Kyrgyz rail link is threat and a
promise By Roman Muzalevsky
"It is not important for China as to who
will be building this railway line. The most
important thing is that it is built," China's
Ambassador to Kyrgyzstan, Wang Kaiwen, said
recently about the China-Kyrgyzstan-Uzbekistan
railway project, which Bishkek and Beijing seek to
implement despite financial and technical issues.
In Kyrgyzstan, the project raises both
fears of China's expansion and hopes that the
land-locked republic would finally have a shot at
integrating into the global economy. In China, the
railway is viewed as a tool to promote
cross-continental trade, develop its northwest
region and ensure access to economic opportunities
in broader Central Asia.
If successful,
the scheme would lead to major geopolitical
ramifications, making
regional actors, including Moscow, uneasy as China
goes west across Eurasia.
On April 17,
Chinese construction company China Road and Bridge
Corporation agreed to perform a feasibility study
for the project within a year. If built, the
railway line would go from Kashgar in Xinjiang,
through Torugart and Kara-Suu in Kyrgyzstan, to
Andijan in Uzbekistan, then across Afghanistan,
Iran and Turkey as far as Europe.
The
Kyrgyzstan section of the line would cover 268.4
kilometers. China's section would span 165
kilometers. The cargo transit capacity of the line
is expected to be approximately 15,000 tonnes.
The railway is expected to help Kyrgyzstan
enhance its position as a transit state in the
land-locked region, connect to the Pacific Ocean,
and link its economy to that of the outside world.
For China, it is projected to complement
the overloaded Trans-Siberian and Alashankou
corridors, to accommodate its expanding trade
across Eurasia, stimulate development of western
provinces and pave the way for further economic
inroads into the resource-rich Central Asian
region.
The sides are negotiating the
width of tracks and forms of financing. China
prefers 1,435-millimeter-wide tracks, which are
used in Iran and Turkey, because this would allow
direct transit and save on delivery times.
Kyrgyzstan, however, uses 1,520-mm tracks that it
inherited from the former Soviet Union. A railway
with Chinese-type tracks traversing Kyrgyzstan,
which hosts a Russian military base, is seen as a
geopolitical blow to Moscow.
The
construction of the
Turkmenistan-Uzbekistan-Kazakhstan-China gas
pipeline in 2009 has already eased Russia's grip
on Central Asia. As a Russian media report put it,
"Changes in the transport routes will lead to a
realignment of economic links, which will then
lead to geopolitical changes".
The talks
on the railway scheme come amid tense relations
between Russia and Kyrgyzstan. During his visit to
Moscow in February, Kyrgyz President Almazbek
Atambaev pressed Russian authorities to pay the
overdue lease fees for its military base in
Kyrgyzstan, pointing to delayed joint projects and
China as an available provider of loans and a
willing investor in the
China-Kyrgyzstan-Uzbekistan railway.
The
former Kyrgyz president Kurmanbek Bakiev also saw
strained ties with Moscow and, during his tenure,
looked to Beijing for assistance after failing to
receive loans that Russia promised in return for
an alleged deal to evict the United States from
its base at Manas.
There are, however,
unresolved financial and potential environmental
issues facing the project. In May, Kyrgyzstan
rejected the "Resources for Investments" scheme
whereby China would get access to a number of
mineral deposits in Kyrgyzstan in exchange for a
government loan to build the rail line estimated
at US$2 billion, the equivalent of approximately
74% of Kyrgyzstan's GDP, based on the official
exchange rate.
Besides being costly,
critics fear that such a scheme would lead to an
"ecological catastrophe" because areas around the
deposits contain approximately 40% of all fresh
water in Kyrgyzstan. Ambassador Wang purportedly
said that China would respect the decision. "We do
not have a right to insist. This will then be a
purely commercial project based on market
principles". The sides are considering whether to
use a concession for a Chinese company to run the
railway for a number of years or to create a joint
enterprise in order to finance the project.
China's regional economic expansion and
nascent but rising nationalism in Kyrgyzstan
explain the reluctance of Kyrgyzstani authorities
to proceed with the "Resources for Investments"
scheme.
Some in Kyrgyzstan fear that the
giant China will devour the tiny Kyrgyzstan,
turning it into a Chinatown - a resource base for
Chinese labor migrants. Han Chinese are already
migrating to Xinjiang in big numbers, creating
conditions for a "surplus workforce", while
Uyghurs could yet flee Xinjiang to Central Asia as
refugees in case of a major government crackdown.
Moreover, approximately 90,000 Chinese nationals
are reportedly staying illegally in Kyrgyzstan
already.
But with threats, come the
opportunities. "We should not fear China's
expansion and fence [it] out," Kyrgyz President
Atambaev said, commenting on the project. "We
should use to our advantage the fact that China is
our neighbor. Even if we do not build the railway,
they [the Chinese] will still come to us".
Ambassador Wang emphasized that as party
to the World Trade Organization and TO and the
Shanghai Cooperation Organization, China would
like to do more to promote economic cooperation in
fields like infrastructure, energy and railway
transport. For China, doing so would speed up the
development of its northwest regions, helping it
turn Xinjiang into a financial and economic center
in the broader region. For Kyrgyzstan, this would
translate into infrastructure development and
investment needed to upgrade its fledgling economy
following recent political upheavals.
There are more than 100 Chinese businesses
in Kyrgyzstan. Many are traders in the largest
Central Asian markets, on which Kyrgyzstan has
relied to re-export approximately 75% of its
imported Chinese goods to Russia, Central Asia and
beyond. This has created jobs for hundreds of
thousands and boosted state revenues.
In
2011, trade between China and Kyrgyzstan stood at
$5 billion; by 2010, trade between China and
Central Asia equaled $23.77 billion.
Unfortunately for Kyrgyzstan, the global
financial crisis, political instability, and the
launch of the Customs Union (CU) comprising
Russia, Kazakhstan and Belarus have reportedly
killed a good chunk of the "Silk Road" trade
coming out of China through Kyrgyzstan.
Russia views the CU as a way to offset
Chinese economic expansion and as a step toward
the creation of the Eurasian Union, encouraging
Kyrgyzstan and Tajikistan to join it. But neither
Kyrgyzstan nor Tajikistan rushes to do that. Some
studies, including by the Asian Development Bank,
say that joining the CU would increase the price
and decrease the amount of goods re-exported from
China through Kyrgyzstan to Russia and Kazakhstan.
The reduction in exports would affect hundreds of
thousands of people engaged in trade.
The
China-Kyrgyzstan-Uzbekistan railway is viewed as a
way to help Kyrgyzstan balance Russia's regional
plans. But another railway may help Bishkek do the
same regarding China as well. Experts in Russia
propose building an Indo-Siberian railway network
to promote Russia's own development and to counter
China's economic influence. The line would connect
the Urals, Siberia, Kazakhstan, Kyrgyzstan,
Tajikistan, Afghanistan and India.
In this
scenario, Kyrgyzstan would need to build a railway
linking the more urbanized and industrialized
north in the Chuy Valley with the more rural and
agricultural south in the Fergana Valley. The
violence between Uzbeks and Kyrgyz in the southern
city of Osh in 2010 stressed the need for economic
integration initiatives to bridge the gap between
the relatively poor south and well-off north. Both
the North-South and East-West transport
initiatives could help Kyrgyzstan integrate from
within and without.
As a Central Asian,
land-locked, and formerly-Soviet country
neighboring China, Kyrgyzstan has no choice but to
look to all directions. Kyrgyzstan's government
believes that cooperation with China and the
China-Kyrgyzstan-Uzbekistan railway offer just
that opportunity, even if both could displease
Moscow or domestic critics who fear Beijing's
economic expansion across Eurasia.
Roman Muzalevsky is an
international affairs and security analyst. He can
be reached at muzalevsky@hotmail.com.
(This article first appeared in Jamestown.Org.
Used with permission.)
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
