Traders stand near a screen showing the Indonesia Stock Exchange Composite Index during the first day of trading for 2012 in Jakarta January 2, 2012. Courtesy Reuters/Stringer.

It’s been a fascinating year for Asia. The region has continued to consolidate its role as the essential player driving global recovery. Developing Asia, including China, India, and the major ASEAN economies, maintained robust growth, in contrast to the advanced economies’ collective anemic growth over the same period.

But 2012 promises to be more fraught as domestic politics take command amid new challenges to growth.

Here are twelve trends I see coming for Asia in 2012—risks, opportunities, and emerging patterns that will shape Asia during the next twelve months, and beyond.

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A Kyrgyz customs officer talks on a radio in front of workers as they reload cargo from a Chinese truck to Kyrgyz one at the Irkeshtam border crossing in southern Kyrgyzstan. Courtesy Reuters/Vladimir Pirogov.

Chris Rickleton, a Bishkek-based journalist, has a fascinating piece up on EurasiaNet about prospective Chinese rail construction in Kyrgyzstan. The piece cuts directly to tough political choices—namely, the push and pull between Russian and Chinese interests in Central Asia and, more important, how politicians in landlocked countries, like Kyrgyzstan, must try to balance among the larger countries on whom their economies depend for transit.

I’ve written a lot on efforts to reconnect trade and transit routes across continental Asia. You can read some of what I’ve argued here, here, here, here, and here.

But Rickleton’s piece got me thinking about two questions:

(1) Since the obstacles to continental trade and transit are so high, is the game really worth the candle?

This is especially relevant because Secretary of State Hillary Clinton is vigorously promoting a “New Silk Road” concept, drawing heavily on a decade of prior efforts and experiences.

(2) With so much focus on the interests of the outside powers—Russia, China, Iran, and the United States, among others—what about the interests of the landlocked countries themselves?

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Former U.S. Secretary of State Henry Kissinger delivers a speech in front of a picture of late U.S. President Richard Nixon meeting with late Premier Zhou Enlai during a ceremony in Shanghai to commemorate the 30th anniversary of the "Shanghai Communique." (China Photo/Courtesy Reuters)

Can the United States and China cooperate to forestall threats to stability? A new CFR report, Managing Instability on China’s Periphery, asks this question in the context of fragile states and regions that share borders with China—specifically North Korea, Myanmar, Pakistan, and Central Asia. I participated in the project, which included workshops with Chinese specialists assembled by Peking University. I also wrote the report’s chapter on Central Asia.

The project is interesting because the U.S. and China actually have a long history of cooperating in places along China’s border. Just take recent tensions over Afghanistan, for example. These strains belie the degree to which Beijing and Washington worked jointly to defeat the Soviet occupation of Afghanistan in the 1980s. Washington encouraged Chinese support for the Afghan mujahideen, and the two countries cooperated in other unprecedented ways during the conflict.

But that was then.

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A general view of the Kalyan ensemble in Bukhara, Uzbekistan, which dates as far back as 1127. Reuters/Shamil Zhumatov.

With Central Asian countries celebrating the 20^th anniversary of their independence, it seemed like a good time to repost a comprehensive report on U.S.-Central Asia relations.

Issued in February by the bipartisan Central Asia Study Group and published by the Project 2049 Institute, the report, Strengthening Fragile Partnerships, was premised, in part, on a concern that U.S. policy toward the region had become swamped by the war in Afghanistan.  Put simply, our group sought to articulate a vision of U.S. policy in Central Asia that was, (1) not derivative of the war, (2) premised on some enduring U.S. interests that date back at least to independence in 1991, and (3) will outlast 2014, when the U.S. military commitment in Afghanistan begins to wind down in earnest.

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Leaders of the Shanghai Cooperation Organization walk during a meeting in the Urals city of Yekaterinburg June 15, 2009. Courtesy Reuters/RIA Novosti/Vladimir Rodionov/Pool.

Over at another CFR blog, The Internationalist, my colleague, Stewart Patrick, has posted a good piece about the Shanghai Cooperation Organization (SCO). Boy, did that take me back to old times.

The SCO stokes up all kinds of opinions in the United States—some informed, some less informed; some vituperative, and others merely skeptical.

Back in 2007, while serving as Deputy Assistant Secretary of State for Central Asia, I became, I think, the only U.S. official ever to devote an entire speech to the SCO.  Just two years earlier, the SCO had called for a timeline to end the Coalition military presence in Afghanistan.  And since the U.S. was in the midst of prosecuting a war, there was a great deal that we in the United States were forced to wrestle with as a result. For one, we sought to forestall any repeat statements from the group.  But for another, we aimed to sort through the SCO’s deeper (and perhaps darker?) intentions.

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Workers assemble a Hyundai i10 car at a plant of Hyundai Motor India Ltd in Sriperumbudur Taluk in the Kancheepuram district of the southern Indian state of Tamil Nadu April 12, 2011. Courtesy Reuters/Babu Babu.

Time to beat my drum again …

A nice little piece from the BBC offers another reminder of how Asia is changing and why America must adapt. It builds illustratively on one of several themes of my recent essay, “Why America No Longer Gets Asia.” Asia is reintegrating but America isn’t adapting quickly enough.

Nissan, the piece notes, “is among several major Asian companies that have set up manufacturing hubs” in the south Indian state of Tamil Nadu. “A short drive down the congested highway, packed with large container trucks, and you’ll pass the facilities of Hyundai, Samsung, Mitsubishi and myriad others. ‘India is a rapidly growing market, so therefore it is very important for global auto manufacturers,’ says Nissan’s managing director in India, Kiminobu Tokuyama. But they are not just hoping to capture the local market. They are also using India as a hub for products aimed at overseas markets … Chennai alone has close to 3,000 Koreans and Little Koreas are springing up in pockets around the city.”

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Kazakhstan's President Nursultan Nazarbayev and India's Prime Minister Manmohan Singh inspect the guard of honor during their meeting in Astana April 16, 2011. Courtesy Reuters/Mukhtar Kholdorbekov.

As the U.S. moves toward military withdrawal from Afghanistan, will its commitment to continental Asia slide too?

My latest “DC Diary” column in India’s leading financial daily, the Business Standard, argues that the question is important to both the United States and India. It matters to Washington because Americans have other interests in Central Asia, quite apart from prosecuting the war. It matters to India because Central Asian governments will have fewer strategic options if the U.S. simply fades away.

Here’s the central reality: U.S. withdrawal from Afghanistan will mean a reduced footprint in Central Asia. But the United States certainly doesn’t have to disappear. And the U.S. and India, too, have some shared strategic interests, not least in facilitating the reconnection of Central Asia to the world economy.

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The author chats with Chinese traders in the Kara-Suu Bazaar, near Osh, Kyrgyzstan, October 2006. (Photo from the author)

I have a new article out in The Washington Quarterly, with a slightly provocative title, “Why America No Longer Gets Asia.”

It’s a think piece. And so it probably won’t be 100 percent persuasive to 100 percent of its readers in 100 percent of its aspects. But the article pulls together the strands of a lot of themes I’ve harped on in recent years, from speeches I was giving while at the State Department to a few years’ worth of articles and blogs. I also worked on an array of projects directly related to these themes while serving in the U.S. government, especially during the period from 2003 to 2007.

Here’s the headline: Asia is reintegrating, but the United States simply isn’t adapting quickly enough. And it is essential to adapt U.S. policy to the contours of change in Asia if the United States wishes to remain vital and relevant there.

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Pedestrians walk past Bibi Khanum mosque in Samarkand, Uzbekistan. (Shamil Baigin/Courtesy Reuters)

As noted in my last post, a new report from the bipartisan Central Asia Study Group, chaired by former Deputy Secretary of State Richard Armitage and issued by the Project 2049 Institute, offers an action agenda aimed at creating a more effective and enduring partnership between the United States and the nations of Central Asia. I was the principal author of the report, which was rolled out at a press roundtable I did with Armitage. But the paper is a consensus document that reflects discussion, debate, and, ultimately, broad agreement among a distinguished group of former senior U.S. diplomatic and defense officials with responsibility for, or interest in, Central Asia.

The report does a lot of things. But one central element is its attempt to offer any U.S. administration seven broad guidelines for U.S. policy in the region. So here they are:

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When it snows on the steppes of eastern Kazakhstan, hunters saddle up and gallop off with eagles on their arms in search of prey. (Shamil Zhumatov/Courtesy Reuters)

I’ve blogged mainly on East Asia and South Asia here at Asia Unbound. But a new report from the bipartisan Central Asia Study Group, chaired by former Deputy Secretary of State Richard Armitage, offers a timely opportunity to blog a bit on Central Asia.

First, a little truth in advertising: I’m the principal author of the study group report, Strengthening Fragile Partnerships: An Agenda for the Future of U.S.-Central Asia Relations, which was issued yesterday by the Project 2049 Institute, and rolled out at a press roundtable I did with Armitage. But I think the paper is important on its merits because it presents the consensus view of a distinguished—and bipartisan—group of former senior U.S. diplomatic and defense officials with responsibility for, or interest in, Central Asia.

The full report can be found and downloaded here.

Why issue such a report now?

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