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Page added on October 30, 2008

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Oil-rich, remote and difficult

As rich countries poured billions of dollars into bank bailouts, China quietly announced plans last month to invest $100bn building roads and railways to open up remote central Asia to the rest of the world. More than 20,000km of rail track will be built in the coming decade to bring Chinese goods into central Asia and carry back oil and metals to China.

Reaching out towards Russia, Europe, Iran and Pakistan, the railways will create a modern equivalent of the region’s ancient Silk Road.

The project, at a time when even the most backward and insular central Asian countries are beginning to look outwards for investment, is expected to energise the region’s delayed integration with global markets. Central Asia’s remote geography, together with the security threat emanating from its southern border with Afghanistan and Iran, has kept most investors at bay since the five countries emerged as independent states at the fall of the Soviet Union in 1991.

Even international oil companies competing fiercely for the region’s vast energy reserves, have grappled to find transport routes out of the landlocked region. Furthermore, its authoritarian leaders have been slow to enact political and economic reforms that could attract investors and foster the development of an entrepreneurial class.

Financial Times

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