Wednesday, 27 November 2013

The Turkmenistan-Afghanistan-Tajikistan Railroad Project: The Prospects of the New Silk Road

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By Oleg Salimov (the 27/11/2013 issue of the CACI Analyst)

The challenges of economic development and regional integration in Central Asia have given rise to a number of projects in various spheres. Among these, the “Turkmenistan-Afghanistan-Tajikistan” railroad is directly aimed at stimulating the participating countries' economies through the creation of a better transportation system for easy access to new markets. The project's goal is to expand regional infrastructure, connect the landlocked countries with seaways, and eventually link Eurasian and Southeast Asian markets. The ability of the participants to successfully finalize construction of the railroad, provide security, and incite an interest from other countries will determine whether this project can mark the beginning of a new Silk Road. 

BACKGROUND: The construction of the railroad officially started on June 5, 2013, in Turkmenistan. The expected total length of the railroad is projected to reach 500 kilometers or longer. The three versions of the project envision around 90 kilometers of railroad in southern Turkmenistan, between 230 and 350 kilometers in northern Afghanistan, and between 50 and 160 kilometers in southern Tajikistan, at cost estimates starting at US$ 400 million. The project is developed as part of the Central Asia Regional Cooperation Program primarily financed by the Asian Development Bank, with completion expected in 2015.

The railroad echoes the strategy for regional development through a network of highways, railroads, and energy-supply lines envisioned by the U.S. in its “New Silk Road Strategy” from 2011. However, the U.S. has sustained criticism for its passivity in implementing its own strategy and for relying on investments from parties immediately affected by the outcome. Although ambitious, the strategy has not proven sufficient to address the challenges involved, in Central Asia and beyond, a problem compounded by reluctance on part of the U.S. to get deeply involved in the region beyond Afghanistan.

At least two of the participating countries are in desperate need of a better transportation system within the region. Afghanistan and Tajikistan are both economically depressed and largely isolated from world markets due to their landlocked geography and lack of interstate roads. Tajikistan's transportation infrastructure is mostly oriented northwards and depends greatly on Uzbekistan, which frequently restricts Tajik transit traffic. In Afghanistan, due to its long lasting turmoil, most of the transporting infrastructure is completely destroyed or in poor condition.

Tajikistan’s frequent disputes with Uzbekistan over land and water have led Tashkent to routinely disrupt or halt all transit traffic to and from Tajikistan. This limits Tajikistan’s access to gasoline, heating oil, consumer goods, and food products, which it imports from Russia. Tashkent also prevents Tajikistan from exporting its own main products: cotton and aluminum. These constraints not only hurt Tajikistan’s economic development but also create humanitarian dangers in the country.

Afghanistan shares long borders with Turkmenistan and Tajikistan (750 and 1,300 kilometers respectively) but has never had strong transport connections with them. Currently, Afghanistan and Tajikistan are reinforcing their cooperation in counterterrorism, social protection, energy, border security, and economy. According to Afghani experts, the trade between the two countries grew to US$ 130 million in the last ten years. In 2010, the European Trade Committee estimated the value of Afghanistan’s trade with Tajikistan to 69.6 million Euros and its trade with Turkmenistan to 163.1 million Euros. The initiated trans-regional railroad project is likely to increase these numbers.

According to Turkmenistan's official media, it is one of the few countries maintaining continuous economic cooperation with Afghanistan in the last 20 years due to its policy of “positive neutrality.” In its cooperation with Afghanistan, Turkmenistan stresses energy supply and the development of transportation connectivity. Having recently started construction of its part of the railroad, Turkmenistan considers the project to be highly lucrative - in addition to its existing access northward and westward via the Caspian Sea; the railroad will provide southward connections.

IMPLICATIONS: All three participants have significant stakes in the project's success. It promises access to new markets for Turkmenistan, an opportunity for Tajikistan to circumvent the transportation constraints imposed by Uzbekistan, and a means for Afghanistan to break out of its isolation and integrate with the Central Asian region. There are also economic and political reasons for extra-regional actors to endorse the project. For example, it will provide South Asian countries with a shortcut to the Caspian and the region's oil and gas resources and is in line with the U.S. political agenda for reducing Russia's influence in Central Asia, not least through alternative transportation networks.

However, the railroad also gives rise to several risks. One is the spread of drug trafficking from Afghanistan. Another is the continuing insurgency in Afghanistan and attacks on targets affiliated with the U.S. or NATO. The recent U.S.-Afghanistan security agreement stipulates U.S. training and funding of Afghan forces and a U.S. presence of about 8,000 troops until 2024. The question arises whether Afghan forces and the remaining U.S. military contingent will be able to provide the security needed for the railroad’s completion and operation.

Tajikistan relies heavily on exploiting its water resources in stimulating the economy. The railway project is crucial for Tajikistan as it will allow for completion of the Rogun and Sangtuda hydropower plants, which are in part postponed due to the logistical difficulties imposed by Uzbekistan. Still, Tajikistan can be considered the weakest link in the chain and the most likely drop-out of the project. Although Tajikistan is actively seeking to bypass Uzbekistan, Azhdar Kurtov from the Russian Institute of Strategic Research believes that the country is unlikely to complete the project. He considers the railroad construction as a pre-election move by President Rakhmon and that building a railroad in the high-mountain terrain of southern Tajikistan is unreasonably challenging and expensive.

In addition, Tajikistan's geographic location is not favorable to the project’s long-term goals. The railroad from the Caspian region to South Asia would go south of the Tajik border, making Tajikistan an adjunct point. Simultaneously, the Pamir mountain range would prevent Tajikistan from extending the railroad into China, leaving the country cut off from the main transport routes. None of Tajikistan’s previously announced railway projects were actually realized, mostly due to a lack of financing.

Turkmenistan, the initiator of the project, will likely become the most prominent beneficiary of the railroad regardless of the outcome. First, the projected railroad connects the southern part of Turkmenistan with the rest of the country. Second, Turkmenistan has maintained economic relations with Afghanistan regardless of the political situation and is expected to continue them in the future. Third, the South Asian markets are not the only but an additional source of income for Turkmenistan. While Afghanistan is considered to be the crossroads of Asia, it still depends on other countries to use its territory for transit purposes. Therefore, as one of the prerequisites, Afghanistan’s ability to provide secure transit can determine its future economic development.

The railroad could have an ambiguous effect on the interests of other political players in the region. The potential for Afghanistan to become more self-sufficient and reduced Russian dominance in Central Asia may present appealing prospects in a U.S. perspective.  However, the economic penetration of Iran and China into the region could be considered a counterproductive side effect. At the same time, China seeks persistently to develop its eastern regions and easy access to the oil resources and markets of the Caspian and Gulf countries would be a conceivable breakthrough in this regard.

CONCLUSIONS: While the railway project holds considerable prospects for economic development in Central Asia, it is still marked by several uncertainties. It is understood that the projected railroad could end Afghanistan's economic isolation, alleviate Tajikistan's transportation predicament, increase regional trade, and provide wider access to Turkmen gas resources. At the same time, Afghanistan's instability and its upcoming transition to autonomous governance constitutes a challenge to the security of the construction as well as the later operation of the railroad. Also, Tajikistan could abruptly withdraw from the project for various reasons. The reaction to the project from other interested countries such as the U.S., Russia, China, and others as well as the leverage they will apply are yet to be seen. 

AUTHOR'S BIO: Oleg Salimov holds a PhD in Interdisciplinary Studies (Public Administration, Political Science, Education, and Sociology) from the University of Montana.

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