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Central Asia: Communication Links Promise Creation Of New Silk Road

London, 28 January 1998 (RFE/RL) -- The promise of better transport and communications links in the Central Asian region could transform what are isolated countries into key trading centers at the crossroads of Europe and Asia.

This view was expressed at a Reading University conference that last week focused on prospects for the five Central Asian nations: Uzbekistan, Kazakhstan, Kyrgyzstan, Turkmenistan, and Tajikistan, all of them recently-independent following the break-up of the Soviet Union.

These countries used to be seen as "terra incognita" -- unknown territory -- because of their remote location, landlocked status, and geopolitical position at the periphery of the Soviet empire. For decades, they were cut off from their natural neighbors to the south and east by the longest and most closed border in the world.

But, there is heightened interest in this region of 53 million people because of its huge mineral wealth and strategic situation between East and West. This interest is reflected in the substantial amounts of money being pumped in by international financial institutions, and growing investment by western energy companies.

Analysts say, in the 21st century, this region -- which is now known as the "Euro-Asian heartland" -- may serve as an important bridge between Europe, Russia, China, Iran and India, if plans go ahead to build an ambitious new communications network.

Kazakhstan's ambassador to Britain, Kanat Saudabaev, told the Reading conference: "This region has had a great history. Today, it is in the middle of radical changes leading to a great future."

Analysts talk of a new Silk Road -- or "Superhighway" linking Europe and China -- running through Central Asia, the Caucasus and beyond the Caspian, involving the creation of a complex of roads, railways, telecommunications, and oil and gas pipelines.

Already, freeways and railroads are being extended to the east through China, to the south through Afghanistan, Pakistan and Iran, and to the west through Azerbaijan, Georgia and Turkey.

The conference also heard of a planned "Eurasian land-bridge" involving the building of a railway from China's Yellow Sea Coast, across Xinjiang and Kazakhstan, to the European port of Rotterdam.

U.S., European, and Asian energy firms, of course, have a vital interest in opening up the area because the oil and gas reserves of Central Asia and the Caucasus are second only to the Persian Gulf.

Saudabaev told the conference that Kazakhstan at the start of the 21st century could export up to100 million tones of oil and 100 thousand million cubic meters of gas; Turkmenistan up to 100 thousand million meters of gas; and Uzbekistan 20 thousand million cubic meters of gas.

Kazakhstan is attracting by far the largest amount of foreign investment of any former Soviet Republic ($3 billion last year), much of it invested in the energy and minerals field. Energy-rich Azerbaijan and Uzbekistan are also attracting higher investment flows than other former Soviet republics (except for Russia).

All five Central Asian countries have endured dislocation and hardship following the collapse of the Soviet Union (Tajikistan has suffered four years of civil war) but analysts say prospects are looking better, particularly for Kazakhstan and Kyrgyzstan, although not for Turkmenistan whose GDP may shrink again this year.

Michael Essex, of Britain's Department of Trade and Industry, told the conference: "The amount of mineral wealth waiting to be exploited could make these countries enormously wealthy." Uzbekistan, alone, has some of the largest mineral deposits in the world (prompting the Uzbeks to "claim they are the 10th richest country in the world" -- a claim, he said, impossible to verify).

Essex said that dependence on extractive industries can have dangers: South American countries made a great effort to exploit their minerals, but the mass of people have seen little benefit.

However, he said that better communications could "change Central Asia from being a fairly remote region to one having access to markets as potentially vast as Russia, China, India and Iran."

He said Uzbekistan, with the largest population in Central Asia (22.7 million), and hence with a sizable home market, could be a manufacturing base for firms wanting to exploit neighboring markets. It also has a potential to export fruit and vegetables, while it is seeking to diversify from its main cash crop, cotton.

Essex said that Kazakhstan, aside from its huge oil and gas reserves, has the potential to step up its grain exports, and also has potential as a center for industry, something proved by a British-Indian concern that bought a large steel complex, employing some 55,000 people, which is now exporting steel around the world.

Kyrgyzstan has great mineral wealth, including gold, and claims it has one of the most advanced reform programs, but its small size, and remoteness, are a problem. Turkmenistan has potential as a natural gas exporter, underlined by the recent opening of a gas pipeline to Iran, a link that could eventually be extended to Turkey.

Essex says present trade flows to the Central Asian countries are probably "vastly under-recorded." Because of the problem of access to the landlocked region, much trade goes through third countries, such as Turkey, Russia and the United Arab Emirates. By his estimate, trade flows could be 5 or 10 times higher than estimated.

Will Central Asia play a major role in the 21st Century? A Russian delegate had no doubt: Yes. Academician Vladimir Myasnikov, deputy director of the Institute of Far Eastern Studies, of the Russian Academy of Sciences, said the opening of roads, railroads and other communication links across the region will lead to the creation of a new high-technology Silk Road.