Foreign Relations / Economy / Kyrgyzstan

Op-Ed: China-Kyrgyzstan railway: one road -- different paths

<a onclick=cad_newsagency"> cad_newsagency
7-09-2018, 11:42
26

China will connect Kyrgyzstan and Uzbekistan with one 450-kilometer road. A big project has been discussed for several years. According to the Kyrgyz media the developer is a Chinese company China Road. However, the financial part is still unclear. So far, China has allotted to Kyrgyzstan 30 million Chinese yuan.

Op-Ed: China-Kyrgyzstan railway: one road -- different paths

According to the preliminary feasibility study, the route will be shortened from East Asia to the countries of the Middle East and Southern Europe by 900 km, and the estimated transit time will be 7-8 days.

“The construction will ensure the development of the transport infrastructure of the countries of Central Asia and provide convenient access to the ports of the Persian Gulf and the Pacific and will stimulate the development and use of natural resources for the countries in the region and enhance international trade and tourism,” the media said.

The Wall Street Journal has published some interesting research data by Center for Global Development.

The main purpose of the monitoring was China's investment policy, that is, projects, which are being implemented in other countries, when large loans are directed towards the implementation of any social and economic programs. Eight countries: Djibouti, Kyrgyzstan, Laos, Maldives, Mongolia, Montenegro, Pakistan and Tajikistan, became financially vulnerable.

On the one hand, China's participation in any social, economic, investment project is actively welcomed by different countries, and it would seem that such investment projects are today's reality. In Montenegro and Mongolia, for instance, the construction of modern, high-speed highways, in Tajikistan - gas pipelines, in Kyrgyzstan - construction of hydroelectric power plants.

But there is also a flipside to the coin: the level of debt and dependence of these countries on China is catastrophically increasing.

According to experts' forecasts, due to the construction of new infrastructure facilities, Kyrgyzstan's debt can grow from 62 percent of GDP to 71 percent. The Wall Street Journal cites one of the authors of the study, Scott Morris: "If the debt in these countries becomes unstable, then this trend will eventually put the Chinese authorities in the center of financial decisions, displacing the International Monetary Fund or private creditors."

Investments in the economy of a rather weak country in comparison with the neighbors and according to the EAEU and on a territorial basis are needed -- they are vital. But then the government of the country needs to choose from two evils. On the one hand, Bishkek will be able to connect the north and south of the country with the Balykchy-Kochkor-Kara-Keche-Arpa-Kara-Suu route and form a unified railway network, on the other, the issue of political independence becomes more acute.

Kyrgyzstan is increasingly falling into a financial trap; half of Kyrgyzstan's public debt is from Beijing. And the controversy around the still non-existent railway raises doubts -- what if Beijing refuses to continue building the road.

Chinese investors want to know what they will spend funds on, as the question has been dragging on for 20 years, as well as, how and who will be responsible for their investment, and what the profit might be in the long run.

It is also unclear, what will the track be like: Beijing insists on European standards, Bishkek - on the standards adopted back in the days of the Soviet Union and now in most countries of the post-Soviet space. It's clear that while Bishkek does not give concrete and clear answers, and in the future, solid guarantees, the work will not commence.

Speaking of guarantees, Sooronbai Jeenbekov is the fourth Kyrgyz leader who is trying to reach an agreement with Beijing, after, frankly speaking, the failed attempts by Presidents Atambaev, Akayev and Bakiyev. Investors prefer stability, unfortunately, Kyrgyzstan can’t guarantee that either.

In a country with a high level of corruption, social instability is very high as well, Islamists are spreading fast and the authorities can’t hide that fact any longer. Both the authorities and representatives of traditional Islam, as well as representatives of special services are facing now the situation that the extremist movement Tablighi Jamaat threatens the stability of the entire country.

Just two years ago, well-known Kyrgyz expert Nargiza Alapayeva said that "the religious situation in the republic is now such that, in the medium term, it may be possible to move away from the secular model of the state system to the fact that the republic will become the regional center for disseminating the Tablighi Jamaat ideas and the gathering place for Tablists from CIS countries.”

Interestingly, the members of Tablighi Jamaat do not actively interfere in the political life of the region yet. Who knows what position they will adopt next, as the corruption continues to grow, people are becoming poorer and the state debt is also increasing. So it is not known in what conditions the construction of a railway will take place, politically, economically and socially.

By the way, this scandal might be one of the reasons why the young prime minister Sapar Isakov lost his seat and fell into disgrace. Huawei businessmen will be able to share their experience doing business with the Kyrgyz authorities with the authorities of their country. Who knows what they might say.

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