U.S. Support for the New Silk Road
The New Silk Road initiative was first envisioned in 2011 as a means for Afghanistan to integrate further into the region by resuming traditional trading routes and reconstructing significant infrastructure links broken by decades of conflict. Today, Afghanistan and its neighbors are leading the way in key areas, creating new North-South transit and trade routes that complement vibrant East-West connections across Eurasia. The region is reducing barriers to trade, investing in each other’s economies, and supporting international development and cross-border projects.
With multiple transitions underway in Afghanistan, the United States and its allies can bolster peace and stability in the region by supporting a transition to trade and helping open new markets connecting Afghanistan to Central Asia, Pakistan, India and beyond. Countries in the region know they have more to gain economically by working together than by being isolated. Promoting connectivity in a region that is the least-economically integrated in the world is challenging, but the benefits can be transformative. This is why the United States is promoting the New Silk Road initiative linking Central and South Asia in four key areas:
Regional Energy Markets: With a population of more than 1.6 billion people, South Asia’s economies are growing rapidly, and South Asia’s demand for inexpensive, efficient, and reliable energy is growing in turn. At the same time, Central Asia is a repository of vast energy resources – including oil, gas, and hydropower. Directing some of these resources southward from Central to South Asia, through Afghanistan, would be a win-win for the region’s energy suppliers and energy users alike. The U.S. has provided:
- Support for CASA-1000 regional electricity grid, including a $15 million contribution following the March 2014 World Bank commitment of $526 million and support for the CASA Secretariat;
- More than $1.7 billion in support of energy transmission lines, hydropower plants, and associated reforms in Afghanistan since 2010; and
- Adding 1,000 megawatts to Pakistan’s power grid, supplying power to more than 16 million people.
Trade and Transport: Improving trade and transit in South and Central Asia means improving the “hardware” of reliable roads, railways, bridges, and border crossing facilities. But it also means working on the “software” side, harmonizing national customs systems, bringing states into multilateral trade institutions, and getting neighbors to work together to break down institutional and bureaucratic barriers to trade. The U.S. has provided:
- More than 3,000 kilometers of roads built or rehabilitated in Afghanistan;
- Support for Kazakhstan and Afghanistan’s accession to the WTO;
- Technical assistance for the passage of the 2010 Afghanistan-Pakistan Transit-Trade Agreement (APTTA), and support for the Cross-Border Transport Agreement (CBTA) between Kyrgyzstan, Tajikistan, and Afghanistan.
Customs and Border Operations: Profitable regional trade depends in large part on speedy and efficient transit. It also depends on border security and good governance that prevents transit of weapons, drugs, and human trafficking. The United States works with regional partners to reduce border wait times, increase cooperation at key checkpoints and crossings, and prevent transit of illegal and dangerous material. With U.S. support:
- Since 2009, intraregional trade in Central Asia has increased by 49 percent;
- Since 2011, the average cost of crossing regional borders decreased by 15 percent;
- Customs procedures have been streamlined at seven Afghan border crossing points, resulting in expedited trade with average release time down from eight days in 2009 to three and a half hours in 2013, saving $38 million annually.
Businesses and People-to-People: Regional economic connectivity is more than infrastructure, border crossings, and the movement of goods and services. Sharing ideas and expansion of economic markets also creates opportunities for youth, women, and minorities and enhances regional stability and prosperity. The U.S. has:
- Funded university studies for hundreds of Afghan students across Central Asia;
- Sponsored the Central Asia-Afghanistan Women’s Economic Symposium and South Asia Women’s Entrepreneurship Symposium in support of thousands of women entrepreneurs and business owners;
- Organized trade delegations, meetings and conferences in Almaty, Islamabad, Kabul, Mazar-i-Sharif and Termez resulting in over $15 million in trade deals.