China opens up Central Asia's new Silk Roads

The fate of the massive deposits of lithium recently discovered in Afghanistan is destined to be no different from that of landlocked Central Asia’s other natural resources: tapped by the West, and eventually controlled by the East.

Siberian timber, Mongolian iron ore, Kazakh oil, Turkmen natural gas and Afghan copper are already channelled directly to China through a newly built East-bound network that is fuelling the rapid development of the world’s largest population.

China’s head-start in building roads, railways and pipelines across Central Asia creates an opportunity for the West — and the region itself. Rather than engaging in a high-stakes competition for Central Asia’s valuable resources — a new round of the 19th century Great Game — the West should support China’s initial steps by coaching local governments on how to expand textile and agricultural exports and avoid the resource curse that blights many developing, one-commodity nations.

China has paved the way to finally open up landlocked Central Asia, and the West should build on its success, creating a new, oil-fuelled, East-West Silk Road.

Oil pipelines from the Caspian Sea across Kazakhstan, the recently opened gas pipeline from Turkmenistan via Uzbekistan and Kazakhstan, and other planned roads and railways across Russia as well as down to the deep sea port of Gwadar in Pakistan are all part of China’s effort to turn Central Asia from a region of buffer states into a transit corridor between East and West. Beijing’s leaders have rightfully looked to Eurasia as a rich source of natural resources to fuel their booming economy.

Rather than think of China’s moves into Central Asia — and into Africa — as a suspicious form of neocolonialism, western countries should focus on how to use Chinese-built roads and railways to make their own floundering regional strategy a success.

This means cooperation rather than competition, and it can happen through heavy infrastructure investment, building new lines on the map that transcend arbitrary borders and bring real economic value.

TAPI and IPI

The most essential of these projects are the as-yet unbuilt Turkmen-Afghan-Pakistan-India (TAPI) and Iran-Pakistan-India (IPI) gas pipelines. With respect to the former, the West’s inability to secure Afghanistan has delayed a valuable enterprise that has willing investors and backing from the Asian Development Bank.

Yet what greater priority could there be than creating jobs for Afghans in building this energy corridor, thus lowering fuel costs for energy-starved Afghanistan and Pakistan? The military strategy in Afghanistan should include security for economic development projects like this pipeline.

As for IPI, Iran and Pakistan signed a major agreement recently to move ahead with construction — despite US objections. What Washington must appreciate is that isolating Iran, a central bridge between the Near East and Central Asia, is futile.

Europeans and Chinese understand this, and their priorities — such as the European Nabucco pipeline and Chinese-financed roads across northern Afghanistan to Iran — stand a better chance of stabilising the region while thawing ties with Iran.

Tapping resources that local governments don’t have the wherewithal to extract and managing them well is a win-win for all sides. Afghanistan today has little in the way of a mining sector, but Chinese, Australian and Russian companies can lead the way.

That’s what has happened in Mongolia for decades, leading to a mineral export bonanza and rapid economic growth. But Mongolia has also tapped western knowledge, copying the model of Norway to set up a National Development Fund to distribute shares of mineral profits to the people, and hiring the prominent Peruvian economist Hernando de Soto, an expert on property rights and small-scale development. Mongolia’s place on the new Silk Road is assured.

Neither China nor Russia sees Central Asia as its exclusive backyard anymore. To the contrary, both countries fear that the West is not leading enough in these areas, where it has a strong track record. Remember that it was the far-sighted leadership of Chevron and adventurous American ambassadors who made the Baku-Tblisi-Ceyhan pipeline a reality despite the post-Soviet wreckage of the Caucasus.

Extractive and infrastructure projects

Western troops across the region, particularly Nato forces in Afghanistan and the various partnership agreements they have with local countries, should focus ever more on protecting the extractive and infrastructure projects that China is willing to finance. This is already happening at the Aynak copper mine, and should extend to the new lithium deposits that China needs to make mobile phones and electric car batteries.

As Chinese-built infrastructure snakes through Central Asia, the Gulf entrepots like Dubai can serve increasingly as conduits for Central Asian produce, textiles and other goods to Europe and America. If the West drops all tariffs on these exports, it would spark a diversification of the region’s economies away from relying on extractive industries and avoiding the resource curse. It would also boost employment in non-energy areas. The result would be the two things this land-locked region needs most: stability and connectedness.

Enough of the Great Game-esque ‘strategic triangles’ — US-China-India, US-India-Afghanistan, or US-Iran-China — that are nothing more than a vice on a region that in its historical prime had been open to all directions. For centuries the Khyber Pass has been a gateway for invaders and smugglers, and now serves as a supply route for American forces in Afghanistan. But instead of mafias serving militaries, the trucks we should see on these roads should be colourfully painted civilian caravans with musical horns.

This is finally possible, thanks to Chinese investment and the newfound wealth of West Asia. The Silk Road has always been a two-way street of mutually beneficial exchange. The Durand Line hasn’t delivered any benefits in more than a century. The oil-fuelled Silk Road could do so tomorrow.