Development banks vie for influence in Central Asia

Central Asia has become a new geopolitical arena of competition - this time in the area of development financing. While the G7 countries are trying to expand their economic presence via international institutions, China is increasing its influence with its own financial instruments and infrastructure projects.

Two development banks are at the center of this competition: the Manila-based Asian Development Bank (ADB), which is dominated by Western countries, and the China-dominated Asian Infrastructure Investment Bank (AIIB).

Infrastructure as a geopolitical instrument

The Asian Development Bank recently announced extensive investments to expand infrastructure and trade links in Central Asia. One focus is on promoting the so-called "Middle Corridor", a trade route between Europe and Asia that bypasses Russia and is increasingly supported by the USA.

Symbolic of the growing attention is also the upcoming annual meeting of the ADB: it will take place at the beginning of May in Samarkand, Uzbekistan - a clear signal of the strategic importance of the region.

China reacted promptly. The new AIIB President Zou Jiayi traveled to several Central Asian states and met with top politicians in Kazakhstan, Uzbekistan, Kyrgyzstan and Tajikistan.

Concrete agreements were not signed during the trip. However, Zou emphasized that the talks had provided important information for future investments. "If we listen today, we can invest better tomorrow," she explained.

The talks focused on topics such as renewable energies, climate protection, water resources, digitalization and the expansion of regional transport links.

The AIIB says it has invested around eight billion dollars in Central Asia to date - around eleven percent of its total loan portfolio.

New trade routes in the shadow of geopolitical crises

Parallel to this competition for development financing, the region's trade routes are also shifting. In view of the instability in the Persian Gulf, Chinese logistics companies are increasingly promoting overland transportation between China and Europe via Central Asia and Russia.

These routes are currently considered less susceptible to maritime bottlenecks than the traditional sea routes via the Suez Canal and the Red Sea.

The region is also coming more into focus politically. The Shanghai Cooperation Organization (SCO), which is dominated by China and includes four of the five Central Asian states, recently condemned the use of military force in the Middle East and emphasized the importance of Iran's territorial integrity.

The governments of Central Asia themselves reacted much more cautiously to the crisis and avoided taking a clear position.

Kazakhstan focuses on water and legal cooperation

Kazakhstan is also trying to expand its international networks. The country is intensifying training programs in the field of so-called water diplomacy - a topic that is becoming increasingly politically sensitive in view of the growing water shortage in the region.

In addition, President Kassym-Jomart Tokayev signed an agreement with Hong Kong on legal cooperation, which provides for mutual legal assistance in investigations and criminal proceedings.

Kyrgyzstan is seeking investors from China

Kyrgyzstan is now increasingly seeking Chinese investment. Deputy Prime Minister Edil Baisalov travelled to the Chinese province of Shandong to attract investors for new industrial projects.

At the same time, the country's largest oil refinery, Zhongda, is being modernized at a cost of more than 190 million dollars. Once the work is completed, the plant will produce fuels in accordance with modern environmental standards.

Other projects with Chinese involvement range from the construction of water treatment plants to the construction of a new stone crushing plant near the capital Bishkek.

China is gaining weight as a trading partner for Uzbekistan

Beijing's economic influence is also growing in Uzbekistan. At the beginning of the year, China accounted for more than a quarter of the country's total foreign trade - significantly more than a year earlier.

However, a much-noticed Chinese-Uzbek economic forum in Tashkent fell short of expectations: no major investment agreements were announced.

In parallel, the Uzbek anti-corruption authority is investigating alleged irregularities during official delegation trips to China.

Turkmenistan opens border for refugees

Turkmenistan has also recently become the focus of regional developments. The country opened its border to foreign citizens fleeing the fighting in Iran.

According to Chinese media, several Chinese citizens are among the people who have entered Turkmenistan since the end of February.

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