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State of Mankind

(137)Debt-Trapping Central Asia

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Following the dissolution of the Soviet Union, the CCP has taken great efforts to develop and cement its relationship with Central Asian countries, like Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan. The goal of the CCP’s strategy in Central Asia can be viewed from several angles: For one, Central Asia is an unavoidable land route in China’s westward expansion. Further, when China constructs infrastructure to transport goods in and out of China, it can also expand its commercial interests in Central Asia. Secondly, China aims to seize the natural resources, including coal, oil, gas, and precious metals that are abundantly found in these countries. Thirdly, by controlling Central Asian countries that are geographically and culturally close to Xinjiang, China can tighten its control over ethnic minorities in Xinjiang.

Though the CCP has not announced its desire to dominate Central Asia, it has effectively taken up the most influential role in this region. The International Crisis Group, a Brussels-based think tank, released a report in 2013 saying that China has been rapidly growing into an economically dominant power in this region by taking advantage of social unrest in Central Asia. Beijing sees Central Asia as a supply base of raw materials and resources and as a market for its low-priced, low-quality products. Meanwhile, the CCP has also poured millions of U.S. dollars into investment and aid in Central Asia in the name of maintaining stability in Xinjiang. [31]

A huge network of highways, railways, airways, communication, and oil pipelines has closely connected China with Central Asia. The China Road and Bridge Corporation (CRBC) and its contractors have been responsible for the construction of highways, railways, and electricity transmission lines in Central Asia. They pave roads on some of the most dangerous and complex terrain and construct new roads to transport China’s goods to Europe and the Middle East, as well as to ports in Pakistan and Iran. In the two decades between 1992 and 2012, of diplomatic relations between China and the five Central Asian countries, the total volume of trade between China and Central Asia grew one-hundredfold. [32]

In Central Asia, the CCP has promoted investments in large state-run, credit-financed infrastructure projects. Some scholars have realized that such investments would form the basis of a new international order in which China would play a dominant role. Seen from this perspective, Central Asia, like Australia, is another testing ground for the CCP’s conceptual revolution in diplomatic strategy. [33]

Beijing tends to support the corrupt authoritarian leaders of the Central Asian countries, and its opaque investment projects are considered beneficial primarily for the local social elites. The International Crisis Group’s report noted that each of the Central Asian governments is weak, corrupt, and fraught with social and economic unrest. [34] The large infrastructure projects promoted by Beijing are not only linked to massive loans, but also involve official approvals and permits, which are based on vested interests. This gives rise to and worsens the corruption in these regimes.

In Uzbekistan, Islam Karimov, the former first secretary of the Communist Party of the Uzbek Soviet Socialist Republic in the USSR, served as the country’s president from the time of independence in 1991 to his death in 2016. After the fall of the Soviet Union, Uzbekistan was under Karimov’s authoritarian rule for another quarter century. In 2005, government forces clashed with protesters in the eastern city of Andijan, resulting in hundreds of deaths. The CCP placed itself as a firm supporter of Karimov, rendering firm support as usual to Uzbekistan and other countries in this region in their efforts to safeguard the status quo. [35]

The fragile economic structures of Central Asian countries, in combination with massive infrastructure loans from China, leave these countries especially prone to falling into China’s debt trap. Turkmenistan is suffering from a severe economic crisis, with an annual inflation rate of over 300 percent, unemployment estimated at over 50 percent, severe food shortages, and rampant corruption. Now China is the only customer of Turkmen gas, [36] and also the largest creditor of its foreign debt, which stands at US$9 billion (estimated at 30 percent of GDP in 2018). [37] It’s possible that Turkmenistan had no choice but to give its natural gas fields to China to pay off its debt. [38] This country has put its economic arteries in Beijing’s hands.

Tajikistan borrowed more than US$300 million from China to build a power plant. Unable to pay its debt, the country transferred ownership of a gold mine to China in order to pay off the liabilities. [39]

The Kyrgyz economy is also in danger, as large-scale infrastructure projects carried out by the CCP there also caused it to fall into the debt trap. The country is likely to give part of its natural resources to pay debt. Kyrgyzstan also cooperated with Chinese communications companies Huawei and ZTE to build digital communication tools in order to tighten governmental control over people, while also leaving China a backdoor to extend its surveillance into these countries. [40]

Beijing took advantage of the power vacuum in the aftermath of the dissolution of the Soviet Union to enter the Kazakh energy sector. The Kazakh economy depends on production of crude oil, and oil revenue in U.S. dollars is used to buy cheap Chinese products. Apart from oil drilling, this nation’s industrial foundation is fragile. With the flow of cheap Chinese products into its market, the Kazakh manufacturing industry collapsed. [41]

Another motive for the CCP’s expansion in Central Asia is to crack down on Uyghur dissidents living in Central Asia. The Shanghai Cooperation Organization (SCO) Charter signed by the China-led SCO allows suspects to be extradited to member countries. A member country can even send their own officials to another member country to conduct an investigation. In this way, the CCP extends its suppression of Uyghurs abroad and arrests Uyghur dissents who have taken refuge in other countries. [42]

From Chapter Eighteen
The Chinese Communist Party’s Global Ambitions


The CCP formed “Anti-Terrorists Alliance” with Central Asian countries
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