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Economy 20/09/2007 Historic Asian Silk Road trade route to be rebuilt

Central Asia has been termed the secondary hearth for the human species. Arriving there roughly 45,000 years ago, early humans spent thousands more years in these game-rich regions before moving to Europe, Asia, or the Americas

The "Silk Road" refers to a series of routes that crisscrossed Eurasia from the first millennium B.C. through the middle of the second millennium AD. It connected many countries along more than 5,000 miles. The best known segment of the Silk Road began in the Chinese capital of Chang’an (Xian), diverged into northern and southern routes that skirted the Central Asian Taklamakan Desert, converged to cross the Iranian plateau, and ended on the eastern shores of the Mediterranean in cities like Antioch and Tyre. The Great Silk Road guide

China and seven countries in Central Asia have reached a preliminary agreement to build a US$19.2bn modern equivalent of the "Silk Road" trade route between China and Europe.

The plan, which was agreed recently in Manila, location of the headquarters of the Asian Development Bank (ADB), is expected to be formally approved in November at a ministerial meeting in Tajikistan. It is supported by the ADB, the European Bank for Reconstruction and Development, the Islamic Development Bank, the International Monetary Fund, the United Nations Development Programme and the World Bank, Finfacts.com reported.

The ADB says that Central Asian countries have been struggling to maintain their basic infrastructure since the collapse of the Soviet Union in 1991. International experts estimate that 1,500 km of roads in the region deteriorate each year.

But road conditions are not the only barrier. Other difficulties are caused by bad weather, herds of sheep crossing the road, and time consuming processes at the border crossing.

Improving road conditions and smoothing out the border processes that pose a barrier to trade, tourism, and investment have been identified as the top agenda for the Central Asia Regional Economic Cooperation (CAREC) Program, initiated in 1997 with ADB support. The participants include Afghanistan, Azerbaijan, China, Kazakhstan, Kyrgyz Republic, Mongolia, Tajikistan and Uzbekistan.

While neighbouring the world’s largest and fastest-growing markets (China, India and Russia), the ADB says that Central Asia’s landlocked status means regional transport costs are a serious impediments to development.

The ADB says that the salient geographic characteristic of the region is its remoteness—the seven Central Asian republics and Xinjiang, China, are all landlocked, except for the inland waterways they share, which have limited value in reaching the outside world.

Uzbekistan is the world’s only double landlocked country. It and all of its immediate neighbours are landlocked. Urumqi, the capital of Xinjiang, is farther from a seaport than any other large city in the world. International trade in the region thus involves shipment of goods over long distances through neighbouring countries.

The region’s landscape is generally harsh and poses substantial barriers to transportation and communication. The terrain varies from the second-lowest point on earth, in the Turpan basin (154 meters below sea level), to mountain peaks that rise 7,400 meters in the Kyrgyz Republic and form the border with China. Inhospitable deserts cover much of western Uzbekistan and Kazakhstan. The Taklamakan Desert in southern Xinjiang was particularly dangerous to ancient travelers and continues to present great hindrance to modern trade and transit. The dry grass plains of Kazakhstan run into the towering mountains of the Tian Shan Mountains in the Kyrgyz Republic. More than 90 percent of Tajikistan is mountainous. The borders and the mountains have limited travel to only a few corridors and passes. Despite the roughness of the land, it has been populated for thousands of years.

The ADB says less than 1 per cent of the more than US$1,000bn of trade between Europe and Asia is now transported through Central Asia, a region that used to be at the very heart of the trade route .

The road and rail investments agreed to by Afghanistan, Azerbaijan, China, Kazakhstan, Kyrgyzstan, Mongolia, Tajikistan and Uzbekistan are to set to begin next year, for completion in 2018.

Azerbaijan Road Project - - ADB’s technical assistance is helping to develop a long-term transport sector strategy that identifies priorities and resources for the development of the sector.

The plan will not follow the exact routes taken by the Silk Road, which was a series of roads and trails. What is envisaged is the development of six corridors combining rail and road services from China to Europe, as well as from Russia to southern Asia and the Middle East. On the European side, the corridors will end in Turkey in the south and in Russia in the north. Russia has been invited to participate in the project but has yet to do so.

An estimated third of the investment is expected to take place in China and Kazakhstan, which is Central Asia’s fastest-growing economy, is also expected to be an important participant as it seeks to become a hub for container traffic between China, Asia, the Gulf states and Europe. Kazakhstan has existing plans to spend US$26bn on transport infrastructure by 2015 including modernisation of its seeks to modernise its railway network and expand the Caspian port of Aktau.

The ADB is expected to fund almost half of the cost of the Silk Road project.

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