A regional investment bank in Central Eurasia could help Washington compete with China and Russia at a low cost and without putting boots on the ground.
In a world increasingly shaped by great power competition, American power must be measured not by the number of bases or warships abroad but by the institutions it helps shape. To remain a global power without draining itself through endless commitments, military or otherwise, the United States must empower regional orders aligned with its interests. One of the most important opportunities to do so lies in an unlikely place: the Silk Road Region, spanning Central Asia, the South Caucasus, and parts of the Middle East.
This vast geography, long viewed as a backwater of great power politics, is undergoing a remarkable transformation. States across the region are asserting themselves, forging new partnerships, and coalescing around the Middle Corridor—a trade route connecting China and Central Asia to Europe via the Caspian Sea, the South Caucasus, and Turkey.
However, this emerging economic corridor faces substantial obstacles: underdeveloped infrastructure, regulatory fragmentation, and chronic underinvestment. What it needs is a vehicle to unlock its potential and manage its growth, a dedicated financial institution that can bridge regional ambition with international capital. The answer is a new institution: a Trans-Caspian Development Bank (TCDB).
This is an initiative the United States can and should support. It would allow Washington to shape a critical region from afar, counter China’s Belt and Road Initiative (BRI), stabilize a key neighborhood, and enable economic growth, all without military entanglements or direct confrontation.
A Region Both in Flux and in Play
To understand why the TCDB matters, it’s essential to examine the geopolitical context of the Silk Road Region, defined as “that part of the world that looks west past Anatolia to the warm seas beyond; north across the Caspian towards the Great Steppe; east to the peaks of the Altai and the arid sands of the Taklamakan; and south towards the Hindu Kush and the Indus valley; and then looping around down to the Persian Gulf and back up across the Fertile Crescent and onward to the Black Sea littoral.”
Three interlocking forces are defining the region’s transformation: the shifting balance among the great powers, the rising agency of regional states, and the growing viability of the Middle Corridor itself.
First, the existing balance of power is shifting. The region sits at the epicenter of a new phase of great power competition. Russia, China, and the West (especially the United States) all seek to shape outcomes, but none can dominate outright. This is what various strategists, such as Nouriel Roubini and Ian Bremmer, call a “G-Zero” environment—a world of fragmented spheres of influence, transactional diplomacy, and the absence of a single hegemon.
This is visible in the case of Russia, whose traditional dominance in Central Asia and the South Caucasus is eroding. For decades, Moscow regarded the region as its strategic backyard—especially the northern tier of Central Asia, where its military presence and economic leverage loomed large. However, the war in Ukraine has accelerated the collapse of this informal empire. Sanctions, diplomatic isolation, and battlefield exhaustion have undermined Russia’s ability to project power. Even allies like Kazakhstan have begun distancing themselves, wary of entanglement and increasingly assertive in crafting independent foreign policies.
China, by contrast, has become the largest external economic player in the region. Through its Belt and Road Initiative, Beijing has financed railroads, pipelines, and logistics hubs across the heart of the Silk Road Region. For Beijing, the Caspian Basin and Central Asia are neither peripheral nor commercial zones; they are strategic arenas to rewire Eurasian connectivity on Chinese terms, reduce dependency on maritime trade, and shape the contours of global economic integration.
It is telling that one of Xi Jinping’s first major foreign policy speeches after becoming president was delivered in Astana in 2013. His message, then and now, is clear: China is building a Eurasian order. Yet Beijing’s rise is not uncontested. Debt concerns, opaque financing, and political sensitivities have prompted a slow recalibration in regional capitals, which increasingly seek to hedge and diversify.
The United States, meanwhile, remains a peripheral but not irrelevant player. Since the Cold War, Washington’s engagement has revolved around counterterrorism, energy diplomacy, and, more recently, managing competition with China. While geographically distant, the United States has the advantage of being a “neutral” actor whose involvement is often welcomed as a balancing force. Initiatives like the C5+1 platform and the Blue Dot Network signal an interest in fostering regional resilience, though they currently lack the scale and institutional heft to match Beijing’s ambitions.
Second, the region’s states themselves are growing in agency. For the first time in decades, perhaps centuries, countries in Central Asia and the South Caucasus are emerging as active shapers of their geopolitical environment rather than mere objects of external manipulation.
On the eastern side of the Caspian, Kazakhstan has embraced a multivector foreign policy, deepening ties with China, Turkey, and the EU while carefully managing its relationship with Moscow. Astana has also prioritized infrastructure development, turning itself into a critical transit hub between East and West. Uzbekistan, under President Shavkat Mirziyoyev, is undergoing profound economic reform and liberalization. Tashkent’s embrace of regional cooperation has helped thaw relations with its neighbors and accelerated internal modernization. Turkmenistan, while more cautious, is quietly expanding its commercial and infrastructural links across the Caspian.
On the sea’s western shore, Azerbaijan has emerged as a key player. Its victory in the Second Karabakh War has allowed it to consolidate control over that disputed territory and pursue a more autonomous and assertive foreign policy. Baku is not only a leading energy supplier to Europe but also a logistical hub for all trade in the region.
Georgia continues to anchor itself to the West, though it remains tactically careful, given its unresolved territorial disputes and proximity to Russia. Finally, Armenia, once a close ally of Moscow, is attempting recalibration toward broader partnerships in the wake of Russia’s CSTO not intervening during the 2020 war (on the basis that Karabakh was internationally recognized as Azerbaijani territory).
Even where rivalries persist, the region’s states increasingly see themselves as capable of collective action. As regional specialist Damjan Krnjević Mišković noted, their emerging logic resembles early-stage regionalisms like ASEAN, the Nordic Council, or the original European Economic Community.
The common denominator is that these states are no longer waiting for external powers to define their future. They are actively seeking to shape it, often in coordination with each other.
Third, the Middle Corridor is gaining strategic traction. Known formally as the Trans-Caspian International Transport Route, the Middle Corridor connects China to Europe through Central Asia, the Caspian Sea, the South Caucasus, and Turkey. Its appeal lies in its political neutrality—it avoids Russia and Iran—and its potential to diversify global supply chains.
Since Russia invaded Ukraine, interest in the corridor has surged. The EU pledged €10 billion to support infrastructure investment, and container volumes have grown dramatically. Relatedly, Gulf states like the UAE and Saudi Arabia have begun quietly investing in strategic logistics and energy terminals. According to the World Bank, with the right policy and investment reforms, the corridor could halve transit times and triple freight volumes by 2030. In 2024 alone, more than 4.5 million tons of cargo moved through the corridor—a 62 percent increase from the previous year.
Still, major gaps remain: rail bottlenecks, port inefficiencies, and inconsistent customs regimes limit competitiveness. New initiatives, like the Digital Trade Corridor and the Trans-Caspian Transport Corridor Coordination Platform, are promising but insufficient. What’s missing is a central financial mechanism to coordinate investment, set standards, and scale up progress.
Why the Region Needs a Bank and Why Washington Should Want One
Given these three forces, the Middle Corridor is not just a trade route. Instead, it is the physical expression of a new regional order, defined by strategic diversification, pragmatic multilateralism, and open competition. But where is the United States in this? Yes, initiatives like the C5+1 framework show some attention, but the reality is that Washington still lacks a coherent strategy for the region as a whole.
That leaves a narrow but real opening. For this new regional order to cohere, institutional architecture is needed. The Trans-Caspian Development Bank could serve as the institutional linchpin.
As envisioned in our original proposal, the TCDB would be a purpose-built, technically expert, and operationally lean institution governed by the states that physically constitute the Middle Corridor but open to investment from global partners. Its mandate would be focused, not bloated: build the physical and digital infrastructure required to transform the Middle Corridor from a string of national projects into a seamless transcontinental artery.
Economically, the rationale is obvious: despite notable improvements in recent years, the corridor remains plagued by high costs, unpredictable transit times, and significant underutilization. Rail bottlenecks limit throughput. Ports across the Caspian lack modern equipment and intermodal integration. Customs regimes are fragmented, duplicative, and prone to delays.
No single national government can fix these issues alone. Piecemeal development leads to inefficiencies, gaps, and duplication. The TCDB would centralize project financing and technical standards, ensuring that capital is deployed where it creates the greatest systemic gains: smoother rail-port interfaces, digitized customs clearance, and interoperable logistics platforms. By establishing a shared financial architecture, the bank would accelerate the region’s emergence as a globally competitive transport and energy hub.
Yet the real value of the TCDB lies in geopolitics. The bank would institutionalize regional cooperation in a way that neither China’s BRI nor EU grant mechanisms can. It would serve as a platform where regional middle powers—Azerbaijan, Kazakhstan, Uzbekistan, and Turkey—can pool resources and align priorities without external domination. Crucially, it would also give outside actors, including the United States, a structured and non-intrusive way to engage.
For Washington, that’s the strategic payoff. The United States cannot, and should not, seek to exert itself in the region through security arrangements. It lacks contiguous geography, faces higher opportunity costs, and has more pressing priorities elsewhere. However, it cannot afford to cede the region entirely to China or Russia. That would mean losing influence over a zone that controls vital energy routes, interconnects Europe and Asia, and increasingly shapes global logistics.
A US-backed TCDB thus offers a solution rooted in offshore balancing. By contributing capital, technical expertise, and diplomatic weight—without seeking to control governance—Washington can help shape the corridor’s development in ways that align with its interests: transparency, multivector partnerships, open markets, and a reduced dependency on other patrons. Moreover, participation in the bank allows Washington to counter China’s infrastructure diplomacy on favorable terrain. Unlike the BRI, which often relies on opaque bilateral loans and creates debt dependencies, the TCDB would be multilateral, transparent, and regionally owned.
There are economic benefits as well. As the corridor becomes more viable, US firms—especially in logistics, engineering, energy, and finance—will find new commercial opportunities. Sovereign wealth funds and pension investors, increasingly seeking long-term infrastructure assets, would have a vetted, professionally managed platform through which to participate. Even modest US engagement could catalyze significant private-sector interest.
Finally, participation in the bank would send a powerful signal that the United States is still willing to invest in shaping the rules and institutions of tomorrow’s global order, not by force, not through ideological crusades, but by building real platforms for regional cooperation.
That kind of presence—constructive, stabilizing, and enduring—is exactly what the region wants. And it’s exactly what America, in an age of constrained resources, should want to offer.
How Washington Can Support the TCDB
The United States does not need to lead the Trans-Caspian Development Bank, nor should it. This is a regional institution, and its credibility depends on the ownership of the states it is meant to serve. However, America can play a vital supporting role that amplifies the bank’s effectiveness while advancing US strategic interests at a relatively low cost.
First, Washington should provide seed capital. A modest US contribution—on the order of $500 million—would demonstrate seriousness and encourage buy-in from European allies, Gulf sovereign wealth funds, and even private institutional investors. The goal is not to fund the bank outright but to catalyze a broader investment coalition by showing early support. That signal alone would carry weight far beyond the actual dollar amount.
Second, the United States can offer technical assistance through agencies like the US International Development Finance Corporation (DFC). This can help shape the bank’s internal governance, ensure project transparency, and develop rigorous frameworks for risk assessment and performance monitoring. American involvement here would not only add value but also reassure potential investors about the bank’s operational standards.
Third, the United States should champion the TCDB diplomatically. That means using its convening power in venues like the C5+1, the G7, and relevant UN platforms to endorse the concept publicly and build momentum. Elevating the bank as a flagship initiative for Eurasian connectivity would help consolidate regional support, attract high-level attention, and position the United States as a constructive partner.
Fourth, Washington should align its efforts with those of key allies. The European Union’s Global Gateway initiative and Japan’s Expanded Partnership for Quality Infrastructure already provide capital and strategic intent for infrastructure development in overlapping geographies. By coordinating funding streams, sharing due diligence, and co-financing select projects, the United States can amplify collective impact and avoid duplication.
Fifth, the United States can help de-risk private sector involvement. Through tools like loan guarantees, political risk insurance, and concessional financing, Washington can make Middle Corridor projects more attractive to commercial investors, particularly those wary of the region’s historical volatility. This is where institutions like DFC or OPIC’s successor structures can play a particularly effective role, crowding in private capital that might otherwise stay on the sidelines.
Taken together, the steps proposed above would allow the United States to support the emergence of a strategically important institution without assuming undue burdens. At a minimum, though, the TCDB deserves a serious look from US policymakers. It is the kind of initiative that aligns with American values but also serves concrete strategic interests: weakening Russia’s grip, constraining China’s dominance, and anchoring American influence in a region that’s fast becoming central to the world economy.
It would be an affordable, non-controversial, and alliance-friendly way to shape Eurasian connectivity on terms that reflect American interests and values. Most of all, it would demonstrate that the United States still knows how to lead, but through institution-building and smart partnerships rather than failed crusades for regime change or democracy promotion. It’s time to trade sermons and soldiers for strategy and statecraft.
About the Authors: Carlos Roa and Charles Yockey
Carlos Roa is the Director of the Keystone Initiative at the Danube Institute, where he is also a Visiting Fellow. He is likewise an Associate Washington Fellow at the Institute for Peace and Diplomacy. He is the former executive editor of The National Interest and remains a contributing editor of the publication.
Charles Yockey is a legal policy analyst at the Manhattan Institute, a Budapest Fellow of the Hungary Foundation, and a Visiting Researcher at the Mathias Corvinus Collegium Center for International Law. He is also a member of the International Institute for Security Studies, the Royal Institute of International Affairs (Chatham House), and the Bretton Woods Committee. In August 2025, he will matriculate to Tsinghua University in Beijing as a Schwarzman Scholar.
Image: Collab Media / Shutterstock.com.
