For three decades, Central Asia has had a front-row seat for the rise and fall of empires. In 1991 the former Soviet republics in the region seceded one by one from the USSR, creating a bulwark of newly independent states and sealing the end of the Cold War. Then, after 2001, Central Asia became an arena for the U.S. war on terror, witnessing firsthand the limits of U.S. power in the ultimately failed occupation of Afghanistan.
Today, on the 30th anniversary of their independence, the five "stans" of the region: Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, and Turkmenistan, are the first to contend with a new era of anarchic geopolitical competition that has replaced the old era of unchecked U.S. hyperpower. Since the 19th century and the "Great Game" of dominance between Russia and Britain, the region has witnessed the seesawing fortunes of one hegemon after another.
To the south lies a vacuum left by the U.S. departure from Kabul, Afghanistan, in August and the arrival in power of Central Asia's new neighbor, the Taliban. The region today is also a global weather vane for the rise of Chinese influence, and a resurgent and increasingly imperial-minded Russia.
Few places feel all these changes more than the secluded, mountainous capital city of Dushanbe, Tajikistan. Many members of Afghanistan's U.S.-backed government fled here after the fall of Kabul. But by far the biggest change is the Chinese construction projects that have reshaped the skyline, and the rumblings of construction machines were heard everywhere this summer.
In a series of interviews that I conducted throughout Central Asia on the eve of the 30th anniversary of independence, the inroads made by China were perhaps the most surprising revelation of all. Chinese construction companies and banks have become a key source of economic largesse, and according to some, a troubling new source of dependence for the economies of the isolated region.
Dushanbe's skyline tells the story: A new building for the national assembly is being built in a great rush. A sign at the entrance gate reads "China Aid" in red letters. The construction of the new parliament and government complex, the budget for which is estimated to surpass $300 million, is financed by grants from the Chinese government and is being built by China's Yanjian Group.
China is pouring money into a range of infrastructure projects and other kinds of investments in Tajikistan, including road construction, mineral resource development and housing. "This is cooperation that never causes loss," are words plastered on billboards in Dushanbe, written in both Chinese and Russian, advertising the Belt and Road Initiative.
Following the collapse of the Soviet Union, the nations of Turkmenistan, Kyrgyzstan, Tajikistan, and Uzbekistan declared independence one after the other, starting in August 1991. Kazakhstan was the last to announce sovereignty, in December that year, a week after the Soviet Union had been disbanded.
But they struggled to remodel their centrally planned economies, in which the governments dictated production levels and prices, into market-driven systems, suffering sharp declines in gross domestic product in the 1990s. Terrorist attacks by extremists broke out across the region, and Tajikistan lived through a fierce civil war.
The loss of economic ties among the members of the Soviet Union also delivered a blow to the former Soviet republics in the region as they became isolated land areas without ports -- a big trade disadvantage.
Today, most major companies in the mountainous nation of Tajikistan are operational only because of assistance from China, according to Farrukh Salimov, a Tajik diplomacy and politics expert. China now accounts for around 70% of domestic investment in the country, he told Nikkei Asia.
But as the deluge of Chinese money gathers speed, it is also making Tajiks uneasy. Gulru, a second-year student at a foreign language university, said she welcomed investment from China because it could help the underdeveloped Tajik economy but worried about Beijing's interference in the country's internal affairs.
China's geopolitical ambitions, supported by its bulging financial muscle, are also reshaping Samarkand, an ancient, fabled city in east-central Uzbekistan that lies deep in the Central Asian steppe. Once a major stop for traders traveling on the Silk Road, a network of ancient trade routes and a key link between the East and the West in the time of Marco Polo, Samarkand later became the capital of the empire of Timur, who made the city a key economic and cultural hub in Central Asia. With the help of a constant inflow of Chinese funds, the city, with an air of almost mystic exoticism, is morphing into a modern and international tourist attraction.
Mumin Kadyrov, a project manager for the Samarkand municipal tourist center's large-scale development project, pointed to one building under construction in a 212-hectare tourism complex. It is slated to be the tallest and most high-end hotel in the complex, he said. The 22-story structure will be operated by a Chinese hotel chain.
When completed at the end of 2021, the massive complex will have eight luxury hotels, a large international conference hall, an open-air theater and waterways, among other facilities. One of the leading providers of loans to finance the project, estimated to cost more than $300 million, is Silk Road Fund, a state-owned investment fund of the Chinese government.
Per capita GDP in these countries only recovered after 2000, to match the levels before the collapse of the Soviet Union, according to the World Bank. Emerging from more than a decade of economic despair, the Central Asian nations extended their transport network in all directions to drive economic growth. A major turning point came in September 2013, when Chinese President Xi Jinping delivered a speech in Kazakhstan.
Xi called for cooperation with China to build an "economic belt along the Silk Road." The New Silk Road has since been renamed the Belt and Road Initiative, a broad strategy aimed at integrating China with the rest of the Eurasian landmass through trade and infrastructure deals.
The Belt and Road Initiative was to be at the heart of Xi's Major Country Diplomacy strategy, meant to establish China as a great leader in global affairs, in line with the country's growing power and status. Through the project, China's government aims to invest in almost 70 countries and international organizations across Asia and the Middle East.
Central Asia can be a key player in this ambitious economic growth plan, with its advantageous location on the land route that can facilitate the arrival of Chinese goods in Europe and the Middle East. Xi's initiative takes advantage of Central Asia's thirst for funds to rev up its economic development, while also promoting the grand strategic vision of a new Silk Road economic sphere powered by China.
Beijing set out on this quest by first devoting a great deal of financial and technological resources to building railway lines, roads and other infrastructure. China's net investment in Central Asia, defined as spending on capital assets minus the cost of the depreciation of the assets, began surging in 2012, according to data from the Chinese government. China invested about $7.2 billion in the region between 2012 and 2019, with an average annual spending of $900 million, nearly half of Kyrgyzstan's national budget. China also provided various forms of credit, proliferating debt levels across the region.
One tangible effect has been the rapid growth of a transit ecosystem. Altynkol Railway Station, located in southeastern Kazakhstan, near the border with China, has emerged as a key terminal on a major railway line linking China with Europe. The Chinese standard gauge is different from the former Soviet Union's broad gauge, which means a break-of-gauge is required at this station. Three container transshipment terminals have been established at the station, along with customs.
When I visited one of the terminals during the summer of 2021, long lines of freight cars carrying containers were entering the facility in rapid succession. Large cranes were used to transship the containers coming from China to cars on the Kazakh side. "China has spent huge amounts on transportation and other types of infrastructure, which has produced solid results," said Yerlan Dikhanbayev, director of Eurotransit, the operator of the terminal.
From the top of a 27-meter-high crane, Horgos, a Chinese city straddling the border with Kazakhstan in the Xinjiang Uyghur Autonomous Region, could clearly be seen. An international free trade zone opened on the border at the end of 2011 as a Belt and Road showpiece. Dozens of new high-rise buildings in the city were visible, some 10 km away, a sign of vigorous housing development. On the Kazakh side, herds of sheep and cattle grazed on a vast stretch of steppe sparsely dotted with houses.
Shipping accounts for over 90% of transportation of goods between Europe and China, according to the United Transport and Logistics Company - Eurasian Rail Alliance (UTLC ERA). But rising shipping fees and the maritime accident in March in which a giant cargo ship blocked the crucial Suez Canal have created some tail winds for railway transportation across Eurasia.
Also, rail freight transport is significantly faster than shipping. Two main rail lines link China and Europe -- the northern route travels via Mongolia and Russia, and the southern route passes through Kazakhstan and Russia. The number of freight containers that were carried on the southern rail line increased more than fivefold in the five years through 2020. While limited cargo handling capacity and China's COVID-19 restrictions have caused a logjam at the border, the volume of container transport grew by 50% in the first half of 2021 from the same period last year, according to the Eurasian Rail Alliance Index (ERAI).
However, for landlocked Kazakhstan, the increase in freight traffic to and from China has only done so much to solve the country's isolation problem. Kazakhstan extends from the Caspian Sea in the west to the Altai Mountains in the east, with the shortest route to the coast stretching for more than 2,000 km, from the south of the country to a port in Pakistan facing the Arabian Sea. But this road also passes through war-torn Afghanistan.
The turbulent conditions in Afghanistan have not stopped Uzbekistan from laying the groundwork for a southward route toward the ports in Pakistan, with a view to future Afghan stability. In 2016, Uzbekistan built a cargo center terminal in Termez, a city on the border with Afghanistan. The terminal is linked to northern Afghanistan with a railway and road. A free economic zone and a special trade zone are in the works.
Five years later, on the cusp of the 30th anniversary of its independence on Sept. 1, Uzbekistan found itself facing a new security crisis as U.S. forces began to pull out of Afghanistan.
Since then, the Taliban have seized power, replacing the government of former President Ashraf Ghani. Amid growing concerns about an influx of refugees and extremists from Afghanistan, many Uzbeks hope their neighbor will soon regain stability. Ideology aside, Uzbekistan harbors pragmatic hopes that its plans for trans-Afghanistan trade routes will not be dented too badly by the new regime. The country recognizes that a healthy relationship with the Taliban will be vital to ensure the success of future infrastructure plans but is also wary of the risk that the group poses to the Afghan people, which many Uzbeks regard as brothers.
Termez Cargo Center, which covers nearly 50 hectares, boasts a huge open container area and provides a full range of customs services. In five days, cargo trucks can travel from the terminal, via Afghanistan, to a port in Pakistan facing the Arabian Sea.
Despite news reports of soldiers and military aircraft fleeing Afghanistan into Uzbekistan, it was quiet at the border crossing. An Afghanistan-Uzbekistan Friendship Bridge, a road and rail bridge across the nearby Amu Darya river, connects Termez with the town of Hairatan in northern Afghanistan, whose white houses and low buildings standing on dry terrain were faintly visible from the Termez side of the border.
Transport companies are cautiously optimistic that the new Taliban regime will remain open to international trade and maintain stability. Even before the fall of the U.S.-backed government, truckers said transiting Taliban-held areas was safe.
In fact, passage procedures for cargo trucks in Taliban-controlled areas have been simpler than in areas under the jurisdiction of the Ghani administration, according to Nodirbek Djalilov, director of Termez Cargo Center.
Cargo traffic with Afghanistan will recover quickly and could grow to higher levels than ever before, said Djalilov. Annual volumes of cargo traffic with Afghanistan, which were around 400,000 tons, have plunged by some 70% due to a decline in security. In addition, sanctions are creating havoc in the Afghan economy. But he predicts traffic will rebound once the security situation stabilizes under Taliban rule.
"Imports of agricultural products such as potatoes are increasing. Now it is the season for the crop. And humanitarian assistance is growing. But exports to Afghanistan are not increasing so much, because bank accounts of Afghan importers are frozen" due to sanctions, he said.
Critics fear that the high-interest loans funding many Chinese projects across the world are saddling unsuspecting populations in sky-high debt.
Over an 18-year period, China has granted or lent money to 13,427 infrastructure projects worth $843 billion across 165 countries, according to the AidData research lab at U.S. university William & Mary.
Much of this money is linked to Xi's ambitious Belt and Road strategy.
At the end of May, loans from China accounted for 43% of the government's foreign debt in Kyrgyzstan and around 40% in Tajikistan. Kazakhstan can manage the diplomatic and economic pressure from such major powers as China, Russia and big Western industrial nations, thanks to its handsome income from oil exports. But this is far harder for Kyrgyzstan, Tajikistan and Turkmenistan, an estimated 80% of whose exports are bound for China.
Rampant corruption and swelling debt obligations to China are fueling anti-China sentiment among the people in these young countries, undermining the power bases of their governments.
Timur, a corporate employee in Bishkek, the capital of Kyrgyzstan, is bracing for another harsh winter with a pall of dark and filthy smog hanging over the city. Since the overhaul of a heat and power plant in the city was completed in 2017, people in Bishkek have seen a steady decline in winter air quality that raises health concerns. In addition to generating electricity, Bishkek Thermal Power Station also pumps heated water into homes. It is suspected that the switch of fuel to low-quality coal, because of the overhaul, is one of the factors behind the worsening air pollution.
The $386 million renovation was funded through a low-interest loan from the Export-Import Bank of China, while the actual work was conducted by TBEA, a Chinese company that is primarily engaged in the manufacture and distribution of electric power transmission and transformation equipment.
A 2018 accident at the plant devolved into a bribery scandal in which several senior executives at the state-run operator were arrested. The revelations about the rot at the plant provoked a major backlash and constituted one of the factors behind a power transition following parliamentary elections in October 2020. The election results were contested by opposition parties claiming irregularities and triggered a wave of protests among citizens. The president resigned and was replaced by an opposition leader.
Nargiza Muratalieva, editor of CABAR.asia Analytical Reports, says anti-China feelings are rising. Local residents have become sensitive to the issues of corruption and pollution, she says.
In Tajikistan, China's big money is supporting President Emomali Rahmon's tight control of the nation's economy through his authoritarian regime.
In Kazakhstan's capital Nur-Sultan, seven former senior municipal government officials were convicted of massive embezzlement fraud related to a costly China-led light rail project. Kazakhstan signed deals with several Chinese companies and the state-owned China Development Bank in 2015 to finance and carry out the project, but it has since been put on ice, and the incomplete bridge piers have been lampooned by locals as "monuments of corruption."
Dosym Satpayev, director of the Kazakhstan Risks Assessment Group, said Chinese businesses tend to adapt to corruption. Chances are that anti-China sentiment could flare up also in Kazakhstan, he warned.
The westward expansion of China's economic sphere has rolled back Russia's presence in the region. Moscow has tried to stem the trend by creating the Eurasian Economic Union (EAEU) with countries in Eastern Europe and Central Asia, including Kazakhstan and Kyrgyzstan. The collapse of the Soviet Union created a geopolitical vacuum in Central Asia with no major power wielding dominant influence in the region. The geopolitical earthquake has triggered competition for regional hegemony among many countries including major Western powers and Turkey as well as China and Russia.
But this competition is not straining the relationship between Moscow and Beijing. Vasily Kashin, a political analyst, says China will be careful to avoid interfering in the crucial interests of Russia on both the security and economic fronts. For example, he predicts China will not build a military base in Central Asia or ask EAEU members to withdraw from the group without obtaining Russia's nod. He also predicts that the Xi administration will not cross the red line for Russia.
Due to their confrontations with Washington, Beijing and Moscow are partners bound by shared strategic interests. In an EAEU summit in May, Russian President Vladimir Putin stressed he will promote efforts to link the Belt and Road Initiative with the EAEU integration process.
Russia has no means to contain the expansion of China's already gargantuan economy. The Kremlin's strategy is apparently focused on strengthening cooperation with China to undermine Western clout in the region by harmonizing the interests of the two countries through such groupings as the Shanghai Cooperation Organization (SCO), founded by China, Russia and Central Asian countries.
Amid the power balance between China and Russia, the stability of internal politics in the five Central Asian nations is being threatened by rapid growth of Beijing's influence in the region. Yet, those nations remain eager to take advantage of China's economic and political clout to promote their infrastructure projects and better deal with the new developments in Afghanistan.
Uzbek President Shavkat Mirziyoyev has proposed a new railway line linking western China with a port in Pakistan via Kyrgyzstan, Termez and Afghanistan. He promoted the idea at an international conference on economic integration of Central and South Asia held in July in Tashkent, the capital of Uzbekistan.
"It fully corresponds to the goals of the One Belt, One Road initiative," he told the attendees, including Wang Yi, China's state councilor and foreign minister.
The new Silk Road also serves as an important channel for trade in resources and energy. Three pipelines bring natural gas from Turkmenistan to China, and a fourth running through Uzbekistan, Tajikistan and Kyrgyzstan is being built.
Turkmenistan has become the largest gas supplier for China, announcing in June it had paid off $8 billion of loans from Beijing.
For the next decade, the Central Asian countries will have to walk a fine line, protecting themselves from the repercussions of China's Belt and Road Initiative while taking advantage of its alluring benefits.
By by Yohei Ishikawa on October 20 2021 for Nikkei (Japan).