113th CONGRESS

1st Session 

Printed for the use of the 

Commission on Security and Cooperation in Europe 

THE NEW SILK ROAD STRATEGY: 

IMPLICATIONS FOR ECONOMIC 

DEVELOPMENT IN CENTRAL ASIA 

JULY 31, 2013 

Briefing of the 

Commission on Security and Cooperation in Europe 

Washington: 2015 


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Commission on Security and Cooperation in Europe 

234 Ford House Office Building 

Washington, DC 20515 

202–225–1901 

csce@mail.house.gov 

http://www.csce.gov 

Legislative Branch Commissioners 

SENATE HOUSE 

BENJAMIN L. CARDIN, MARYLAND, 

Chairman 

SHELDON WHITEHOUSE, RHODE ISLAND

TOM UDALL, NEW MEXICO

JEANNE SHAHEEN, NEW HAMPSHIRE

RICHARD BLUMENTHAL, CONNECTICUT

ROGER WICKER, MISSISSIPPI

SAXBY CHAMBLISS, GEORGIA

JOHN BOOZMAN, ARKANSAS

CHRISTOPHER SMITH, NEW JERSEY, 

Co-Chairman 

JOSEPH PITTS, PENNSYLVANIA

ROBERT ADERHOLT, ALABAMA

PHIL GINGREY, GEORGIA

MICHAEL BURGESS, TEXAS

ALCEE HASTINGS, FLORIDA

LOUISE MCINTOSH SLAUGHTER, 

NEW YORK

MIKE MCINTYRE, NORTH CAROLINA

STEVE COHEN, TENNESSEE

(II)


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ABOUT THE ORGANIZATION FOR SECURITY AND COOPERATION IN EUROPE 

The Helsinki process, formally titled the Conference on Security and Cooperation in 

Europe, traces its origin to the signing of the Helsinki Final Act in Finland on August 

1, 1975, by the leaders of 33 European countries, the United States and Canada. As of 

January 1, 1995, the Helsinki process was renamed the Organization for Security and 

Cooperation in Europe (OSCE). The membership of the OSCE has expanded to 56 participating States, reflecting the breakup of the Soviet Union, Czechoslovakia, and Yugoslavia. 

The OSCE Secretariat is in Vienna, Austria, where weekly meetings of the participating States’ permanent representatives are held. In addition, specialized seminars and 

meetings are convened in various locations. Periodic consultations are held among Senior 

Officials, Ministers and Heads of State or Government. 

Although the OSCE continues to engage in standard setting in the fields of military 

security, economic and environmental cooperation, and human rights and humanitarian 

concerns, the Organization is primarily focused on initiatives designed to prevent, manage 

and resolve conflict within and among the participating States. The Organization deploys 

numerous missions and field activities located in Southeastern and Eastern Europe, the 

Caucasus, and Central Asia. The website of the OSCE is: <www.osce.org>. 

ABOUT THE COMMISSION ON SECURITY AND COOPERATION IN EUROPE 

The Commission on Security and Cooperation in Europe, also known as the Helsinki 

Commission, is a U.S. Government agency created in 1976 to monitor and encourage 

compliance by the participating States with their OSCE commitments, with a particular 

emphasis on human rights. 

The Commission consists of nine members from the United States Senate, nine members from the House of Representatives, and one member each from the Departments 

of State, Defense and Commerce. The positions of Chair and Co-Chair rotate between 

the Senate and House every two years, when a new Congress convenes. A professional 

staff assists the Commissioners in their work. 

In fulfilling its mandate, the Commission gathers and disseminates relevant information to the U.S. Congress and the public by convening hearings, issuing reports that 

reflect the views of Members of the Commission and/or its staff, and providing details 

about the activities of the Helsinki process and developments in OSCE participating 

States. 

The Commission also contributes to the formulation and execution of U.S. policy 

regarding the OSCE, including through Member and staff participation on U.S. Delegations to OSCE meetings. Members of the Commission have regular contact with 

parliamentarians, government officials, representatives of non-governmental organizations, and private individuals from participating States. The website of the Commission 

is: <www.csce.gov>. 

(III)


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THE NEW SILK ROAD STRATEGY: IMPLICATIONS FOR 

ECONOMIC DEVELOPMENT IN CENTRAL ASIA 

—————— 

JULY 31, 2013 

WITNESSES 

Page 

Craig Steffensen, North American Representative, Asian Development Bank ....................... 2 

Danica Starks, Senior Desk Officer for Russia, Caucasus and Central Asia, U.S. Department of Commerce .................................................................................................................... 4 

Eric Stewart, Executive Director, U.S.-Turkmenistan Business Council ................................ 8 

Joshua Kucera, Freelance Journalist and Analyst .................................................................... 11 

PARTICIPANT 

Shelly Han, Policy Advisor, Commission on Security and Cooperation in Europe ................. 1 

(IV)


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(1) 

THE NEW SILK ROAD STRATEGY: IMPLICATIONS FOR 

ECONOMIC DEVELOPMENT IN CENTRAL ASIA 

—————— 

July 31, 2013 

Commission on Security and Cooperation in Europe 

Washington, DC 

The briefing was held from 2:05 to 3:46 p.m. EST in 340 Cannon House Office Building, Washington D.C., Shelly Han, Policy Advisor, CSCE, presiding. 

Ms. HAN. Good afternoon. I’d like to welcome you all to the Commission on Security 

and Cooperation in Europe’s briefing on economic development in Central Asia. We’re focusing our attention today on what is broadly called the New Silk Road strategy. It’s 

a strategy that’s been around for quite some time but has been resurrected as part of 

our post-2014 strategy for Afghanistan. 

The U.S. has struggled to define a strategic value for engagement in Central Asia 

that goes beyond security or counterterrorism or energy, and Central Asia has become 

more important after the invasion of Afghanistan in 2001and then a similar shift occurred 

in 2009, with the creation of the Northern Distribution Network. 

Over the past few years, I get the impression that our economic and foreign policy 

in the region has been led by military logisticians and that it will create some challenges 

as we move away from the need for these supply lines and to seek other avenues of engagement. 

All of the countries in Central Asia face economic challenges, even the resource-rich 

countries like Kazakhstan and Turkmenistan. Kazakhstan and Turkmenistan are both 

facing problems, even though they literally have oil and gas to burn. They’re having problems creating a more coherent economic strategy that can provide jobs, and then also 

the high employment and the fragile economies in Tajikistan and Kyrgyzstan and Uzbekistan mean that job seekers often have to leave the country in order to find work. Remittances have become important linchpins in these economies. 

Combine these economic challenges with the lack of political freedoms and we have 

a recipe for potential future instability. 

Because we have a limited time for discussion today, we’re going to leave aside an 

in-depth discussion of the political challenges and focus on the challenge of economic development as a key component of stability in the region. I realize that the political and 

the economic are always intertwined, and nowhere more so than in Central Asia, but 

I think that we’ve all heard the very good and persuasive political arguments on why 

economic integration is important. But what I think would be most interesting to do 


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today—and it doesn’t get as much attention—is hearing the business case for investment 

in Central Asia. 

I’d like to ask the panel to talk about where we are in terms of building a better 

foundation for that economic development and how integration to the south, east and west 

can help accomplish that. 

Once we hear from the panelists, I’ll kick off the question-and-answer period, and 

then we’ll open it up to the audience for questions as well. 

I’m going to start with Craig Steffensen, who is the North American representative 

for the Asian Development Bank. Craig just moved to Washington in May. I think you 

just came from Thailand, right? Before that, had spent time in Afghanistan and 

Kazakhstan, and so bring some good experience from the region. I look forward to hearing 

your thoughts. 

Mr. STEFFENSEN. Thank you, Shelly and members and staff of the Helsinki Commission, for this opportunity to join you this afternoon. I’d like to especially thank Senator 

Cardin and Representative Smith for hosting this discussion on economic development 

in Central Asia. 

By way of introduction, I’m originally from Alexandria, but I’ve lived and worked 

in Asia for 30 years, most of them with the Asian Development Bank, almost all of them 

in the field. I hope, therefore, that my view from the trenches that you’ll hear when we 

move to the discussion section will be useful. 

The ADB has embarked upon the rebuilding of a New Silk Road that connects Afghanistan with Central Asia—and there’s no stretch to say the Eurasian supercontinent— 

beginning in 2001. Much of the required investment that’s taken place has been administered through the Central Asia Regional Economic Cooperation, or CAREC, program to 

what the ADB serves as a de facto secretariat. I was the head of the CAREC unit in 

Almaty, Kazakhstan, for a few years, in 2004 to ’07. 

To date, CAREC has funded some 136 projects, focusing primarily on transport, energy and trade facilitation, valued at more than $21 billion. Some $7.5 billion has been 

financed by the ADB, $4.2 billion by the governments themselves and another $9.4 billion 

by our development partners who work with us on CAREC. 

For those of you who don’t know CAREC, it’s a voluntary grouping of 10 countries 

from Azerbaijan to Mongolia, including all the ‘‘stans,’’ together with six multilateral institutions—ADB, the European Bank for Reconstruction and Development, the IMF, the Islamic Development Bank, UNDP and the World Bank. It’s not founded by a treaty or 

a charter. It’s a very practical, results-oriented sort of building block approach to development. 

The officials involved are not from ministries of foreign affairs. They tend to come 

from economic ministries, most of them at the technical level. 

There’s annual ministerial-level conference that signs off on things. There are quarterly senior officials meetings, who prioritize and sequence what needs to be done. Then 

there are lots of working groups in transport, energy, trade policy and in trade facilitation 

that meet as needed to flesh out the details of what can and should be done. 

In simple terms, CAREC—it’s all about projects. It’s also the only ADB-supported 

regional cooperation program that has a results framework which has been endorsed by 

all the country ministries to monitor the programs’ effectiveness. 


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Is CAREC achieving the results? Well, I’m probably not the one to say so, but I believe yes, it is. As part of CAREC’s transport strategy that calls for six transport corridors 

running east and west, north and south, ADB has already helped build about 2,500 miles 

of new roads, 2,000 miles of new railways, 1,500 miles of transmission lines, and trade 

facilitation or the time it takes to get goods, people and vehicles across borders has seen 

a 50 percent improvement in time. 

In Afghanistan, CAREC is helping to rehabilitate the Ring Road, a 1,367-mile highway that links major cities like Kabul and Kandahar with Mazar-e Sharif and Herat. 

It’s also supporting the development of a north-south corridor that will one day provide 

improved access for Central Asian countries to the ports of Karachi and Gwadar in Pakistan. 

It’s also supporting a new expressway linking Kabul with Jalalabad, and a new 46- 

mile railway line that connects Mazar-e Sharif with Uzbekistan and, for that matter, with 

the railway network of Central Asia, Europe, Russia and China. 

So I’d like to believe that CAREC is playing a pretty important role in linking Afghanistan with its neighbors. 

You may have heard of the TAPI project or the Turkmenistan-Afghanistan-PakistanIndia natural gas pipeline project. It’s something we’ve been supporting for about 10 years. 

We put about a million dollars a year into it. I used to think it was a pipe dream, but 

I think every time they meet there’s a little bit of progress, you know, towards moving 

this project towards reality. It’s currently envisioned to be able to transport 90 million 

cubic meters of natural gas a day from Turkmenistan to Pakistan and India. 

In Afghanistan, I think the—my proudest moment working there for six years was 

the day that the Ministry of—the Ministry of Energy flipped the switch for lights to come 

on in Kabul via a transmission line from Uzbekistan across some pretty mountainous 

country in Afghanistan to reach Kabul. It currently provides about 40 percent of the town 

with 24-hour-a-day reliable adequate power. 

Let me skip ahead here and say that the construction and formation of the New 

Silk Road—it’s very much underway, and there’s been a lot of success over the past 11 

years. We project that by 2020 more than $50 billion in additional infrastructure is required to complete the six transport corridors, improve energy security and promote new 

corridors. 

We look forward to the continued support to our multilateral partners to support 

the United States, one of ADB’s largest shareholders, together with Japan, on these initiatives. The U.S. has been very important to ADB over the years, and we look forward 

to closer collaboration with the U.S. to ensure that Afghanistan resumes its rightful place 

at the heart of the Silk Road. 

Thank you for your attention, and I look forward to the discussion. 

Ms. HAN. Thanks, Craig, I appreciate that. 

Next, we’re going to turn to Danica Starks, who is the senior international trade 

specialist in the Office of Russia, Ukraine and Eurasia for Market Access and Compliance 

in the International Trade Administration of the Department of Commerce. Danica spends 

basically all day of every day trying to promote U.S. engagement, particularly economic 

engagement, in the region. So I’m looking forward to hearing her thoughts. 


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Ms. STARKS. Great, thank you, Shelly and thank you to the members of the Helsinki 

Commission for having me on this panel today. You all have my statement; I will run 

through parts of it as briefly as I can and am definitely open to questions later. 

My role today is centered around three primary areas that I’ll talk about, and that 

is looking through strictly a commercial lens, what is there to be gained by the strategy, 

the New Silk Road strategy? Is it viable going forward? What are the challenges that 

need to be overcome to make the strategy effective? How is the Commerce Department 

in particular leveraged its mission in terms of promoting American business, but also 

its expertise in trade and investment and economic development, to promote regional— 

the regional integration policies of the New Silk Road strategy? 

As has been mentioned before, the idea of a regional approach into development is 

certainly not new. I can say, at least for the last 10 years, there have been various 

iterations of regional integration versus North-South corridor, and there’s always been 

a certain amount of controversy going with it, especially the idea of integration for the 

region. There is a lot of sensitivity coming from many of the countries of the region with 

integration sort of having a context of domination, that the idea of integration would mean 

therefore a zero-sum game in terms of less political and economic independence, for nations that were legitimately trying to struggle for an independent identity, as well as an 

independent economic identity. 

But one of the things that I would like to offer is that regardless of the terminology, 

regional integration, New Silk Road and other things, that the greater issue is that regional collaboration at the very least needs to increase in order for the economic viability 

of this regional to be fully realized. 

New Silk Road or not, no matter what we call the policy, ultimately, companies are 

going to go where the opportunities of the market meet what they perceive as the risk 

and what their risk tolerance level is. In looking at the region, the question becomes, 

does this strategy or how do the strategies that the U.S. government is working on help 

to mitigate this risk? That is definitely something that the Commerce Department in particular is looking at. 

Taking it back to Economics 101, I think we still believe that the development of 

economies of scale and the pursuit of comparative advantage still increases economic efficiency and is still a viable economic model that companies often look to in making a decision as to whether or not they’re going to export to, invest, import from the region. Companies will go where the market is, and the greater the market and economic opportunity, 

the greater of amount of risk that they generally are willing to pursue. 

In my work, I meet with companies pretty much on a daily basis, answering questions 

about what the business environment in the region is like and what are the opportunities, 

and I’ve been told on many occasions that in their—companies are often in a wait-andsee mode. They’re either in the region doing certain projects and waiting to see whether 

or not they can expand to other countries in the region and do other projects, or they’re 

waiting on the margins of the region, often doing business in countries such as Turkey 

or Russia, looking at opportunities in Central Asia. 

In some cases, depending on the business model, the companies do not see the potential of just operating ad hoc-ly in one or two markets in the region. They really need 

to see a fuller, more developed market of the whole region, partly for population reasons, 

in terms of selling consumer products, consumer goods, but also logistics in order to make 


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it viable to enter into the region. So for example, if a company wants to set up in Country 

X, they would like to be able to use Country X to be able to export to Countries Y and 

Z. 

The other thing that we have noticed is—I’ll take an example of the franchising 

sphere—we’ve done quite a bit of work trying to help facilitate U.S. franchise businesses 

to take root in the region. We noticed that especially looking at a lot of the smaller markets, given the logistics with both supply chain, as well as the need to control quality, 

to control branding, that often, the master franchisers are looking for the ability to conduct 

a franchise agreement with the region, not just one country. In other words, they don’t 

necessarily want to go through what it would take to set up in, say, Kazakhstan alone, 

without there being a plan to use that as a base for further work in the region. 

So often, when you see a franchise open up in one country, very often, the person 

who got that license actually has a license for the whole region, not just one country. 

In addition to those things, the geography of the region, mainly the fact that the 

region is landlocked—and even the countries that border a sea do not border an ocean 

there’s increased transportation infrastructure links, ease of customs administration on 

a regional level in order for individual countries to be successful in getting their goods 

out to market, especially outside of the region. 

There really is simply a lot more business that could be done if the region would 

work together. 

There’s a recent article that I came across in Industry Magazine called ‘‘Cold Facts,’’ 

and it was a newsletter and it was an article written by a gentleman named Bsrat 

Mezghebe and he’s the knowledge manager for the Global Cold Chain Alliance. He noted 

that there are many opportunities for further investment and further work in exports 

agriculture from the region if the cold chain storage infrastructure and transportation 

and road infrastructure were improved. He noted that from the Caucasus to Central Asia, 

fresh vegetables and fruits, frozen produce often do not make it to market due to the 

poor infrastructure and the lack of cold storage capacity. 

In this case, this is an example of why regional collaboration is imperative. If one 

country were to develop an elaborate road system and one for cold storage, that’s great, 

if you’re only staying in that one country. But if your goods need to move anywhere else, 

you need every country the route to have developed the same level of capacity. 

Some countries have made more progress than others, ultimately, it really depends 

on a regional approach to looking at things such as supply-chain management. We’ve seen 

some successful examples of where regional collaboration has led to transformative 

projects and success. Assistant Secretary Blake from the State Department spoke in 

March and he mentioned the Baku-Tbilisi-Ceyhan pipeline as an example in the energy 

sphere of a promising area. And he said, and I quote, that the Baku-Tbilisi-Ceyhan energy 

corridor shows us that linking producers in the region with consumers in Europe is a 

win-win. The leadership and collaboration among Azerbaijan, Georgia and Turkey and 

the development of the pipeline was critical not only in opening up that pipeline and that 

corridor, but also paid forward for further projects, as the Baku-Tbilisi-Kars railway. 

Mr. Blake also went on to note the TAPI project that my fellow panelists also mentioned, the Turkmenistan-Afghanistan-Pakistan-India gas pipeline, and that this project, 

just like BTC, could be another transformative moment in the region, opening up not 

just the energy corridor, but a corridor for goods in transit. 


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As we look specifically to Afghanistan, it’s definitely imperative, based on a lot of 

the nascent industries in Afghanistan, that transportation links be improved. The benefits 

in general, again, are not just limited to the New Silk Road. It’s not just about Afghanistan 

and Central Asia. A lot of this regional collaboration is necessary if these countries are 

going to compete with the world and are going to be able to do business with the world. 

The challenges have been enumerated, the invitation to this event actually laid out very 

well a lot of them, in terms of the governments being able to create the necessary conditions, the questions about infrastructure development, customs regimes, reliable transportation networks, and the political divide. 

I would like to proffer two other challenges from the commercial perspective that 

we see: One is looking at the area of public sector procurement. Companies have noted 

to myself and my colleagues very often that they’re unaware of the opportunities in the 

region, because there is a lack of advance notice about opportunities in mining, in road 

construction and other things that are done by the governments of the region. Even when 

these opportunities are announced, often the window for applying is very short, they’re 

very short lead times. 

Also, there’s often a nontransparent or perceived nontransparent selection process 

for many of these tenders, so we have had experiences where U.S. companies have wanted 

to go after projects in the region and have not been able to, solely because they can’t 

actually bid on the tender. 

Another area that has reduced and has potential to reduce commercial interest in 

the region is the limited infrastructure for innovation, and by this I mean the legal infrastructure: poor and in some cases nonexistent protection of intellectual property rights, 

a lack of legal basis for technology transfer, judiciary systems that are not equipped to 

adjudicate commercial disputes and commercial issues and also that are perceived as 

being heavily influenced by the executive or other government ministries, and then an 

often outdated or nonexistent policies regarding standards and other quality control items 

that disincentivize not just U.S. but any companies coming to the region to innovate but 

also discourage local innovation as well. In terms of a commerce response, in my statement 

that you have in paper, you’ll see that we have a lot of programs to offer. But I wanted 

to really emphasize that our goal is broader. It’s—in our opinion, it’s not just narrowly 

about a new Silk Road. It really is about enabling this region to be the commercial partners that will allow people on both sides of the water to do more business. I note that, 

you know, ideally we would love for Kyrgyz farmers to sell their food in markets not just 

to Kyrgyzstan but Afghanistan and Pakistan. If Uzbek traders could fly directly to 

Dushanbe, if businessmen flying from New York could visit Azerbaijan, Kazakhstan and 

Turkmenistan in one week—how many of us in this very room have tried to string together three countries on a trip to Central Asia and just can’t do it because the flights 

don’t exist? You can’t drive. It’s definitely a challenge. We want to move beyond just a 

new Silk Road to really helping these countries to be competitive globally. Listing several 

of the programs that we have working in this area, I’m from the International Trade 

Administration, which, broadly speaking, strengthens competitiveness of U.S. industry by 

promoting trade and investment. We work to improve the global business environment. 

We work to promote U.S. exports to this region and all the regions of the world. We support efforts, for example, with accession to the World Trade Organization, which several 

countries in the region are pursuing. We have another program that I’ll be mentioning, 


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our Special American Business Internship Training Program, which we lovingly called 

SABIT, and that program brings managers from all over Eurasia, as well as Afghanistan 

and Pakistan, to the U.S. for sector-specific training and interaction with U.S. companies. 

We have an Afghanistan Investment and Reconstruction Task Force that supports the 

development of the Afghan private sector through business, business matchmaking and 

various other programs. We have our commercial law development program, which is 

under our general counsel’s office, which works to try to help U.S. foreign policy goals 

by advising on commercial legal reform. 

I’ll just list out a couple of examples. The rest you can read in the statement. The 

Regional Business Integration program of our Afghanistan reconstruction task force is 

going to be assisting its participating Afghan firms to develop relationships that can 

produce opportunities for trade. One of the programs that they have coming up is called 

Sheep to Shop, and it’s an interagency initiative to develop Afghanistan’s carpet sector. 

The carpet sector is still Afghanistan’s top legal export. The idea is to help introduce Afghan carpet producers to wholesale retail markets and also giving them a sense of what 

modern trends are in terms of rug design. We’re also doing several business missions, 

helping Afghans to access markets in Oman, Turkey, the UAE, Singapore and others 

places. Our Special American Business Internship Training Program, among the sectors 

that it runs programs in, we have programs in transportation and logistics and cold-chain 

storage, where we bring these companies from the region to meet with U.S. companies 

and logistics in these areas. I can explain more about that later. Our commercial—our 

development program has been implementing programs in Kyrgyzstan as a pilot for the 

rest of the region, looking at legal infrastructure. They’ve been working on intellectual 

property rights. They’ve been working on customs. They’ve been working on public procurement. They submitted a proposal in cooperation with the U.S. trade representative 

to do a regional program looking at standards and customs. In conclusion, I wanted to 

emphasize that we do not believe that our core mission, which is primarily to support 

American business, American exports, is not mutually exclusive to helping the countries 

of the region. In fact, we believe that as we, the U.S., are looking to promote our own 

economic growth and to grow domestic jobs, that building opportunities in this region 

only helps us. This region taken together does have tremendous opportunity for U.S. exports, does need U.S. goods and services, lots of needs and equipment in other areas. 

Creating better markets there creates better markets for U.S. products. 

Our efforts are not in vain. Our SABIT program that I mentioned has received a 

14:1 return investment for the money—U.S. government money that was used—that has 

been used to run the program, they have generated over $900 million in U.S. exports. 

We believe that in helping these countries to compete not just locally but globally, 

that there will also potentially be investors for the U.S. One of the things that this administration has looked at is how to increase foreign investment in the U.S. I have to put 

in the obligatory plug. The Commerce Department is having a first-ever SelectUSA Summit—Investment Summit October 31 to November 1st, where we’re encouraging people 

from other countries to come and learn about opportunities to invest all over the U.S. 

We would love one day, if not this year, to see companies from Central Asia coming to 

maybe franchise their products and to franchise their businesses in the U.S. and to employ 

U.S. workers. We believe that there’s return on investment in these programs, that there 


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is potential but tremendous amount of challenges. But we’re looking forward to working 

to try to do what we can to meet those challenges. Thank you. 

Ms. HAN. Thanks, Danica, that’s great. 

Next, I’d like to ask Eric Stewart to offer his expertise. He is a partner with the 

Washington, D.C., firm of Williams & Jensen, and he also serves as the executive director 

of the U.S.-Turkmenistan Business Council. Prior to that, he was a deputy assistant secretary for Europe at the Department of Commerce. But Eric gets a gold star in my book 

because he’s the first U.S. businessman I met at an economic forum of the OSCE. So 

he’s one of the few U.S. businesspeople who understand that OSCE process. So over the 

years I’ve followed your work, and am interested to hear how the U.S.-Turkmenistan Business Council is going and how that parlays into the new Silk Road strategy. 

Mr. STEWART. Great. Thank you very much, Shelly. I thought I was going to earn 

the gold star because I drove back from vacation today for this hearing. 

Ms. HAN. That too, that too. 

Mr. STEWART. I’m going back to vacation right after this. Hence the tan. I have not 

submitted my paper to you yet, Shelly, but I will do that after this. 

Ms. HAN. Taking away the gold star. 

Mr. STEWART. Yeah, yeah. I’m going to just talk a little bit and—rather than go directly through my paper, just give some collective thoughts on my view of the region and 

these ideas, something that we’ve been talking about, Danica and I have been talking 

about for many, many years. What do we do? If somebody actually put out a map out 

front, which was really nice to have the map so everyone can see where the countries 

are. But if you look at the map, Central Asia really is in the middle of the world. When 

you consider the fact that you are surrounded by China, Europe, Russia, India and the 

Middle East, the only thing you’re really missing is the Americas and Africa. I mean, 

other than that, you’re surrounded by the world. And so what a great strategic asset. 

In addition to oil and gas and minerals and agricultural, what a great strategic asset. 

But there’s always a but. There’s a hook, right? So the Central Asian countries are in 

the most wonderful strategic location in the world, but the hook is, you’re landlocked. 

If you’re landlocked, you can’t develop maritime. Well, right now, the maritime between 

Europe and the West, if you will, the West more generally and Asia, 90 to 95 percent 

of all the goods going back and forth between Asia and the West is maritime. Utilization 

of a supply route is something you can’t utilize. So what do you do? You develop the land 

transportation, and that’s essentially what really needs to happen. And you’re starting 

to see a fair amount of the land transportation being developed: Kazakhstan, China, 

Turkmenistan, Russia. A lot of the countries are developing the rail and putting a lot 

of emphasis and investment into rail, which is a great idea. But roads need to also be 

significantly developed as well, because road transportation is a great mechanism not just 

for the long haul between Europe and Asia, but for the short-distance trading. And why 

is this critical? Because this is where the Central Asian countries will input their goods 

and their products into the—in the process as well. So if the roads aren’t developed along 

with the rail, then what you’re essentially doing is building a bridge over or through Central Asia, and that’s obviously not the strategy or the development that will lead to a 

long-term development for the republics of Central Asia. It’s critical that we not only have 

rail development but we have road development as well. 


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In a previous sort of life, if you will, I ran a program at the U.S. Chamber of Commerce called the Eurasia Business Platform. It was a program that we ran for a number 

of years that was focused literally on this very idea of how do we develop and create 

an interesting policy program that would be of interest to American companies and doing 

more business in Central Asia, because at the end of the day, you know, each of the countries is doing well enough, right? Each of the countries is developing. Each of the countries 

is developing at their own pace. They are having success. Kazakhstan, obviously, has attracted billions of dollars in U.S. investment. Turkmenistan—we have—as the head of 

the Turkmenistan Council, we have almost 20 American companies that are members 

of our council, which is absolutely significant. The countries are, themselves, doing well 

in many respects. 

They could be doing better, though. That’s the idea, and that’s the discussion that 

we’re having today is, how do you—how do you make it better? What Danica has talked 

about, and what’s been discussed for many, many years, this idea of the great Silk Road 

is, you create some type of regional hub, you create some type of regional interaction. 

The fact of the matter is, those discussions—the way we have had those discussions 

are not working, in my opinion. The reason they’re not working is, we continue to have 

these discussions, in my opinion, with the Central Asians as a group. We group the Central Asians together and say, you are Central Asia. 

That doesn’t work very well, in my opinion. Each of the individual countries need 

to be treated as individual nations, as individual republics, and on a very bilateral basis, 

with the same messaging and the same points, but not together as a group. This is something that I think the U.S. government and specifically the USTR recognized a number 

of years ago when they had this Central Asia TIFA—the Trade & Investment Framework 

Agreement, which is supposed to be a mechanism leading to future free trade agreements, 

if you will and a number of years ago, made the decision to not just have Central Asia 

discussions regionally, but made a decision to have regional discussions and bilateral discussions. 

That’s something that I think is absolutely essential and critical, but I think for me 

and the number of companies that I talk and the businesses that I talk to, what’s essential 

is to work with the Central Asian republics to the point where they see the future value 

and the immediate value of developing what I consider to be the lowest common denominator of working together, which is to create some type of harmonized customs and border 

procedures, going to Danica’s point from the Commerce Department, because individually, 

the largest country in Central Asia is just under 30 million; the smallest is a couple of 

million. 

Well, for the distance, the complexity, the cultural differences that we have—that’s 

a long way to go for many American companies to make an investment. Now, if you bring 

all the Central Asian governments together, now you’re looking at a substantial market. 

You put the Central Asian and the Caucasus together, now you have a market of 80 million people, which is roughly the size of Germany. Now you have an interesting—from 

a business standpoint, an interesting market that has a lot of consumer potential for not 

only trading but also investing and potentially creating hubs. 

The lowest common denominator, in my opinion, that needs to be accomplished, is 

to have some type of harmonized customs and border procedures. And again, I believe 

this is something that needs to happen individually with each of the nations and underVerDate Sep 11 2014 04:02 Sep 01, 2015 Jkt 095487 PO 00000 Frm 00013 Fmt 3191 Sfmt 3191 E:\HR\OC\A487.XXX A487

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standing what they would be comfortable with and what they’re willing to do, recognizing 

that security is going to be a—one of the top issues on that agenda, in addition to the 

ease of doing business. 

But as we talk about this and go through this process, I’m sort of struck by curiosity 

as to what’s in the Russia-Kazakhstan-Belarus customs agreement, and, you know, here 

is something that was able to be accomplished between three neighbors, two of them very 

important—or three of them, really—all three of them very important for the land bridge, 

if you will, between Asia and Europe. Is there enough in there that would allow for the 

transparency, the security, the stability for some type of mechanism that Western companies would be comfortable with? 

I don’t know the answer to that question; I’m simply throwing the question out to 

experts who might. But I think, in my opinion, that’s really what it comes down to, is 

really finding a way to develop the borders, because if you don’t, then they will—each 

country will continue to develop on its own pace, which is not, frankly, in my opinion, 

fast enough for each of the countries to allow themselves to really take their God-given 

potential in this global economy and developing at the rate they should be for where 

they’re located and for the great natural resources that they have. 

I think, in order to achieve this has to be an approach with a lot of organization— 

we call them the alphabet soup, if you will; the ADBs, the UNCTADs, the UNECEs, WCO, 

UNDP, World Bank—I could go on and on; you name it—but also with the countries themselves, the Turkeys and Russia and China and the European member states. What else 

is really interesting about this is because the first contact points into Europe—if you were 

to truly develop a private sector Silk Road that really made sense are some of the U.S.’ 

closest friends and allies anywhere in the world. I mean, and a lot of the first entry point 

countries are going to be Poland, Romania, Lithuania, into the European Union. These 

are countries that we worked with very closely. 

I think also, it is very interesting—these are countries, I think, that would be good 

partners and good role models and good interlocutors with Central Asian countries simply 

because of some of the shared history and some of the shared challenges that they have 

jointly gone through together, and especially when you look at some of the Baltic countries, the—a lot of the populations are similar in size. So I think they could be good interlocutors in the process. And in fact, over the last five years or so, we’ve seen a lot of 

heads of state from the Baltic countries and Central Asian countries visiting one another, 

and from Central Europe as well. So I think there’s a—there’s a real potential there. 

I’ve gone longer than I expected to talk, but the bottom line is, my message is, very 

simply, the importance of some type of custom harmonization border control program that 

not only allows trade between Europe and Asia, but allows the Central Asian countries 

to participate and develop in that, so they service the land bridge, but then they also 

participate in the land bridge as well. If that’s possible, then we end up with a win-winwin-win situation, thanks. 

Ms. HAN. Thanks, Eric. Batting clean-up is Josh Kucera, who is a journalist who 

writes for EurasiaNet. He also has his own blog—or do you—the Bug Pit is your blog, 

right?—and travels a lot in the region; just recently came back from Tajikistan and also 

an extended trip to the Caucasus and the Baltic countries. I’ve asked Josh to sort of step 

back from the details that we’ve been talking about and give a little broader view of what’s 

going on, in your perspective. Thanks. 


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Mr. KUCERA. Well, thanks, Shelly, for inviting me to this. So as a journalist covering 

Central Asia, and especially U.S. policy towards the region, I’ve been closely following 

the development of the U.S.’ New Silk Road Initiative since it was formally announced 

by Secretary of State Clinton two years ago, and even before that, when it was a concept 

being worked out by think tanks here in Washington and by military policy planners at 

CENTCOM who were looking at long-term ways to stabilize Afghanistan. 

For those of you who are—don’t recall the New Silk Road Initiative when it was 

rolled out, Secretary Clinton spoke—it was almost exactly two years ago in India; her 

sort of takeaway quote from this—announcing this New Silk Road Initiative—let’s work 

together to create a New Silk Road; not a single thoroughfare like its namesake, but an 

international web—a network of economic and transit connections. That means building 

more rail lines, highways, energy infrastructure like the proposed pipeline to run from 

Turkmenistan through Afghanistan through Pakistan into India; it means upgrading the 

facilities at border crossings, such as India and Pakistan are doing now at Wagah, and 

it certainly means removing the bureaucratic barriers and other impediments to the free 

flow of goods and people. It means casting aside the outdated trade policies that we are 

all living with and adopting new rules for the 21st century. 

That’s a very ambitious statement. Even before this initiative was rolled out two 

years ago, there was a lot of skepticism about whether it was workable. Two years since 

then have only given more reasons to doubt its efficacy. Two years after it was announced 

and a year—only a year before the U.S. starts to pull out its forces from Afghanistan, 

it seems that the New Silk Road remains more of a talking point than an actual initiative. 

When we talk about the New Silk Road, it’s important to clarify exactly what we’re 

talking about. Generally speaking, the New Silk Road is basically a marketing term that 

encompasses anything that involves trade between Asia and the West, whether the former 

Soviet Union or the Middle East or Europe. 

No doubt there are connections like that popping up all over the place. That was 

an inevitable result of the collapse of the Soviet Union. 

With the opening up of the borders of Russia and Central Asia—the Central Asian 

states of China and South Asia—of course, cross-border commerce of all kinds is filling 

that vacuum that was artificially created by those hard Soviet borders. Companies now 

ship goods by rail from China to Europe through Kazakhstan. New railroads are being 

built from Kazakhstan through Turkmenistan to Iran. China, Iran and Turkey are building roads and bridges in Tajikistan. 

However, when we talk about the U.S.’s New Silk Road initiative, this is something 

much more specific. This initiative puts Afghanistan at the center, as a hub of regional 

trade. This is why the U.S., when it talks about the New Silk Road initiative, you’ll hear 

them over and over mention two specific projects: TAPI, like several people here have 

already mentioned, and the CASA–1000 electricity export project, which would ship electricity from Kyrgyzstan to Tajikistan to Afghanistan and Pakistan. 

However, while this U.S. vision is more specific, the means by which the U.S. intends 

to implement it remain very unclear. U.S. officials emphasize they are supporting a regionally-owned vision rather than putting their own money into it or developing their 

own projects. 

But the problem is that very few existing regional integration projects involve Afghanistan, for the obvious reason, that it’s very unstable and has very poor infrastructure. 


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There are very few pairs of countries that if you try to imagine, you know, the most advantageous way to get goods from one to the other that the route would pass through Afghanistan. Making this even less likely is that the U.S. explicitly says that it doesn’t want 

these projects to include Iran, Afghanistan’s giant neighbor and probably its most convenient corridor to Europe. So effectively, that leaves only trade between ex-Soviet Central 

Asian republics and South Asia projects like TAPI and CASA–1000. 

So those projects, even if they do develop, hardly seem like the kind of game-changing 

projects that Secretary Clinton said were part of the U.S.’ vision of the New Silk Road. 

This focus on Afghanistan I think is the fundamental flaw to the U.S.’ vision of the New 

Silk Road. 

However, there’s also a number of more specific reasons that it won’t work. I’m going 

to focus primarily on, you know, Afghanistan’s northern neighbors, the ex-Soviet Central 

Asian republics. I think there are analogous issues. Pakistan’s relationship with Afghanistan obviously is very complex, not to mention with India, that sets on a set of issues 

but I’m going to focus here on the Central Asian question. 

The first problem is the lack of a market for this sort of commerce. U.S. officials 

have repeatedly argued that the Northern Distribution Network, the series of military 

transport routes that it uses to ship cargo to soldiers in Afghanistan can serve as a proof 

of concept for the New Silk Road. And NDN has indeed been a success in terms of ensuring 

relatively smooth delivery of supplies to the military in Afghanistan via the Central Asian 

states. Recently, the U.S. celebrated its 100,000th container shipped via the northern spur 

of the NDN, originating in the Baltics. But the NDN has a market: troops in Afghanistan. 

Absent the military, the U.S. has failed to demonstrate what sort of market there might 

be for an Afghanistan-centered New Silk Road. 

The second reason, and this is a big one, is that these countries fear Afghanistan. 

Most Central Asian countries want nothing to do with Afghanistan. They see it as a source 

only of potential problems, primarily drugs, radical Islamism and guns. 

One buzz word that you now regularly hear in Central Asia, Central Asian capitals, 

is spillover. This is the idea that once U.S. forces leave Afghanistan, the chaos there will 

increase and spread into Central Asia. I would argue that these fears are somewhat overblown and exaggerated for their own internal reasons. Nevertheless, it’s obvious that these 

countries see Afghanistan, especially post-2014, as more of a problem than as a solution. 

U.S. government officials, when they talk about the New Silk Road initiative, indirectly acknowledge this fear by saying that increased trade will result in positive spillover 

from Afghanistan. But this—while it’s a nifty rhetorical device, there’s no indication that 

Central Asian governments believe it. 

One telling statistic is that while about 80 percent of military cargo going into Afghanistan has been shipped via the NDN, only 4 percent of the goods being shipped out 

go via the NDN. That’s because Uzbekistan, which is the first stop after Afghanistan on 

the main route of the NDN, has thrown up a number of barriers to traffic coming out 

of Afghanistan, making it almost prohibitive to use that route. Shipping companies working on the NDN say that the government of Uzbekistan is apparently afraid that contraband can be smuggled via these trains carrying U.S. military cargo back. The U.S. is 

sending scanners to the Uzbekistan border to help expedite this process of clearing these 

shipments, but it speaks to the great mistrust that Uzbekistan has of Afghanistan. 


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A third big problem is regional mistrust, not just of Afghanistan but among the Central Asian countries themselves. No Central Asian regional integration plan can work 

without Uzbekistan. This is something everybody agrees on. It’s the most populist country 

in the region, the only ex-Soviet Central Asian republic to border all the others. It’s the 

hub of the Soviet legacy transportation system and has by far the best connection from 

Afghanistan’s north to the rest of the world. However, it has very bad relations with nearly 

all of its neighbors and has exhibited no interest in U.S.-backed regional integration programs like the Istanbul process. 

In addition to the problems mentioned before with Afghanistan, Uzbekistan has also 

systematically cut off commerce with Tajikistan. If you look at the map, you’ll see that 

Tajikistan really relies on Uzbekistan to—for commerce with the rest of the world. Uzbekistan has used—with various political problems, has used that fact as a lever to pressure 

Tajikistan in various ways. Over the past decade, Uzbekistan has mined the border, repeatedly raised import duties, imposed visa regimes on Tajikistan citizens and blocked 

rail traffic. 

Neighboring countries have begun to react to this by creating rail projects that bypass 

Uzbekistan, like the Kazakhstan-Turkmenistan-Iran, and the Tajikistan-AfghanistanTurkmenistan projects. And while the projects are necessary lifelines for these countries 

to avoid the road blocks that Kazakhstan is throwing up, a real regional strategy has 

to include Uzbekistan. U.S. officials, however, almost never acknowledge Uzbekistan’s intransigence on this, let alone criticize it, needing to stay on the good side of the government for the sake of the NDN. 

Fourth big reason is the lack of interest in free trade in the region. Boosters of the 

New Silk Road initiative argue that it doesn’t require hardware. It doesn’t require the 

U.S. to necessarily spend any money on large infrastructure projects, but only software, 

like reducing bureaucracy on borders. 

Like Eric said, that is the—you know, the primary barrier now to trade in the region, 

but the bureaucracy on these borders, that is the high customs fees and the pervasive 

corruption are in the minds, of Central Asian government not bugs but features. Control 

of border traffic is a sinecure which all Central Asian governments use to pay off elites, 

including their family members. So while free trade may be good for the countries of Central Asia, it would be bad for the members of the government and their allies. That’s 

who these governments serve. That is a problem that the U.S. is incapable of solving. 

The final problem is the lack of U.S. resources. This is an incredibly ambitious vision 

with a lot of obstacles. The U.S. has promised basically that it’s not going to devote any 

resources to implementing it. With a resurgent Russia exerting its authority again in Central Asia, a China that’s obviously becoming increasingly economically active in the region, 

the U.S. has less and less clout to throw around in Central Asia. Absent that, and without 

spending any money, it’s not clear what Washington hopes to do to steer these regional 

integration projects in the direction that they want them to go. Furthermore, U.S. interest 

in Central Asia is certain to decline even more as the pullout from Afghanistan progresses. 

In addition to the large amount of skepticism that Central Asia watchers have regarding the New Silk Road initiative, among its few backers, there’s a frustration that the 

State Department and other officials who are supposed to be implementing it are in fact 

slow rolling it and not doing anything to implement it. 


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Taking that all into consideration, it’s hard not to escape the conclusion that the 

New Silk Road initiative is effectively a little more than a talking point, a rhetorical fig 

leaf to make it appear as if the U.S. isn’t abandoning Central Asia after 2014. 

Thanks for having me. And I look forward to your questions. 

Ms. HAN. Great way to start the discussion, Josh. I’m going to kick off with a couple 

of questions for the panelists. There will also be an opportunity for the rest of you to 

maybe react to some things that Josh has said. 

I think it’s true that the term the Silk Road—and the State Department does have 

a specific definition I believe on Silk Road strategy itself, the New Silk Road, but we 

could look at it as a larger issue of just economic development and whether or not you’re 

looking at Afghanistan being integrated with South Asia, India, Pakistan, or if you’re 

looking more at Central Asia or if you’re talking about China to Europe going through 

Central Asia, if we just look at this broadly and ask, what are the opportunities? 

I’m curious because Eric had touched on something that’s always been a question 

in my mind is if we look at the markets and where goods go there was a great New 

York Times article last Sunday about Hewlett Packard sending computers from China 

to Europe going across the—Central Asia by rail. You mentioned that, you know, just 

rail routes aren’t going to cut it because you need the road infrastructure so that—because 

even—but to me, it seems like even with roads, Central Asia is just becoming another 

transit point. 

Then how does transit then translate into economic development, because it seems 

that without having any sort of value added by the Central Asian states or inherent markets that it’s difficult to have growth, economic growth? They’ll just become transit opportunities. And no matter how many truck stops you would build, how is that going to help 

the country? 

If we could talk a little bit about what we see as opportunities for actual development 

and what those things would be. It gets also into the question of harmonization. I think 

the ADB and CAREC do a lot of work on this in terms of the harmonization of the infrastructure. And maybe you could talk a little bit more about what the ADB has done and 

what Eric was talking about, the need for doing that. And Danica, I think you also have 

that as well. 

If you could also perhaps comment on the Eurasian Union proposal and then also 

how, China, I believe, has also proposed a Shanghai Cooperation Organization free trade 

area as well, and how those types of opportunities could help or hurt this type of harmonization strategy that is needed. 

I’ll start with Craig, then go to Danica and then Eric and Josh, if you all want to 

weigh in. 

Mr. STEFFENSEN. Before moving to Washington a few weeks ago I headed up ADB’s 

office in Bangkok. And I worked quite a bit when I was there on something called the 

Greater Mekong Subregion Economic Cooperation program, which is a predecessor in 

some ways to the CAREC program. 

We like to show a PowerPoint where we show the sort of evolution of the road and 

network across the sub-region. It shows transmission lines and Internet, telecommunications, trunk lines, pipelines, what have you. 


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From 1992, you know, you see one sort of grid, sort of a skeleton framework, and 

then it switches to 2002 and then 2012, and the final slide is what things, you know, 

may look like in 2022. It’s all very impressive to see these cascading slides of this road, 

power network appearing. 

That’s the most dynamic region in the world today. We thought for a long time that, 

GMS investments were sort of—undergirded a lot of the development that’s taking place. 

But I saw some slides at a tourism forum recently—it had really nothing to do with 

GMS program because it was all private sector—but they showed the evolution of a lowcost air carrier network in that part of the world. And it got started sort of in 2001, I 

think. And they had only a few slides, but if you look what happened between 2001 and 

2013, it makes everything that’s happened on GMS look like, you know, like it’s not— 

it was wired. It looked like the backside of a—you know, a computer chip under a microscope. It was amazing how quickly the regional air network has come together. It’s not 

something that ADB or the governments were directly involved in. These are all private 

investors. It’s not something that really required a whole lot of attention on our part. 

On the contrary, no one was really paying much attention to this at all. Maybe that’s 

the reason it’s taken off so well. 

But extrapolating all this and applying it to Central Asia—and what I’d like to say 

is that sometimes I think we sort of take as a given that there are things we have to 

do for things to happen. I think that maybe the low-cost air carrier network and the GMS 

shows that if the conditions are right, if entrepreneurs believe that they can make a buck, 

and that the government is not going to shut them down, and if the demand is there, 

you know, if there are tourists who want to fly from Bangkok to Mandalay, to Luang 

Prabang, up to Da Nang in Vietnam and back to Bangkok, sort of a tourism circuit there, 

if the same thing were to happen in Central Asia between—you know, between Tashkent 

and Bamyan, and then Bishkek, and I could go on, there’s nothing that anyone really 

would have to do except to make it known that this is possible. It’s always been sort 

of a mystery to me why there aren’t more low-cost air carriers across the subregion. 

I don’t want to look at a glass half empty here and see what’s wrong with the place. 

I see just all kinds of opportunities. For all the sort of attention that—for all the reports 

we read in the media about how things aren’t going so well militarily, even politically 

in Afghanistan, my view from the trenches there is that, at least economically—and if 

you look at what development partners together with and others are doing, you know, 

there’s a real success story that can be told. 

Who has the upper hand at this point? I don’t know. The politicians or the business 

people? You know, one could really muck it up for the other, but I can’t help but think 

that things aren’t as bad as maybe we’d like to believe sometimes. 

On harmonization, what can I say? The fact that Russia has joined the WTO is huge, 

and now that they’ve sort of set terms and conditions for their own participation, I think 

the expectation for a long time has been that Central Asian countries will follow suit, 

you know, with a very similar package. 

When it comes to some of the trade issues we’ve been hearing about, I think WTO 

will sort of provide a framework where everyone can negotiate a way forward. There’s 

a spaghetti soup of trade agreements across the region that sort of, you know, has everyone confused, if not paralyzed at the moment, but thanks to WTO, I think, you know, 

there’s a way out of this mess yet. 


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Ms. HAN. Danica, is WTO sufficient or what else do we need to do to get harmonization going? 

Ms. STARKS. Sure. Well, being in the WTO alone is not sufficient. It’s what you make 

of it. Passing laws is not enough. It’s enforcement. However, it does provide an incredible 

framework. The actual process of accession is a tremendous opportunity to take a look 

at the entire trade infrastructure from a policy standpoint. 

But again, a lot of it comes down to something that Josh implied when he was talking, 

which is political will, that you can have all the great laws in the world, but if there 

are interests who benefit from those laws not working, then you ultimately are not going 

to be able to move forward. 

Answering Eric’s comment about the Eurasian Economic Community and the Customs Union, it has been very interesting to watch. The interplay between Russia, 

Kazakhstan and Belarus as they negotiate, in some cases not negotiate, tariffs and other— 

and common borders and looking at intellectual property rights and other things, it’s a 

little bit complicated because, for example, Russia got into the WTO; Kazakhstan is still 

acceding. And so there are things that have had to change over time. 

But it’s been fascinating to watch because it’s forced a dialogue, and the dialogue 

is not between countries of the region and the U.S. It’s not about what the U.S. or Europe 

or what anybody else wants. It’s them looking at their own country, their own nascent 

industries and trying to work out among neighbors. 

It’s an interesting idea, but I don’t know that the complexity that it requires is something that there’s political will for right now in Central Asia in terms of looking at that 

level of harmonization that’s needed. 

I do think that your example, Eric, of looking at the Baltics or some other countries 

as there a country—interlocutors and models is a great idea. Again, I use the term ‘‘regional collaboration’’ over, say, integration not because integration in some cases is necessary—Eric and others mentioned that harmonization is a key area—but in some cases, 

the collaboration is to enable each country to develop individually. But right now, in a 

lot of cases, they are competing against each other. 

Everybody is trying to make the same things. Everybody is trying to sell the same 

commodities. The region has not really realized the comparative advantages that it could 

if countries could actually specialize amongst themselves. If everybody would agree that 

this is the country that’s going to specialize in this area, this is the country that’s going 

to specialize in this area—there were some examples given the other day that there are 

countries that are producing products that they really don’t have the economies of scale 

to make enough money on. 

It would be great if they could just stop producing those products, but that’s not that 

easy to tell a country that’s struggling to prove that it can operate independently and 

on its own, but a regional approach in terms of collaboration and looking at where are 

the niche areas that we can fulfill. 

You mentioned the Baltics. I look at Estonia. I was there actually on vacation recently, and I’d gone on a cruise. You pull up to the port, and they basically did everything 

possible to encourage you to get off that ship and spend money in Estonia. I mean, everything but—come on and wheel you around in a golf cart. In terms of making it very easy 

to enter into the port, no bureaucracy in terms of getting into the country; English and 


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Chinese, Japanese speaking tour guides waiting around, and sightseeing and those types 

of things. 

Then I look at a lot of the countries in the region that have some of the—have similar 

touristic ambitions but it’s impossible just to buy a plane ticket over the Internet in some 

cases. So the ability to actually develop a niche, but to have the political will to make 

the changes necessary I think is key. 

In terms of the idea of harmonization, I think one the tacks that we’ve taken is exactly what Eric mentioned, that, in some cases, it doesn’t always work to put everybody 

in the same room and try to get everybody to speak the same language. You’re right. 

In addition to the Central Asia Trade Investment Framework Agreement to have bilateral 

working groups to work individually with countries. 

Our commercial—our development program—I believe we have a representative here, 

Emily Lanihan. In the back. They’ve put together a proposal that would do just that, 

that would look at standards and customs and other issues but work individually with 

each country to get them up to international standard. If you get everybody up to international standard, then you eliminate just right there a lot of the barriers. Then you can 

talk to each other on a regional level because everybody’s speaking from the same page. 

So that’s another strategy going forward. Whether or not the sort of Customs Union 

idea would work, I just—I’m not sure. It remains to be seen. It’s still in the development 

stages for what it is, but it is an interesting model to look at. 

Ms. HAN. Eric, do you have a comment? 

Mr. STEWART. Sure. Just building on this idea. There’s so many cultural differences 

and so many ways of doing business that are different from us and Central Asia. That’s 

the reason I suggested looking outside the box. 

I don’t think you can continue to say this is the way we do it and, Central Asia, 

adopt our programs. It’s not going to work. We’ve got to find ways to do things together 

that make sense from a Central Asian perspective and working to their culture and their 

ideas for business. That’s the reason I threw out something what I think as sort of unconventional, if you will. 

But to go back to your question, Shelly, on the idea of investment and how does 

Central Asia play a role and not just be, you know, passed over or passed through, if 

you will, transient from one to the other. 

If you look at where American companies and Western companies and any kind of 

companies invest, they’re not political decisions, they’re decisions based on costs, on supply 

chains, on consumers and the ability to, you know, efficiently run an operation. 

I mean, you look at your example of HP. They’ve opened their plants in western 

China, where issues of corruption run rampant, where crime is high, where poverty is 

high, people are still on a couple of dollars a day. They are in the Wild, Wild West, if 

you will, of China with their plant. What country in the world doesn’t want HP to open 

a plant in their country? Every country wants an HP plant, so western China has one. 

There’s no reason that that same plant couldn’t be housed in any one of the Central Asian 

countries, but there are reasons today why they are not. And one of them is the ability 

to move efficiently. 

I don’t think it’s so much just focusing on what do the Central Asians have today 

that they, you know, grow or that they develop or that they manufacture that would fit 


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into the overall scheme. It’s what opportunities can they attract, and what types of companies can they attract, and what types of companies can they bring in? Because a lot of 

countries around the world haven’t necessarily developed from themselves what their 

niche is, right? They brought it in and they made themselves competitive. 

You have tiny little countries all over the world who have made themselves extremely 

competitive by being transparent and open and having the ability to create themselves 

as a hub for other parts of the world. I think that’s the—that’s the message to continue 

to push. 

Frankly, when I look at the countries of Central Asia, I’m not sure there is a single 

big American investment anywhere in Central Asia, outside of energy, outside of the energy sphere. I’m not sure that here is something significant. There are few things here 

and there. I mean—I know Uzbekistan has an assembly planned from Case New Holland, 

and they’ve got the Ford—— 

Ms. STARKS. GM. 

Mr. STEWART. GM, sorry. That was an Uzbek sort of financed operation as they were 

losing the plant from another company. But I think the point being, for me, it still goes 

down to the very fundamental fact that this is what needs to be developed and it’s the 

ability to move across borders. If that happens, as you talked to—you said, as you termed 

it, the soft—if that happens, the hard infrastructure will come. The companies will build 

the roads. The government doesn’t need to do that, the companies will do it. If they see 

the opportunity to do business, they’ll put the money into the infrastructure. They’ll put 

the money into the ports, into the stations, into whatever it takes if there is a system 

there that shows them they’re going to be able to move the goods. 

Ms. HAN. Thanks. Just one more question from me and then I’m going to open it 

up to the audience, so you all can be thinking about what you might want to ask. 

I want to talk a little bit more about the role of China and the European Union, 

and how things are moving across, and what push and pull factors are there. I know 

that China is really active in Central Asia. You probably, Eric, run across trade delegations from China in Turkmenistan all the time. But I’m curious—do you ever run across 

European trade delegations with the same frequency? Do we see the same type of engagement? Then does the European Union support the ADB and CAREC programs? What 

kind of engagement do you have from Europe in terms of trying to create some sort of 

integration that way? 

Danica, how are you all working with China? Do you work with the Chinese in the 

region or is there any sort of engagement on that side? Thanks. 

Ms. STARKS. In terms of Commerce specifically, I can’t think of an area where we 

directly—in terms of third-party work, work with the Chinese on the region. I think— 

as far as commerce is concerned, we’re market oriented. We’re following what the companies are doing. We are not taking the lead and telling companies where to go and what 

to do. 

Often, we will—we will look at opportunities where U.S. companies have expressed 

an interest in a certain sector, and there might be Chinese interest in that sector. We 

will do our best to try to promote the U.S. component. 


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But in general, we have not had any sort of third country or bilateral cooperation 

with the Chinese in any commercial spheres. But yes, you do see quite a bit of engagement 

by the Chinese, as they should. They’re neighbors. So that makes sense. 

Ms. HAN. Do you see them opening up opportunities that U.S. companies might— 

perhaps the Chinese are willing to put in some extra time and effort or money that doesn’t 

necessarily make sense for American companies. 

Ms. STARKS. I would say in general, a lot of the sectors where we’ve seen a lot of 

the Chinese interest are not necessarily areas where U.S. companies have been as interested in general. So there hasn’t been that cross-pollination as much. 

Ms. HAN. Except for maybe energy would be the exception. 

Ms. STARKS. But even there, look at, for example, Uzbekistan. There’s quite a bit 

of Chinese interest in the energy sector in Uzbekistan, but you don’t really have any U.S. 

majors that are doing exploration and development there. 

Mr. STEWART. Smaller energy. It’s not the huge projects. 

Ms. STARKS. Very small. Part of it is our interests are different. China actually borders Central Asia, so it’s interested in pipelines and roads going to and from places that 

don’t necessarily have an attraction for a U.S. company. It doesn’t mean it’s not good 

for the region, but I think there are a lot of areas where there’s a Chinese interest that 

there just is not a U.S. interest, and that’s OK. 

Mr. STEFFENSEN. A lot of what Danica just said about China versus Central Asia 

is true. The EU—is there EU interest in CAREC? Yeah, definitely. We’re both involved 

in trade facilitation work. They made very clear for years they’re interested in joining 

CAREC, but as a bilateral at best. We kept them out because once we open the door 

to the EU, then the U.S. and the Germans and Chinese and others and Japan aren’t 

far behind. And the countries themselves decided just to limit this thing to current membership plus or minus a couple of countries to ensure that it remains a forum where their 

interests—that is, the countries’ interests—can be discussed and not those of their development partners. Yeah. 

You said something earlier regarding the New York Times article, and if I could share 

or relate something unrelated to Central Asia, but related to this railway. About a year 

ago, I had a discussion with the chief policy advisor to the Thai prime minister. He started 

talking about these time trials to move containers between Chengdu, China, and Lodz, 

Poland. And I didn’t know what the heck he was talking about, so I went back and started 

Googling and found a few articles, including a good one on Business Week. The gist of 

the New York Times article. Bottom line is, you know, there is no rail connection between 

Southeast Asia and China for that matter between Southeast Asia and Europe today. 

But he was talking about the importance of engaging the Chinese now, even before 

a rail connection is built maybe through Myanmar or Laos or Cambodia and Vietnam, 

to ensure that one day Thailand has access to the Chinese railway network to be able 

to export its containers to Europe in a way that’s cheaper and almost as fast as—well, 

cheaper than air transport—almost as fast as sending it by ship that’s green and that 

would, you know, improve logistics and lower transport cost and improve Thailand’s competitiveness. 

This railway experiment, it’s potentially a game-changer, I think, in the way we see 

trade across the continent. The Thai authorities are looking at it very carefully. ADB 


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has begun to look at it in terms of the intermodal possibilities that we could be—should 

be supporting. But it’s potentially a huge development, yeah. 

Ms. HAN. All right. Eric and then Josh, I don’t know if you have anything to say 

about China and EU. I’ll let Eric start, then you can finish. Then we’ll go to questions. 

Mr. STEWART. Before I forget, let me also just include talks about WTO. Please keep 

focusing on WTO. It is a very, very good thing. From the Turkmenistan perspective, we’re 

extremely pleased that Turkmenistan has started down this process. It’s a good thing. 

It’s a painful, long, arduous thing to go through, but at the end of the day it’s positive 

regardless of how it plays out. 

I think what’s actually going to be interesting, going back to your question, well— 

one—actually one historical thing that’s sort of interesting. If you look back at the European Union, back when it was the EEC, before it was the European Union, you know, 

land transportation was a big component of that actually coming together and frankly 

bringing countries like France and Germany to be able to do business together. I think 

actually Europe continues to be—and again, going back to the point of the Baltic and 

the Central Europeans, a good, I think, interlocutor for working with the Central Asian 

countries. 

Every dynamic has politics in it. There is some politics involved obviously in that 

because the Europeans want oil and gas coming from the region. That’s not a bad thing, 

that’s a good thing. But that is a factor. I think what’s actually interesting and I don’t 

know the answer to this, but I think what’s actually interesting and maybe this is not 

accurate, but it would seem to me that post-Afghanistan, actually the U.S. would be a 

sort of a benign interlocutor in a sense because there is less of an agenda in the region, 

right? I mean, the agenda at this point, will be simply, you know, business opportunities 

for American companies and the development of the Central Asian countries. 

I think that’s actually a very interesting question, sort of flipping it around and looking at it post-2014. 

Mr. KUCERA. Well, I’d make the point sort of the converse of what Eric just said 

that the U.S. has a very different interest in all of this than China and the EU in that 

China, especially, to a lesser extent EU, I mean, they actually have an economic interest 

in this trade. I mean, they can get cheaper stuff or export their stuff cheaper, whereas 

the U.S., you know, only very indirectly will benefit economically from trade in Eurasia. 

The U.S.’ interest is kind of more geopolitical. I think that to the extent that the U.S. 

is doing anything, it’s more driven by geopolitics than economics. 

Whether the U.S. being an outsider makes them an honest broker, like you suggested, 

or if, in fact, you know, maybe they have less at stake, and so they’re more willing to 

meddle without getting benefit. Maybe China and Europe’s interest is in fact sort of pure 

in that we want open markets to—for our benefit for open trades. 

One more point I wanted to make that I was thinking about the Eurasian Union. 

In my presentation, I made blanket statements about all of Central Asia. I think 

Kazakhstan is an exception in a lot of ways to what I said, that Kazakhstan is in fact 

interested much more than the other countries in free trade. I mean, this HP example 

is one. I sometimes get the sense that people in Astana are more interested in the New 

Silk Road initiative than people in Washington are. They’re constantly asking about it. 

They’re promoting the port at Aktau for the U.S. to build up and so on. 


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This also speaks to the Eurasian Union, that they’re willing to do this with Russia 

and Belarus as well. Kazakhstan does seem to be, in fact, quite interested in free trade. 

It’s the other ones that we should have questions about. 

Ms. HAN. All right, thanks. Now, I’m going to turn to the audience to see if anyone 

has any questions. We do have a microphone, I think, Max, is that right? We’re not sure. 

OK. We do need you to speak into the mike, though, right? If they don’t speak into the 

mike, is that OK? 

All right. If you’re going to ask a question, please speak loudly. We can hear you, 

but we just need to make sure that the transcriptionist can hear you. If you could identify 

yourself, that would be great. Anyone have a question? Yes over here. 

Questioner: Hi. I hope this is loud enough. My name is Charlie and I’m working for 

Senator Sheldon Whitehouse. I just have a question. I wonder if the rest of panel could 

react to Mr. Kucera’s depiction of the economic outlook for Afghanistan. I’m wondering 

if the U.S. is mistaking economic hopes or fantasies for economic strengths in the post2014 world. 

Ms. HAN. OK. Anybody want to take on Afghanistan? Maybe Craig. 

Mr. STEFFENSEN. Yeah, I lived and worked in Kabul for six years. And I don’t know 

what to say except Afghans are born entrepreneurs and you know, if the security situation 

were to improve and if there were opportunities made available to them, other than to 

carry a gun, I think they’d be, you know, out there running a business before we knew 

it happened. 

That’s sort of generally speaking, but the mining sector there, as I think it’s, you 

know, it’s no secret whether it’s Ainak or Hajigak or other parts of the country, iron ore 

and copper, you know, one estimate made by a Norwegian mining specialist working in 

the Ministry of Mines and Industry was that Hajigak alone could bring, I think it was 

$3 billion a year in revenues to the government for centuries. 

Now, that’s not as much as USAID was putting in at one point, but it’s a lot for 

Afghanistan and it would free up the government, I think, from using a lot of the funds 

that we’re now providing by way of support to cover recurrent costs, I mean salaries of 

government officials and all that, to begin investing in things, so that the mining sector 

could actually take off. By that, I mean railways and power and training for people to 

work in that industry, et cetera. 

Nothing’s going to happen overnight. These are long term solutions to problems. But 

I don’t doubt for a second that Afghanistan has the potential to become, you know, a 

leader economically in that part of the world. Someone said at one point that—I mean, 

it was the ministry of mines said that Afghanistan has more underground than China 

has in international reserves in banks. Someone went on to say, well, there’s a big difference between having money in a bank and having it underground. But that’s the, you 

know, that’s the amount of resources that we’re talking about. 

Ms. HAN. Thanks. Anyone else? Yes. 

Questioner: Hi. My name is Olga Kuzmina. I’m from the Center on Global Interests. 

It’s a new think tank that focuses mostly on U.S.-Russia relations. To me it seems like 

Russia here is the big elephant in the room that we haven’t really addressed. I mean, 

you’ve mentioned the customs union and the Eurasian Union that Russia’s kind of trying 

to build in this area. It seems like your kind of idea’s maybe that the U.S. can kind of 


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22 

piggyback often the progress that’s made there, like if they free up the trade borders and 

have some kind of internal visa regime, that would make it easier for the U.S. to trade 

with the region as a whole. 

I think the kind of understated fact is that Russia is kind of trying to, you know, 

contain this area for itself with these projects. How do you envision working with Russia 

or what problems do you anticipate, with Russia as the U.S. has been a supporter of 

the Silk Road plan and how do you intend to address them or involve Russia probably 

could be better? 

Ms. STARKS. Sure. I don’t think that involvement of Russia and our interests are 

mutually exclusive. I think Russia not being brought up today mostly was because my 

brief from Shelly was to talk about Central Asia, not to talk about Russia. It wasn’t an 

intentional slight. I cover Russia as well and there’re actually far more U.S. companies 

now that are doing business with Russia that if Central Asia—if opportunities to transit 

to Central Asia, even from Russia, were to open up, that they could benefit. 

I don’t think they’re mutually exclusive. I think they could actually work together. 

I think there’re a lot of U.S. companies now that are doing business in Russia that are 

not in Central Asia could foresee having better opportunities because they already have 

a base from which to operate. But right now, going back to, Eric’s point about the harmonization and customs and other issues, just being in Russia doesn’t necessarily mean that 

the Central Asian market is open for you. 

In the case of the customs union with Russia and Kazakhstan, there are some U.S. 

companies that have benefited from the opening of transit between Russia and 

Kazakhstan. Companies that are already doing business and producing or doing things 

in Russia have been able to benefit by being able to send goods duty-free into Kazakhstan. 

I don’t think that it’s an issue. I don’t think that the U.S.—and I’ll let my State 

Department colleagues take over the political aspect—but commercially, we’re not looking 

to compete with Russia in the region. I think similar to China, a lot of our interests commercially are very different. Right now, as Josh mentioned, the amount of U.S. investment 

and trade in the region, apart from oil and gas, is quite minimal. In terms of the commercial perspective, I don’t think that we could compete with Russia even if we tried at this 

point. 

I don’t think that we’re necessarily going after the same things. For example, one 

of the areas in which several of the countries of the region are looking for investment 

is in hydropower. Hydropower is not an area generally where U.S. companies invest in 

and manage projects. We might supply equipment and services, but it’s not an area where 

you see a lot of U.S. interest in investment. That’s a major area where we’re not actually 

competing with anyone. It’s not an area where we feel that we have an advantage looking 

forward. 

In terms of this, whatever sphere Russia may or may not want to create, we cannot— 

that’s Russian foreign policy. That’s their choice. I actually had a lunch, several years 

ago, with trade attache ́’s from Russia, Japan, Germany and a couple of other countries 

in Uzbekistan. We all had the same challenges. The Russians, the Europeans, the Japanese, everybody was facing some of the same business environment challenges, so I think 

actually greater Russian investment and looking at opportunities in the region could still 

actually promote a lot of this opening of doors and opening of harmonization. I don’t think 


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23 

it would be to our detriment if there was greater Russian interest in the region on the 

commercial sphere. 

Politically, that’s a whole different ballgame, but commercially, I don’t know that 

that actually takes anything away from us. 

Mr. STEWART. Yeah, my point in mentioning the issue or throwing out there the issue 

was simply—look at it from a Central Asian perspective. If you’ve got this—Kazakh perspective—you’ve got this customs union already with Belorussia and Russia. The Americans come along and say we’ve got this great new border harmonization program we want 

you to implement. Then here we go again. Is it the Russians or the Americans? I mean, 

you’re stuck in the middle of the two, right? My point in saying the businesses aren’t 

interested in the political jockeying. The businesses are interested in getting business 

done. 

If that means taking the already existing—the only customs union that I’m aware 

of in the region and saying how do we use that as a starting point to create something 

broader that we can support and that we can buy into and that makes sense for American 

companies, then let’s go that road. That was simply the proposal and the idea. To sort 

of further what Danica was saying, when I take business missions to this part of the 

world, almost every executive that comes from an American company is—not all of them, 

but a majority of them are based out of Moscow. 

This is for them a regional approach to doing business. If we can find ways to simplify 

it and to make it easy and make it happen, that’s all we want. 

Mr. KUCERA. I would just add that, you know, the U.S. does engage in a lot of Eurasian trade right now, which is the NDN. And Russia is, in fact, very cooperative with 

that. I mean, they host almost all of the equipment and have never really caused any 

problems from it. 

One thing I’m curious and this discussion got me thinking, and I wonder if somebody 

in the audience knows—if so, tell me afterwards—you know, whether the customs union 

has made it in fact easier because most of this NDN traffic goes, you know, from the 

Baltics through Russia or through—but through Russia, then Kazakhstan, then the rest 

of Central Asia. I wonder if this customs union has made that Russia-Kazakhstan border 

crossing easier. 

Mr. STEWART. On that point, you tried Josh and I think he did a good job of trying 

to clarify what is the Silk Road right now. I actually think there’s two different things 

that we talk about. There’s the north and the south and then there’s the east and the 

west. They’re very, very different proposals and programs. There is the potential for them 

to both work together and intersect together, but how that works at this point is yet to 

be determined. I mean, it’s unclear. 

We know it works north to south now with military, but is that long term, sustainable 

via the private sector. Look at companies like Maersk that are moving goods from, you 

know, Klaipe ̇da to Afghanistan. I mean, that’s working great. You’re seeing a neat supply 

chain that’s building out of that. Hopefully, that’s sustainable before ’14, but the answer 

to that question is yet to be determined. 

Ms. HAN. And Craig, that was one of the questions that I wanted to ask you was 

the issue of the north-south versus east-west. And certainly, I think, the U.S. is focused 

more on the South Asia integration. There’s lots of ADB programs that focus on that. 


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You support TAPI and other things, but I mean, do you think that there’s relative value 

to one or the other, or is it an all-of-the-above strategy? 

Mr. STEFFENSEN. The last time I looked, I think there was about 1 percent of trade 

going north-south as there was going east to west. It was mentioned earlier. I think Josh 

mentioned it that a lot of countries would prefer, you know, not to pin their hopes on 

Afghanistan as a transport—trans-accorder at this point in time. That’s exactly right. 

It’s been stated as much in quite a few CAREC meetings. Until the security situation 

calms down and the cost of trucks from Central Asia transiting Afghanistan to Pakistan 

comes down as well. 

We didn’t mention Russia very much. We also didn’t mention Iran. The northern 

and western parts of Afghanistan have security incidents once in a while. They do. But 

it’s a lot safer up there relatively speaking than it is to the east and south in Afghanistan. 

And if only Iran were part of the picture, you know, we might be able to facilitate movement of people, goods, and vehicles between Central Asia and, well, ports on the Caspian 

Sea. 

The ports in Bandar Abbas, in Chabahar are just waiting for these goods to move 

in their direction, but you know, until now, I think all of the incentives are to access 

ports in Pakistan. Until that changes, you know, I think it’s unrealistic to expect the 

trade picture between Central Asia, South Asia to change a whole lot. 

Ms. HAN. OK. I’m going to wrap it up with one last question and give the panelists 

one last chance to respond. I think one of the themes that we identified today is the issue 

of trust among the countries and how that, in conjunction with political will, is a necessary 

precondition to creating a better economic environment there, the precursors for a better 

economic environment. Wondered if you had thoughts on what sort of confidence building 

measures or what sort of things we should be doing, either from the U.S. government 

strategy or from international organizations or other areas that would help move that 

forward, the trust issue. I’ll start with Josh. I know you’re not a policy person, but give 

it a shot. 

Mr. KUCERA. I think you have to think in generational terms, frankly. I think you 

have to think in generational terms. I think these political systems that have arisen in 

these countries are, you know, the closed borders and the insularity is built into the system. What can the U.S. do about that? 

Frankly I’m at a loss, other than, you know, wait and perhaps train younger cadres 

of people on how to do things more in the way that we would like them that in the case 

that there’s a slow opening in the future, those people will have the technical expertise 

to do something better. But we have to think very modestly. 

Ms. HAN. Danica. 

Ms. STARKS. I don’t know that it’s something that the U.S. as a government can make 

people trust each other. I just don’t know how that could possibly happen. Speaking as 

a commercial person, I would say commercial success that involves these countries working together to achieve a goal could do it. I go back to the Baku-Tbilisi-Ceyhan example, 

BTC, and look what that did for the relationship between Georgia, Azerbaijan, and Turkey. It created—friendship might be too strong a word, maybe it’s not strong enough, 

but these countries now depend on each other and depend on each other’s security for 

the viability of that pipeline. 


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25 

When Georgia faced troubles early on in the decade, Azerbaijan was very supportive 

of Georgia in helping them to develop and keep the lights on and that type of thing. 

There’s a lot of interest in the security of the pipeline because Turkey had an interest 

in what happened in Georgia. 

I don’t want to beat the TAPI horse too much, but that’s why the State Department 

and others have pushed this and other similar projects, is if you can get these countries 

to work together for an overriding goal and have something that important at stake, that’s 

what can build the trust, having something where everybody in this particular project 

is benefiting, but you need everybody to cooperate and having those kinds of things in 

place. 

But as Josh mentioned, that could be generational. I mean, these projects don’t happen in one year. Craig said he’s been working on TAPI for a decade. And it may not 

be TAPI. Maybe it’s something else. But I do think that in the long term, there’re going 

to be some projects that will not go forward unless two or more or three or more countries 

in the region come together. And the benefit and the economic benefit and the economic 

outlook of that project is going to be so good that it will force some people to come to 

the table. 

What that project is necessarily, I don’t know, but it’s going to be something—it’s 

going to be a deal of a lifetime that the countries are not going to want to pass up. They’re 

going to work together. That is one of the ways that trust can be built. But do I think 

that it can come from a random government policy? No. I think we can support projects 

and things that can, in small ways, help build trust, but I don’t know that there’s any 

one particular thing that we can do. 

Ms. HAN. It’s one way of doing it. Craig. 

Mr. STEFFENSEN. Yeah, I agree with everything that Josh and Danica have said. 

Clearly there’s a new form of multilateralism going on out there that doesn’t include the 

U.S., and whether it’s the Shanghai Cooperation Organization or the European Economic 

Community or CACO or some others. It’s important for all of us just to be realistic about 

what the U.S. can say and achieve in a part of the world that others consider their backyard, not ours. 

Maybe we need to be a little more collaborative in our approach to getting things 

done. The bilateral approach oftentimes is easier, but I think the sure way to success 

is just doing something Eric said, meeting with people privately before you go to a meeting 

and talk about it as a group, you know, focusing the discussion on some issues that people 

aren’t prepared to discuss and not allowing the discussion to go off course because the 

next thing you know, they’re talking about trans-boundary water management and all 

hell breaks loose. 

As people have said, it’s really a generational thing, not just in terms of addressing 

these problems because they’re big problems, but I think a new generation of leadership 

in that part of the world is probably required too before we can see solutions to some 

of these things. 

Mr. STEWART. I think a lot of it is expectations; I mean, expectations on both sides. 

What I mean by that is, we’re working very closely with Uzbekistan on the NDN and 

we say, Uzbekistan, what do you want? Well, we want investment. We want companies. 

We bring the companies, but then they don’t invest. Then the Uzbeks look at us and 

say, what are you doing for us, right? I think managing the expectations that our system 


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26 

doesn’t work that way, right? We can’t go to HP and say, Uzbekistan is a great friend 

of ours, put a plant there. That just doesn’t work that way. 

I’m going to beat my drum of the customs and border harmonization, that’s what’s 

going to bring the companies. But little that the U.S. government tells the companies 

is going to make a difference. What actually takes place in the region is what’s going 

to make the difference and what’s going to attract the companies. 

What else can we do? I think, going back to what I mentioned earlier, is I really 

think we need to engage Russia, engage the EU, engage Turkey, engage China and have 

these Central Asian talking points, something of common trilateral, multilateral, whatever you want to call it. And so when working with the Central Asians or working directly 

with the individual countries in Central Asia, they hear a common theme from Russia. 

They hear the same theme from the U.S. They hear the same theme from Turkey. Then 

it becomes the right answer versus what do the Russians want, what do the Americans 

want. They’re constantly being pulled in so many different directions from so many different entities that want something. But if they continue to hear the same answer and 

the same issue repeatedly, then it becomes the right thing to do. 

From that perspective, going back to the question about Russia—there are so many 

opportunities to be had in Central Asia and there are so many opportunities for investment, for trade. There’s a lot of development that needs to take place. There’s a lot of 

money to be made for each of the countries, but also for the interlocutors that are working 

with them. 

From the Russia perspective, they actually would have the upper hand from the 

Americans because of location and because of historical reasons, et cetera. I tend to believe—I’ll put an American company up against any company in the world, head to head, 

and I’ll take us. But at the same time, the natural advantage for Russia would give them— 

would give them the lead. There are a lot of opportunities and I think there should be 

less us versus them and more, if we would do this all together, we’re all going to benefit. 

Ms. HAN. Yes, that’s a great point. Because the U.S. does have interests there besides 

promoting U.S. business. I think we want to see economic development happen regardless 

if it’s U.S. companies that are doing it or not. So that’s a good point. 

I want to thank all of our speakers for participating today. You’ve made a great contribution to this discussion. I look forward to continuing the discussion on this as we go 

forward. Thanks for coming and thanks all of you for participating as well. 

Æ 


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