Kyrgyzstan's recent proposal to Germany to invest in logistics centers along the China-Kyrgyzstan-Uzbekistan (CKU) railway marks a significant moment in the broader geopolitical dynamics of Central Asia. President Sadyr Japarov's invitation, made during the "Germany-Central Asia" summit in Astana, is not just a pitch for investment - it underscores the growing regional importance of infrastructure projects connecting Europe and Asia and highlights the region's strategic pivot towards fostering deeper global partnerships.
The CKU railway is a key component of China's Belt and Road Initiative (BRI), a transcontinental infrastructure network aimed at enhancing trade routes between China and Europe. The idea of establishing an alternative corridor connecting China and Europe was first proposed back in 1997 and received support from all interested parties. However, over the past 27 years, the project has faced numerous obstacles and remains unrealized. Various factors have hindered progress, with one of the key issues being disagreements over funding, route alignment, and the width of the railway gauge. Uzbekistan and Kyrgyzstan, like most post-Soviet republics, use a broad gauge of 1,520 millimeters, while China employs a narrower, European standard gauge of 1,435 millimeters. This technical disparity has been a significant point of contention in advancing the project.
The final agreement, signed by China, Kyrgyzstan, and Uzbekistan on June 6, 2024, in Beijing, marked a significant step toward realizing a project that has been in the works for over 20 years. The agreement outlines the construction of a railway in Kyrgyzstan along the route Kashgar - Torugart - Makmal - Jalal-Abad - Andijan. To oversee the project, the three countries will establish a joint project company (JPC) in Kyrgyzstan, operating under its laws. The shares in the company's charter capital will be distributed as follows: 51% for China or its holding subsidiary, 24.5% for Kyrgyzstan, and 24.5% for Uzbekistan.
This railway project holds significant promise. It is set to become a vital link for land-based trade, cutting transport times between China and Europe, bypassing traditional routes through Russia. However, the success of the CKU railway depends not only on its completed construction but also on the development of complementary infrastructure, such as logistics hubs. These centers will be crucial for handling goods efficiently, boosting the region's role as a transit hub, and providing services for the surrounding industries.
By inviting German investors to take part in these logistic projects, it appears that Kyrgyzstan aims to diversify the foreign presence in a region increasingly influenced by China and Russia. Germany's involvement could introduce European standards in logistics and technology, providing a counterbalance to the dominant players. In turn, this presents Germany with an opportunity to expand its economic influence in Central Asia while fostering a more diversified and competitive investment landscape.
The larger question, however, is to what extent China and Russia will tolerate Germany's involvement in infrastructure projects in Kyrgyzstan. The generally accepted scenario that has suited all actors in the region has been one where Russia serves as the key strategic partner and security guarantor in Central Asia, while China assumes a more informal leadership role, primarily in economic and infrastructure development. However, both players have historically shown reluctance to welcome the involvement of external powers in the region, raising concerns about how Germany's increasing presence may be perceived.
Furthermore, when it comes to Germany in particular, and the EU in general, their development strategy in Central Asia has been modest, ad-hoc, and largely issue-based. So far, the EU has struggled to craft a coherent and long-term policy for the region. The EU's ill-defined role in Central Asia can be partly explained by the geographical distance, as well as Russia's dominant position as a strategic and security actor in the region, which has limited Europe's ability to establish a stronger foothold.
The Kyrgyz president's invitation to Germany presents a timely opportunity to reshape relations in a new, more strategic format. The creation of logistics hubs along the China-Kyrgyzstan-Uzbekistan railway is an excellent way for Germany to begin its pragmatic involvement in the region. This approach not only strengthens trade links but also allows Germany to engage in a project already deeply tied to China's infrastructure initiatives. By collaborating on shared infrastructure, Germany could work alongside China rather than compete, offering complementary expertise in logistics, technology, and sustainability. This collaborative approach could foster a more balanced regional development while allowing Kyrgyzstan to leverage both Chinese investment and German innovation, setting the stage for a more diversified and competitive regional economy.
By encouraging German investment, Kyrgyzstan is clearly signaling a desire for a more diversified set of partnerships. For Germany and other European nations, this represents a unique opportunity to engage with Central Asia in a meaningful way that promotes stability, economic development, and global connectivity. The EU, for instance, can contribute by supporting the development of small and medium-sized enterprises, investing in energy and transport infrastructure, combating poverty, and improving the overall quality of life in the region. Importantly, all of this can be achieved without reigniting major power competition, as European involvement can complement existing efforts rather than fuel rivalry.
Furthermore, involving Germany, a country with strong trade relations with both China and the EU, could make it an ideal neutral partner. This could help reduce tensions between Russia and China over control of Central Asia's strategic infrastructure while also ensuring that the CKU railway does not become dominated by any single power. Germany's reputation for engineering excellence and neutrality makes it a suitable partner to develop logistics hubs that serve both Asian and European interests.
Germany's participation could also enhance the quality and reliability of the infrastructure, attracting further European investment and positioning Kyrgyzstan as a crucial bridge between East and West. Moreover, Germany can introduce cutting-edge logistics technologies such as automation, AI-powered supply chain management, and environmentally friendly practices to create state-of-the-art logistics hubs. This is particularly important for the region, where environmental risks are high.
Most importantly, if successful, these Germany-China-Central Asia logistics hubs could serve as a pilot for broader engagement in Central Asia. Germany, as Europe's largest economy, could set the stage for future European infrastructure investments in the region. This could extend beyond logistics, potentially involving sectors such as renewable energy, digital infrastructure, and education.
