China’s Belt and Road Initiative in Central Asia: insurmountable obstacles and unmanageable risks?
28 Jun 2017|

Image courtesy of Flickr user Asian Development Bank.

At the mid-May Belt and Road Initiative (BRI) summit in Beijing, Chinese President Xi Jinping pledged $124 billion to expand transportation links and infrastructure between Asia, Africa and Europe, showcasing his commitment to the massive project.

Central Asia is a key component in BRI. The five Central Asian republics—Kazakhstan, Turkmenistan, Kyrgyzstan, Uzbekistan and Tajikistan—all feature heavily in the plans for the land component of the BRI initiative, and all have responded positively to it. Central Asia and the Caucasus saw a tenfold increase in Chinese investment between 2005 and 2015, from US$5 billion in 2005 to US$48 billion in 2014, reflecting China’s growing geopolitical interest in the region.

But BRI has dramatically escalated the scale of Chinese investment. Uzbekistan alone recently received promises of US$20 billion in investments, including a three-year natural gas supply contract and funding for a synthetic gas plant. That plan reflects the region’s fundamental importance to China’s BRI plans, with key western land corridors passing through the Central Asian republics. BRI will also greatly improve China’s ability to extract critical mineral and agricultural resources from its Central Asian neighbours.

The Chinese model of investment creates some challenges for recipient states. It’s already clear that BRI will follow the traditional Chinese investment model of using expatriate Chinese workers and Chinese technology and equipment for funded projects. That approach arguably creates very few direct benefits for the recipient state, such as critical jobs creation of skills and expertise in the local population.

But the republics of Central Asia, with their corrupt authoritarian regimes, widespread inequality and unemployment, and a potentially inflammatory mix of growing Islamic fundamentalism and latent ethnic tensions, may prove to be insurmountable obstacles for China’s ambitions for a new global Silk Road. As the experiences of the US, NATO and Russia (historically the region’s hegemon) show, the republics can be fickle and frustrating partners.

First, given the scale of institutionalised corruption across the region—all five republics feature towards the bottom of Transparency International’s Corruption index—there’s a real risk that Chinese investment may be misdirected or syphoned off by the region’s elite. The Chinese model of foreign investment, with most of the money remaining in the hands of Chinese companies carrying out the work and ethnic Chinese workers completing it, may mitigate that risk.

However, the scale of Chinese investment may result in the region’s governments seeing themselves as largely freed from the need to fund major infrastructure themselves. That may embolden them to be even more irresponsible in their budgeting and more rapacious in their tendency to siphon off earnings from natural gas, mineral and agricultural resources, many of which still reside in the hands of state-owned enterprises. Over time, this will put the countries in the unenviable position of potentially defaulting on loans, or ceding even more control of assets to Chinese interests.

Second, an inflow of Chinese investment may further harden the authoritarian tendencies of the local governments. They’ve already demonstrated a willingness to do Beijing’s bidding, even before China possessed the levers of influence provided by large-scale investment. Kazakhstan, in particular, has regularly acquiesced to China on ‘domestic issues’, including targeting ethnic Uighurs on China’s behalf.

And lastly, Chinese investment, accompanied by highly visible Chinese companies and significant numbers of ethnic Chinese expatriate workers, may attract the attention of militant groups. While the debate continues on whether militant Islam will gain momentum across the region, it’s feasible that a reinvigorated Islamic Movement of Uzbekistan or a new Islamic State-aligned group could emerge in the near future.

Two main factors could see the religious dynamic in Central Asia change dramatically in the near future. First, there has been a dramatic increase in mosque building across the region in recent years, with the overall number of mosques in Kyrgyzstan alone increasing from 39 in 1991 to around 2,300 today. Many of those mosques were funded by Saudi interests and espouse the narrow Wahhabi form of Islam that’s most often linked to modern Sunni terrorism. And second, the collapse of the Islamic State in Iraq and Syria could see a significant number of Central Asian foreign fighters, estimated at between 2,000–4,000 returning home, potentially seeking a new theatre of operation.

China’s increasingly visible presence in the region may make Chinese investment projects attractive and relatively soft high profile targets for militants, especially given the local population’s potential for animosity towards China. And China’s ‘cultural genocide’ against the Uighurs of Xinjiang—a Turkic-speaking Muslim population closely related to the ethnic groups in Central Asia—has already raised China’s profile with both Islamists and the general population.

Baloch separatists in Pakistan have already established a precedent by attacking workers on a Chinese-funded BRI project, with the local armed forces bearing responsibility for protecting expatriate Chinese workers. Similar attacks in Central Asia could prove disastrous for Chinese ambitions in the region. They’d also likely prompt a brutal government response that would further marginalise local populations already disenchanted with their corrupt and authoritarian governments.

Institutionalised corruption, authoritarianism and a potential for Islamic militarism all create a dangerous recipe for governments across Central Asia. The overarching problem for China is that not only does BRI do little to encourage the Central Asian governments to deal constructively with those issues, it could exacerbate existing problems.