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The Rise Of Eurasian Silk Road 

Economics / Asian Economies Nov 08, 2016 - 03:41 PM GMT

By: Dan_Steinbock

Economics Premier Li’s Eurasian tour heralds the new future of Eurasia that will be based on regional economic integration.

Last Wednesday, Premier Li Keqiang began a week-long trip in Kyrgyzstan, Kazakhstan, Russia and Latvia seeking to promote China’s relations with the four countries, and boosting regional development and cooperation.


Interestingly, it was one of those multinational visits that was left in the dark by the Western media. Yet, Premier Li’s visits precipitate increasing economic, political and security cooperation in a world region that the leading US strategic thinkers have historically considered critical to “American primacy”; that is, US global hegemony.

U.S. security doctrines contend that no Eurasian challengers should emerge capable of dominating Eurasia. In reality, Eurasia wants peace and prosperity, not dominance and hegemony.

The rise of Eurasian Economy

During his tour, Premier Li also attended the 15th prime ministers’ meeting of the Shanghai Cooperation Organization (SCO) in Bishkek, the Kyrgyz capital, and the fifth leaders’ meeting of China and Central and Eastern European (CEE) countries in Riga. In the Latvian capital, he proposed four principles to guide ‘16+1’ cooperation: mutual respect and assistance, win-win cooperation, openness and inclusiveness, and joint development.

From the Eurasian perspective, Premier Li’s visit continues to pave the way to regional cooperation in Eurasia and economic integration within the Eurasian Economic Union (EAEU). In January 2015, the EAEU was signed by Belarus, Kazakhstan and Russia, with further accession treaties by Kyrgyzstan and Armenia.

The five EAEU nations represent an integrated single market of more than 180 million people and a GDP of $1.5 trillion; the economic size of Canada or South Korea, respectively. While Russia dominates more than 85% of the total, the real importance of the Union is that through economic integration it will ensure peace and economic cooperation between the member countries.

From the Chinese perspective, the four countries - Kyrgyzstan, Kazakhstan, Russia and Latvia - are all located along the ancient Silk Road. Indeed, Li’s tour sought to foster the joint implementation of China’s One Road One Belt (OBOR) initiative.

It is the modern restoration of the trade, logistics and infrastructure network that will connect East, South and Southeast Asia with Central Asia, the Middle East and North Africa, through Central and Eastern Europe to Western Europe.

From SCO security to economic development

In the Shanghai Cooperation Organization (SCO) Summit, Premier Li also backed the creation of a development bank and fund to boost financial cooperation. The proposal was signed by member countries of the five-country group: China, Russia, Kyrgyzstan, Kazakhstan, Tajikistan and Uzbekistan. Li also proposed that China is open to the establishment of a free-trade zone among the SCO members.

“The transition to a preferential trade regime within the SCO is a complicated matter,” said Russian Prime Minister Dmitry Medvedev. Free trade among the SCO members will not happen overnight, but it is something that could take the cooperation to a new level in the not-so-distant future.

The proposed development bank and fund, and the free-trade zone complement not only the OBOR Initiative, but the establishment of the Asian Infrastructure Investment Bank, the BRICS New Development Bank, and China-proposed free-trade initiatives, which rely on regional and trans-regional economic integration .

However, historically, an economically strong, politically coordinated and strategically united Eurasia has not been in Washington’s interest. As Zbigniew Brzezinski, one of the veteran US security advisers, argued in The Grand Chessboard (1997), “a non-Eurasian power is preeminent in Eurasia and America’s global primacy is directly dependent on how long and how effectively its preponderance on the Eurasian continent is sustained.”

In this view, the Eurasia is a grand chessboard, which has room for only one ‘hegemon’ - the United States.

From destabilization to prosperity

Three years ago, when I first argued that the SCO is moving from security to economic development, the idea was welcomed with great skepticism in the West. After all, for half a century, US global primacy has been seen to depend on pre-eminence in Eurasia, according to Western security doctrines.

“Eurasia is the chessboard on which the struggle for global primacy continues to be played, and that struggle involves… geopolitical interests,” Brzezinski argued in The Grand Chessboard. Only a year before the release of his treatise on Eurasian power, China, Kazakhstan, Kyrgyzstan, Russia and Tajikistan founded an Eurasian political, economic and military organization called the Shanghai Five. After the inclusion of Uzbekistan in 2001, it became the Shanghai Cooperation Organization.

In 2007, the SCO signed a collective security treaty agreement to broaden cooperation in security, crime and drug trafficking. At the same time, many nations have received observer status at the SCO summits (including Afghanistan, Belarus, India, Iran, Mongolia, and Pakistan), while others have become “dialogue partners,” (including Belarus, Sri Lanka and Turkey, a member of NATO). Today, the SCO’s six full members account for 60 percent of the land mass of Eurasia. It is home to a quarter of world population.

Brzezinski thought it was imperative that no Eurasian challenger should challenge America's global pre-eminence. Unlike NATO, the SCO does not seek hegemonic expansion through destabilization, but economic prosperity through stabilization. That’s the way to the future - the only way.

Dr. Dan Steinbock is an internationally recognised expert of the nascent multipolar world. He is the CEO of Difference Group and has served as Research Director at the India, China and America Institute (USA) and visiting fellow at the Shanghai Institutes for International Studies (China) and the EU Centre (Singapore). For more, see www.differencegroup.net   

© 2016 Copyright Dan Steinbock - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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