The Modern Silk Road: The rejuvenation of Eurasia?

Written on the 18/07/2016

By Harry Chambers.

The New Silk Road Development Project encompasses a broad area of Eurasia, almost the point of ambiguity, with the regional economic development Central Asia, the Middle East and Western China supporting the belief that this predominately bypassed area of the world is possibly regaining its status as the centre of world trade and politics. Indeed, the former silk road once proved to be the fundamental trade route between the China in the East and Europe in the West, prior to the development of maritime trade and European colonialism, ensuring that Eurasian states did not play a peripheral role in politics. Thus there is hope within these states that Central Asia in the words of Kishore Mahbubani is returning to “its natural place at the core of human history”.

The natural resources of Central Asia are perhaps the greatest indication that the Silk Road route is rising to importance again, with the monopolisation of resources in this region by Western powers throughout the 19th and 20th centuries demonstrating the recognition of the regions importance and the promising role it had to play. There fundamental importance and possible wealth are nearly impossible to dispute, with the production of 250,000 barrels per day by the oil reservoirs of the Taq Taq Field in Kurdistan, and estimated 700 trillion cubic feet of natural gas that resides under Turkmenistan, being the fourth largest supply in the world, suggesting the potential benefit for the region in exporting these gifts is limitless. Similarly, the possession of large quantities of rare earth metals in Kazakhstan, necessary for the production of batteries, mobile phones and nuclear energy or warheads further indicates the shift of global economic gravity towards this area.

Yet the large quantities of natural resources held by Eurasian states does not determine their seemingly inevitable success and return to the centre of global politics. Indeed, the economic development of the region as a result of its resources is perhaps a broader reflection of global economic development as found in the BRICS (Brazil, Russia, India, China and South Africa) and MIST (Malaysia, Indonesia, South Korea and Turkey) nations, rather than the unique position of Eurasia and the ability of states to utilise their natural resources. This is most clearly exhibited in Africa, with states much like those in Central Asia using them to their advantage, producing 55% of the worlds diamonds and 22% of global gold, with the Witwatersrand basin continuing to prove the dominant source of gold in the world over the secondary Tian Shan belt in Eurasia. Thus the rising importance of Eurasia because of the possession of natural resources is possibly exaggerated, being part of a broader trend in global economic development rather than the unique rejuvenation of a once overlooked region.

On the other hand, the re-connection with Eurasia is perhaps indefinite evidence of its rising importance, with China turning towards Eurasia. Foremost the pursuit of the Silk Road Economic Belt and Maritime Silk Road introduced in China’s “One Belt, One Road” (OBOR) initiative in 2013, with Chinese investment over $900 billion acting as an incentive for Eurasian states to join the initiative and enabling them to export their resources. Moreover, the creation of the Eurasian Economic Union illustrates Russia’s turn towards Central Asia, enabling free regional trade agreements between Eurasian states whilst India, Iran and Turkey have further voiced interest in membership or free trade agreements, that only further propels the shift in global economic influence towards Eurasia. Thus the increasing enlargement of the EEC, such as the addition of Kyrgyzstan in 2015, clearly exhibits Russia’s shifting outlook towards Asia and away from Europe, as advocated by Andrey L. Kostin that Russia is “close to Asia, and in some ways part of it”. Likewise, the introduction of the Northern Distribution Network allows for the delivery of non-lethal goods from Central Asia to the USA, while the creation of the 7,000-mile-long Yuxinou international Railway from China to Duisburg in Germany and $43 billion investment in rail links further facilitating the introduction of Central Asia into global trade, at a journey time of only 12 days compared to the 42 days of overseas routes. Corporations have further recognised the shift in influence towards Eurasia, with the western Hewlett-Packard shifting production from Shanghai to Chongqing and Foxconn similarly moving to Chengdu from Shenzen because of cheaper labour costs. Indeed, Eurasian states have certainly responded to the supposed shift in global politics and increased levels of wealth as a result, with the modernisation of Heydar Aliyev airport in Baku and flourishing of Astana, Kazakhstan’s new capital after 1997 demonstrating the economic growth and new outward look of Eurasia. Therefore, stakeholders in global politics have clearly recognised the possible benefit of greater interaction with Eurasia, leading to its rejuvenation and the Silk Road route as a whole.

However, the investment in Eurasia and its success should not be exaggerated. In spite of authors such as Peter Frankopan portraying outside investment as beneficial and proof of Eurasia once again establishing itself as the centre of global politics and history, it bears similarity with the negative colonialism of Western powers and MNC’s such as Anglo-Persian Oil, in the 19th and 20th centuries that largely exploited the natural resources of Central Asia with little benefit to the states themselves. Bert Hoffman at the World Bank cites the investment infrastructure by China, particularly the transportation of goods, is possibly a form of neo-colonialism enabling China to secure its energy and raw materials supply and reduce its heavy reliance on shipping through the South China Sea and the Straits of Malacca, through which 75% of China’s oil imports pass. Indeed, protests have arisen in Kazakhstan because of the rumoured Chinese purchase of Kazakh land, displaying the public sentiment in Eurasia differs greatly the national plan of the government and the reluctance to embrace the free trade of the OBOR initiative. Differences further exist between the EEU and the OBOR, with the EEU predominately being an inward focused organisation that acts as a form of protectionism and extend Russia’s influence over former Soviet Eurasian states, whilst the outward focus of the OBOR initiative aims to cross borders and enhance free trade. The contradictions between the regional initiatives thus prevent them from linking together and the possible rejuvenation Eurasia, despite the enthusiasm of Chinese Foreign Minister Wang Yi that “China and Russia should speed up linking the Silk Road Economic Belt and EAEU”. Similarly, Adam Cooley of Columbia University’s Harriman Institute cites the Silk Road Economic Belt is simply an effort by China to expand its influence in the region at the expense of the US as it withdraws from the region, rather than any resurgence of Eurasia itself. Thus the OBOR initiative perhaps remains a form of neo-colonialism in order to extract natural resources of Eurasia to China’s own benefit.

Yet the scope of the re-connection with Central Asia remains broad, with regional initiatives such as the OBOR aiming to facilitate trade between Europe and China rather than simply encourage that in Eurasia. Indeed, the many summits’ between China-Central and Eastern Europe propose the creation of a bridge to Europe, in order to reach the most lucrative markets of Western Europe. This is clearly supported by the infrastructure programmes in Central and Eastern Europe, such as the high speed rail line between Budapest and Belgrade and promised upgrade to port facilities in The Adriatic, Baltic and Black Sea, that will serve only to promote China’s connectivity to Europe. The CEE states certainly hope to use Chinese investment to their own benefit, with Vazil Hudak, Slovakia’s Minister of the Economy supporting integration with the trade network and that “The Whole region could be interested in larger infrastructure projects”. Thus Eurasia would appear to have a central role in the ambitious trade network planned.

Although the infrastructure planned is perhaps a simpler aim to tap the markets of Western Europe, and thus the single market of the European Union, whilst the project further appears to benefit China disproportionately, with Chinese companies planning to be the “main players” in the project and Chinese financing requiring the use of Chinese products and equipment. Similarly, the new Silk Road initiative may be designed to address other vulnerabilities, particularly the need to earn more contracts for Chinese construction companies, with construction growth and the modernisation of infrastructure in China slowing, these can be found abroad in Eurasia where new infrastructure is greatly needed. Indeed, Tom Miller of Beijing Consultancy Gavekal Dragonomics argues the clear aim is “to get more contracts for Chinese construction companies overseas”. Thus the connection with Europe is possibly a further attempt by China to expand her sphere of influence, than the rebirth of the ancient Silk Road trade route.

Additionally, the OBOR initiative poses regional difficulties as a result of the rising terrorist threat, instability and corruption. This is particularly prevalent in the Western province of Xinjiang where the Muslim and culturally Turkish Uighur population that seeks to break from China, endangers China’s effective use of oil and coal, with the province containing 22% and 40% of its deposits respectively. Furthermore, China’s expansion through the OBOR ensures it inherits the same problem of nation building that has hindered the USA in its efforts to nation build in the Middle East, with great uncertainty as to whether China’s investment and infrastructure building, such as the $46 billion investment in Pakistan to redevelop areas including the Port of Gwadar, will pacify and stabilise the regional population. Likewise, the simpler trans-Siberian route, with a journey time of only 7 days from Vladivostok to Moscow, allows for the bypass of Eurasia entirely and the difficulties posed without a single tariff and border system that would need to be implemented in order for Eurasian states to compete.

Overall, the ambiguity of the Modern Silk Road scheme hinders its possibility of success with the turn towards Eurasia by states such as China and Russia perhaps being an attempt to address their own concerns, particularly over the economy, be that the protectionism of the EEU or the seeming neo-colonial export focus of the OBOR initiative, with the conflicting approaches further inhibiting the possibility of linking up the initiatives. The ambiguity of the scheme also presents doubt as to whether it aims to revitalise Eurasia or simply act as a transit towards the currently more lucrative single market of the EU and thus avoid the more regional conflict and trade issues of Central Asia. Therefore, it is undoubtable that Eurasia is taking a greater role in the global economy and politics particularly owing to China’s enthusiasm to do even if for her own interests, although it remains to be seen as to whether economic developments and foreign investment are perhaps simply part of a broader trend in global development. Indeed, Peter Frankopan cites the discovery of America fundamentally changed the role of Eurasia, placing Europe at the centre of global trade and politics, ensuring it is unlikely that Eurasia will return to its once former glory.

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