Rebuilding the Legendary Silk Road

Led by the Asian Development Bank, a flock of agencies and countries will pour as much as US$18.7 billion into the moldering infrastructure of the Stans — the landlocked countries of Central Asia that were formerly under the yoke of the Soviet Union — building a network of roads, airports, rail lines and seaports ovber the next decade.

Much of that infrastructure is already there, courtesy of the Soviets, although poverty, corruption, declining economies and deteriorating government services have led in a large extent to ruin. Getting it back into shape, over some of the most daunting terrain on the planet, and through a clutch of countries that have rightly been described as kleptocracies, is not going to be easy.

Hundreds of generations of gypsies, conmen, traders, tourists and Marco Polo himself have traveled through the area by horse, camel, yak, and more recently by diesel truck, buying and selling as they went. It is the warren of tracks called the Silk Road. And, although its historic terminus is the Shaanxi province city of Xian, in fact today traffic flows all the way to Beijing.

In Beijing, it is a chaotic scene, in a vast parking lot where scores of trucks, on any given day, are loading up with supplies to trade their way thousands of miles into Russia. Families live aboard the trucks, packed with whatever the traders fancy will sell on the road and at the end of the line, from T-shirts to chickens.

But it is high-level commerce — the ebb and flow of globalization — that needs the upgraded infrastructure most. And Central Asia, with its deteriorating physical plant, “is the missing link in the whole puzzle of the Eurasian continent,” says Sean D. O’Sullivan, the director for infrastructure for Central and West Asia for the ADB, the logical extension of China’s Go West policy, which has built or rebuilt roads, railway systems and communications all the way to the border.

The plan also preserves an important role for the Asian Development Bank, which has been struggling to find a new reason for existence, given that most of Asia by 2020 will have moved to middle-income status, diminishing the bank’s focus on poverty alleviation and ending its role of bringing in capital from the non-Asian developed world. Although ADB has been steeped in infrastructure development, so much so that the bank’s initials once were referred to as “Asian Dams and Bridges,” cross-border infrastructure development is one of the four pillars of the bank’s new regional cooperation strategy. Also involved are the European Bank for Reconstruction and Development, the International Monetary Fund, the Islamic Development Bank, the United Nations Development Program and the World Bank.

Major Regional Transit Directions

map

Courtesy ADB

The US$18.7 billion thus will go into six new transport corridors, primarily road and rail links, with about half of the funding coming from multinational organizations, while the rest will come from the countries themselves. The plan, under the auspices of the Central Asia Regional Economic Cooperation, shortened to CAREC with the ADB’s mania for acronyms, was agreed in early November by the governments of Afghanistan, Azerbaijan, China, Kazakhstan, the Kyrgyz Republic, Mongolia, Tajikistan and Uzbekistan. It is to encompass dozens of projects and is designed to improve trade flows by improving customs and immigration bottlenecks as well.

That is a good deal easier said than done. For 40 years, under the auspices of the United Nations, there has been an attempt to create a Trans-Asian Railway to provide a continuous 14,000-kilometer link between Singapore and Istanbul with connections radiating out to Europe and Africa, with a northern corridor connecting the rail networks of China, Kazakhstan, Mongolia, the Russian Federation and the Korean Peninsula, as well as a southern corridor connecting Thailand and the southern Chinese province of Yunnan with Turkey through Burma, Bangladesh, India, Pakistan and Iran.

While some of those rail links have taken place, the vast majority haven’t, at least partly because few countries have common-gauge rail lines. The cost of constructing new rail lines and the rolling stock to travel on them is prohibitive. Also, the problems of the Eurozone in creating customs-free borders, which ultimately came to pass with the European Union, are multiplied many times over by individual satrapies across Central Asia that don’t want to give up the money-spinning – and often corruption-enabling – bureaucracies created by borderless travel.

Nonetheless, O’Sullivan and his fellow officials are optimistic. “It is the opportunity that we are trying to capture – eight countries, with the five Central Asian countries at the core. They have come out of the negative GDP growth that followed independence (when the Soviet Union collapsed). Some are growing fast, some not so fast. But we expect GDP across the region to double during the 10 years of the strategic plan.”

According to an August study by the World Bank Development Research Group, in the old Soviet bloc countries traded 43 times more among themselves than could have been predicted by relative gross domestic product and distance between them. However, after independence, trade didn’t pick up with any other countries either. “By 1998,” the study found, “trade between Russia and former Soviet Union countries, although reduced, was still 30 times greater than ‘normal.’”

One of the major goals of the transport plan therefore is nothing more than a major reorientation of trade flows. Currently, despite the fact that the Stans, the collective nickname for the landlocked countries, lie at the very epicenter of the Eurasian continent, less than 1 percent of all trade between Asia and Europe goes through the region. Most of the commerce goes around the region by sea or the Trans-Siberian Railway far to the north. According to the World Bank, railway density averages only 5.4 rail-kilometers per 1,000km, about a third of the average railway density of low- and middle-income countries. About 90 percent of total freight in the Central Asian countries travels by rail – an indication of how negatively low infrastructure levels affects trade across the region.

Thus the new transport corridors being proposed under the plan do not follow the routes taken by the Silk Road. The corridors will not only run from east to west but from north to south as well, connecting the Central Asian republics, Russia itself and China with seaports in South Asia and the Arabian Sea.

The obstacles are intimidating. Populations in the region, according to the ADB study of the program, “are concentrated at nodes, separated from each other and world markets by deserts, mountain ranges and the longest land transport distances on Earth.”

The agencies have been involved, for instance, in building a ring road around Afghanistan, barely a country, where war has been raging for generations.

“Between western China and Central Asia, you have huge mountains, so basically a lot of these roads go through the passes,” O’Sullivan says in an interview. “There are challenges for keeping them open in the winter, developing railways, but to the south, going towards Afghanistan, there is no railway infrastructure at all, so there is a huge move to do a ring road, so that it would provide the opportunity to the Central Asian countries to access the sea. Further to the east, you cross the Caspian and the Caucasus.

“I can’t say it is going to be easy,” O’Sullivan says. But as difficult as the projects are, he adds, when they are completed, the ability to move goods to market should triple the region’s GDP.

Photos courtesy of Asian Development Bank