenistan	6,56	6,45	6,51	6,43	6,47	6,22	6,19	6,08	5,90	5,93	5,85
Germany	2,74	2,70	2,68	2,64	2,61	2,54	2,51	2,50	2,66	2,64	2,54

The correlation matrix for the World Risk Index indicator shows significant positive correlations between most of the observed countries. The only correlations that are statistically insignificant (< 0.5) are those between Uzbekistan and Tajikistan, Kazakhstan and Germany, and Tajikistan and Germany. The covariance between Turkmenistan and the Kyrgyz Republic, i.e. Turkmenistan and Kazakhstan, is somewhat more significant compared to other covariance values, as shown in Table 48.

Table 48

World Risk Index correlations in Central Asian countries and Germany (2011–2021)
Country	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Kyrgyz Rep		0.73	0.79	0.53	0.89	0.74	Correlation
Kazakhstan	0.0153		0.51	0.70	0.89	0.21
Uzbekistan	0.0126	0.0081		0.01	0.73	0.84
Tajikistan	0.0149	0.0197	0.0003		0.60	-0.13
Turkmenistan	0.0567	0.0563	0.0233	0.0254		0.52
Germany	0.0044	0.0013	0.0082	-0.0018	0.0101
	Covariance

Regression analysis shows a slight negative increase in the World Risk Index indicator in all countries (Regression line coefficient is less than − 0.1). Details are shown in Table 49.

Table 49

World Risk Index regression analysis in Central Asian countries and Germany (2011–2021)
	Kyrgyz Republic	Kazakhstan	Uzbekistan	Tajikistan	Turkmenistan	Germany
Intercept	155.78	80.57	70.70	71.01	160.80	33.65
Coefficient	-0.07	-0.04	-0.03	-0.03	-0.08	-0.02

Other statistical measures of the observed sample are:

	+Germany
min	2,5	3,59
max	8,18	8,18
stdev.p	1,938161	1,472548
mean	5,735572	6,36
significance	0,05	0,05
sample size		55
confidence		0,389167
		0,047575

The main results of the correlation analysis show no significant correlation between the six indicators: Unemployment rate, Poverty rate, Carbon emission, Health expenditure, Consumer Price Index and GINI. The analysis of these indicators resulted in very small positive or negative correlations, but without statistical significance. The regression analysis showed that the values of these indicators had a slight increasing or decreasing trend, without greater significance and influence on other indicators. On the other hand, these indicators are of great importance for the sustainable development of any country, especially the countries with lower GDP per capita values. Therefore, it is evident that no significant progress has been achieved in this sphere of social sustainability.

The related economic indicators show higher degree of correlation. GDP per capita is growing in all countries in the sample. The Public debt indicator is gradually decreasing only in Germany, and all Central Asian countries are showing an increasing trend, whereby the lowest increase in the Public debt indicator is reported for Kazakhstan. Foreign debt is an indicator for which no significant correlations were found, whereby it is decreasing in Germany and Turkmenistan, and steadily increasing in other countries in the sample. The Foreign exchange reserves indicator has an extremely negative trend when it comes to Turkmenistan, but this trend is positive in other countries. When it comes to the Inflation indicator, correlations between countries are high (which may speak in favor of imported inflation), with the highest inflation recorded for Uzbekistan, and deflation for the Kyrgyz Republic. All Central Asian countries record a high correlation when it comes to the Budget deficit indicator, with a negative trend. The best indicator values are recorded in Germany, where the amount of the Budget deficit is at a stable level, without major fluctuations.

When analyzing the Energy imports indicator, high correlations and different trends are observed. There is a very high positive correlation between Turkmenistan and Kazakhstan, which may suggest that all the mentioned countries have a similar energy policy, and are well connected in infrastructure terms. Regression analysis showed that Germany recorded the same values of the Energy imports indicator in the mentioned period. Turkmenistan is an absolute energy exporter.

The Government efficiency and Corruption Perception Index indicators have similar values in analysis. The correlation is highly positive for Kazakhstan and Uzbekistan, with positive trend data only for Kazakhstan. Correlations for the Corruption Perception Index are very high for all Central Asian countries, and regression analysis shows a slight increasing trend in all countries, with Kazakhstan and Uzbekistan leading the way.

The economic progress of the European Union was possible largely due to the stable supply of energy, mostly from imports. After adopting appropriate environmental policies, natural gas from the Russian Federation, as an environmentally friendly energy source, has become a reliable support for the further development of the European Union for almost three decades, and its favorable prices have enhanced the competitiveness of the European economy. With the transition to the 21st century, trade between the European Union and the Russian Federation regarding the supply of natural gas and oil continued and grew in volume and value, with no problems reported even during the Covid 19 pandemic. The increasing needs of the EU economy were recognized and met by the construction of Nord Stream 1, but Nord Stream 2 would be a chance to enable the fulfillment of all European needs for this energy product. Nord Stream 2 was built and the infrastructure brought up to Germany, but the commencement of exploitation was halted for geopolitical reasons.

With the outbreak of the Ukrainian crisis, the European Union made a decision to gradually stop importing energy products from the Russian Federation, and has been forced to find other sources of supply. Bearing in mind that the largest reserves of natural gas and uranium are located in only a few countries in the world, it is necessary to take complex steps and initiatives in order to enable supply from new, often remote regions.

Central Asia represents a region rich in energy resources, of which natural gas and uranium are certainly the most important for the European Union. Therefore, the efforts to establish a stable supply from the countries of this region are clear. On the other hand, five countries of Central Asia are heavily influenced by the Russian Federation and China, and apart from that, the state of their economy and government efficiency are unknown. The main goal of this paper is therefore based on the analysis of available indicators that can indicate the internal specificities and challenges the European Union may face in its efforts to establish cooperation with these countries.

Data were analyzed for 16 indicators, in the period from 2011 to 2021, and Germany was included in the sample in order for the comparison to be enabled. The results showed that the countries of Central Asia are directly or indirectly connected and lead a similar economic and energy policy, with the low values of the Government efficiency and Corruption Perception Index standing out as indicators of special importance for international business cooperation. The above greatly hinders a faster progress of these countries after the dissolution of the USSR, and represents a kind of challenge on the world geopolitical scene and in the domain of economic cooperation. However, there are no clear indications from the governments of said countries about the measures planned in order to improve the above indicators, so that the countries of Central Asia, which are rich in all energy resources, could become a more reliable trade partner on the global level, and primarily to the European Union.

Ethics approval and consent to participate

Not applicable.

Consent for publication

Not applicable.

Availability of data and materials

The datasets used and/or analyzed during the current study are available from the corresponding author on reasonable request.

Competing interests

The authors declare that they have no competing interests.

Funding

Not applicable.

Authors' contributions

BV and IP prepared concept of the study and literature review and conducted data collection. GŠ conceptualized and conducted data processing. All authors participated in discussion and interpretation of data processing results. All authors participated in manuscript editing and approved the final manuscript.

Acknowledgements

Manuscript has been translated by a professional translator Tanja Paunović, Republic of Serbia.

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Energy security and corruption in Central Asia as the main challenges for the European Union energy diversification policy

Status:

Journal Publication

Version 1

Abstract

Background

Methods

Results

Conclusions

Introduction

Methodology

Results

GDP per capita

Public debt

Foreign debt

Foreign-exchange reserves

Inflation

Budget deficit

Unemployment rate

Poverty rate

Energy imports

Health expenditure

GINI

Government effectiveness

The consumer price index

Corruption Perception Index

Carbon emission

World Risk Index

Discussion

Conclusions

Declarations

References

Additional Declarations

Status:

Journal Publication

Version 1