22 March 2019
From Atlantic To Pacific Ocean: First Dialogue Connecting Eurasia
BRUSSELS (UrduPoint News / Sputnik – 16th March, 2019) Former French head of state Charles de Gaulle famously defended the idea that Europe stretched from the Atlantic to the Urals, meaning that Russia was clearly anchored to the European continent.
In today’s world, which is much more interconnected than at that time, next to the European Union, Russia and China at the other end of “Eurasia,” there are countries, often landlocked, often rich in minerals, oil and gas, that want to be part of this interlinked world.
Connecting Europe and Asia via land routes is an idea that dates back to Marco Polo in the 13th century and the Silk Road, the mercantile exchanges on this road that flourished from the Roman times to the Renaissance, linking Asia through Uzbekistan, Kazakhstan and Russia to different places in Europe.
This Silk Road is being efficiently revived by China, Russia, countries along the old Silk Road and some European countries, with Italy in the lead. In terms of business models and world strategy, it is an exciting innovation.
The Italian and Chinese governments are in the process of negotiating more than 30 memoranda of understanding (MoUs), of which 16 would be signed by the two governments, and 15 between or with businesses at both ends.
The Italian government has taken the lead, informing the European Commission, but without waiting for the European Union to approve it. Taking advantage of its excellent relations with Moscow, the Italian “populist” government has embarked on the project with Russia, with ex-Soviet republics of Central Asia and with China. Brussels was the perfect venue for organizing a first conference on what this Eurasian dialogue could become.
On March 15, Russian development institutions, such as Roscongress, the Russian and Italian governments, as well as many big European businesses in the fields of energy, engineering, logistics, transport, pharmaceuticals and finances organized in Brussels the first event of the Connecting Eurasia Dialogue. The Association of European Businesses (AEB) was one of the sponsors of the event.
The participating politicians, diplomats and business people included such prominent figures as former president of the European Commission (1999-2004) and ex-prime minister of Italy, Romano Prodi, Russian Deputy Foreign Minister Alexander Pankin, Deputy Chairperson of the Uzbek Senate Sodiq Safoyev, and Aigul Kuspan, representing the republic of Kazakhstan in the European Union.
The idea is that this Dialogue will regroup the political world, business and the banking world to support long term projects of the Eurasian dimension. The project’s name is the Belt and Road Initiative, also known as One Belt, One Road, and it would be based on an infrastructure program that will “run” from China, across Central Asia, Russia, and Belarus as the Northern route, to key European trade hubs; and to northern Italy or Germany, and from there – to the rest of Europe.
The German city of Duisburg, at the confluence of the Rhine and Ruhr rivers, is one of the destination points of the new Silk Road’s railway, which is in the making. There are also long cargo trains traveling from Belgium to China several times a week. In Italy, one of the destination points would be the northern port of Trieste on the Adriatic Sea. The Chinese state companies had already poured billions into their national infrastructure and different key places on the line, including the container terminals in Europe.
More than 30 freight trains running from China to Western Europe pass each week through Duisburg, badly hit by the decline of the steel industry, which has benefited from the Chinese investment. Berlin officially supports efforts to reduce transit time for rail freight arriving from Asia. Germany’s main business lobby, the Federation of German Industries (BDI), has been helpful, and it was mentioned at the Brussels conference by Frank Schauff, CEO of the Association of European Businesses.
Now, transport by road and rail, in a more or less straight line between China and Europe, only represents 5 percent of the economic exchanges. Many goods are transported via much longer maritime routes. A train of 60 carriages has of course less capacity than a vessel transporting containers, but there can be many more of these trains; they are much faster and it would be an incredible development tool for landlocked countries, enthusiastic about the perspective, such as Uzbekistan and Kazakhstan, who had representatives at the Eurasia Dialogue conference.
“Samarkand is enthusiastic over the creation of this dialogue platform with Russia and Europe. Central Asia emerges from its non-existence in the political life and non-presence on global markets. We believe in the One Belt, One Road, and are actively building and improving road sections and rail infrastructure. We have created the financial infrastructure necessary to support this long-term project. Our largest trading partner is Russia, and all these issues and the financing were discussed during Russian President Vladimir Putin’s visit to Uzbekistan in October 2018,” Uzbekistan’s Safoyev said.
The representative of Kazakhstan, Aigul Kuspan, was also very enthusiastic about the projects. She confirmed that MoUs had been signed, but complained of the attitude of the European Union.
“I must say that we have difficulties contacting some ministers and people in charge. There is clearly a stalemate between Russia and the EU, and Ukraine is responsible for it. This is counterproductive for everybody,” she said.
MUTUAL SANCTIONS OF RUSSIA, EU POSTPONED ECONOMIC DEVELOPMENT
“We have to overcome obstacles and stagnation in our relations with Europe. It has been estimated that the Eurasian Union has lost some $300 billion due to the reciprocal sanctions between Russia and the EU. We all lost something in this, whether in money terms or in products not sold. We need to sit at a table together and look at the great opportunity to develop business. Creating this new trade corridor between East and West will be very profitable to all. The Eurasian union is not just a transit route, and not just a mountain to cross for faster trade. All these countries on the road want integration in the economic process. There is a potential for a single economic space. Of course, there are barriers, linked to political power or to administrative red tape. We need common standards; we can’t hide behind excuses. This project will boost industrial development and the business leaders are here with us, to demonstrate it,” Russian Deputy Foreign Minister Alexander Panki
The business panel gathered the president of Alstom Russia, executive director for the European Federation of Pharmaceutical Industries and Associations, the president of GEA Group (Russia), the vice-president of Finnair, other industrialists, presidents of chambers of commerce and representatives of the financial world, such as Garegin Tosunian, president of the Association of Russian Banks, as well as market operators, such as Fares Kilzie, chairman of Creon Capital in Luxemburg.
All stressed the great potential in building infrastructure and developing business over the long term period along the One Belt, One Road economic corridor. All deplored the present difficulties between Russia and the European Union, and the missed opportunities in terms of business.
There were bright smiles though: those of the two industrialists from the pharmaceutical sector, since medical and pharma products do not fall under the present sanctions, and Sergey Ivanov, CEO of Alrosa, largest producer of Russian diamonds, whose company sells some $2.5 billion in rough diamonds to Antwerp every year. Alrosa is booming and has 35,000 employees in the world. 35 percent of its stock is held on the stock exchange by hedge funds and pension funds, mostly from the United States.
Brussels and Washington worry that the Eurasia agreement would bring China closer to Europe. The exchange of data and information seems to worry the EU officials who see China as a competitor for technological leadership and a ‘systemic rival.’ Brussels and Washington do not like the agreements concluded by Rome with Beijing.
Add this fear of China to bad atmosphere created by the sanctions on Russia and China for different reasons, and one can wonder if the appeasement period is not much further away in the future.
Whatever the outcome of the present disagreements, the new One Belt, One Road project is an economic winner, and progresses on different fronts despite opposition.