Not a silky road
11 June 2012
Can economic incentives trump geo-political rivalries and revive the Great Silk Road?
Mention of a new Silk Road project evokes images of a smooth trade route relatively free of geo-political or economic encumbrances, as it was during the Great Silk Road era (200 BC – 1500 AD) when it covered 7000 km and connected Europe with Western Asia and China, before its importance was greatly reduced with the introduction of new sea routes.
The revival of the Great Silk Road was first mooted by the European Commission (EC) in 1991 after the disintegration of the former Soviet Union when the Central Asian countries – Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan – became independent nations. The EC’s Silk Road proposed to connect Europe with Central Asia through the International Transport Corridor Europe-Caucasus-Asia (TRACECA). The project was announced in Brussels, Belgium in 1993, and was followed by an international conference on ‘Restoration of the Historic Silk Route’ five years later in Baku, Azerbaijan.
Talk of ‘restoring’ the earlier Silk Road, however, is misleading, as multiple visions for the Road are emerging in response to ever-changing geo-politics. In 1999, for instance, the US introduced the ‘Silk Road Strategy Act’, which aimed to secure long-term US interests in Central Asia and the South Caucasus by strengthening energy security and keeping Russia at bay. Emphasising the need for political and economic independence for the Central Asian countries, the Act aimed to promote regional stability through conflict resolution, economic assistance and infrastructure development, and by developing defence capabilities, securing borders and controlling proliferation of weapons of mass destruction.
Seven years later, the Act was updated to the ‘Silk Road Strategy Act of 2006’, reflecting the economic, political and security changes in the region, particularly post- 9/11. The revised Act sought to integrate Afghanistan into Central Asia by making the country one of the focal points of the project and thereby moving it towards further economic liberalisation.
One Road, two ways
With most NATO troops are likely to leave Afghanistan by the end of 2014, the US has been pushing its version of the Silk Road as a means of stabilising Afghanistan, and has therefore been seeking the support of geo-strategically important countries such as India.
In July last year, US Secretary of State Hillary Clinton spoke about the need to connect Central Asia with Southasia and visited both regions to promote the Silk Road project. Her visit was followed by a ministerial-level meeting in New York on the sidelines of the UN General Assembly in September 2011, where the project received support from Pakistan, India, Afghanistan and the Central Asian countries. Both Pakistan and India see the revived Silk Road as a means of stabilising Southasia – not just Afghanistan – and harnessing its immense economic potential. The project was also discussed during the course of the Bonn and Istanbul conferences on Afghanistan last year.
A realistic appraisal of the regional response to Washington’s project so far shows some developments in its favour. For instance, in late-May India and Pakistan signed the Gas Sales and Purchase Agreement (GSPA) with Turkmenistan for the US-backed Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline. Although the TAPI pipeline has much to do with energy security in the four nations concerned, it also represents unprecedented regional cooperation of its kind, opening a gateway to the New Silk Road.
The increasing trade and economic engagements between India and Pakistan is equally indicative of positive prospects for the US’s Silk Road. Pakistan recently agreed to grant the Most Favoured Nation (MFN) status to India by gradually reducing the negative trade list, which bans the import of certain goods and commodities from India. That list is likely to be phased out entirely by the end of this year. The month of April witnessed the inauguration of the Integrated Check Point at the Attari-Wagah border between the two Punjabs. India has offered to build a pipeline through this border to supply Pakistan with 50 million tonnes of petroleum products each year. With plans to open up new border points such as Rajasthan-Sind and to liberalise the visa regime – especially for the business communities of both countries – cross-border trade is likely to increase. Currently, the two Southasian nations are working to set up a joint business council to enhance their economic relationship and achieve the bilateral trade target of USD10 billion by 2015.
The Chinese version of the Silk Road, on the other hand, seeks to connect South and Central Asia to Europe through waterways, railways and highways – a blueprint based on the concept of the Eurasian Land Bridge, a transcontinental railway linking Russia and China with Europe via Kazakhstan. Accordingly, in September 2000 Iran, Russia and India signed the International North-South Transport Corridor agreement at St Petersburg. That network is still evolving.
The American and Chinese visions of the New Silk Road differ significantly in the countries they include or exclude, with each side carefully weighing its short- and long-term geopolitical objectives. For instance, the US has always excluded Iran from its plans as part of its economic sanctions against the state, while simultaneously promoting Afghan participation and cooperation in Central Asia.
China, which is not included in the US’s Silk Road strategy, initially had reservations about including Afghanistan, largely due to concerns over its stability and security, but is now looking for ways to stabilise and cooperate with the country. In late-May, Beijing even hosted an international conference on Afghanistan and its future. And on 6 June, during its annual summit in Beijing, the Shanghai Cooperation Organisation (SCO) – an intergovernmental organisation comprising Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan – accepted Afghanistan as an observer state. India, Pakistan, Mongolia and Iran are observer states in the SCO.
The Chinese Silk Road also enjoys support from Russia, and China has no qualms about giving Russia an important role in the project. Hence, developments at the SCO summit are of importance to South and Central Asia, as the SCO seems to be drawing the framework for the Chinese version of the New Silk Road.
New Great Game
While the concept of the New Silk Road – in whatever configuration – is a laudable one, the biggest problem is that there is yet no clarity on the contours of the project. The inclusion and exclusion of certain countries also fails to guarantee a long-lasting relationships and cooperation among the countries of the regions in question.
Moreover, in the case of the American Silk Road, even looking past the discussion on Afghanistan and Iran, everything is not hunky-dory between the US and Pakistan, despite the TAPI pipeline deal. A series of events in 2011 created a level of discomfort between the two nations – be it consistent drone attacks and resulting civilian deaths on Pakistani soil, or the assassination of Osama bin Laden, or the chairman of the US Joint Chiefs of Staff calling Pakistan’s Inter-Services Intelligence a genuine arm of the Taliban. The gas pipeline deal between Iran and Pakistan signed in late-May does not augur well for the US-Pakistan relationship either. It remains to be seen how the US will pressurise Pakistan to back out of that deal, which could inadvertently cause China to join the project instead.
Pakistan tried to ease tensions with the US by opening up routes for NATO supplies that had been closed since late-November after the US raid in the Afghan-Pakistani border killed 24 Pakistani soldiers. And Pakistan did get an invitation to the NATO summit held in Chicago in late-May, but after it demanded USD 5000 for every truck moving through its territory, the planned meeting between Pakistani President Asif Ali Zardari and US President Barack Obama did not materialise. The rift between these nations only seems to be widening, especially with continued suspicion that Pakistan had prior awareness of bin Laden’s hideout, and with Pakistan’s escalating objections to unauthorised US raids within its territory.
However, it is not just US-Pakistan relations which threaten to derail the American version of the new Silk Road. Aside from China, Russia has also openly expressed its reservations and challenged the legitimacy of Washington’s project. That challenge is backed by Russia’s readiness to entice supporters financially. During an SCO meeting last year, Russia expressed a desire to make a financial contribution towards the Central Asia South Asia Regional Electricity Trade Project (CASA-1000), which, ironically, might provide power for the TAPI project.
Unfortunately, rather than creating a New Silk Road that will bring South and Central Asia closer to Europe, the superpowers – US, China and Russia – are competing in a new Great Game for supremacy in Central Asia. Still, it remains to be seen how Washington will respond to Beijing’s all-out efforts to build its own version of the Silk Road – and whether economic incentives will in the end trump geo-political rivalries.
~ Tridivesh Singh Maini is an associate fellow with Observer Research Foundation, New Delhi.
~ Manish Vaid is a research assistant with Observer Research Foundation, New Delhi.