From the 2nd Century BCE to the 18th Century CE, the Silk Road was central to economic, cultural, political and religious interactions between regions. People used it for international trade through a network of trade routes connecting the East to West.
However, the intercontinental overland trade routes fell into decay after great geographical discoveries between the late 15th and early 16th centuries. The speed of sea transportation and the ability to ship far greater volumes resulted in the decline of the Silk Road by the end of the 15th century, hindering trade between different countries. It eventually resulted in some countries like Uzbekistan to cut ties with the rest of the world, that is until very recently.
Uzbekistan, the ‘buckle’ of the Belt and Road Initiative (BRI) is Central Asia’s most populous country. It is currently going through dramatic political and business reforms and has a massive inflow of foreign investments that are spearheaded by China. The significance of all the new reforms is brought to light through the fifth instalment of Channel News Asia’s award-winning series, The New Silk Road.
The documentary portrayed how Uzbekistan had been closed off from the world for 60 years as secret military research-based under the Soviet Union (USSR) and later as a hermit state under an authoritarian government. It also showed how the new government that came to power in 2017 has helped Uzbekistan to open its markets to the global economy and invest in several profitable business opportunities. The episode also discussed how Uzbekistan hopes to make China their biggest market and how important it is for them to be a part of this initiative – both to China and to Uzbekistan itself.
Mr Cui Hongjian, head of European Studies at the China Institute of International Studies, stated that Central Asia is of the utmost importance to the BRI because it is the first stop of the Belt and Road from China, and for both the economy and security of China. Especially since Uzbekistan has good relations with China and Russia, it is an “important dynamic for China, Russia, and the regional peace and development.”
In September 2013, President Xi Jinping first introduced the idea of a New Silk Road, then referred to as One Belt One Road, now known as the BRI. The ‘Belts’ refer to the railroads that will connect China to Asia, continental Europe and the ‘Roads’ refers to multiple ports that will be used or built along the South China sea.
China’s BRI is a trillion-dollar global development strategy. An ambitious undertaking to reconstruct the ancient Silk Road trade routes connecting Asia and Europe, that aims at the expansion of infrastructure, especially in developing countries and hope to win over the local population by channelling in investments, jobs and tourism which would cater to their economic growth and integration.
BRI was introduced with five main cooperation ideas in mind – policy coordination, facilities connectivity, facilitate unobstructed trade, financial integration, and people-to-people bonds.
Policy coordination provides for the advancement of cross country trade and improving regional cooperation by allowing countries along the Belt and Road to come up with development plans and measures. Facility connectivity aims to establish an infrastructure network that connects various south Asian regions with other parts of Asia, Europe and Africa. It aims to resolve the issue of protectionist measures by reducing trade barriers and promoting regional economic integration.
The idea of financial integration hopes to expand the scope of a local currency and settle disputes regarding currency exchange in trade and investment along with deepening the multilateral and bilateral financial cooperation and reduce or eliminate potential financial risks through regional arrangements. Likewise, the BRI aims to improve and strengthen diplomatic ties between different countries, improve tourism and promote exchanges and dialogues between different cultures to cater to the advancement of regional cooperation.
During the Second BRI Forum for International Cooperation, Swiss President Ueli Maurer said that the BRI is advancing globalisation. Emphasising on how BRI is seeking the greater good for the world, Mr Maurer said this initiative is meant to allow more countries to benefit from economic development so that inclusive globalisation is realised.
It would also prove to be a good opportunity for developing countries to enjoy the economic benefits of free trade.
Singapore’s Prime Minister Lee Hsien Loong affirmed that the partnership between China and the host countries could bring together a “wider range of capabilities and resources.” Such new models of cooperation may open new doors to projects and enhance trade and cooperation not only between other countries and China, but among other countries as well.
Rong Yueming, director of Literature of Shanghai Academy of Social Sciences (SASS) said: “Culture plays an important role in the BRI as cultural exchanges are the foundation through which multinational cooperation can be strengthened in all aspects.”
The BRI host countries have carried out diplomatic activities and cultural exchanges of various forms in wide fields over the past five years. It has enhanced mutual understanding and recognition and helped lay a solid cultural foundation for furthering the initiative. Different countries were actively involved in hosting art, film and music festivals, cultural relics exhibitions, book fairs and have jointly launched many new media platforms.
Since the launch of the BRI, there has been a surge in tourism in many Silk Road cities and Uzbekistan was no exception. In the documentary, Mr Alisher Oripov, a university student and tour guide explained that Uzbekistan’s location on the Silk Road, as well as the ancient architecture and culture, has led to an increase in tourism, especially amongst the Chinese in the past three years.
The Chinese language is also becoming more popular among the locals and many students are going to universities in China for their exchange programmes. Hotel owner Mr Komil Kadirov has also noticed the increase in tourism in the past four years and believes that the New Silk Road will continue inviting more people, especially amongst the Chinese tourists.
Deeper cooperation in health and medicine has been achieved between China and other Belt and Road countries. Ongoing efforts have been made in disaster relief, assistance, and poverty alleviation. Since the first Belt and Road Forum for International Cooperation, China has provided ¥2 billion (US$298 million) in emergency food assistance to developing countries participating in the initiative, injected an additional US$1 billion to the South-South Cooperation Assistance Fund and implemented several projects.
Of course, the positive impacts of the BRI will only be enjoyed if the host countries are able to seize the opportunity. While the benefits are promising, failure to handle them can have a cataclysmic effect.
The BRI is an expensive affair – Four to eight trillion US dollars upon completion. As is, developing countries have their fair share of debt problems to deal with and financing a project that may project promising returns only adds to the debt burden. There are no guarantees that countries can break even in this investment, let alone even profit from it, considering the fact that the BRI’s cost-effectiveness is not promising. There is also the added concern of slowing growth and an impending recession.
Many developing countries which China have aided financially in building their infrastructure could be putting themselves at what the International Monetary Fund calls a high risk of debt distress. Reliance on China and its resources could veer many towards a Chinese mode of repression. While China’s ambitious economic development programme is driven by the increase in economic development for its host countries, the Center for Advanced Defense Studies claimed otherwise. The report highlighted that China’s investments appear to “generate political influence, stealthily expand China’s military presence and create an advantageous strategic environment in the region”.
Although an official policy linking BRI strategy with China’s national security interest is yet to be discovered, it states that developing the programme and pursuing Chinese security are “intimately linked”.
As opposed to the economic benefits that the BRI offers upon completion, its payoffs in terms of sustainability are sparse. The existing modes of transportation, mainly waterways and airways that are being used for trade between different countries owing to their perpetuity are undoubtedly cheaper and faster than roadways. There are ever-evolving technologies that help make these forms of transport more eco-friendly and efficient.
The BRI promises to ease the flow of goods, services, ideas and people in a less restrictive fashion amongst the member countries. However, the same stands to pose a security threat. The benefits come bearing ammunition which can be easily exploited and can take the form of cross-country terrorism.
At the opening of China’s Belt and Road three-day forum in April last year, President Xi’s keynote speech emphasised that China would be committed to transparency and the construction of “high-quality, sustainable, risk-resistant, reasonably priced, and inclusive infrastructure.”
Nevertheless, the question remains as to whether China will adhere to their promise on the process and the true motive of the BRI. Countries and their leaders who are considering to fully partake in this Chinese-led endeavour must seriously weigh out the opportunity cost, or risk being bogged down and mired in unwanted consequences.