Development debates often focus on natural curses and blessings. For some countries, being landlocked
is a curse resulting in difficult and costly access to/from markets. However, for the countries comprising
Central Asia, most notably Kazakhstan and Uzbekistan, in ancient times and today, being landlocked has
been a blessing. The Silk Road puts Central Asia in the crossroads of the East-West and North-South trade
routes.
Infrastructure is the key to exploiting this location and transforming it into economic development
and prosperity for the people of the region. Much of the attention focuses on the hard infrastructure:
pipelines, railways, highways, and communications networks. Going back to ancient times, such
infrastructure allowed markets to function and grow by connecting supply and demand and maximizing
the value of the region’s natural resources.
However, the hard infrastructure needs the soft infrastructure to result in long-term success and make
a positive development impact. Governments must carefully consider the soft elements of their legal,
regulatory, and fiscal infrastructure. How will the projects be structured? What will be the local content
and labor requirements to foster the growth of human capital? What are the terms of debt and will the
government have future capacity to repay it? Lastly, and perhaps most importantly, are the “rules” and
“terms” of each infrastructure project transparent?
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