AT present, in the context of globalization, Central Asia faces an imperative to open up to the world community. While there are a growing number of actors in the region, the main catalyst to Central Asia’s reintegration process has been the resurgence of the ‘Great Silk Road’. The process of opening up the region was significantly intensified in 2013, after Chinese President Xi Jinping presented the Silk Road Economic Belt¹ that forms part of the Belt and Road Initiative (BRI). This massive investment programme will help countries that participate in it to receive investments for the development of their infrastructure, particularly in the transport sector. Today, almost six years since the initial declaration, the question of transforming Central Asia into a transport hub still remains open.

At first glance it seems that Central Asia is the ideal continental transport hub in Eurasia. A number of factors contribute to this. First is geography: the region is situated at the heart of the Eurasian landmass, midway between Europe and the emerging Asian economies. Second is economics: driven by the willingness of the People’s Republic of China to invest and lend for infrastructure projects coupled with the desire of the Central Asian countries to integrate into existing international geo-economic structures by removing intra-regional barriers to cooperation and maintaining stability. Despite the political will to create joint regional infrastructure, apart from the Kazakhstan-Turkmenistan-Iran railway, other projects remain only on paper. However, in the oil and gas sector, the Central Asia-China gas pipe-line has brought Turkmenistan, Uzbekistan and Kazakhstan together.²

 

In response to China’s BRI, India, Iran, Japan, the European Union (EU), and the United States (U.S.), among others, are also interested in developing transport corridors through Central Asia. The potential for competition and confrontation among these powers in the region parallel to existing geopolitical rivalries, and their manifestation, at the global and regional levels. Globally, this includes the clash between the West and Russia as well as the growing rivalry between the United States and China. At the regional level, this includes the animosity between India and Pakistan, Iran’s ambitions in Central Asia, instability in Afghanistan, along with the degree of success of the Russian turn East policy. Under these conditions, what are the risks associated with the opening up of Central Asia? How feasible is the implementation of projects that have been announced? Can these projects foster economic development in the region?

 

To realize Central Asia’s potential as a continental hub, it is necessary to modernize transport infrastructure systems and create logistics services to reduce the speed of land transportation of goods. This would allow it to compete with maritime transport. At sea, the high level of competition between ports constantly increases the speed of service, and the development of large capacity vessels reduces the cost of transporting freight. While land transportation cannot match up to maritime transportation with respect to costs or traffic volumes, its competitive advantage remains the speed of delivery.

At the moment, a number of common problems plague road and rail transportation across Central Asian countries, regardless of their geographical location, socio-political, or economic development. For the former, the first is the low quality of roadways and bridges. Almost half of the roads for international corridors are covered with a gravel-bitumen layer and only 30% are paved with asphalt.³ In Tajikistan, there are no first category roads, which are all weather.⁴ In the other countries, the situation is marginally better. Second is the status of countries in the region as net importers of road transport services.⁵ Their domestic fleets cannot meet the growing demand for transport services. Third is the further deterioration of road and equipment, which leads to accidents and shortage of vehicles.⁶ These factors contribute to the low speed of road transport and shorten the life of vehicles.

The latter, which is required for longer distances and holds strategic importance, also faces a number of serious challenges. First is the difference in the width of the gauge across regions. While Central Asian countries use a gauge of 1520 mm, other states in Asia and Europe use 1435 mm. Therefore, it is necessary to build additional infrastructure in the form of transshipment centres, where containers are transferred to different trains.⁷ In Kazakhstan, the dry port of Khorgos has more than sufficient capacity to meet the current requirement.⁸ Most other Central Asian countries, however, experience idle times and loss of cargo since they do not have enough capacity to handle, dispatch, load and redistribute cargo.⁹

 

Gauge differences also complicate multilateral projects with countries in the region. Thus, for the China-Kyrgyzstan-Uzbekistan railroad construction project, the three countries disagree on the railroad gauge. Kyrgyzstan opposes the 1435 mm gauge. China, which was earlier willing to work with the 1520 mm gauge, now wishes to convince Tashkent and Bishkek to accept the 1435 mm gauge. While Bishkek mainly played spoiler thus far, Uzbekistan has sought to be more flexible because of the possibility of alternative projects excluding it.¹⁰ This includes the Five Nations Railway Corridor, a rail road project connecting China with Iran through Kyrgyzstan, Tajikistan and Afghanistan.¹¹

 

The second challenge is geography. In Kazakhstan, it is difficult to maintain roads across vast distances given the severe climate in the area. In Kyrgyzstan and Tajikistan, the mountainous terrain poses difficulties for construction, thereby making rail links almost non-existent in most regions. Third is the high cost of wagon rental, since the price for delivery of goods also includes the costs incurred for the return journey of the train, which in turn affects the final cost of the goods. While goods are transported by rail from China to Europe, encouraged by generous subsidies from the Chinese government, European demand for overland transport to China is virtually non-existent. As a result, the trains are empty during their return to China.¹²

Fourth is the shortage of modern carriages, locomotives, infrastructure, and technologies that meet international quality standards.¹³ This contributes to the fifth challenge, which is the low speed of transportation. It is necessary to increase the average speed of transportation from today’s 60-75 km/hr to about 80-90 km/hr. This will ensure the stable delivery of goods in a short time, while making an allowance for delays at the borders, if any.¹⁴

 

Apart from infrastructure deficits, the speed of movement of goods is also influenced by the institutional and political challenges that the region needs to overcome. This includes differences in customs clearance procedures for goods transported across each border, particularly the time required for customs procedures and inspection of goods as well as challenges like corruption. At the political level, the challenges include disputes on cross-border issues as well as the difficult relations among countries in the region. This sometimes has a spillover effect on the transit of goods at the borders, with states adopting more involved customs procedures leading to long delays. For instance, earlier this year, Kyrgyzstan accused Kazakhstan of introducing hidden customs control, through burdensome procedures that violate regulations of the Eurasian Economic Union, of which both countries are members.¹⁵ In contrast, Uzbekistan’s recent attempts to improve its relations with neighbours have been a positive development.¹⁶

Since 2015, container traffic from China to Europe through Kazakhstan has doubled each year and is organized through two border crossings at Khorgos and Dostyk respectively. In 2017, this stood at 201,000 TEUs.¹⁷ This will continue to increase as external interest and investments grow. To realize this transit potential, the countries of Central Asia need to bring down barriers, develop infrastructure, and prepare their transport sector for rapid modernization. Apart from regional issues, geopolitical competition can also create new opportunities for the region or frustrate this aim, leaving Central Asia ‘closed’.

 

The Eurasian continent includes economically developed flanks – Western Europe and East and Southeast Asia – and a sagging centre – Central and South-Western Asia. While this centre has the potential to directly connect the two flanks, it is also where interests of major powers clash. This rivalry has both positive and negative consequences. On the one hand, it opens up a number of opportunities for countries in the region; on the other hand, this also poses security risks.

Sino-Russian relations in Central Asia hold the key to understanding the regional dynamics. Moscow has long sought to maintain its monopoly on access to the region to ensure Russian security and preserve its international status. Central Asia’s growing economic dependence on China has been a cause for concern. Tajikistan and Kyrgyzstan, for instance, are at a high risk of debt distress due to unsustainable Chinese credit.¹⁸ In response, Russia has been pushing for alternatives to Chinese projects in the region. Moscow has been improving its own competitive advantage as a transit country to diminish the economic attractiveness of projects through Central Asia. Simultaneously, Moscow has also extended support to alternate transport projects, particularly the International North South Transport Corridor (INSTC). This will provide a corridor through the Iran-Turkmenistan-Kazakhstan railway to access Russian and European markets.

 

However, Beijing and Moscow have developed an understanding of how to work together in the region. Both sides have common interests in ensuring regional stability and security. Further, their need to maintain friendly relations with each other and with countries in the region is also driven by their confrontations with the West. The strategic importance of their ties with each other indicates that both sides will seek to maintain the status quo in the region for now. This bodes well for the creation of transport and transit infrastructure in the region, in the short run at least.

Central Asia’s southern neighbours, Afghanistan and Iran, also determine the opening up of the region. Historically, Afghanistan had linked Central Asia with South Asia.¹⁹ However, regional connectivity projects via the country face security risks and political instability. Nevertheless, several projects, which connect to Afghanistan through Central Asia and Iran, are in the works. Apart from the China-backed Five Nations Railway Corridor, other initiatives include the Lapis Lazuli Corridor – which connects Afghanistan with Turkey and Europe via Turkmenistan – and the India-backed Zaranj-Delaram highway which connects Afghanistan with Iran’s Chabahar port.²⁰ Both are now operational.²¹ Within the region, Uzbekistan, constructed a rail link between Hairatan at the Uzbek-Afghan border and Mazar-e-Sharif in northern Afghanistan.²² In December 2017, Uzbekistan and Afghanistan signed an agreement to expand this to Herat to launch a trans-Afghan corridor route which can then connect to Iran’s Chabahar as well as Pakistan.²³

 

With the operationalization of the Chabahar port and the ongoing development of a railway line from Chabahar to Zahedan, near the Iran-Afghan border, Central Asia is looking toward Iran for connectivity. In turn, India which backs the Iranian projects hopes to connect with Central Asia through Iran. This is not limited to the routes through Afghanistan. The Kazakhstan-Turkmenistan-Iran railway link was operationalized in 2014.²⁴ Further, there are plans to develop a transit corridor connecting Uzbekistan, Turkmenistan, Iran, and Oman.²⁵ Both projects provide opportunities for Central Asia to access Chabahar as well as the INSTC which passes through Iran’s Bandar Abbas port. Moreover, the Chabahar port also provides Central Asian states an alternative route to Asian markets, which are only accessible through Chinese ports today.

 

Given the multitude of regional infrastructure projects and recent attempts by Central Asian states to improve their ties with each other, there are exciting prospects for Central Asia’s emergence as a dynamic hub connecting the Eurasia continent. This process has been catalysed by China’s ambitious BRI, which pays significant attention to infrastructure projects in the region. This has also given new impetus to the implementation of other projects around the region.

 

Footnotes:

1. Xi Jinping Speech at Nazarbayev University – Astana 2013 https://www.fmprc.gov.cn/mfa_eng/topics_665678/xjpfwzy siesgjtfhshzzfh_665686/t1076334.shtml

2. ‘Kazakhstan: Workers Complete Section of Turkmenistan-China Pipeline’, Eurasianet. For more information see https://www. woodmac.com/reports/upstream-oil-and-gas-turkmenistan-china-gas-pipeline-11165314

3. ‘State Target Programme for the Development of the Transport Complex of the Republic of Tajikistan Until 2025’, 2011, p. 8. http://www. mintrans.tj/sites/default/files/2017/ gosudarst vennaya_celevaya_programma_ razvitiya.pdf (in Russian).

4. ‘On Endorsement of the National Earmarked Development Programme for the Transportation Sector of the Republic of Tajikistan up to 2025’, Government of the Republic of Tajikistan, 1 April 2011, https://www.wto. org/english/thewto_e/acc_e/tjk_e/WTAC CTJK23A1_LEG_10.pdf

5. Ibid.

6. Sayed Parto, Josh Winters, Mohsin Usyan and Anastasia Hozyainova, ‘Afghanistan and Regional Trade: More or Less Imports from Central Asia?’ University of Central Asia Bishkek, 2013. https://www.ucentra-lasia.org/Content/Downloads/UCA-IPPA-WP-3-Afghanistan% 20and%20Regional% 20 Trade-Rus.pdf (in Russian).

7. ‘1520-1435: Prospects for Cooperation’, Tekhnika Zheleznodorozhnyk 1, 2015 (in Russian).

8. Wade Shepard, ‘Khorgos: The New Silk Road’s Central Station Comes To Life’, https: //www.forbes.com/sites/wadeshepard/2017/02/20/khorgos-the-new-silk-roads-central-station-comes-to-life/#27fd0899c22e

9. ‘Locomotive Market of Russia and Countries of the 1520 Space’, INFOLine, 2015, p. 190 (in Russian).

10. ‘Uzbekistan, China One Step Closer to Building Railway Corridor via Kyrgyztsan’, RailFreight.com, 8 October 2018. https://www. railfreight.com/beltandroad/2018/10/08/uzbekistan-china-one-step-closer-to-building-railway-corridor-via-kyrgyzstan/?gdpr=accept

11. ‘Afghanistan-China-Kyrgyzstan-Tajikistan-Iran Rail Road Project (Five Nations Railway Corridor Project)’, Centre for Strategic and International Studies. https://reconnect-ingasia.csis.org/database/projects/afghanistan-china-kyrgyzstan-tajikistan-iran-rail-road-project-five-nations-railway-corridor-project/27ac1f27-8f41-48cc-b6c7-db58f7763028/

12. Ivan Zuenko, ‘Why China Subsidizes Loss-Making Rail Transport via Russia and Kazakhstan’. https://carnegie.ru/commentary/64555

13. O.A. Krasilnikova and D.V. Astashov, ‘Problems Impeding the Realization of the Transit Potential in the Territories of the Eurasian Economic Union Member States’, Sovremennyye Naukoyemkiye Tekhnologii 5(1), 2015, pp. 142-143 (in Russian).

14. E. Vinokurov, M. Dzhadraliev and Yu Shcherbanin, Sector Review, ‘EEU International Transport Corridors: Faster, Cheaper, More’, Eurasian Development Bank, 2015 (in Russian).

15. ‘As Trucks Idle on Border, Kyrgyzstan Lashes Out At Kazakhstan Over Delays’. https://www.rferl.org/a/kyrgyzstan-trucks-border-kazakhstan-delays-ees/29858576.html

16. ‘Uzbekistan, Tajikistan Resume Bus Connection After 26-Year Break’. https://www. azernews.az/region/131994.html

17. ‘Deputy Foreign Minister (RoK) Roman Vassilenko at the Roundtable at "Euractiv".’ http://mfa.gov.kz/en/content-view/remarks-by-deputy-foreign-minister-roman-vassilenko-at-the-roundtable-at-euractiv-eu-kazakhstan-relations-from-security-issues-to-regional-cooperation

18. Dylan Gerstel, ‘It’s a (Debt) Trap! Managing China IMF Cooperation Across the Belt and Road’. https://csis-prod.s3.amazonaws. com/s3fs-public/181017_DebtTrap.pdf? MKq76lYIBpiOgyPZ9EyK2VUD7on_2rIV

19. S. Akimbekov, History of Afghanistan. The Institute of World Economy and Politics at the Foundation of the First President of the Republic of Kazakhstan – the Leader of the Nation; Astana-Almaty, 2015, p. 848.

20. ‘Afghanistan-Centred Regional Cooperation – From Planning to Implementation’, Ministry of Foreign Affairs of the Islamic Republic of Afghanistan, November 2018. http://cdn.mfa.af/mfa_reports/RECCA-2018-Summary-SP.pdf

21. Mariam Safi and Bismellah Alizada, ‘Afghanistan: Prospects and Challenges to Regional Connectivity’, The Diplomat, 19 April 2019. https://thediplomat.com/2019/04/afghanistan-prospects-and-challenges-to-regional-connectivity/

22. ‘Hairatan to Mazar-e-Sharif Railway Development Programme’, Central Asia Regional Economic Cooperation Program. https://test0302.carecprogram.org/?project=hairatan-to-mazar-e-sharif-railway-development-program

23. ‘Special Interview with Uzbekistan Ambassador Javlon Vakhabov’, Caspian Policy Center, July 2019. http://www.caspianpolicy. org/wp-content/uploads/2019/07/Special- Interview-with-Uzbekistan-Ambassador-Javlon-Vakhabov-by-CPC.pdf

24. ‘Kazakhstan-Turkmenistan-Iran Rail-way Opens’, Economist Intelligence Unit, 5 December 2014. http://country.eiu.com/ article. aspx?articleid=912554875&Country =Turkmenistan&topic=Politics&sub topic=Forecast&subsubtopic=Inter-national+relations

25. ‘Turkmenistan, Iran and Oman Have Begun the Final Phase of the Project to Create a Transport Corridor’, Transport Journal, 11 February 2014. https://transport-journal. com/news/autotransport-i-dorogi/uzbekys-tan-turkmenystan-yran-y-oman-prystupyly-k-zaklyuchytelnomu-etapu-proekta-po-sozdanyyu-transportnoho-korydora/ (in Russian).