About the Silk Road Initiative

If you are unfamiliar with the Silk Road Initiative, or if you would like a reminder of the ideals we works towards, the following provides an overview of the project, its goals and direction.

Quick Facts
The Silk Road Initiative (SRI) is a regional programme under UNDP* administration involving China, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.

The programme’s overarching goal is to help the region meet the Millennium Development Goals of reducing poverty and promoting growth and equality.

More specifically, and inspired by the ancient Silk Road trade traditions, the Initiative aims to enhance regional cooperation and development. Targeting the three main areas of trade, investment and tourism; the Initiative is launching mechanisms to build sustainable capacity by injecting 'seed money'.

The Silk Road Initiative works to:
• Improve policy and legal conditions for trade
• Initiate and encourage investment
• Promote and attract tourism

Background
Once upon a time, the Silk Road was one of the most dynamic and vibrant centres of economic life in the world. For centuries, trade plied the routes of Central Asia and western China, linking East with West in an extraordinary manifestation of early multilateralism.

Although commerce may have formed its backbone, the benefits of this large-scale cooperation far exceeded economic prosperity. The Silk Road also provided an extensive network for cultural, ideological, theological, social and scientific exchange.

The region’s status changed dramatically over time however. Alternative routes by sea, political realignments, and a host of other factors caused the demise of the ancient route, and Central Asian countries became isolated from global economic forces.

Still today, China, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan, stand in each other’s paths for access to major markets, but foundations for development are lacking. Drawing inspiration from the legacy of the ancient route, the Silk Road Initiative seeks to establish a framework for further regional cooperation.

In many ways the potential for this kind of collaboration is at a critical juncture. Since achieving independence from USSR in 1991, the Central Asian Republics (CARs) have moved unevenly through privatisation and the introduction of market-based incentives for trade liberalisation. These landlocked countries are now at very different stages of economic transition.

But with a combined market of 56 million people, and positioned between two major powers, Russia and China, Central Asia’s ability to integrate into the international economic system is seen increasingly in terms of its ability to expand levels of inter-, and intra-, regional economic cooperation.

However, significant bottlenecks to closer economic cooperation persist. Trade has yet to be used as a driving force for the region’s economic development and is stifled by the imposition of complex tariff and non-tariff barriers. In addition, poor physical infrastructure, inadequate institutional capacity and insufficient implementation of regional agreements, are all factors which delay cooperative efforts.

The re-establishment of a robust trade exchange, the development of local markets, and increased levels of inward investment, will contribute to a more equitable and balanced economic growth. A stable, growing economy is crucial to combat overall trends of uneven development, low levels of purchasing power, and limited capital for investment.

Strategy
The SRI uses the concept of ‘seed money’ to lay the foundations for sustainable capacity-building mechanisms in the region. As a result, it is hoped that the Silk Road region may continue to reap rewards, and to further develop and prosper beyond the duration of the programme.

The initiative works towards achieving policy results through close cooperation with the Shanghai Cooperation Organization (SCO) and participating governments. It seeks to underpin institutional capacity, whilst encouraging a broad basis of support for sustainable levels of economic cooperation between Central Asian countries and China.

The SRI supports and encourages national programmes in line with project objectives and the three focus areas. Once fundamental goals have been attained, ways of broadening the geographical scope of the programme will be examined.

Trade
In the trade component, the SRI works to abolish remaining barriers, harmonize trade facilitation procedures, and promote constructive policy-making and legal environments.

Small- and medium-sized enterprises (SME) are encouraged to take part in the project as greater private sector participation is crucial to sustainable trade.

The SRI cooperates with the SCO in supporting regional initiatives in trade and transit promotion and facilitation. It will organise capacity building programmes for business, trading companies and national institutions, and also projects to establish trade and entrepreneurship training for export-orientated SMEs.

Mayors’ Forums, symposiums and regional roundtable discussions form part of the Initiative’s working-level activities for trade promotion.

Investment
2006 will see the launch of the Silk Road Investment Forum. The Forum’s main objectives are to attract international and regional investment, and to encourage region wide public private partnerships (PPP). Priority areas for FDI promotion may be selected, for example, in infrastructure, tourism, and hotel development.

The SRI’s main partner for investment is the UN Conference on Trade and Development (UNCTAD).

Tourism
In collaboration with the World Tourism Organisation (WTO), the SRI encourages the development of value-added tourism and ecotourism. A “UN Silk Road City Award” is currently taking shape, whereby participating countries must fulfill criteria for sustainable development and cultural preservation. An Eminent Persons’ Group will convene in March 2006 to decide on award criteria and assess potential winner cities. The Initiative is also promoting a “Silk Road Visa” to further attract and facilitate tourism to the region.

Partners
• UN Conference on Trade and Development (UNCTAD)
• UN World Tourism Organization (UN WTO)
• Shanghai Cooperation Organization (SCO)
• Central Asia Regional Economic Cooperation (CAREC) Programme
• BOAO Forum for Asia

*United Nations Development Programme