Plan agreed on $19bn new Silk Road
Monday, 19 November 2007
Raphael Minder from Dushanbe, Tajikistan
EIGHT countries have signed an agreement to spend $19bn on roads and railways running through central Asia to revive and expand the ancient Silk Road that connected China and Europe.
The modern version is expected to include north-south routes throughout the region that will connect Russia to south Asia and the Middle East.
The central Asian countries of Kazakhstan, Kyrgyzstan and Tajikistan signed last weekend the agreement with their eastern neighbours China and Mongolia, Afghanistan to the south, and their fellow former Soviet republic of Azerbaijan to the west.
The Asian Development Bank says less than 1.0 per cent of the $1,000bn-plus of trade between Europe and Asia passes through central Asia, a region that was once at the heart of trade between the two continents.
While the new roads and railways should revive central Asia's importance in the transit of goods, officials said a better transport network was needed to help some of the countries maintain their strong growth. Oil-rich Kazakhstan, for example, has recently averaged an annual growth of 10 per cent.
Azil Gezen, an ADB consultant on the project, said: "There is a real risk of stifling the growth of some of these countries if the transport system cannot serve their future needs."
Work is expected to start next year on developing six road-rail corridors and finish by 2018.
The ADB is backing the plan, along with the European Bank for Reconstruction and Development, the Islamic Development Bank, the International Monetary Fund, the United Nations Development Programme, and the World Bank.
Such multilateral institutions are expected to fund just under half of the entire project.
Beijing is also expected to provide a substantial amount of financing. Almost a third of the investment is expected to take place on Chinese soil.
On the European side, the corridors will end in Turkey in the south and Russia in the north.
Russia has been invited to join the scheme but has yet to do so.
(Under syndication arrangement with FE)
EIGHT countries have signed an agreement to spend $19bn on roads and railways running through central Asia to revive and expand the ancient Silk Road that connected China and Europe.
The modern version is expected to include north-south routes throughout the region that will connect Russia to south Asia and the Middle East.
The central Asian countries of Kazakhstan, Kyrgyzstan and Tajikistan signed last weekend the agreement with their eastern neighbours China and Mongolia, Afghanistan to the south, and their fellow former Soviet republic of Azerbaijan to the west.
The Asian Development Bank says less than 1.0 per cent of the $1,000bn-plus of trade between Europe and Asia passes through central Asia, a region that was once at the heart of trade between the two continents.
While the new roads and railways should revive central Asia's importance in the transit of goods, officials said a better transport network was needed to help some of the countries maintain their strong growth. Oil-rich Kazakhstan, for example, has recently averaged an annual growth of 10 per cent.
Azil Gezen, an ADB consultant on the project, said: "There is a real risk of stifling the growth of some of these countries if the transport system cannot serve their future needs."
Work is expected to start next year on developing six road-rail corridors and finish by 2018.
The ADB is backing the plan, along with the European Bank for Reconstruction and Development, the Islamic Development Bank, the International Monetary Fund, the United Nations Development Programme, and the World Bank.
Such multilateral institutions are expected to fund just under half of the entire project.
Beijing is also expected to provide a substantial amount of financing. Almost a third of the investment is expected to take place on Chinese soil.
On the European side, the corridors will end in Turkey in the south and Russia in the north.
Russia has been invited to join the scheme but has yet to do so.
(Under syndication arrangement with FE)