The Central Asian Republics & CPEC – Formation of a New Economic Block

As a landlocked but resource rich region, 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.

China has been a key drive of infra-structure investment and construction in Central Asia since the mid-1990s. Chinese state-owned companies have built highways, railways, bridges, and telecommunication systems in Tajikistan, Kyrgyzstan, and Uzbekistan. China’s economic strategy in South and Central Asia is based on the assumption that building up economic prosperity in the region will help alleviate the threat posed by local radical Islamist groups. CPEC would be a natural extension of that strategy. Also, by connecting Central Asian countries with CPEC, China intends to cultivate new markets with significant growth potential in the region and evolve goodwill with neighboring countries.

In this context, several Central Asian countries have welcomed the implementation of the CPEC project. Turkmenistan’s President, Gurbanguly Berdimuhamedov’ discussed CPEC with Pakistan former PM Nawaz Sharif in March 2016, emphasizing the role of the project in promoting progress and prosperity. Berdimuhamedov’s enthusiasm should not come as a surprise, as his country is 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. However, there is currently a lack of significant connections, whether roads or railways, between Dushanbe and Islamabad. Ultimately, Tajikistan may provide a road linking Pakistan with other Central Asian countries through Murghab province in Tajikistan. But that will require the construction of a new highway, due to the latter’s mountainous location.In 2015, Tajik President Emomali Rahmon and Nawaz Sharif approved three new highway projects linking their countries and connected to the broader CPEC framework.

Deputy Prime Minister of Uzbekistan Ulugbek Rozukulov expressed a similarly supportive stance during his official visit to Islamabad in December 2016. 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. In 2015, the then Prime Minister, Karim Massimov highlighted the importance of the CPEC project for Kazakhstan and the Central Asian region. Massimov assured former Prime Minister Nawaz Sharif that 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 upsigning 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 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.

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 One Belt One Road project 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.

Additionally, in December 2016, Pakistan became part of the historic Lapis Lazuli corridor which runs through Afghanistan, Turkmenistan, Azerbaijan and Georgia to the Black Sea and Turkey until it leads straight to the Mediterranean Sea and Europe. Two centuries ago, blue lapis lazuli stone was exported from Afghanistan to Europe via the old route, similarly the modern Lapis Lazuli Corridor would encompass a large part of the CAREC Transport Corridor network which connects the Central Asian republics to each other.

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.

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 so it was encouraged to join the Ashgabat Agreement in November 2016. It is an arrangement whereby an international transport and transit corridor is created as a result which facilitates multi-modal transport of goods between Oman, Iran, Turkmenistan, Uzbekistan and Kazakhstan.Pakistani officials in the Pakistan-Afghanistan-Central Asian Republic States Trade Summit (PACTS) in Islamabad in December, 2016, opined that “There is a huge trade potential in Afghanistan and five Central Asian states, namely Kazakhstan, Kyrgyzstan, Turkmenistan, Tajikistan and Uzbekistan, with combined gross domestic product (GDP) of $ 445 billion and population of 66 million, offer a sizeable market for Pakistani goods, services and investment.”

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 critically important for Eurasia in its own inimitable manner, according to David Denoon, Professor of Politics and Economics at New York University, “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.

Central Asia is naturally dependent on both Russia and China due to its geography so its inclusion in these forums is to be expected. Farkhod Tolipov, Director at Education and Research Institution “Knowledge Caravan”,writes in his article ‘One Belt, One Road and many Countries’,“Central Asian countries desperately needed to break their newly land-locked status. Forming a trade path from East to West was part of their unique selling point. However, such a position is not merely their geographical destiny. It is also a geopolitical condition due to the fact that unlocking the region depends largely on neighbouring great powers – namely China and Russia. But interestingly, the opening and unlocking of Central Asia appears to be a more complicated and protracted process than expected, in which the ‘Modern Silk Road’ needs to balance multiple national interests.”

While highlighting the significance of Pakistan in the CPEC connectivity initiative, Andrew Korybko writes in his article, ‘Pakistan is the Zipper of Pan-Eurasian Integration’,“Far from being a lost cause, 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.

While talking about the significance of sea routes, US Admiral Alfred Thayer Mahan stated in his book ‘The Influence of Sea Power Upon History’ that nations with domination of the seas would dominate the world.’The control of the seas’ is of immense importance for leading the world and OBOR is a combination of land power and maritime power, it is significant that it extends China’s sea power by linking key Eurasian ports with rails, roads and pipelines in a way never seen before. It opens up the landlocked Chinese hinterland and Central Asian republics and connects them to sea ports, the land area of Eurasia links to enlarged deep-water ports of the OBOR Maritime Silk Road.

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

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About Erum Akbar 17 Articles
The author is Executive Editor of Mélange int’l Magazine and Secretary Information at Center of Pakistan and International Relations (COPAIR).