As the United States has grown more dependent on the countries of Central Asia for transit routes into and out of Afghanistan, policymakers in Washington have talked up the military’s Northern Distribution Network as the beginning of a “New Silk Road.” The idea is to help the region’s stagnant economies by promoting regional trade and, hopefully in the process, bring stability to Afghanistan.
Secretary of State Hillary Clinton trumpeted the idea at a town hall meeting in Dushanbe in October 2011, saying she hoped the New Silk Road would increase “economic opportunity here in Tajikistan so that so many of your people do not have to leave home to find work, that there can be a flourishing economy right here.”
But a new study says these hopes are overly optimistic. The Northern Distribution Network (NDN), a logistics supply chain that has, since 2009, become the primary overland supply route for the war in Afghanistan, has not helped ease trade or cut corruption throughout the region. Instead, the study, released by the Open Society Foundations on October 19, finds it may be having the opposite effect in Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. [Editor’s Note: EurasiaNet operates under OSF’s auspices.]
The report, by Graham Lee (a former EurasiaNet contributor), asks four key questions: Is the NDN incentivizing regional cooperation and border reforms? Is the NDN helping to fight corruption in Central Asia? Has the NDN made transshipment through Central Asia more efficient? Are ordinary Central Asian citizens benefitting from NDN trade?
[I]n each case, the NDN is not performing in practice as was expected in theory. There is little evidence to suggest that the NDN is increasing regional cooperation, and in some cases, it may be causing rises in border fees. Indirectly, the NDN also appears to be stimulating corruption in Central Asia. It has done little to improve the efficiency of regional trade, and its revenues flow overwhelmingly to opaque state coffers rather than to ordinary citizens.
Some of the problems are rooted in how the region is viewed from afar. Washington “needs to better address the economic mechanisms at work in autocratic, centralized, and patronage-based Central Asian states,” says the report. “Graft in the regional transport economy appears to rely on mutual dependencies throughout the hierarchy of power, and must therefore be dealt with at all levels of this hierarchy, not just the lowest. How best to tackle these problems, however, remains an open question.”
Washington had hoped a “desire for revenue will spur those in power to adopt the necessary anticorruption reforms.” But Lee found reasons to fear the NDN was actually encouraging corruption.
In Tajikistan, “drivers from other regional countries are charged vastly more [in bribes] than they were two years ago, as punishment by the Tajik GAI [traffic] police for taking Afghanistan-bound business from local firms. This would indicate a causal link, albeit an indirect one, between the NDN and increased corruption in Tajikistan.”
And in Uzbekistan:
In December 2011, Director A claimed that payment demands by the GAI for road transit through Uzbekistan had increased around twofold in the previous two years. Director B cited a similar increase for rail transit through Uzbekistan, stating that over the previous two years unofficial payment demands by railway officials, per crossing of Uzbekistan, had increased from $20 per ton to $40 per ton on average.
Does the NDN help ordinary people in Central Asia?
Lee estimates that of approximately $1 billion spent every year on the NDN, “not less than 93 percent … flows to the opaque budgets of regional governments.”
Even in the most obvious places, Lee finds little reason to celebrate the NDN’s effect on the local economy. Almost 90 percent of NDN traffic passes through or within a few kilometers of Termez, Uzbekistan, on the Afghan border, yet:
During a December 2011 trip to Termez, the author could identify almost no increase in economic activity which could be attributed to the NDN. Compared to a trip 2 1/2 years previously, there were no new restaurants, hotels, filling stations, mechanical shops or any sort of commercial enterprise in the town that could have been linked to secondary economic activity arising from the NDN. On the road corridor itself, there was one recently built restaurant on the outskirts of Termez with three or four trucks parked outside.
On the road from Kyrgyzstan, through Tajikistan, to Afghanistan, drivers are paying so much in bribes to local officials that they have little left to spend in the licit local economy.
In a region as secretive as Central Asia, of course many questions about the NDN and the future of the New Silk Road remain unanswered. But Washington could help by requiring more transparency on the part of its contractors. “U.S. contractors on the NDN should adhere to strict disclosure requirements for the commercial payments they make,” Lee concludes. “Given the close links between government and business in Central Asia, NDN contractors should go further by disclosing payments both to states and commercial companies.”