«ФИЛОСОФИЯ, САЯСАТТАНУ ЖӘНЕ ӘЛЕУМЕТТАНУ» секциясы Секция «ФИЛОСОФИЯ, ПОЛИТОЛОГИЯ И СОЦИОЛОГИЯ»
THE BELT AND ROAD INITIATIVE AND ITS IMPLICATIONS FOR CENTRAL ASIA
Kazhenova A.B.
Corvinus University of Budapest, Hungary
aigulkazhenova90@gmail.com
Idea of creation of a ―Silk Road Economic Belt‖ from China through Central Asia (CA) to Europe was proposed by the President Xi Jinping in September 2013 during his visit to Kazakhstan. In his speech, he stressed a step by step approach of regional co-operation which implied strengthening of economic relations, trade and investment facilitation, provision of road connectivity, creating a transport route from the Pacific to the Baltic and a transport network connecting East, West and South Asia. Chinese President also mentioned the importance of increasing of financial resilience of the CA states and enhancing their economic competitiveness in the world. In addition, people-to-people exchanges should promote understanding between the countries [1].
So, since China made the decision to emphasize the importance of an overland component of the Belt and Road Initiative (BRI), it increased the significance of participation of the Central Asian states which laid the basis for geopolitical changes in the region. The fact that the new initiative announced in Astana demonstrates Kazakhstan’s special importance in the BRI narrative [2].
According to many experts, though there is no geopolitical component of the China’s Belt and Road Initiative and this concept is still under negotiations, it seems that it could serve as an alternative to the Eurasian integration. The Customs Union and later the Eurasian Economic Union already started to function with some Central Asia states being already its members (with Kazakhstan, later Kyrgyzstan becoming the member of the EAEU). This situation created quite an ambiguous situation in the region though we cannot say the BRI is not an integration project as it is.
The main role of the BRI for China is creation of favorable conditions for promoting Chinese goods in Central Asia, Russia and Europe. Moreover, development of infrastructure and economic ties with the states of the CA region helps to provide China’s economy with energy resources [3]. In addition, building infrastructure westwards is expected to benefit economically the western province of Xinjiang which is expected to become an important transport route to Europe [1]. As a whole, the Belt and Road Initiative should bring together over 70% of the world’s population, which accounts for about 55% of global GDP and has about 75% of discovered energy reserves [4].
We cannot neglect the fact that the BRI is considered as an attractive project for the states of the CA region. So, what are the interests of the Central Asian states in participating in this mega-project?
First of all, unlike other projects in Central Asia, Chinese project has an absolute lack of political requirements for participants. Experts note that Russia, for example, within the Eurasian Economic Union pays attention not on accumulation of economic power, creation of modern transport network, but on advantages of the Eurasian project with a hint of strengthening of a political component [5: 90]. China, in contrast, offers investments, modernized transport infrastructure and, at the same time, does not require any political conditions for countries.
Secondly, the BRI is strongly provided with financial resources such as the Silk Road Fund and Asian Infrastructure Investment Bank (AIIB) with $100 billion in capital designed to fill a real need for more investment in infrastructure in Asia [3]. These institutes already began financing a number of projects, in particular, in Kazakhstan. It is necessary to note the significant increase in China’s investments in the state after agreement on the Belt and Road Initiative and national program ―Nurly Zhol‖ convergence (coordination) was made. The development of transit transport corridor, creation of joint industrial projects, cooperation in knowledge-based and technology sector, agribusiness is planned within it [5: 97-99].
Moreover, China has common borders with three countries of Central Asia that gives it indisputable advantages in development of joint transport projects [3]. It is essential that the countries which the BRI goes through are also interested in implementation of these projects. For example, Kazakhstan’s ambitions to be better integrated with global markets fully overlaps with China’s plans [2]. It is also important to note that in 2016 a special programme of transferring industrial capacity from China to Kazakhstan was adopted. It includes about 50 projects (worth approximately 28 billion US dollars) with the aim of developing the chemical industry, transportation infrastructure, agribusiness, information technologies, etc.
[2]. Thus, with the help of Chinese investments and technologies Astana intends to diversify its economy and develop domestic infrastructure.
China is ready for a compromise with the states territories of which the BRI project goes through. From the point of view of economic growth, development of regional economic cooperation is a foremost keynote of Chinese policy in relation to all countries. China actively looks for new external incentives for the economic growth, and the CA countries have considerable resources and economic potential for that [5: 92]. In addition, China needs to solve the problem of growing deficiency of energy resources and problems of their delivery while the countries of Central Asia are interested in increasing of supply of energy resources to China.
However, a lack of clear BRI objectives is one of the main questions for Central Asian states. It still remains not really clear what this project assumes apart from creation of transport, trade and financial infrastructure. It seems quite obvious that from the beginning of a large-scale implementation of the project and, in particular, transfer of industrial capacities of China to the territory of the CA states, the number of Chinese labor will increase. There is a fear connected with the
possibility of increase of Chinese labor migration, therefore, experts note that implementation of the BRI project should not have even a hint of possible prospects of ―Chinese expansion‖.
According to N. Kassenova [2], there is a certain communication gap between the government’s image of the BRI and its plans and the fear of China among the population of Kazakhstan. For instance, the list of 51 projects within the BRI which were announced in 2016 is not publicly available today. For this reason, there is a need to increase transparency and inclusivity of decision-making and basic information on projects should be available to the public as the authorities should take into account the concerns of the population.
At the same time, taking into account all the resources invested by China, it seems that implementation of the project will enhance China’s involvement and geopolitical presence in these countries [5: 89]. Yet, one of the problems China can face is building relations with the CA countries. Central Asia is a very difficult region where interests and contradictions of not only external players are intertwined, but also the relations between the states of the region are not explicit. There are a lot of problems on the intraregional level as border issues, water and energy management which are still not solved. Therefore, for China as the initiator of the new project, it is necessary to make skillful efforts in implementation of the initiative.
Another important question which should be addressed is how the Eurasian Economic Union, in particular, the CA member-states of the EAEU, and the BRI can function together? Will the EAEU and BRI be competitors or partners in the region?
Many experts believed that one of the main problems of the BRI implementation in Central Asia was that it could become as a competitor to the idea of the Eurasian integration. However, the first and very productive attempt to settle terms of the EAEU and BRI took place in May, 2015 in Moscow. The contours of interaction model of the Eurasian Economic Union and the Belt and Road Initiative were formed with the idea that the EAEU and BRI convergence could become beneficial for their participants with the long-term plans of creating a free trade zone [6: 68].
One of the main points which should be taken into account is the way how to implement it without conflict of interests of Russia, China and the states of the CA region [3]. Though the Chinese project has significant advantages, China will need to negotiate with all interested states. It means that in the EAEU and BRI convergence, there should be a room for mutual concessions considering the strategic interests of all participants. There is a task to create such conditions so the two projects could work not as competitors but supplement each other.
In general, the EAEU and BRI convergence can have perspectives due to a number of reasons. For instance, one of the main objects of both projects is creation of modern transport infrastructure. It promises not only grow in income from transit and financial investments in economies of the countries of the Eurasian region, but also will promote increase in transport connectivity between them. It is also important to note, in case of successful construction of a uniform powerful economic complex, it can become a channel of export of EAEU products to foreign markets [3].
Both projects aim at simplifying of customs procedures and removal of barriers which hinder development of mutual trade, and all the steps made within the Eurasian Economic Union (common customs territory, common borders, common rules of customs regulation, and other types of non-tariff regulations) are favorable for the BRI project.
However, ―sopryazhenie‖ of the EAEU and BRI can face several issues in practice. Due to the fact that the EAEU is a young union and the dominance of intergovernmental not supranational relations within it, coordination of interests within it is not regular. Furthermore, the EAEU and China dialogue excludes from negotiations those CA states who are not members of the Eurasian Economic Union which are Tajikistan, Turkmenistan and Uzbekistan [6: 77]. So, though the idea of convergence of the two projects is developing, the bilateral relations between China and the CA states prevail. Despite the fact the agreement to pursue the EAEU and BRI convergence was signed in May, 2015, very little so far was done in reality.
Moreover, it seems that this idea is not a mechanism for integration of the Central Asian states and development of a regional cooperation, but more a tool of avoiding its destabilization. So, according to experts, the EAEU and BRI convergence is also partly a functionalistic approach (with neofunctionalism elements at the level of the EAEU) to prevent a political rivalry in Central Asia [6: 69]. It means that a starting point for the stable region is economic cooperation. However, at the same time, Central Asia has numerous not economic threats, such as terrorism and extremism [6: 77]. So, the convergence only on a narrow circle of economic problems leaves the issue of stability and security in the region open.
In general, the CA countries should choose the strategy which provides the use of the growing interest of China in the region for development of their national economies. It is important to prioritize states’ national interests as the BRI includes the countries which have incomparable economic weight and financial potential. Nevertheless, China’s Belt and Road Initiative, considering all the advantages and disadvantages, can play a really positive role for the Central Asian region.
References:
1. Bond I. The EU, the Eurasian Economic Union and One Belt, One Road: Can they work together? Center for European Reform, March 2017.
2. Kassenova N. «Information on the projects should be available to the public». Friedrich Ebert Stiftung Connect, 26 February 2018. Available at: https://www.fes-connect.org/people/information-on-the-projects-should-be-available-to-the-public/?platform=hootsuite
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4. World Economic Forum, What can the New Silk Road do for global trade? 22 September 2015. Available at: https://www.weforum.org/agenda/2015/09/what-can-the-new-silk-road-do-for-global-trade/.
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