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Central Asia

China and Central Asian Republics’ Connectivity Through CPEC

Syeda Dhanak Hashmi

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photo by Taik president's press service

The CPEC is just not a road but a network of connectivity, industrialization, trade promotion, energy generation, and much more. The main purpose of the package is to create a land link between western China and Pakistan by providing access to the southern port of Gwadar in Balochistan province. This port was especially designed to cater the needs of China and Central Asian Republics. CPEC route provides immense opportunities to Central Asian Republics to expand trade with Pakistan and also go through China and expand their trade. Chinese Xinjiang enjoys centuries old cultural traditions and trading links with Central Asia. The ancient Chinese Silk Road first connects with Central Asia than rest of the world. Central Asia is thus central to Silk Road. It is believed that Gwadar Port and its allied road infrastructure is a Suez Canal for China and Central Asia. With abundance of natural resources such as oil, gas, gold, and other metals, Central Asian Republics have great potentials to investment in CPEC-related projects and also to investment in the new industrial zones. Pakistan’s location at the crossroads of West Asia, South Asia, Central Asia and the Middle East makes it the natural gateway for the landlocked Central Asian Republics.

The Central Asian Republics have been historically connected to the world through the ancient Silk Road, situated at the crossroads of East Asia, West Asia, South Asia and Europe, their location is excellent for trade. The CARs states are literally a goldmine of energy reserves with Kazakhstan having 30 billion barrels of oil reserves while Turkmenistan’s natural gas is estimated at 265 trillion cubic feet, this wealth makes the region central in the battle for resources between world powers and portend to play an important role in determining global supremacy. Central Asian countries have always looked to access regional markets, including Pakistan, China, India, and the countries of West Asia. In this regard, CPEC could serve as a strategic opportunity for Turkmenistan, Uzbekistan, Kyrgyzstan, and Tajikistan to transport their goods and market them more competitively to regional and global markets. Pakistan also desires to access the rich resources of Central Asia via Afghanistan to meet its energy needs, as well as transport goods to Central Asia. It becomes pertinent at this point to state that indeed the China-Pakistan Economic Corridor has great potential to become a gateway to Central Asia and to provide the region with the much needed economic uplift. It would be a natural extension of that strategy by connecting Central Asian countries with CPEC, China intends to cultivate new markets with significant growth potential in the region and evolve goodwill with neighbouring countries.

In this context, several Central Asian countries have welcomed the implementation of the CPEC by emphasizing the role of the project in promoting progress and prosperity. For instance, Turkmenistan has been allowed to use the crown jewel of CPEC, the newly modernized Gwadar deep-sea port in Pakistan, which gives Turkmenistan access to the Indian Ocean. Tajikistan is also eying access to Gawadar port, as it would be a junction to connect the landlocked Central Asian state with the rest of the world. Uzbekistan expressed a similarly supportive stance about CPEC. The participation of energy-rich Uzbekistan in the CPEC project has the potential to double Pakistan’s energy output for the next six years, ensuring the country with permanent access to electricity. Kazakhstan is also seemingly eager to launch joint projects under CPEC and highlighted the importance of the CPEC project for Kazakhstan and the Central Asian region. Kazakhstan would like to join the mega project as it would provide an alternative route to the Central Asian State for access to sea. Kazakhstan and Pakistan concluded that both countries had a large scope for trade in textile and cotton products, pharmaceuticals, food items, engineering equipment and machinery and construction enterprises. They ended up signing Memoranda of Understanding (MOUs) for cooperation in the areas of trade and investment, defence and strategic studies and training in foreign services along with establishing the need of cooperation for bringing peace in the region.

The Central Asian Republics happen to be the nearest and most dependable source of energy supply via fastest trade routes for China’s burgeoning economic growth. Three of the Central Asian states have common borders with the Chinese province of Xinjiang so it is being planned as a future economic and transportation hub for 75% of Chinese trade with CARs. Further down the route Xinjiang connects with Pakistan so it is all set to function as a key trade centre on the economic belt. An extensive highway network is to be laid for transporting oil, coal and agricultural products from Xinjiang which would be shipped out from Pakistan’s Gwadar Port. Thus Central Asia is unlocked once it links to these trade routes and it gains access to the China Pakistan Economic Corridor. China’s BRI kicked off with its first corridor, the China Pakistan Economic Corridor, it would connect the Central Asian Republics (CARs) to the world with Pakistan becoming a center-point where most routes converge. The CPEC lies at the very heart of an intricate network of corridors working their way through land and sea as they connect vast regions, it can be defined as the most important of the six OBOR corridors and it is the linchpin of the entire strategy.

The Central Asia Regional Economic Cooperation (CAREC) transport corridors are key conduits, improving connectivity and facilitating cross-border movement in the region. Most CAREC countries are landlocked and rely almost exclusively on overland transport for trade within the region and with markets just outside. Comprising an extensive, but still underdeveloped, network of roads and railways spanning the region, the six CAREC corridors are intended to expand trade and improve competitiveness, and in the process augment regional economic cooperation. The notion of a ‘corridor’ was developed to address the trade and accessibility problems of landlocked countries. The corridor concept has since evolved to include transport, trade, logistics, economic, and even supply chain corridors. In addition, these corridors have exceeded their primary functions, and are now indispensable in promoting global and regional economic development. The map shows the three CAREC corridors.

Where there are advantages there are drawbacks too and here the negative factor is the presence of various radical Islamist movements that could destabilize the entire region, so it is essential that CARs be integrated and stabilized with trade and economic opportunities to stem militancy before it spreads across the length and breadth of Eurasia. China would like to quell Uighur rebellions in its territory and prevent the influence of militants from the Central Asian countries. Consequently, the Shanghai Cooperation Organization was formed as a confidence building forum aimed to promote the integration of the region, borders were demilitarized and the vision is to reduce the influence of Western influenced world forums like the United Nations. The focus of the SCO is on economic initiatives, India and Pakistan also became members recently and the mandate has been broadened to include joint security, trade and anti-war pacts.

Central Asia is important in its own right because it is the vital fulcrum between the dynamism of East Asia and the wealth and technology in Western Europe. Pro-actively, Central Asia is being reoriented into the new Silk Road and Eurasian Economic Union to promote the joint objectives and unity of the region. The US would certainly like to have unrestricted access to the CARs energy reserves and maintains military bases at this valuable strategic location, Russia feels that the US is intruding in its territory and has its own military bases to counter American invasive intentions. The Central Asian states of Kazakhstan, Kyrgyzstan, and Tajikistan are members of the Moscow-led Collective Security Treaty Organization (CSTO) while all the Central Asian Republics are part of the Shanghai Cooperation Organization as well and are well consolidated with China and Russia.

While highlighting the significance of Pakistan in the CPEC connectivity initiative it is observed that the country is actually one of the supercontinent’s most important economic hopes, as it has the potential to connect the massive economies of the Eurasian Union, Iran, SAARC, and China, thereby inaugurating the closest thing to an integrated Pan-Eurasian economic zone.” Moreover, the strategic significance of all this enhanced connectivity can mean the end of an empire and result in a multi-polar world, shifting the ‘power base’ to Eurasia. US geopolitical strategy has received this setback at a time when it is a progressively weakened force, this is why analysts call this the Eurasian Century, the integration and economic prosperity it offers make its success inevitable.

To conclude, CPEC is instrumental in economically uplifting the entire region not only through the land routes but also through sea channels, not only benefitting Pakistan but also the Central Asian Republics.

Author is a Foreign Policy Analyst and Research Head at a think tank based in Islamabad. She has done Master of Philosophy (M.Phil.) in Governance and Public Policy. Her areas of research include both regional as well as global issues of contemporary international relations.

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Central Asia

The Track to Prosperity

Sabah Aslam

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The world is rebalancing and one of the key gears of this shift is that the tide has turned towards eastern hemisphere. The world is being reshaped here, not just politically but also economically. The long awaited curse has now been lifted as the cogs of new era are positioned in destiny of eastern hemisphere. As liberalism re-emerges over international arena, the thrust of this new order is in trade and connectivity.

One such cord to this anecdote is Uzbekistan and its rising role in the infrastructural developments and regional activity. This Central Asian region and Afghanistan had been conflict zones for long periods of time but now Asian picture is changing. With changing regime in Pakistan, US-Taliban Dialogues going on in Afghanistan the dynamics of regional politics are changing. Tashkent already has cordial relations with Kabul and thus leads many developmental projects in the Afghani land including the Hairatan to Mazar-e-Sharif Railway Project. Being the only country without any rift with Kabul administration, Uzbekistan is seeking to put its influence not by force but by the fist of development. Mutual benefits of both countries can open new doors to regional connectivity and prosperity. Not only this, Uzbekistan is determined for regional connectivity with various projects including Central Asian countries, china and South Asia. Uzbekistan also shares good relations with Pakistan, which is its second largest trade partner in the region after Russia. Also Uzbekistan also shares the floor of Shanghai Cooperation Organization with Pakistan. But after the changed ruling party and its policies, Uzbekistan came up with better ideas.

One such venture was recently proposed by the delegation led by Uzbekistan’s foreign minister, Mr Abdulaziz Kamilov, who visited Pakistan and met his Pakistani counterpart, Mr Shah Mehmood Qureshi at the end of the last year. The proposal which may evolve into Euroasian concept of interconnectivity, aimed at connecting Pakistan with Uzbekistan through a railroad network which will pass via Afghanistan’s Mizari-Sharif. The two possibilities for the construction of lines are Mazar-i-Sharif-Khulm-Puli-Khumri-Doshi-Surabai-Jalalabad-Torkham on Pakistani side or along Surkhan – Puli-Khumri – Doshi – Surabai-Jalalabad-Peshawar (Pakistan).

The proposal if implemented will have far-reaching outcomes, booming the trade which is the dire need of economy for these countries. The trans-afghan railway project will not only connect Pakistan to central Asia and its market but also open doors to Russia, which can also play key role in the economics of the nation. The five year plan which was presented in December of 2017 by Uzbekistan involved such developments which will help the country to boost up its economy by establishing transit trade routes benefitting the economy and amplifying the regional connectivity. The trade route between Uzbekistan and Pakistan will allow access of central Asian states to open waters enabling their reach to the rest of the world through the deep sea port of Pakistan.

The Uzbek soil is enriched with the production of cotton and sugar and apart from this the agro-machinery in Uzbekistan is more advanced than in Pakistan since Islamabad and Tashkent already are trade partners which can clearly be seen as in 2018 the trade between two, crossed the 90 million US dollars mark. This trade volume can reach new altitudes if the direct link is established between the two countries and Pakistan, a country with agro centered economy, can have advanced parameters.

Such collaborations not only can decrease the trade deficit but also boon the local industry and economic growth can be achieved in areas which are underdeveloped. Also the majority of the population in this part of the world lives below the poverty line, the track can help in improving their living standards. Various studies indicate that high cost of trade in this region is because of lack of interregional infrastructure. Therefore leading to lower prices of trade can help raising lower class and expanding middle class. Also when there is a market, Foreign Direct Investment comes in rushing. Hence overall the conditions of the states would improve drastically over the years.

Uzbekistan has been long interested in Afghan soil which is conflict ridden from its postmodern to modern history. It is difficult for the landlocked Uzbekistan to have a global access. Thus in order to open its trade tentacles Uzbekistan needs Afghanistan and to outreach globally it needs a port which is deep sea. The proposal if comes into reality will make good use of Pakistan’s strategic location, making Pakistan as the focal point for regional trade and its connectivity with the rest of the world. Uzbekistan and Afghanistan are landlocked states and need a country like Pakistan with warm water sea ports for getting to hot waters.

A railway line will reduce the cost of transportation and make it convenient for the two states for getting a suitable sea port. Also, a train would take not only goods but also people. This would lead to increased people to people contact. With people connected together, peace and stability in the region would be comparatively easy to attain. Developing the underdeveloped areas of Pakistan and Afghanistan and the sense of insecurity which is visible will be minimized. These developmental projects can enhance the capacity to achieve collective prosperity and enrich the relation between the countries. Consequently, a better image of these countries will eventually be projected. Through such initiatives the whole eastern region will be interconnected with each other and trade will be boomed benefitting participant countries.

Apart from this, the world has now left with only a few untapped resources which are mainly located in central Asia and Afghanistan. If odds don’t go against, it will be a great victory for Pakistan to be connected with Central Asian states directly through the rail road network. With the new shift and East into light, everyone is eyeing on Asia and its proximities for energy reserves. Pakistan, once connected through railroad, can take maximum possible advantage of this untapped potential in the region which would not only be beneficial for countries itself but for Pakistan as well.

Recent proposal can curb the miseries of Afghanistan and steer it into a healthy voyage of productivity, and through developments peace and security can be achieved in the Afghanistan. Such initiatives will open doors not only for Pakistan, Afghanistan and Uzbekistan but also for the countries that have potential markets. Apart from this, these acts will make region interdependent which further can deescalate the tensions among countries opening them for each other and becoming market for each other. The regional connectivity will also boost the integration and regional harmony.

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Central Asia

Belt and Road Initiative in Central Asia and the Caucasus

MD Staff

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Left to right: Speakers Johannes Linn of the Brookings Institution, Harinder Kohli of the Emerging Markets Forum, ECA Chief Economist Asli Demirguc-Kunt, and Caroline Freund, World Bank Director of Trade, Regional Integration and Investment Climate. The panelists discussed the Belt and Road Initiative in Central Asia and the Caucasus. Photo: World Bank.

The massive Belt and Road Initiative (BRI) plans to build roads, railways, seaports and other trade infrastructure in dozens of countries in the Eurasian continent. The BRI aims to connect Asia to Europe, and the initiative has steadily expanded economic corridors and projects as far as Africa.

Two of the planned corridors of this ambitious project will run through countries in the Central Asia and South Caucasus. These countries are mostly land-locked, and their transportation infrastructures and quality tend to be low.

“If properly implemented, BRI transport projects are expected to reduce travel times and trade costs, potentially leading to enhanced trade, foreign investment which would translate into higher economic growth and poverty reduction for the countries involved,” said Asli Demirguc-Kunt, chief economist of the World Bank’s Europe and Central Asia (ECA) region.

“However, there are also significant risks involved, and the initiative can leave countries with excessive debt and poor quality projects; and there are potential environmental and social costs,” Demirguc-Kunt said. “So the question is how can these countries maximize the benefits and minimize the risks?”

Economists Harinder Kohli of the Emerging Markets Forum and Johannes Linn of the Brookings Institution spoke about the BRI at the inaugural ECA Talks event, a series of monthly talks in which researchers exchange and challenge ideas about key issues affecting the region.  Their talk was based on a study that draws on background notes prepared by experts from the region on their countries’ perspectives on the BRI, hence providing an “inside-out” perspective. 

One of the constraints to good analytical work in this area is that no comprehensive dataset exists with reliable information about BRI project costs, conditions and terms of financing.

“There are great benefits to be had but also considerable risks that need to be addressed in one way or another,” said Linn. BRI investments should reflect country priorities and be integrated with national and regional plans.  Macroeconomic constraints, especially debt sustainability, must be carefully monitored and respected. 

Governance and corruption issues are important as in any large infrastructure project, so there is a need for greater transparency on terms and conditions of these projects, for example open and transparent public procurement.  Some BRI routes pass through ecologically important landscapes lacking adequate protections, posing a wide range of environmental and social risks, which need to be addressed.

Reaping the benefits will also depend on soft investments made to support trade. Such soft investments include ensuring the efficient operation and maintenance of projects after they are built and improving trade logistics at border crossings. Kazakhstan, for example, stands to receive a potential $5 billion annually in transit fees from goods moving through it to other markets.

BRI projects also include investments in energy, mining, agriculture, communications, and technology to improve trade connectivity. But not everyone will benefit from BRI projects, which will usher in more global trading competition and labor mobility. Countries will need to consider ways to compensate businesses and workers that are eventually forced out.

“What we need is to have more data and more information,” said Caroline Freund, World Bank director of trade, regional integration and investment climate. “This is the only way we are going to understand where the benefits come from.”

World Bank

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Central Asia

Kazakh police raid raises spectre of China’s long arm

Dr. James M. Dorsey

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A police raid on a Kazakh group documenting the plight of Kazakhs and Uyghurs caught in a brutal crackdown in China’s north-western province of Xinjiang is about more than a government seeking to please Beijing in the hope that it improves the lot of its ethnic kin while preserving diplomatic and economic relations.

Amid suspicions that the raid on the offices of Atajurt Eriktileri and the arrest of activist Serikjan Bilash was carried out as a result of Chinese pressure aimed at squashing criticism of the crackdown, the raid seemingly reflects an increasingly aggressive Chinese effort to impose its will on others and ensure that they observe the respect and deference that China believes it deserves.

Atajurt Eriktileri supports relatives of people who have disappeared in Xinjiang and says it has documented more than 10,000 cases of ethnic Kazakhs interned in China.

Police on Sunday sealed the group’s office in Almaty, Kazakhstan’s largest city, seized the group’s computers and archives and flew Mr. Bilash, who said he was being accused of “inciting ethnic hatred, to the Kazakh capital of Astana.

The East Turkistan Awakening Movement, a Washington-based Uyghur exile group, said Mr. Bilash had been arrested on charges of “creating tensions between #Kazakhstan and #China.”

The Kazakh police raid is but the latest incident pointing to China’s more aggressive form of diplomacy that includes an increasing number of undiplomatic comments by Chinese diplomats across the globe.

At times, those comments are couched in civilizational terms steeped in what political scientist Zhang Weiwei describes as the rise of the civilizational state under President Xi Jinping.

Describing the trend towards a civilizational state that involves a rejection of Western concepts, including notions of human rights and freedom of religion, Financial Times columnist Gideon Rahman noted that China was not alone in its embrace of the idea as an alternative to the traditional concept of a nation state based on national borders and language. Mr. Rahman suggested that the concept was also gaining currency in countries like India and Russia.

Chinese Foreign Minister Wang Yi defended his diplomat’s more outspoken statements by pointing to China’s need to stand up for its “rightful and lawful interests.” Mr. Wang insisted that China would not tolerate infringements of its sovereignty and national dignity.

“Chinese diplomats, wherever we are in the world, will firmly state our position,” Mr. Wang told journalists this weekend covering the National People’s Congress.

Former senior Singapore diplomat Bilahari Kausikan noted that “China does not just want its new status recognised as a geopolitical fact; China wants its new status accepted as a new norm of East Asian international relations; a hierarchy with China at the apex. Most countries accept the geopolitical fact; few accept the norm.”

Examples of China’s more aggressive attitude abound while the Kazakh raid suggests that China’s concepts of deference and respect amount to far more than traditional notions of respect. They also provide a potential insight into the values and norms that in China’s view would undergird a new world order.

China’s notion of deference was put on display last September at the Pacific Islands Forum when Beijing’s ambassador to Fiji, Du Qiwen, allegedly demanded the right to speak before Tuvalu prime minister Enele Sosene Sopoaga. The forum’s host, Nauru president Baron Waqa accused the Chinese envoy of being “insolent” and a “bully.”

Both Nauru and Tuvalu, to China’s chagrin, maintain diplomatic relations with Taiwan.

Similarly, Papua New Guinea police were called after Chinese officials allegedly tried to force their way into the office of the country’s foreign minister in a bid to influence the final communique of last November’s Asia Pacific summit.

The summit ended without a final statement because of disagreements between the United States and China. Chinese officials dismissed the report of them having attempted to gain access to the foreign minister’s office as “a rumour spread by some people with a hidden agenda.”

In an oped in The Hill Times, an Ottawa-based newspaper, Lu Shaye, China’s ambassador to Canada, described as “Western egotism and white supremacy” demands that China release two Canadian nationals arrested in China.

The two Canadians are being held in apparent retaliation for the detention in Canada at the behest of the United Sates of senior Huawei executive Meng Wanzhou on charges of having misled banks about the company’s business dealings with Iran.

A series of incidents in the wake of a visit to Sweden last September by the Dalai Lama involving Chinese tourists and a satirical Swedish television show that poked fun at Chinese visitors and excluded Taiwan and parts of Tibet from a map of China drew the ire of the Chinese embassy in Stockholm.

The embassy denounced Swedish police as “inhumane,” decried “so-called freedom of expression,” charged that the tv show “advocate(s) racism and xenophobia outright, and openly provoke(s) and instigate(s) racial hatred and confrontation,” and issued a safety alert to Chinese tourists because of multiple cases of theft and robbery and poor treatment by Swedish police.

In line with Mr. Wang’s justification of his diplomats’ more undiplomatic approach, Brookings fellow Ryan Hass told Bloomberg that the envoys were “matching the mood of the moment in Beijing… Some in Beijing also seem to be growing frustrated that China’s rising national power is not yet translating into the types of deference from others that it seeks.”

The raid in Kazakhstan, like earlier cases such as Egypt’s return at China’s request in 2017 of up to 200 Uyghur students to an uncertain future in the People’s Republic, suggests that Beijing maintains an intrusive, far-reaching definition of its concept of deference and respect.

Kazakh activists charged that the raid was indicative of the kind of pressure applied by China. “Our government doesn’t want to spoil relations between Kazakhstan and China,” said Atajurt’s lawyer, Aiman Umarova.

There was no independent confirmation of assertions that Chinese pressure prompted the raid.

In a video statement, Mr. Bilash confirmed that he was Kazakh police custody and had not been detained “by either the Chinese or Chinese spies”.

Mr. Bilash’s wife, Leila Adilzhan, said she was “afraid our government will give him to China.”

That may be one step too far for the Kazakh government given mounting anti-Chinese summit among Kazakhs and public demands that Kazakhstan be more forceful in its standing up to China for the rights of Kazakh nationals and Chinese citizens of Kazakh descent. Kazakhs constitute the second largest minority in Xinjiang after Uyghurs.

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