Central Asia between Digital Silk Road and Digital Silk Way

Central Asia in the age of digital technologies finds itself between two megaprojects of China and the European Union as the Russian Empire and British Empire in the XIX century competed for this one of the most landlocked regions of the world. The victory of the Russian Empire in this contest decided where the transport lines of Central Asia would be directed in the next decades. The so-called “second transportization” process of the region during the Russian Empire and the Soviet Union built in Central Asia a network of northward-oriented railroads that played a strategic role in economic and political purposes.

Source: Unsplash

On the threshold of digitalization, Central Asia is facing a similar challenge that may influence the decade-long standards and architecture of the digital infrastructure of the region. The landlockedness of the region to the sea routes prevented it from joining global trade directly after the crisis of economic relations along the Silk Road. This same factor in the modern period contributes to the territory not being fully connected to the internet lines through underwater cables. In this case, there are a couple of options to connect to the quality and advanced systems of the Internet: the Digital Silk Road of China and the Global Gateway of the European Union.

The increasing demand for the Internet due to urbanization, digital projects of governments and businesses, decreased traffic costs, and the rise of income makes Central Asia choose between these two options or converge them strategically.

Both projects serve to improve the digital connectivity of the region and accelerate the digitalization process that has been advancing in recent years. For example, the e-gov system of Kazakhstan already provides more than 83% of public services and demonstrates the smallest digital gap compared to other Central Asian countries while Uzbekistan is indexed in first place in the development of the digital economy with a 2.8% share in the total GDP of the country.

In the past decade, Central Asian governments adopted their national digitalization strategies and plans. The Concept of Digital Economy in Tajikistan approved in 2019 presents a plan in three stages until 2040 which includes strengthening non-digital foundations, training qualified personnel, and developing policy and legal frameworks in the first phase and continues with cybersecurity, information security, cloud technology programs and building data centers between 2026-2030. The transformation process according to the concepts ends with “further strengthening the non-digital and digital foundations and launching digital projects in key sectors of economic activity in the country, as well as in the social sphere.”

According to its “Digital Uzbekistan – 2030” strategy, Uzbekistan intends to increase internet coverage by 100% by 2030 and improve its e-government index to 0.86 points from 0.66 in 2020. Furthermore, the program mentions an increase in fiber-optic cables from 41km to 250km until the targeted year. The national project of Kazakhstan also entails ambiguous goals such as enhancing the average network speed by 100 megabits per second and installing fiber-optic cables in at least 3000 settlements.

The rise of the Internet community in Central Asia may facilitate e-commerce and e-service sectors that could help trade deficits with countries, otherwise the region cannot compete in industrial production. The statistics of the trade with China in 2023 presenting that only Turkmenistan out of five regional countries favored the balance of trade because of natural gas exports displays how important for Central Asia to seek alternative profit lines like the export of digital services.

The export of digital products and services, meanwhile, enables Central Asia to trade with the areas where physical goods through transport roads are hard to reach due to the landlocked position of the region to sea routes and mainly northward-oriented railway system. In turn, it increases the connection of Central Asia to the global economy at the international level while this tendency provides middle and small businesses with revenue opportunities.

Considering that Central Asian countries have limited potential of resources, technology, specialists, and innovation capacity to facilitate these conditions and plans single-handedly, the region needs to address the international community to ease the hurdles to the rise of the digital sector. The most promoting options for the region in the current situation are the Digital Silk Road of China and the Global Gateway of the European Union. These projects may support education and training, infrastructure, data centers, and global connectivity of the region as both China and the EU possess adequate capacities.

In this case, the main problem is the opposite positions of China and the EU at global geopolitical poles, which necessitates careful considerations for Central Asia to benefit maximally from both projects and converge them strategically for the good of the region. It enables the region to minimize the political pressure and acquire economic and scientific outcomes. Moreover, the region, in this way, could ease the effect of “technology-induced cultures.”

By the time Houthi rebels in the Red Sea where SEA-ME-WE systems, the Internet backbone of the Middle East, Indian Subcontinent, South-East Asia, and Europe pass through, Central Asia had been playing a minor role in the geopolitics of digital connectivity of the European Union. As Daniel Markey wrote about American strategy in Central Asia, the region was also left by the EU with passive participation. Therefore, the Digital Silk Road of China developed major digital infrastructures in Central Asia.

Apart from the EU's inactiveness in this issue, the affordable costs of Chinese technologies apply better to the economic conditions of Central Asian conditions. Furthermore, China and its companies, unlike the United States and the European Union, cooperate with partner states with fewer political and social obligations unacceptable by governments and societies.

As a result, the Digital Silk Road has achieved notable success in Central Asia and built critical digital infrastructures in the region. Huawei of China won several projects in Central Asia to build “smart” and “safe cities” that resemble the “caravansary settlements” of the ancient Silk Road. These settlements provided security and stability along the routes for caravans and these backbones influenced the trade conditions.

The presence of Huawei has also risen in the training sector from 25 to 50 ICT academies in Kazakhstan providing its service for 5000 students in critical areas and the Kazakhstani team won the Grand Prize for the Computing Track of the Regional Finals of the Huawei ICT Competition 2023-2024 Middle East and Central Asia. It signals how China is strengthening its presence for the future of the region as education may impact generations-long periods.

Furthermore, there are the terrestrial cable networks with the participation of Chinese companies which may drive Central Asian connectivity. The Transit Europe-Asia (TEA), Europe-RussiaMongolia-China (ERMC), the Diverse Route for European and Asian Markets (DREAM), and Super TSR include China Telecom Global and China Unicom, the companies jointly control around 40% of the market share in their country.

These projects contributed and may continue providing main services to the governments and societies of Central Asia in the age of digitalization. The affordability of Chinese technologies with less political and social obligations plays a significant role in the success of the Digital Silk Road in the region. However, this megaproject of China is not unchallenged anymore.

The European Union is on the brink of renewing its strategy on Central Asia and the document may include important notices on the digital connectivity of the region. Although the Strategy in 2007 overlooked the digital sectors of the region, the updated Strategy in 2019 showed interest in the fields of cybersecurity, research and education networks, digital entrepreneurship, and e-government. The document also mentions cooperation on positioning and timing services of Galileo satellite to facilitate transport connectivity.

The European Union could contribute to digital governance, inclusive digital development, and transportation digitalization in Central Asia although the EU is described as a digital latecomer. The Global Gateway initiatives that were announced in Samarkand in 2022 mention enhancing green data centers, personal data protection, and the telecoms sector in the region.

Significantly, the projects of the EU could leverage China in Central Asia, and provide alternative access to hardware and software technologies, education and training capacities, and the models of digital standards. Additionally, the Digital Silk Way initiated by AzerTelecom and Caucasus Online of NEQSOL Holding means laying a 340-kilometer, 400 terabit-per-second fiber-optic cable along the bottom of the Caspian and increasing the transmission capacity of the Black Sea cable line to at least 16 terabit/s. This Azerbaijani initiative strategically connects Central Asia with Europe and opens further routes to the global internet system.

The projects of the European Union serve to boost the digital economy of Central Asia and diversify the connection of the region to global internet systems. According to World Bank studies, “a 10% increase in broadband penetration adds around 1% to economic growth in Central Asia, while a 1% increase in internet connectivity corresponds to 4.3% of export growth.”

On the other hand, the EU also benefits from digital intervention in the region. For instance, the EU challenges Chinese digital dominance and secures its Eastern borders while granting access to Central Asian markets and cheap digital services. Moreover, alternative fiber-cable lines through stable Central Asian countries rather than disruptive Red Sea may guarantee a faster and more secure connection with China, and even with broader Asia.

In an overview, both Chinese and European digital projects come with opportunities and challenges that the regional states should deal with intelligently and strategically. In this way, the five Republics could find necessary technologies and know-how to implement their national strategies efficiently and to avoid technology-induced one-sided standards. This "strategic convergence" enables Central Asia not repeat the historic experience in the XIX century.