SINGAPORE: From a stalled Indonesian rail project to an insurgency-threatened economic corridor in Pakistan, China’s push to revive Silk Road trade routes is running into problems that risk tarnishing the economic crown jewel of Xi Jinping’s presidency.
The “One Belt, One Road” initiative, unveiled by Xi in 2013, envisages linking China with Africa, Asia and Europe through a network of ports, railways, roads and industrial parks.
Xi, the most powerful Chinese leader in decades, has pushed the infrastructure drive which is central to his goal of extending Beijing’s economic and geopolitical clout.
The initiative was enshrined in the Communist Party’s constitution at a key congress last month, and some estimates say more than $1 trillion has been pledged to it, with projects proposed in some 65 countries.
But on the ground it has run into problems. Projects traverse insurgency-hit areas, dictatorships and chaotic democracies, and face resistance from both corrupt politicians and local villagers.
“Building infrastructure across countries like this is very complicated,” said Murray Hiebert, from Washington think tank the Center for Strategic and International Studies, who has studied some of the projects in Southeast Asia.
“You’ve got land issues, you have to hammer out funding agreements, you have to hammer out technological issues.”
Chinese foreign ministry spokeswoman Hua Chunying, however, insisted the initiative was “moving forward smoothly.”
Beijing won the contract to build Indonesia’s first high-speed railway in September 2015, but more than two years later work has barely started on the route from Jakarta to the city of Bandung.
A recent visit to Walini, where President Joko Widodo broke ground on the train line in January last year, found excavators flattening land but no track laid for the train, which is meant to start operating in 2019.
“The first year after the ground-breaking ceremony, I did not see any progress at all,” Neng Sri, a 37-year-old food stall owner from nearby Mandala Mukti village, told AFP.
The central problem has been persuading villagers to leave their land on the proposed route, which is often an issue in the chaotic, freewheeling democracy.
The Indonesian transport ministry declined to give an update on the project and the consortium of Chinese and Indonesian companies building the line did not respond to repeated requests for comment.
On another planned high-speed line from southern China to Singapore, the Thai stretch of the railway was delayed by tussles over financing and protective labor regulations, and it was only in July that the military government finally approved $5.2 billion to start construction.
Work is under way on the 415-kilometer (260-mile) part of the line in Laos, a staunch ally of Beijing.
But even there the project has stoked controversy due to its huge price tag — at $5.8 billion, roughly half the country’s 2015 GDP — and the question of how much deeply poor Laos will gain from the project.
There have been concerns in many countries about how much they will benefit from One Belt, One Road initiatives.
Gains for China, such as access to key markets and tackling overcapacity in domestic industries, are often more obvious than those for their partners.
Such worries have bedevilled projects in Central Asia, part of a potential route from western China to Europe.
These include a free trade zone at Horgos on the China-Kazakh border, notable for flashy malls on the Chinese side and relatively little on the Kazakh side, and a planned railway to Uzbekistan that has stalled in large part due to opposition in Kyrgyzstan, through which the line would run.
“I am against this railway as it stands because the financial benefits that could accrue to Kyrgyzstan accrue to (China and Uzbekistan) instead,” said Timur Saralayev, head of the Bishkek-based New Generation movement.
The China-Pakistan Economic Corridor, a $54-billion project launched in 2013 linking western China to the Indian Ocean via Pakistan, has been targeted by separatist rebels in Balochistan province, who have blown up gas pipelines and trains and attacked Chinese engineers.
But the Chinese foreign ministry spokeswoman Hua insisted the One Belt, One Road initiative enjoyed broad support.
“We have seen more and more support and approval of our projects. Many projects have delivered tangible benefits to the people in these countries,” she said.
The view from the ground, however, is not always so positive.
“The high-speed train... is only for super-busy people who think time is money,” said the villager Sri, who lives next to the Indonesian rail project.
— AFP
China’s Silk Road revival hits the buffers
China’s Silk Road revival hits the buffers
What MENA’s wild 2025 funding cycle really revealed
RIYADH: The Middle East and North Africa startup funding story in 2025 was less a smooth arc than a sequence of sharp gears: debt-led surges, equity-led recoveries, and periodic quiet spells that revealed what investors were really underwriting.
By November, the region had logged repeated bursts of activity — culminating in September’s $3.5 billion spike across 74 deals — yet the year’s defining feature was not just the size of the peaks, but the way capital repeatedly clustered around a handful of markets, instruments, and business models.
Across the year’s first eleven months, funding totals swung dramatically: January opened at $863 million across 63 rounds but was overwhelmingly debt-driven; June fell to just $52 million across 37 deals; and September reset expectations entirely with a record month powered by Saudi fintech mega facilities.
The net result was a market that looked expansive in headline value while behaving conservatively in underlying risk posture — often choosing structured financing, revenue-linked models, and geographic familiarity over broad-based, late-stage equity appetite.
Debt becomes the ecosystem’s shock absorber
If 2024 was about proving demand, 2025 was about choosing capital structure. Debt financing repeatedly dictated monthly outcomes and, in practice, became the mechanism that let large platforms keep scaling while equity investors stayed selective.
January’s apparent boom was the clearest example: $863 million raised, but $768 million came through debt financing, making the equity picture almost similar to January 2024.
The same pattern returned at larger scale in September, when $3.5 billion was recorded, but $2.6 billion of that total was debt financing — dominated by Tamara’s $2.4 billion debt facility alongside Lendo’s $50 million debt and Erad’s $33 million debt financing.
October then reinforced the playbook: four debt deals accounted for 72 percent of the month’s $784.9 million, led by Property Finder’s $525 million debt round.
By November, more than half the month’s $227.8 million total again hinged on a single debt-backed transaction from Erad.
This isn’t simply ‘debt replacing equity.’ It is debt acting as a stabilizer in a valuation-reset environment: late-stage businesses with predictable cash flows or asset-heavy models can keep expanding without reopening price discovery through equity rounds.
A two-speed geography consolidates around the Gulf
The regional map of venture capital in 2025 narrowed, widened, then narrowed again — but the center of gravity stayed stubbornly Gulf-led.
Saudi Arabia and the UAE alternated at the top depending on where mega deals landed, while Egypt’s position fluctuated between brief rebounds and extended softness.
In the first half alone, total investment reached $2.1 billion across 334 deals, with Saudi Arabia accounting for roughly 64 percent of capital deployed.
Saudi Arabia’s rise was described as ‘policy-driven,’ supported by sovereign wealth fund-backed VC activity and government incentives, with domestic firms such as STV, Wa’ed Ventures, and Raed Ventures repeatedly cited as drivers.
The UAE still posted steady growth in the first half — $541 million across 114 startups, up 18 percent year-on-year — but it increasingly competed in a market where the largest single cheques were landing elsewhere unless the Emirates hosted the region’s next debt mega round.
The concentration became stark in late-year snapshots. In November, funding was ‘tightly concentrated in just five countries,’ with Saudi Arabia taking $176.3 million across 14 deals and the UAE $49 million across 14 deals, while Egypt and Morocco each sat near $1 million and Oman had one undisclosed deal.
Even in September’s record month, the top two markets — Saudi with $2.7 billion across 25 startups and the UAE with $704.3 million across 26 startups — absorbed the overwhelming majority of capital.
A smaller but notable subplot was the emergence of ‘surprise’ markets when a single deal was large enough to change rank order.
Iraq briefly climbed to third place in July on InstaBank’s $15 million deal, while Tunisia entered the top three in June entirely via Kumulus’ $3.5 million seed round.
These moments mattered less for the totals than for what they suggested: capital can travel, but it still needs an anchor deal to justify attention.
Events, narrative cycles, and the ‘conference effect’
2025 also showed how regional deal flow can bunch around events that create permission structures for announcements.
February’s surge — $494 million across 58 deals — was explicitly linked to LEAP 2025, where ‘many startups announced their closed deals,’ helping push Saudi Arabia to $250.3 million across 25 deals.
September’s leap similarly leaned on Money20/20, where 15 deals were announced and Saudi fintechs dominated the headlines.
This ‘conference effect’ does not mean deals are created at conferences, but it does change the timing and visibility of closes.
Sector leadership rotates, but utility wins
Fintech retained structural dominance even when it temporarily lost the top spot by value.
It led January on the back of Saudi debt deals; dominated February with $274 million across 15 deals; remained first in March with $82.5 million across 10 deals; topped the second quarter by capital raised; and reclaimed leadership in November with $142.9 million across nine deals — again driven by a debt-heavy transaction.
Even when fintech fell to ninth place by value in October with $12.5 million across seven rounds, it still remained ‘the most active sector by deal count,’ a sign of persistent baseline demand.
Proptech was the year’s other headline sector, but its peaks were deal-specific. Nawy’s $75 million round in May helped propel Egypt to the top that month and pushed proptech up the rankings.
Property Finder’s debt round in October made proptech the month’s top-funded sector at $526 million. In August, proptech led with $96 million across four deals, suggesting sustained investor appetite for real-estate innovation even beyond the megadeal.
Outside fintech and proptech, the year offered signals rather than dominance. July saw deeptech top the sector charts with $250.3 million across four deals, reflecting a moment of investor appetite for IP-heavy ventures.
AI repeatedly appeared as a strategic narrative — especially after a high-profile visit by US President Donald Trump alongside Silicon Valley investors and subsequent GCC AI initiatives — yet funding didn’t fully match the rhetoric in May, when AI secured just $25 million across two deals.
By late year, however, expectations were already shifting toward mega rounds in AI and the industries built around it, positioning 2025 as a runway-building year rather than a breakout year for AI funding in the region.
Stage discipline returns as valuations reset
In 2025, MENA’s funding landscape tried to balance two priorities: sustaining early-stage momentum while selectively backing proven scale. Early-stage rounds dominated deal flow. October saw 32 early-stage deals worth $95.2 million, with just one series B at $50 million. November recorded no later-stage rounds at all, while even September’s record month relied on 55 early-stage startups raising $129.4 million.
When investors did commit to later stages, the cheques were decisive. February featured Tabby’s $160 million series E alongside two $28 million series B rounds, while August leaned toward scale with $112 million across three series B deals. Late-stage equity was not absent — it was episodic, appearing only when scale economics were defensible.
B2B models remained the default. In the first half, B2B startups raised $1.5 billion, or 70 percent of total funding, driven by clearer monetisation and revenue visibility.
The gender gap remained structural. Despite isolated spikes, capital allocation continued to overwhelmingly favour male-led startups.
What 2025 actually said about 2026
Taken together, 2025 looked like a year of capital market pragmatism. The region demonstrated capacity for outsized rounds, but much of that capacity ran through debt, a handful of megadeals, and a narrow set of markets — primarily Saudi Arabia and the UAE.
Early-stage deal flow stayed active enough to keep the pipeline moving, even as growth-stage equity became intermittent and increasingly selective.
By year-end, the slowdown seen in November read less like a breakdown than a deliberate pause: a market in consolidation mode preserving firepower, waiting for clearer valuation anchors and the next wave of platform-scale opportunities.
If 2025 was about proving the region can absorb large cheques, 2026 is shaping up to test where those cheques will go — especially as expectations build around AI-led mega rounds and the industries that will form around them.
