Starting in 2016, a number of competing transportation projects could begin to take shape in Central Asia, including projects from China, Russia and the U.S. Could they lead to geopolitical discord in the region?
Uyghur ethnic minority travelers, Turkic-speaking people of Asia who live mainly in Western China, look out the window as they ride on a train to Urumqi, capital of the Xinjiang region and another stop along the Silk Road, at the Turpan station in China. Photo: AP
In late November China, Turkey, Kazakhstan, Azerbaijan and Georgia met in Istanbul and agreed to create a consortium for cargo transportation via rail from China to Europe. The consortium could lay the foundation for a Trans-Caspian route that extends from China to Turkey to Europe. All lines of the new railroad are designed to bypass Russia. Consortium participants suggest that by 2016 Ukraine could join in and start transporting its goods to Northern and Eastern Europe.
China is interested in diversifying Silk Road Economic Belt (SREB) routes, and the Trans-Caspian project would be a major step towards that goal. Moreover, in 2016 the SREB and the Eurasian Economic Union (EEU) will start integrating their projects.
Kazakhstan, an EEU member and Russia's strategic ally, is trying to reserve as many routes between China and Europe as possible. Astana is also expressing interest in the American New Silk Road project, especially after U.S. Secretary of State John Kerry’s visit to Central Asia. To be fair though, all countries in the region are doing their best to make sure that Chinese and American roadways pass through their territory.
Russia Direct asked Central Asian and Russian experts to weigh in on the possibility of geopolitical conflicts between world powers in the region as well as the benefits of competing international transportation and infrastructure projects for Central Asian countries.
Kubat Rakhimov, Central Eurasia Infrastructure Development expert, Director of Smart Business Solutions Central Asia
American and Chinese projects can affect the region positively from a re-industrialization perspective. It is necessary to build economic, not transit, passages. Chinese semi-finished goods should be processed and converted into final products in the transit countries of Central Asia and in Russia. Then Europe will be getting ready-to-use merchandise.
China and the U.S. agree with this approach and state that they perceive transport routes as development areas, but there are a lot of issues with customs regulations and processes. Chinese semi-finished goods entering Central Asian countries and Russia will be assigned a certain customs code, but if they are then converted into final products, the customs nomenclature will change, making it unclear how customs fees are going to be determined and what share of the goods import and export revenue will factor into a transit country's GDP. The issue is very complicated.
In my opinion, it is important to organize an international conference and discuss contact points between Chinese SREB, American New Silk Road and EEU transportation projects. All sides have their ideas about routes and transit countries, and the conference would provide a great opportunity for dialogue. With global tensions on the rise, those who choose to negotiate and integrate transportation projects will come out on top.
The U.S. is nearing the election season, so it will not get entangled in a new transportation project; China is concentrating on SREB promotion; Afghanistan is too unstable to be a reliable transit partner; Central Asian countries are seeking to obtain not only regional, but also state-wide benefits; and Russia, though currently under sanctions, is supporting the Chinese SREB and strives to keep its top position in Central Asia without having to make any serious financial contributions.
I think that by the summer of 2016 most interested parties will make their major moves and take a stand on the transit corridor issue. Next year, Iran and India will start playing a big part in transportation geopolitics. Indian interests in Central Asia are at odds with those of the Chinese, but Indians are on good terms with both the U.S. and Russia, which lets them play their own game in Central Asia.
As for the countries of Central Asia, in order to have a say in major geopolitical projects and defend their interests, they need to improve regional cooperation and stand together as one.
Also read: "China, Russia and the new great game in Central Asia"
Alexander Gabuev, Chair of the Russia in the Asia-Pacific Program at the Carnegie Moscow Center
It is incorrect to assume that the transit region status which is supposed to bring Central Asian countries some easy money for the transit of goods will remove the incentives for the development of their own industries. Such statements can be compared to complaining that oil and gas are a Russian national curse that prevents the country from developing its own production and becoming a knowledge-based economy. If we remove the oil factor for Russia and the transit status for Central Asia, will it create the stimuli for industrial development? The speculations about the transit or oil curse sound like excuses for failure to move forward.
The more transport corridors go through Central Asia, the better opportunities and alternatives they will bring, and the competition between different routes will bring down logistics costs. Central Asian companies will be able to choose the most profitable roadways, tariffs and markets.
A more pressing issue here has to do with competitive production factors for facilities located in Central Asia or Russia. The Chinese approach involves the production of maximum added value on its own territory. If it is economically beneficial to complete the production cycle in transit countries, it is imperative to make Beijing understand that. If there are no benefits, transit countries could use government incentives to produce goods that can compete with Chinese products. However, the requirement to build factories in exchange for opening transit routes is a sign of protectionism. If we keep coming up with new stipulations, the Chinese may decide to stick to water routes.
We have to understand that a Central Asian kishlak or a Russian village can benefit from transportation projects even if trains do not stop there. Transit revenue will help local budgets and then trickle down to country doctor or teacher salaries.
Abdugani Mamadazimov, Chairman of the National Association of Political Scientists of Tajikistan
Historically, the Great Silk Road was not just one road, but three, and all of them had multiple branches. That is why we should not assume that the clash between modern transportation projects is inevitable. At the moment, only China understands the practicality of integrating transportation projects.
Nowadays, various routes are being discussed, such as China-Mongolia-Russia-Europe, China-Central Asia-Middle East-Europe, etc. SREB is going to build a China-Myanmar-India route and further connect it to major sea ports. China's flexibility on route diversification does nothing to change the main point: Beijing dominates all passages.
The revived Great Silk Road may stretch from China to Europe, and that is what it used to be like in the past. American, Russian, Iranian and Japanese projects may serve as the Northern, Central, and Southern branches of the main Chinese SREB. The projects are competitors, not antagonists.
In the times of the Renaissance, silk was the most sought after fabric throughout Europe, which is confirmed by a discovery made in the 1980s in Belgium. There Catholic reliquaries were found to contain Sogdian silk, which was more valuable that its Chinese counterpart and was produced in ancient Sogdia, a historical region that spanned over the territory of contemporary Uzbekistan and Tajikistan. Moreover, Europeans also had access to Lebanese and Byzantine silks, a fact that means that silk production was developing not only in China, but also in transit countries located along the Great Silk Road.
That is why I do not believe that the modern revival of the Silk Road and the transit status of Central Asian countries constitute a curse. It is possible that local businesses will not be able to compete with China, but they will find their own niche the same way their ancestors did centuries ago.
Aset Ordabaev, expert with the Institute of World Economy and Politics of the Foundation of the First President of the Republic of Kazakhstan
Beijing sees Central Asian participation in the SREB as a way to secure Xinjiang Uyghur Autonomous Region (XUAR) through the economic development of the area. It is important to understand that the country, which created the most comprehensive transportation network in Central Asia, intends to run it. Given the growing confrontation between China and the U.S. in the Asia-Pacific region, competing transportation projects in Central Asia will increase the tensions between the two countries.
All Silk Road supporters lack a clear concept of the layout and location of transport corridors. Central Asia countries failed to suggest prospective routes that would satisfy all interested parties. Chinese investors often inquire what infrastructure projects would be the most efficient and profitable for the countries in the region. There are constant negotiations and arguments. For example, now the point of contention is the railway route with two options under discussion: China-Kyrgyzstan-Tajikistan or China-Uzbekistan-Tajikistan. Kyrgyzstan insists that the road should go through its territory, but China is actively investing into the development of railroads in Uzbekistan.
The idea that the transit of Chinese goods will remove the incentives for the development of countries' own production is invalid. The issue here lies rather in effective government management and the commitment to investing in the country's own economy.
Rafael Sattarov, independent political scientist, Uzbekistan
We should not see every transportation project as a threat. Outside forces have changed their priorities with regards to Central Asia. The U.S. understands that it is not going to succeed in removing the Chinese and Russian influence from a region that is not critical to its national security. Moscow and Beijing have worked out a modus vivendi on their spheres of influence in Central Asia.
For external parties' participation in transportation and infrastructure projects to translate into an opportunity, not a curse, Central Asian countries need to carry out economic reforms and discover mechanisms of pragmatic cooperation among themselves. However, reforms are often simulated, and regional cooperation falls apart due to political differences. The result is economic stagnation.
It is necessary to evaluate the effect of the SREB project and EEU integration that occurred in May before assessing the possibilities for future interaction with the American New Silk Road project. The SREB relies on its transportation and logistics platform, while the EEU’s strength is economic and political. So far, the EEU has not come forward with any transportation projects of its own. Moreover, not all Central Asian countries are members of the EEU.
For Uzbekistan, Chinese SREB and American New Silk Road projects signal the opportunity for industrial development and the diversification of its transport corridors with access to water routes. Tashkent has been working on its own transportation projects for quite some time. In 2009, it built the Tashguzar-Baysun-Kumkurgan railroad that eliminated transit through Turkmenistan. With support from China, Uzbekistan will complete the construction of the longest railroad tunnel in Central Asia in the spring of 2016. Under Asian Development Bank supervision, the Central Asia Regional Economic Corporation (CAREC) built the Khairaton-Mazari Sharif railroad that now connects Uzbekistan and Afghanistan. In the future, the railway will stretch all the way to Herat.