Many Obstacles to New Silk Route

Grand plans for a free flow of goods between east and west could be undermined by suspicious and uncooperative Central Asian leaderships.

Many Obstacles to New Silk Route

Grand plans for a free flow of goods between east and west could be undermined by suspicious and uncooperative Central Asian leaderships.

While analysts welcome a recent agreement to create a modern trade route through Central Asia, they say many barriers still stand in the way of its implementation.

An agreement on the trade route has been given the green light, with costs estimated at 18 billion US dollars. However, local experts say the reluctance of Central Asian countries to work together to smooth cross-border traffic remains a serious obstacle.

On November 3, eight regional states agreed to a plan to improve the network of roads, airports, railway lines, and seaports in Central Asia to create a modern-day version of the Silk Road – the trade route which for centuries supplied a vital link from east to west – and make the region a vibrant land route for trade between Europe and Asia.

The plan was agreed at the sixth conference on the Central Asia Regional Economic Cooperation (CAREC) Programme in the Tajik capital Dushanbe, attended by ministers from, four of the five Central Asian states - Kazakstan, Kyrgyzstan, Tajikistan and Uzbekistan – plus Azerbaijan, Afghanistan, China and Mongolia.

CAREC is an initiative backed by the Asian Development Bank, ADB, established in 1997 to encourage economic cooperation among countries in Central Asia.

The plan as approved will mean ten years of investment in constructing and upgrading of six road and rail transport corridors. Half of the funding will be provided by the eight participating countries, and the ADB should put up the rest.

In their joint declaration, CAREC ministers said, “The strategy will establish competitive transport corridors across the CAREC region, facilitate movement of people and goods across borders, and develop safe, dependable, effective, efficient and fully integrated transport systems that are environmentally sustainable.”

The idea of a common transport network has been discussed at other recent forums. At a November 8 meeting with Sergei Lebedev, the Executive Secretary of the Commonwealth of Independence States, president Kurmanbek Bakiev said he would his country’s term in the rotating chairmanship of this former Soviet grouping to work on regional transport issues and lifting unnecessary barriers to trade, which he said were vital to develop the economic potential of regional states.

China and Uzbekistan announced they wanted to accelerate the construction of transit roads through Kyrgyzstan - a decision confirmed when Chinese premier Wen Jiabao visited Tashkent in early November. According to the Xinhua news agency, China and Uzbekistan intend to increase their trade turnover to one and a half billion US dollars by 2010.

While Central Asian analysts welcome the idea of a modern version of the Silk Road, they express concern that the chronic lack of coordination between countries in the region may mean the plan never gets off the ground. They say that in the 16 years since the Soviet Union collapsed, Central Asian leaders have failed to understand that collaboration is essential if they want to compete internationally.

According to the ADB, less than one per cent of the volume of trade between Europe and Asia currently goes through Central Asia.

Most trade and transit arrangements are organised on a bilateral , often ad hoc basis rather than through mulitilateral agreements.

Dosym Satpaev, who heads the Almaty-based Risk Assessment Group, argues that disagreement on customs and transit policies has obstructed regional development.

“International experience shows that transit brings in very substantial profits,” he said. “The problem is that… there are considerable differences in transit fees, customs regulations and tax levels have not been agreed, there are problems with cross-border trade, and frontier are often closed, generally for no good reason. And most importantly, there is no common policy for levying fees on the transit of goods and services. All these factors, of course, have a damaging effect on trade and economic cooperation in Central Asia.”

Satpaev believes a supranational body is needed to develop and oversee common customs and trade rules.

At the moment, he said, mistrust between regional leaders and a tendency to strive for purely national interests puts them at a disadvantage. Central Asian leaders feared losing the sovereignty their countries won with the collapse of the Soviet Union.

“These elites fear they would lose sovereignty – a kind of mythical independence – if a supranational body were to be created. But nothing can happen unless it is set up,” he said.

Asylbek Ayupov, a specialist on regional economic ties at the Kyrgyz-Russian Slavonic University in Bishkek, is convinced that creating common transport corridors could boost the regional economy, but notes that outstanding disputes between some regional states and their different levels of development are not conducive to greater cooperation.

One of the main obstacles to the free flow of goods, he said, is systemic corruption at every step of the process.

“The system itself… does not change; the same people are in charge of the process. It is their fault that corruption has become a clot in the blood vessels of the economy. Corrupt relationships are an integral part of the current system; they cannot be broken as they are as strong and enduring as a granite monolith,” said Ayupov.

Mahamadjon Abdurakhmanov, a businessman from Bishkek, told IWPR of the kind of problems Central Asians face when crossing into neighbouring countries, “You face many difficulties even when you go to the nearest, neighbouring country. In my experience, the journey entails all kinds of checks and searches at the border. People often have to wait in queues, fill in migration cards and customs declarations and go through lengthy procedures.”

According to Abdurakhmanov, transporting goods is even more difficult, with long and cumbersome border procedures to go through.

“Although there are legal requirements to be met in order to cross the border, these could be simplified and more civilised limits,” he said. “That would mean that my colleagues and I would cross the border more frequently – five or ten times a month, instead of the two or three times we do now. We – together with the leaders in our region - would benefit from such a revival in commerce.”

Tolkunbek Turdubaev is a BBC stringer in Kyrgyzstan.

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