What Happened to the New Silk Road?

Five years ago, when the United States rolled out its New Silk Road (NSR) initiative, the notion of tethering Afghanistan to Central Asia attracted a wealth of advocates. Two decades after the Soviet Union’s collapse resulted in a trio of new nations along Kabul’s northern border, and one decade after American troops first landed in Afghanistan, State Department plans to see Afghanistan “integrate further” into Central Asia “by resuming trading routes and reconstructing significant infrastructure links broken by decades of conflict” made a form of facile sense.

After all, Central Asia stood as the least trade-friendly region extant. Afghanistan, per American officials, would not only tap necessary Central Asian fiscal and energy reserves, but would act as a hinge within nascent South Asian and Central Asian trade, especially within the hydrocarbon sphere. As then-Secretary of State Hillary Clinton explained, “Turkmen gas fields could help meet both Pakistan’s and India’s growing energy needs and provide significant transit revenues for both Afghanistan and Pakistan. Tajik cotton could be turned into Indian linens. Furniture and fruit from Afghanistan could find its way to the markets of Astana or Mumbai and beyond.” Unsaid, but understood, lay broader geopolitical inclinations: The NSR would re-route Central Asian hydrocarbon reserves southward, away from Russian export markets, while also propelling economic redirection alongside.

A half-decade on, the NSR not only retains primacy within Washington’s approach to Central Asia, but remains, on paper, sound strategy, linking nominally energy-rich markets in Kyrgyzstan, Tajikistan, and Turkmenistan to energy-deficit markets in India, Pakistan, and Afghanistan. In its broader theory, the NSR remains tenable.

But in practice, the platform remains in tatters. Indeed, not only has the NSR all but disappeared from American rhetoric, but the principal programs within the NSR – a pipeline running from Turkmenistan to India, and an electricity grid transiting Kyrgyz and Tajik electricity to Afghan and Pakistani consumers – remain interminably delayed, each displaying disconcerting unfamiliarity with regional demands and dynamics. The NSR may stand as the prime American strategy within Central Asia, but any promise within the program has morphed into an empty diplomatic shell, an undertaking bogged down by bureaucratic inertia that offers little beyond inflated rhetoric and wasted resources.

Look to the Central Asia South Asia Electricity Transmission and Trade Project (CASA-1000), for instance. Planned since 2007, upon completion the grid would transit a total of 1,300MW of excess summer electricity from Dushanbe and Bishkek to Kabul, which would receive approximately 300MW, and Islamabad, which would receive approximately 1,000MW. Despite costs now running over $1.2 billion, the project retains continued support from Washington, London, and the World Bank. As USAID detailed, the grid will have a “game-changing impact” on “fostering an increased regional interdependence that ties Afghanistan’s future to that of its neighbors,” and would act, according to Deputy Secretary of State Antony Blinken, as one of the linchpins in “helping develop the region’s connectivity.” Again, per Washington’s theoretical construct, the project remains worthwhile, exporting nominally excess hydropower electricity from Central Asian suppliers to South Asian markets.

But there’s a reason the project has experienced myriad delays, and appears no closer to completion. To wit, low levels of rainfall have flipped Kyrgyzstan, over the past three years, from a net electricity exporter to a nation forced to import electricity from its neighbors. A few months ago, Kyrgyzstan was forced by circumstances to sign an agreement to import electricity from Kazakhstan. In light of continued shortages – and on top of Russia’s pullback from Kyrgyzstan’s hydrocarbon project – neither American nor regional officials have yet explained how and where Bishkek would locate sufficient electricity supply for export for CASA-1000.

Tajikistan, meanwhile, continues to roil with continued and extended blackouts through much of the country. Much of the country receives electricity for less than 10 hours per day. Nonetheless, Dushanbe has pushed ahead with the project – and insisted that export would run year-round, contra even the optimistic planned projections. Moreover, President Emomali Rakhmon has claimed that CASA-1000 will only prove profitable while connected to his planned Rogun Dam, a proposed $2.2 billion dam that, at 335 meters, would stand as the largest dam in the world. As Rahmon outlined in 2013, CASA-1000 “is not profitable unless two units of Rogun [hydropower plant] are running.” Once more, Rahmon’s claimed linkage to Rogun stands outside current proposals; all of the “necessary power generation” for CASA-1000, according to planners, “is already in place.”

But the concomitant concerns stemming from Rogun don’t dovetail only from Rahmon’s outsized claims. Uzbek President Islam Karimov – whose country sits downstream from Tajikistan’s water supplies, with Uzbekistan maintaining some 10 million individuals dependent on irrigated agriculture – referred to Rogun when outlining potential rationale for regional war. As Karimov noted in 2012 when discussing Rogun, “I won’t name specific countries, but all of this could deteriorate to the point where not just serious confrontation, but even wars could be the result.” A 2013 letter from Tashkent further detailed Uzbekistan’s position on the project: “The implementation of the CASA-1000 Project is integral with the plans of the Tajik and Kyrgyz participants to construct gigantic hydro-engineering facilities … which will catastrophically aggravate the already tense water management situation in the region,” while also causing “irreversible social and environmental consequences in the Central Asian region.”

American officials, as it is, have remained silent on Karimov’s belligerence, and have plied the dictator since with the largest military donation Washington has yet seen in the region. Nonetheless, the reality remains that the U.S. continues to back a project – and continues to place it at the heart of the NSR – that has spurred a regional autocrat to threaten war against a another regional autocrat.

But CASA-1000 doesn’t stand as the NSR’s lone inter-regional project mired in myopia. The proposed Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline, on the drawing board since the mid-1990s, parallels CASA-1000 in theoretical construct. That is, much like CASA-1000, those backing TAPI have centered on the nominal supply excesses of Central Asian producers and the expanding energy needs of South Asian markets, while ignoring both fiscal and security realities. All regional governments remain interested in the proposal, most especially Ashgabat, which continues casting about for any non-Chinese markets to which it can export its excess gas reserves – all the more now that Russia has cancelled remaining imports. The pipeline would ship some 14 billion cubic meters annually to markets in both Pakistan and India, with Afghanistan receiving both transit fees and 5 bcm alongside.

TAPI’s implementation, however, has already witnessed more missteps than those besetting CASA-1000. Not only is the endeavor projected to run some $5 billion over the original $10 billion budget, but Turkmenistan’s unwillingness to allow any foreign energy majors – most especially France’s Total and the United States’ Chevron and ExxonMobil – from investing in onshore gas reserves has stalled investor confidence. And security concerns, especially in northern Afghanistan, continue to buffet the 1,735km project. To wit, recent estimates called for some 18,000 security personnel in total to guard the pipeline – with events in Kunduz since last fall further exacerbating security concerns. (For added measure, a recent Taliban assault on power transit to Kabul added yet another layer of concern to CASA-1000 but also casts doubts on TAPI.) Questions on Indian-Pakistani cooperation continue ringing the project, while deteriorating security guarantees along the Turkmen-Afghan border degrade TAPI’s potential that much further.

Moreover, the longer the pipeline is delayed, the greater the likelihood the pipeline disappears in the morass of external options and geopolitical realities. Afghan President Ashraf Ghani has already announced that the pipeline will likely be delayed until at least 2020, and New Delhi has rumbled about renegotiating the current pricing scheme, which was finalized in 2012, far before the current collapse in hydrocarbon costs. Likewise, as Iranian markets continue their opening, India remains well aware that a buyer’s market burgeons. As such, a few months ago, Indian Prime Minister Narendra Modi called to explore the “possibility of [a] land-sea route through Iran” – effectively negating TAPI’s necessity.

To be sure, regional officials continue to crow about the promise behind the regional integration projects: Over the past few months, Turkmenistan President Gurbanguly Berdymukhamedov and Pakistan Prime Minister Nawaz Sharif have both continued praising TAPI’s potential, and Tajik and Pakistani officials reaffirmed their commitment to CASA-1000 earlier this month. TAPI’s recent “groundbreaking,” held in Turkmenistan, also saw the Asian Development Bank, which backs the pipeline, mirror their American counterparts’ rhetoric on CASA-1000 and term the pipeline “a true game changer.”

And that would be true – were TAPI ever to move from paper to practice. But between extensive and expanding security concerns, pricing disagreements, and external options opening, TAPI’s moment seems to have passed. Likewise, CASA-1000 remains heavy on promise, and light on practicality – and that’s only when a regional autocrat isn’t threatening war over its completion. All the while, the U.S. continues trundling forward with both TAPI and CASA-1000 as the primary mechanisms in its desiccated NSR portfolio. As Deputy Secretary of State William J. Burns described in late 2014, “The most important – and perhaps most transformational – step we can take is to build a regional energy market linking existing transmission lines and large supplies of hydropower and natural gas in Central Asia with 1.6 billion energy-hungry consumers in South Asia.” That may well be the case. But as George Washington University’s Sebastien Peyrouse recently noted, the NSR “does not adequately reflect regional economic and trade dynamics.” Five years on, it’s clear the NSR remains a policy swamped in both nonsensical planning and discordant demands – and has helped spur, at least in part, the threat of war in a region that can least afford it.