Eurasian Infrastructural Corridors: Opportunities, Challenges and Practical Steps for Better Cooperation

The Central Asian countries, being landlocked, are facing the challenge of the cost of import and export that impede considerably their chances for successful international competition. The land transportation routes are vitally important for the countries of the region, especially for the smaller ones as they increase the transit capability and open the access to the markets of the neighboring states that are, in turn, interconnected with the larger markets beyond the region, namely India, Pakistan and Iran to the South as well as Russia to the North.

Trade and transport are inextricably interdependent. There have been considerable efforts made in Central Asia to develop the transport and energy infrastructure to increase the volume and change the structure of the foreign trade.

There is an extensive infrastructure network in Central Asia that is located at the crossroads of several international highways and railways. There are six corridors functioning within the Central Asia Regional Economic Cooperation (CAREC), with the total length of 80,000 kilometers, that contribute to the further development of the transport network of roads and railways. The other projects aimed at development of the transport corridors in Central Asia are the New Silk Road and Silk Road Economic Belt.

Historical Background

Kazakhstan, China, Kyrgyzstan, Russia, and Tajikistan held the summit on August 25, 1999 in Bishkek. The Heads of State supported the concept of the Silk Road Diplomacy proposed of President of Kyrgyzstan. The Silk Road Diplomacy was based on the following principles: shared past and present of the Great Silk Road; equal partnership, friendship, and cooperation of all countries of the Great Silk Road; interdependence; mutual benefit; long term perspective; multi-vector international cooperation.

I believe that these principles were incorporated in the Silk Road Economic Belt project articulated by President Xi Jinping of China in 2013. On March 28, 2015 the Vision of the joint Silk Road Economic Belt and the 21st Century Marine Silk Road was published setting the tasks to stimulate the efficient distribution of the resources and market integration by strengthening the communication and interaction between Asia, Europe and Africa. The document calls for coordination of policies, development of infrastructure, free trade, financial integration and human exchanges in order to use the unique resource advantages of the participating countries for the greatest mutual benefit through the multilateral and multilevel mechanisms.

One of the concrete tasks was the construction of the new Continental Bridge. The other most relevant projects for the countries of Central Asia are those of building the China-Mongolia-Russia and China-Central Asia-West Asia international corridors.

Practical Measures

International Legal Framework. The effectiveness of any economic cooperation depends on a strong legal framework. The exchange of experience in the lawmaking including that on economic crimes related to corruption and other irregularities is very important. Another area of cooperation could be in conducting the multilateral agreements regulating the movement of goods and capital.

Public-Private Partnership. States shall be responsible for taking the measures to create favorable business environment so that the government policies would be able to rely on the support of business community and civil society.

Security of Container Trains. The cargo transit through the territories of many countries is one of the key elements of the Silk Road Economic Belt promoted by China as well as in the project about the construction of the Russia-Kazakhstan- Kyrgyzstan-Tajikistan Railway proposed by Kyrgyzstan and the project of building the number of the hub-cities connected by the railway network with the center in Astana that is to be implemented in Kazakhstan. The efforts of the relevant services of Central Asian countries to maintain the security of the transportation corridors are supported by the specialized agencies and organizations such as the World Customs Organization (WCO). The Framework of Standards to Secure and Facilitate Global Trade (SAFE) is the key international instrument.

Passports and Other Travel Documents. The Silk Road Economic Belt and the Eurasian Economic Union as well as a number of other initiatives require a high mobility of people, namely businessmen, scientists and cultural workers, students, tourists, etc. In this regard, the cooperation in promotion of the safety standards by the International Civil Aviation Organiza-

tion (ICAO) is important. Several countries in Central Asia have already introduced biometric passports or are planning to do so in the nearest future. For example, biometric passports will be used in Kyrgyzstan from 2016. The other field

of cooperation may be the joint commitment of the states parties to their OSCE obligations to use the Interpol database ASF-SLTD to identify illegal use of travel documents.

Multilateral Structures. The Central Asian countries are cooperating with more than twenty UN agencies, international, regional, and subregional organizations as well as specialized agencies to support their economic activities, share experiences, and strengthen the contacts between the countries' leaders and international experts. This cooperation shall be extended further to the other partners that could provide the assistance in such fields as lawmaking and law enforcement as well as technology.

Logistics. Effective transport infrastructure is vitally important as well as the improved transport service. The other crucial tasks is the cost efficiency. The transportation within and through

Central Asia shall be less expensive.

The transport and transit potential of Central Asia shall be fully realized. The development of the transport facilities shall not lagg behind the economic growth. It is necessary to create a sustainable management system for the transport corridors. In this regard, the multilateral format of cooperation can make the greatest difference.

Challenges and Risks

Slowdown of the world economic growth is one of the major future risks facing the countries of Central Asia. The others are the discrepancies between the deficit of aggregate demand form the

one hand and the oversupply from the other as well as; rising cost of manufacturing enterprises; and lack of innovative capacity. All in all, there are certain contradictory relations between the development of economy, resources shortages and environment.

It is important to be aware of the fact that large-scale economy does not always mean strong economy: growth can be fast but not optimal. Extensive development when economic growth and its extent depend on the resources and other factors of production cannot be sustainable. The most developed countries and China, being well aware of such a global trend, are to undergo the transition from the model of development based on the factors of production and large-scale investments to the model that is based on innovation.

To make such a transition possible, it is necessary to increase the innovative capacities. The most urgent task is to eliminate institutional and systemic obstacles, to identify and exempt the potential of science and technology making them a new production engine.

As for Central Asia, one of the major obstacles to the development of trade is infrastructure. According to the World Bank Logistics Quality Index in 2014, Kazakhstan is ranked the 88th among the 160 countries, at the same time Tajikistan is on the 114th place, Uzbekistan is on the 129th, Turkmenistan and Kyrgyzstan are ranked 140th and 149th respectively.

Projects in Kyrgyzstan

Central Asia has a considerable transit transport potential and Kyrgyzstan is a transit site between Europe and China. The most important task for Kyrgyzstan is to fully realize its advantageous geographical position. A number of infrastructure projects are implemented in Kyrgyzstan. One of the most significant is the project of the Regional

Transport Corridor (RTC). It is about the construction of the overland multimodal regional transport corridor through Kyrgyzstan that will connect China, Uzbekistan, Tajikistan, Kazakhstan and Afghanistan. In other words, containerized cargo will be transported by rail from the seaports of China to the Kashgar railway station where it will be reloaded into the road containerships.

Regional transport corridor will have two branches: the Northern Branch will begin in Kashgar, cross Torugart, and terminate in Bishkek and the Southern Branch will connect Kashgar to Osh thorough Irkeshtam.

The Regional Transport Corridor has the following advantages: it will stimulate business activity in the Xinjiang Uighur Autonomous Region (XUAR) of China and the trade with other regions of China; it will reduce the distance and time of transportation; it will provide the access to the sea ports in China and Europe that will increase cargo transit between East and Central China, Europe and the Middle East.

There is a fairly steady flow of containerized cargo from South Korea, Japan, China, and the USA to Kyrgyzstan, the Fergana Valley of Uzbekistan, Tajikistan, Turkmenistan and Afghanistan. This route is crossing Dostyk-Alashankou and Khorgos-Altynkol in Kazakhstan as well as the Lokot station of the Trans-Siberian Railway of Russia. The Kashgar-Torugart-Naryn-Bishkek and Kashgar-Irkeshtam-Sary-Tash-Osh Highways are important parts of the RTC. These roads are functioning within the TRACECA, CAREC international transport corridors.

Currently, to reach Kyrgyzstan, the container cargo from South Korea, Japan, the USA, and the UAE is transported from the seaports of China by rail through Kazakhstan to Bishkek or through Kazakhstan, Uzbekistan, and Tajikistan to Osh.

President Xi Jinping said that China's development is beneficial for the entire world and, above all, for the neighboring countries. These words may be considered as the invitation to the Central Asian countries. In order to fully realize the Silk Road Economic Belt and gain the benefits of the mutual cooperation, these countries need to mobilize the activity of all parties, to learn how to use both the "visible" and "invisible" hands of market.

Year: 2015
City: Almaty