The United States’ Silk Road to Nowhere

The United States’ Silk Road to Nowhere

The United States has invested billions of dollars in Afghanistan over the past 13 years in an attempt to rebuild the country fractured by war and poverty. Now, as U.S. forces withdraw and Kabul is expected to assume security duties, Washington is trying to improve Afghanistan’s beleaguered economy by reviving one of history’s oldest trading routes — the Silk Road.

Speaking at the Asia Society in New York on Tuesday, Deputy Secretary of State William Burns called for the return of a vital trade hub between the East and West by connecting Central Asia to South Asia via Afghanistan. "We see clearly that Afghanistan’s fortunes remain tied to its neighborhood, just as the neighborhood’s fortunes remain tied to Afghanistan," said Burns.

First rolled out in 2011, the New Silk Road — as the initiative has been dubbed — means to integrate the Central Asian countries of Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan with Afghanistan, India, and Pakistan by liberalizing trade and building infrastructure, such as roads, bridges, electrical grids, railways, and pipelines. In essence, the project aims to connect the resource-rich countries of Central Asia to South Asia’s approximately 1.6 billion consumers, while allowing Afghanistan to profit as an intermediary. But the United States’ integration project is facing a series of uphill battles before it even gets off the ground.

For starters, Central Asia is the world’s least economically integrated region, with intra-regional trade composing only 6.2 percent of global trade, according the Asian Development Bank. More importantly, the area lacks financing and trust among its governments. The New Silk Road’s two key development projects: the CASA-1000 hydroelectricity grid and the proposed TAPI (Turkmenistan-Afghanistan-Pakistan-India) natural gas pipeline — which aims to connect Central Asian energy to South Asian consumers — each involve a high degree of intra-regional cooperation that seems unlikely to materialize.

The CASA-1000 project would deliver electricity to vast parts of the region still struggling to provide basic services and will rely on Kyrgyzstan and Tajikistan to supply the hydropower. However, infrastructure remains dilapidated and routine blackouts plague both countries. Moreover, Uzbekistan, which sits downstream from the rivers that Kyrgyzstan and Tajikistan will tap into for their hydroelectricity, remains suspicious of its neighbors controlling the region’s precious water supply and could use it as a political tool. Kyrgyzstan, Tajikistan, and Uzbekistan all maintain frosty relations with one another and have withheld gas, water, and even electricity from one another to leverage their own political agendas.

Afghanistan’s deteriorating security situation is also tripping up Washington’s effort to reincarnate the Silk Road. Back in June 2013, the Asian Development Bank, which was slated to finance 40 percent of the project, backed out citing security concerns. Similarly, the TAPI pipeline remains stalled as the picture for post-2014 Afghanistan looks bleak.

Meanwhile, Washington has invested billions in Afghanistan’s infrastructure — more than $2 billion for energy transmission lines, hydropower plants, railways, and roads alone. But up north in Central Asia, American financing is comparatively scarce, which has led many experts and insiders to roll their eyes at U.S. rhetoric of reviving the old Silk Road.

"The fact that the United States is turning to this grand project shows a real lack of vision for the region," says Luca Anceschi, a Central Asia expert at the University of Glasgow. "The New Silk Road seems like a leftover idea to fill the void left by China and Russia’s own integration projects."

Both Russia’s and China’s economic projects already have roots in Central Asia, making the United States late to the game. The Russia-led Customs Union, which seeks to coordinate trade and transportation policy and boost Moscow’s profile in the region, has already brought Kazakhstan into the fold, with Kyrgyzstan mulling membership. Similarly, the soon-to-be Eurasian Union seeks to deepen what the Customs Union started. Meanwhile, China’s presence in Central and South Asia continues to boom. "When it comes to economic cooperation in the region, China is in the best position to capitalize in Central Asia, and even in Afghanistan," Anceschi said.

Central Asia provides 45 percent of China’s natural gas, according to British Petroleum, and not only does Beijing already build the infrastructure that Central Asian governments desire, it is also the region’s top foreign investor. China unveiled its own regional economic project, naming it the "Silk Road Economic Belt." It seeks to build upon western China and Central Asia’s growing shuttle trade and connect parts of South Asia with Europe. China has sealed numerous high-profile trade deals across Central Asia recently, which could make China’s Silk Road vision a reality: a $30 billion investment package with Kazakhstan, a $15 billion deal with Uzbekistan, and a $3 billion financial aid package with Kyrgyzstan.

The one exception to Beijing’s dominance could be Kazakhstan, one of the few countries supporting the United States’ New Silk Road. Kazakhstan has taken on the role of Central Asia’s regional leader and unlike its neighbors, it actually has the financial capabilities to join and contribute to the region’s economic projects. Not only is Kazakhstan a Customs Union and Eurasian Union member as well, it is also a vital hub in China’s own integration project.

"It is the elites who decide policy in Central Asia, not Washington, Moscow, Beijing, or the local population," Anceschi said. "And at the moment, only some regional elites have an interest in cooperating with Afghanistan."

So with Afghanistan still on the outside looking in with Central Asia, talk from the State Department of building economic grids and possible pipelines will do little for Kabul. On that note, the New Silk Road has already hit a dead end.