$18 Billion Plan to Build New "Silk Roads" through Central Asia

DUSHANBE, TAJIKISTAN - Eight countries on Saturday agreed to an $18 billion strategy to improve Central Asia’s network of roads, airports, railway lines and seaports to make the region a vital transit route for trade between Europe and Asia – a modern-day equivalent of the ancient Silk Road.

The plan was agreed at a meeting in Dushanbe, Tajikistan attended by Ministers from Afghanistan, Azerbaijan, People’s Republic of China, Kazakhstan, Kyrgyz Republic, Mongolia, Tajikistan and Uzbekistan, and supported by ADB and five other multilateral institutions.

“Central Asia is becoming a pivotal region in Eurasia, a vital land-bridge linking Europe, Russian Federation, People's Republic of China, South Asia, and the Middle East,” the Ministers said in a joint declaration at the end of the 6th Ministerial Conference of the Central Asia Regional Economic Cooperation (CAREC) Program.

“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 statement said.

Even though Central Asia lies at the center of the Eurasian continent, less than 1% of all trade between Europe and Asia currently goes through the region. Inadequate transport infrastructure and cumbersome border processes have resulted in nearly all trade going by sea.

The plan calls for $18 billion investment over the next decade in six new transport corridors, mainly roads and rail links. About half of the funds are likely to come from multilateral organizations like ADB, while the rest will come from the countries themselves.

“This is a large and ambitious strategy. It encompasses dozens of projects and will require more than $18 billion in investments over the next decade,” ADB President Haruhiko Kuroda said in a speech at the conference.

“I am confident that with the unwavering involvement of each country and each institution participating in the CAREC Program here today, the active implementation of this strategy has the potential to transform the region's economic prospects and the lives of its people. “

The plan also calls for the improvement of border crossings to speed trade flows. Customs and immigration procedures are currently bottlenecks for trade in the region.

Historically, Central Asia was braided by multiple routes linking east and west, known as the Silk Road and dating back more than 2,000 years. It was an important economic artery that stretched more than 10,000 kilometers (6,000 miles), from the Mediterranean to China's Yellow River Valley.

The proposed new transport corridors do not follow the exact routes taken by the Silk Road and will not only be orientated east-west, but also north-south, connecting the Central Asian Republics, Russia and China with South Asia and the Gulf.

Titled the Transport and Trade Facilitation Strategy, the plan was proposed by the CAREC Program, which is an ADB-supported initiative to encourage economic cooperation in Central Asia and was established in 1997.

"Creation of safe and reliable transport corridors, together with measures on simplified trade relations as indicated in the CAREC Transport and Trade Facilitation Strategy, will provide an opportunity to improve the general investment climate and to increase the rate of economic development of the region,” Tajik President Emomali Rakhmon said in his speech at the conference.

At the meeting in Dushanbe, the Ministers also agreed to a shared vision for their region for the next decade. It included the aspiration that by 2018 all countries will be members of the World Trade Organization.

“Our shared objectives are to significantly increase official trade among CAREC countries as well as with non-CAREC countries and to facilitate and improve the quality of transit trade so as to better integrate with global markets and foreign investors,” the statement says.

“We remain unanimous in our view that regional cooperation is vital to achieving rapid, sustainable economic growth, and to accelerating our progress in reducing poverty and generating greater prosperity for all of our people.”

The vision also says that by 2018, governments aim to “fulfill Central Asia’s potential as an energy hub” to ensure no community is without reliable and affordable electricity.

“We envision greatly increased cooperation among CAREC countries, drawing on the vast petroleum, natural gas, coal, hydropower, and other energy resources of the region,” it says.

It says that by 2018, CAREC countries will be cooperating extensively to deal with regional challenges, such as environmental problems, communicable diseases like bird flu or HIV/AIDS, and disaster management and preparedness.

The eight countries attending the Dushanbe conference were joined by senior representatives of an alliance of multilateral institutions that also participate in CAREC, namely, the European Bank for Reconstruction and Development, International Monetary Fund, Islamic Development Bank, United Nations Development Programme, and World Bank - in addition to ADB.

Ministers at the meeting also endorsed a plan to establish the CAREC Institute, which is intended to act as a focal point for policy discussion to further the process of regional cooperation and integration in Central Asia. It will also help CAREC government officials better engage in regional cooperation processes and to plan and implement regional cooperation projects.