Central Asia: Are There Potholes in the New Silk Road?
When NATO representatives meet with their Afghan and Central Asian counterparts in Istanbul on November 2 to discuss the “New Silk Road” project, they will try to play up its mutual economic benefits. But in order to have any chance of realizing those benefits, plan promoters must address the “rent-seeking” mindset of Central Asian leaders, especially that of Uzbek strongman Islam Karimov.
At the heart of Washington’s Silk Road vision is free trade, or, at least, freer trade. But Uzbekistan, which has emerged as an important Central Asian transit hub, has exhibited in recent years a demonstrable preference for higher trade barriers. Meanwhile, Kazakhstan is casting its lot with a new economic grouping, a Moscow-led customs union known as the Eurasian Economic Community, which, while wanting to eliminate tariffs among participating states, intends to maintain firm trade walls to the outside.
During a stop in the Tajik capital Dushanbe on October 22, Secretary of State Hillary Clinton touted the New Silk Road as “a network of transit and trade connections to open up new markets for raw materials and energy and agricultural products that can be traded among all nations in the region.” For the plan to work, however, Clinton said that “barriers to trade have to come down.”
Beyond Washington’s Beltway, many Central Asia experts cast doubt on the Silk Road project’s ability to realize its potential. There is little faith that men like Karimov are capable of taking the kind of long-term view that is needed to allow the plan to flourish. Watchdog groups rank Uzbekistan, along with Tajikistan and other Central Asian states, among the most corrupt nations in the world.
“The New Silk Road is a cliché which gives the impression that various economic- and security-based initiatives are combined into a single strategic framework. This is not the case. Outside Washington, it has little meaning or purchase,” John Heathershaw, a Central Asia expert at the University of Exeter, told EurasiaNet.org in Bishkek.
According to Tajik press reports, Uzbekistan has hiked cargo transit fees five times over the last two years. Tajikistan has raised its tariffs twice over the same period. As hostility between the two countries simmers, some of the Uzbek rate hikes appear targeted specifically to hurt the Tajik economy.
Tashkent fears Dushanbe’s Rogun Dam project – which would be the tallest hydropower dam in the world – will give it control over water resources upstream. At times, Tashkent has blocked the transit of construction materials for Tajik dams across its territory. Tajik officials maintain the Rogun dispute has played an influential role in shaping Uzbekistan’s tariff policy.
On March 20, Asia-Plus reported that Uzbekistan had upped fees on Tajikistan-bound rail containers by 74 percent, which the Dushanbe-based news agency estimated would cost Tajik entrepreneurs at least $23 million over the remainder of 2011. On July 1, Tashkent hiked its rate for road freight to Tajikistan by 15 percent, from $230 per truck to $265. Uzbek authorities declined to comment, making it difficult to verify the Asia-Plus figures, though in 2010 officials were quoted as saying earlier fee hikes were imposed due to “increases in maintenance charges and fuel expenses.”
Uzbekistan’s actions has produced a chain-reaction of sorts. In April, Radio Free Liberty reported that Tajikistan had started charging shippers $20 per ton for freight headed to Afghanistan, when it had previously been charging just over $12.
When contacted by EurasiaNet.org, authorities in both countries declined to comment.
“By increasing transportation fees, Uzbekistan is once again letting all interested countries know they have control over traffic through Tajikistan, which is a bitter truth,” said a Tajik trade expert, adding that politicians in Tajikistan are actively searching for transport routes that avoid Uzbekistan.
The rapid development of the Northern Distribution Network, a web of road, rail and air routes to ferry supplies to US and NATO forces in Afghanistan, may stifle the development of New Silk Road trade routes. Military-related traffic is already crowding out civilian commerce in a region that is infrastructurally challenged.
“The Northern Distribution Network provides extremely profitable rent-seeking opportunities for Central Asian elites and, as such, helps maintain authoritarian and oligarchic regimes in power,” Heathershaw said.
At the Uzbek-Tajik border last spring, Afghanistan-bound traffic was being prioritized over local traffic, UzNews.net reported on April 12, causing delays in the supply of critical goods to ordinary Tajiks.
“Unfortunately, the people bear all these inconveniences on their shoulders,” said the Tajik trade expert. “If businesses now need more time and more money to get their goods to Tajikistan, local people will cover all these expenses, paying higher prices for the things they need to live and even to survive.”
Matthew Stourbridge is the pseudonym for a journalist specializing in Central Asian affairs.