Kyrgyzstan, Russia, China discussed on The Economist: The Intelligence

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This is Anna kasparian, host and executive producer of the Young Turks, the largest online progressive news show in the world. Today's episode is brought to you by naked wines. The wine industry has done business in the same old way for a century. It's the closed door, boys club way. And to be honest, things haven't really aged as well as a, let's say, fine Bordeaux would. But naked wines wants to change all that. Naked wines believes the best wine is made by people, not big corporations, so they connect you directly with the world's best independent winemakers, helping to support their craft in making the best wines. They also save you money all while cutting out the middlemen and getting you incredible wine at up to 60% off. Take back control of the way you whine, find out more at U.S. naked wines dot com slash podcast. Drink responsibly, and be sure to listen to the Young Turks on Apple podcasts, Spotify, or wherever you get your podcasts. Landlocked countries are particularly reliant on neighbors for getting goods in and out. In Central Asian countries such as Kyrgyzstan and Uzbekistan, that means being dependent on Russia. Some newly proposed railway routes, though, could do away with that. One line would link Kyrgyzstan and Uzbekistan with China. That could be a big loss for Russia and its influence in the region and potentially a big win for China. At the moment, Central Asia does have some railway links to the outside world, but they were mostly built by the Russians, either an imperial times or when Central Asia was part of the Soviet Union. And their links to each other within Central Asia are not particularly good. Jeremy page is The Economist's Asia diplomatic editor. At the moment, the major freight route between China and Europe goes from China via Kazakhstan and then through Russia. And that's become a pretty important conduit for trade in recent years. And it now carries the vast majority of China's railway trade with Europe, which was about 8 billion dollars in 2016, and it's gone up to 75 billion as of 2021. But this new line would open up a new route from China to Europe. First, going through Kyrgyzstan and Uzbekistan and then passing through Turkmenistan Iran and turkey and on two western markets. And not only would that shorten the journey by some 900 kilometers and about 8 days. But perhaps more importantly, it would completely skirt Russia. That's important because of the sanctions regime that Russia is under? Exactly. So Russia has become much harder to move goods across in the last few months, largely because of the sanctions imposed by western governments following Vladimir Putin's division of Ukraine. And that has caused a lot of uncertainty, particularly among European freight forwarders. And so they have switched a lot of them have switched to a slower and more expensive hybrid rail and sea routes whereby goods cross the Caspian Sea by ship, do the rest of the journey by rail, but they have to be loaded onto ships for that section in order to bypass Russia. So this new route via Kyrgyzstan and Uzbekistan will provide an alternative, which is still cost effective, completely non Russian, rail only, and would be equally effective in moving cuts between China and Europe. And this would be especially beneficial for China as it would give it a chance to diversify those railway trade routes and make sure that it can maintain sustainable rail trades with Europe regardless of the situation in Russia. And presumably it would also bring some benefits to the countries that this new route runs through. That's right. There is great hope, particularly in Kyrgyzstan that this line will bring them some economic benefits. So for example, I spoke with the transport minister of Kyrgyzstan and who estimates that this new railway link would carry it between 7 and 13 million tons of cargo a year, most of that would be bound for other places, but Kyrgyzstan would get significant transit fees from that, and he thinks that those transit fees combined with taxes and the jobs generated by the railway would give Kyrgyzstan quite a significant economic boost. And that's important for a country like which is a former Soviet country. It's extremely remote and its population 6.7 million depends very heavily at the moment on remittances from migrant workers in Russia. So this would give them an alternative source of income, but it would also help to reduce their dependence on Russian. But the Russian question aside, given all those benefits potentially on offer, why hasn't this kind of root been proposed before now? Well, it has to be talked about for a long time, plans were first drawn up as early as 1997, but they kept on running into the same kind of roadblocks. We disagreements between China and Kyrgyzstan over the route and the costs China basically wanted the quickest, shortest route possible to get to Europe and Kyrgyzstan wanted it to stop off at more places within Kyrgyzstan, so it could serve more of its population. So that was one problem, then there were also differences over where to switch the gauge because China and Europe use track that's 1.435 meters wide. Whereas the Soviet Union, the former Soviet Union, uses 1.52 meter standard. So that was another point of contention. So basically the idea was repeatedly shelved because of those and other differences. But now it's getting a new push. Partly because it seems to make more commercial sense, given the expansion of railway trade between China and Europe and partly because of this desire to become less dependent on Russia. And so they've managed to work out those long-standing differences in the end. It seems so. The transport minister of Kyrgyzstan told me that there wasn't agreement on the route between China Kyrgyzstan Uzbekistan, they had agreed on where to change the gauge of the track and they'd agreed on a divisional budget of $4.1 billion. So on paper at least it looks like it's going ahead. Geological surveys have started, they started in August, a group of Chinese experts arrived in Kyrgyzstan to do them. And feasibility study will be finished by March. That said, there are some major challenges ahead, particularly on the financing front, the president of Uzbekistan is also promoting another very ambitious railway project, which would build a line down from Uzbekistan through Afghanistan to Pakistan, which has been estimated to cost about $4.8 billion. And there is a fair degree of skepticism among diplomats and regional experts about whether these governments can really raise the funding for either of these railways. But that does seem to be real momentum, particularly behind the trans Kyrgyzstan railway. And if either of these does actually become a reality, it really will be a very important step towards improving connectivity within the region and reducing its reliance on Russia. Thanks very much for your time, Jeremy. Thank

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