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New Silk Road to Benefit Regional Economies, Including Caspian Region

By Aybek Nurjanov May 16, 2017

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Chinese President Xi Jinping, foreign delegation heads and guests pose for a group photo at the Leaders' Roundtable Summit of the Belt and Road Forum (BRF) for International Cooperation at Yanqi Lake International Convention Center in Beijing, capital of China, May 15, 2017 / Yao Dawei / Xinhua

The Caspian region will be a part of the world's largest global trade network, stretching from China to Europe, thanks to the One Belt, One Road (OBOR) initiative orchestrated by Beijing.

The project, considered the brainchild of Chinese President Xi Jinping, who announced the idea in 2013, will form a vast network of overland and sea trade routes stretching from China in the east to as far as The Netherlands in the west.

The project is widely seen as a revival of, and modern twist on, Asia’s ancient and famed Silk Road. Multiple high-speed rail networks and massive ports across Asia and Africa will form free trade zones, encompassing countries with a total of 4.4 billion people – more than 58 percent of the world’s population – and $21 trillion in GDP, in more than 60 countries.

This past weekend Beijing hosted a two-day “Belt and Road Forum for International Cooperation,” attended by leaders from 29 countries, including Caspian states Russia and Kazakhstan, in order to consolidate interest in and develop plans for OBOR.

“The initiative ‘One Belt, One Road’ allows for forming a new geo-economic paradigm, and the countries with a total population of 4.4 billion people will benefit from its successful implementation,”  Kazakhstan’s President Nursultan Nazarbayev said at a roundtable meeting in Beijing, viewing OBOR as coming at a time when the world needs a new driver to stimulate international cooperation.

The Caspian and Central Asia regions have traditionally acted as a bridge between the Far East and Europe since the time of the ancient Silk Road, which saw its heyday between 120 BC and 1450 AD. As a New Silk Road, OBOR will not only cut through but actively include regional countries like Kazakhstan, Tajikistan, Azerbaijan, Turkey and Iran. Only Turkmenistan is expected to remain outside its corridors.

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The One Belt, One Road project / Xinhua

Vugar Bayramov, Chairman of the Center for Economic and Social Development in Baku, predicts that OBOR could increase incomes of the Caspian region countries.

“Caspian countries will extract huge incomes from international cargo transportation once OBOR is realized, generating new sources of revenue,” he told Caspian News.

“This is good news, as countries in this region are experiencing a decline in their state budgets due to oil-triggered economic crises,” Bayramov added. Economies like Iran and Azerbaijan are heavily dependent on fossil fuel exports and have been hit hard in recent years due to a global decline in the price of oil.

In Beijing, Presidents Vladimir Putin of Russia and Recep Tayip Erdogan of Turkey vowed their support for OBOR, which is considered critical for the project's realization, as Russia and Turkey are precursors to routes that extend into Europe.

“It is clear that Turkey and Russia will enjoy increases in cargo transportation through their territories as a result of OBOR,” Bayramov said, adding that the project may also serve to their political interests.

“Currently both Russia and Turkey do not have smooth relations with the US. They also are not interested in intensive US intervention in the region," he explained. "From this standpoint, both Russia and Turkey may, via this project, balance American influence in the region and have a strong partner like China.”

Bayramov said the project could reshape the role of regional and global players, including China, the US and Europe.

“China is not active in the Caspian region as compared to the US and European countries. But with OBOR, China could accelerate its policies and any agenda it might have for the region. The project should be viewed not just economically but with an understanding that there may also be strategic and political goals in mind.”