Wednesday, 11 January 2006

THE KULMA–KAROKURUM ROAD: A NEW LINK BETWEEN CHINA AND CENTRAL ASIA

Published in Field Reports

By Bakhtiyor Naimov (1/11/2006 issue of the CACI Analyst)

The path was closed as a part of the Soviet Union’s foreign policy, due to paranoia and isolationist politics. However, now the road to China is not only perceived as a chance of economic progress in Tajikistan, but is perceived as such in the whole of landlocked Central Asia.

The Murghab valley of Gorno-Badakhshan that is located over 4,500 metres above the sea level was left isolated when the Russian frontier post was pulled out from there in 2002.

The path was closed as a part of the Soviet Union’s foreign policy, due to paranoia and isolationist politics. However, now the road to China is not only perceived as a chance of economic progress in Tajikistan, but is perceived as such in the whole of landlocked Central Asia.

The Murghab valley of Gorno-Badakhshan that is located over 4,500 metres above the sea level was left isolated when the Russian frontier post was pulled out from there in 2002. The road to China, which is connected to the rest of Tajikistan and Kyrgyzstan through Murghab, indeed seems to be the best way of connecting the people of this district with the rest of the world. A teacher in Murghab noted: “Even during the Soviet Union time, the so-called most prosperous period, here in Murghab we did not have more than two TV channels and only the most well-connected people had color TVs. Now, with easy access to cheap Chinese products, most of the families in Murghab enjoy the 32 channels that can be accessed through satellite antennas that most households now possess”.

Murghab is an illustration of the active character of trade through this new road. Most of the business, however, is targeting wider and relatively richer markets like Khorog, Dushanbe, Osh, Bishkek, etc. Due to the mountainous geography and high altitude, the road is only open from May through October. The Chinese government has nevertheless promised to finance the widening of the Kulma–Karokurim road. When the road is made decent, it might be ale to keep it open all around the year. Given that the closing of the road for winter adversely affected prices in Khorog, this will be an important development. Gorno-Badakhshan will be ever more isolated during the winter period, because of the danger of avalanches. Fortunately, electricity is operating around the clock in Khorog city, which was not the case in past years.

Businessmen, businesswomen, and traders can obtain Chinese visas at the border. There are four options to choose from: 15 days, 1 month, 3 months, or 6 months. The visas for the period up until 2 months cost US$20, for 2-6 months US$40, and for 1 year US$60. It is very easy to get a visa and with these visas, traders and their truck(s) can go until Koshkar’s terminal. Koshkar is the first commercial city on the Kulma Karakorum route. The main merchandise that is imported from China includes all kinds of construction material, equipment, furniture, stationary, etc. Traders usually use Fura trucks to transport the goods, and shipping 40 tons of goods from Koshkar to Khorog costs around US$3500.

Although the short-term benefits of the road seem to be overwhelming, such a heavy import link is not something exclusively positive for the Central Asian economies. Economically speaking, when imports exceeds exports there is a trade deficit that makes the already weak economies more unstable. Besides, Chinese goods are not of top quality; moreover, most of the technology is labeled after very famous companies like Sony, Samsung, Toshiba, LG, etc, however, everyone understands that China – like the Former Soviet Union – ignores copyright laws, thus importing pirated and unreliable goods to Central Asia. One needs not worry about a television set of bad quality, since the worst thing that could happen is that is breaks down. However, construction materials and cars from China that are not checked for quality could be dangerous. Therefore, disappointment with the low quality of some Chinese goods imported to Central Asia would most likely be comparable to the elation from low prices. Meanwhile, the lack of trade partners makes it hard for the Central Asian countries to set up quality controls and enforce them on imported goods from China.

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