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Traversing the Silk Road and revisiting a frontier market

Chew Sutat
Chew Sutat • 10 min read
Traversing the Silk Road and revisiting a frontier market
Registan in Samarkand, a city of Uzbekistan, which features several other Unesco world heritage sites / Photo: Chew Sutat
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For 1,500 years, caravans traversed the Silk Road, ferrying precious metals, spices and other goods to China and returning with bales of silk prized by rich Romans, Egyptians and Greeks.

The trade went on until the middle of the 15th century when the Ottomans, taking advantage of its geography, stifled trade flow with heavy levies. This inspired European traders to look seaward, leading to the eventual discovery of America and proving that the earth was indeed a sphere.

The Silk Road was formally established during China’s Han Dynasty in 130 BC with Emperor Wu’s pursuit to acquire the legendary Ferghana horses to improve his cavalry’s chances of survival against marauding nomads. It spun tales of intrepid explorers such as Marco Polo, Zhang Qian and Ibn Battuta but also led to a constant stream of clashes between civilisations.

The value of trade and taxes loomed large behind the wars fought over the routes between the Assyrians, Parthians, Sogdians, Mongols and Arabs. Trade wars also took place as the Roman Senate sought to solve a trade deficit brought about by the import of silk from China which was much more valuable compared to all the exported jewels, carpets, amber, dyes, glass, metals and drugs combined.

Tired of paying exorbitant prices, Emperor Justinian I of Byzantine sent two emissaries disguised as monks to steal silkworms from China and smuggle them back to Europe. With this historical act of industrial espionage, the West created its own silk industry and trade patterns changed.

What made the Silk Road more remarkable was the series of pivotal advancements in science made by individuals in the fabled cities of Samarkand, Bukhara and Khiva in modern-day Uzbekistan. Invented 10 centuries ago, these advancements helped lay the foundations of the world we know today.

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Some may have read about Ulugh Beg, the grandson of Timur, also known as Tamerlane, who ruled Central Asia in the 15th century and was proficient in his work in astronomy and mathematics such as trigonometry and spherical geometry. Setting up a massive 36m-long sextant at the great observatory in Samarkand, he wrote a star catalogue, which corrected Ptolemy’s work and was relied on by Western astronomers post the Middle Ages. In 1437, Ulugh Beg even determined the length of the sidereal year to be 365.2570370 days, which was off by a mere 58 seconds.

In fact, that era of discovery and science had started centuries earlier. Al-Khwarizmi, who lived between 780 and 850, developed the foundations of algebra, quadratic equations and algorithms. Ibn Sina (980–1037) known in the West as Avicenna, is dubbed the father of early modern medicine with his The Book of Healing and The Canon of Medicine, a standard text in medical universities.

This list goes on. Samarkand paper, made using mulberry and described by Babur, who founded India’s Mughal Dynasty in 1526, as “the world’s best papers”, was used in many ancient texts. Fire-retardant and insect-proof, it could last for a thousand years. The secrets of making paper were divulged by Chinese captive troops in 751 and the ancient recipe was enhanced with a couple of additional steps to make it more enduring.

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Back in 1994, I witnessed in awe the Naqsh-e Jahan Square in Isfahan, Iran, which was modelled after the Registan in Samarkand, a city of Uzbekistan and built some two centuries later. Three decades later, I managed to see the original, along with numerous other sights and wonders of Uzbekistan.

I was particularly chuffed to find out that the looming 254-room Hotel Uzbekistan at Tashkent, built in 1974 in the Soviet Brutalism style, is now owned by a Singaporean company. A boutique hotel that I stayed in, minutes’ walk from Ichan Kala old city in Khiva, is run by former Channel NewsAsia newscaster Timothy Go.

The national dish pilaf or plov is made from Khwarezm rice of lower glycemic index and served with beef or lamb, much like my favourite biryani. We even found delicious mountain carp on an excursion to Chimgan mountains, the western Tian Shan range that leads into Kyrgyzstan and Xinjiang, and across the Pamirs and the Hindu Kush to Himalaya and Tibet. But all this will change. And soon.

The 254-room Hotel Uzbekistan at Tashkent, built in 1974 in the Soviet Brutalism style, is now owned by a Singaporean company / Photo: Chew Sutat

From Ladas to BYDs
Uzbekistan was one of the former Soviet republics which gained independence in post-glasnost 1991. Islam Karimov, who was the first secretary of the Communist Party of Uzbekistan, was elected its first president in 1991. His largely conservative rule went on for 25 years and his elder daughter Gulnara Karimova was convicted of corruption, money laundering and other crimes after.

With a new regime in place since 2017, Uzbekistan is looking both West and East. It beckons with its vast resources, such as gold and natural gas; its population of 37 million is young, energetic and ready to do business.

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Soviet-era Ladas still ply the countryside, fuelled by cheap gas at US$4 ($5.38) for 10 litres but signs of change are visible. South Korea was the first to recognise Uzbekistan back in 1991 and leveraging on this special relationship, Kias and Hyundais have been mainstream imports. However, Chevrolets and BYD EVs are getting more popular, especially with BYD opening a plant in the country later this year.

Chinese construction companies, which entered the playing field and stoked competition, are among others building a new international airport, an eco-city and even sports stadiums as Uzbekistan aims to hold major Asian and Olympic events by 2030. We saw the equivalent of Beijing’s “Bird’s Nest” on our drive to the mountains.

For travellers, it was a bit of a weary sigh when we saw hordes of young Uzbeks swarming KFC, which opened in 2021, and not letting religion get in the way like the Malaysian boycotts. Indeed, it was a tad surreal to hear racy lyrics of popular Ed Sheeran songs in Tashkent’s Magic City — a mini Disneyland of sorts — as a backdrop to a musical fountain swaying in front of Cinderella’s castle. Well-heeled Uzbeks snap up foreign brands as GDP per capita almost doubled in the last three years, crossing US$4,000. Less well-off urban dwellers or folks in smaller towns, meanwhile, spot their share of bling with Gucci knock-offs.

Ten years ago, Uzbeks would keep their head down in stable jobs, save their money and only go out for a meal on very special occasions. With easy credit dangled by at least 33 banks, out of which 29 are privately owned, those on US$1,000 urban salaries and paying US$500 in rent have no qualms driving flashy US$14,000 Chevrolets and frequenting ice cream shops.

While reused shipping containers painted with Cosco’s logo still serve as shelters or roofs in the villages that dot the desert, between the oasis and very fertile agricultural lands that the Soviets came to exploit, international hotel chains are building world-class hotel towers with state-of-the-art infrastructure, but offering service standards that still have much room for improvement.

Like the aspirational desire for international brands and goods and rising consumerism, the service in Uzbek is also reminiscent of China in 2004 — where they can copy the modalities but still have to catch up with Western dining etiquette and service culture. A conversation I had with a 35-year-old oil and gas engineer at a railway station was illuminating. He was pessimistic that the country could take off economically and be like the “very strong economy of Singapore”, no thanks to “monopolists” controlling key industries and resources in cahoots with the ruling elite. Yet, he recommended I take another wife as he proudly declared that he has two wives now and five years on, he is ready for a third, and eventually, the fourth, because Uzbekistan is booming and he could afford to do so.

There have been entrepreneurial miracles since the liberalisations post-Karimov. A delicious packaged snack we bought from a local supermarket that was sold mainly from a cart in a railway station just three years ago is now a huge national success, thanks to an entrepreneur.

Traditionally a tea-drinking country, instant coffee is now the choice for the young. I believe a Singaporean friend is on to a good thing when he told me how he has launched his coffee and toast business and opened outlets in the many universities that are sprouting up across main cities. There is a thirst for new knowledge where our own MDIS has established a foothold. I leave the country harbouring thoughts of co-investing in tourism and real estate in Khiva and trying to figure out how to trade on Tashkent’s stock exchange. Perhaps, there is an international ETF.

Back from the Golden Crescent
It was nice to return to Singapore with no major event affecting markets these two weeks as Chew On This took a break. The Dow hit 40,000. Its price-weighted index exaggerates the extended US bull market as S&P and Nasdaq continued to just hold up through rotation out of the Magnificent 7 stocks. Despite Biden’s new tariffs, China continues with its stealth bull, which we had flagged last month. This was going on as Putin went to Beijing to kowtow to Xi Jinping with no change in geopolitics after Xi’s trip to Europe. The Hang Seng Index has recovered 30% from the bottom in late January, outperforming most global markets but still lagging the Straits Times Index (STI) if pre-pandemic levels are used as the starting line. Once written-off Tencent Holdings is up 40% from its January low of HK$260 ($44.87) to HK$400, although still a distance from its HK$705 peak.

Even the much-maligned FTSE100 hit a new high as value stocks and traditional industries took over market leadership from growth, AI and tech. The speculative froth is churning with US meme stocks the likes of GameStop back in play, squeezing short-sellers while launching another rights issue. Is this perhaps a clear, sign of a bubble in the West?

Meanwhile, in boring Singapore, even though the three banks went ex-dividend and MSCI dropped five counters from the Singapore component of its index, the STI was still chugging along nicely to hold at 3,300 points. Elsewhere, “value” versus “growth” is being rediscovered. A few stocks like Singapore Technologies Engineering S63 -

are breaking out of their range following strong earnings.

Surely, our time in the sun must come if we only have more confidence to invest in ourselves. The Golden Cross we postulated two weeks back seems to be building a base. I remain optimistic for the summer ahead as Singapore peacefully transited to our 4G leadership on May 15. Yes, there are risks all around in a very uncertain world. But shouldn’t we continue to be relevant to both China and the US as a neutral hub, playing to our traditions as an entrepôt? We did not have a role in the old Silk Road but we certainly have one in the modern-day digital version.

Chew Sutat retired from Singapore Exchange S68 -

after 14 years as a member of its executive management team. During his watch, the exchange transformed from an Asian gateway into a global multi­-asset exchange, and he was awarded FOW’s Lifetime Achievement Award. He serves as chairman of the Community Chest Singapore

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