by Federico Pieraccini
Strategic Culture Foundation (June 20 2017)
The last thirty days have shown another kind of world that is engaging in cooperation, dialogue and diplomatic efforts to resolve important issues. The meeting of the members of the Belt and Road Initiative (“BRI”) laid the foundations for a physical and electronic connectivity among Eurasian countries, making it the backbone of sustainable and renewable trade development based on mutual cooperation. A few weeks later, the Shanghai Cooperation Organization (“SCO”) meeting in Astana outlined the necessary conditions for the success of the Chinese project, such as securing large areas of the Eurasian block and improving dialogue and trust among member states. The following Asian Infrastructure Investment Bank (“AIIB”) meeting in the Republic of Korea (“ROK”) will lay out the economic necessities to finance and sustain the BRI projects.
The SCO and the BRI have many common features, and in many ways seem complementary. The SCO is an organization that focuses heavily on economic, political and security issues in the region, while the BRI is a collection of infrastructure projects that incorporates three-fifths of the globe and is driven by Beijing’s economic might. In this context, the Eurasian block continues to develop the following initiatives to support both the BRI and SCO mega-projects. The Collective Security Treaty Organization (“CTSO”) is a Moscow-based organization focusing mainly on the fight against terrorism, while the Asian Infrastructure Investment Bank (“AIIB”) is a Beijing-based investment bank that is responsible for generating important funding for Beijing’s long-term initiatives along its maritime routes (ports and canals) and overland routes (roads, bridges, railways, pipelines, industries, airports). The synergies between these initiatives find yet another point of co nvergence in the Eurasian Economic Union (“EEU”). Together, the SCO, BRI, CTSO, AIIB, and EEU provide a compelling indication of the direction in which humanity is headed, which is to say towards integration, cooperation and peaceful development through diplomacy.
On the other side, we have the “old world order” made up of the IMF, the World Bank, the European Union, the UN, Nato, the WTO, with Washington being the ringmaster at the centre of this vision of a world order. It is therefore not surprising that Washington should look askance at these Eurasian initiatives that threaten to deny its central and commanding role in the global order in favour of a greater say by Moscow, Beijing, New Delhi and even Tehran.
One of the most significant and noteworthy events in the last month, or even in recent years, has been the admission into the SCO of India and Pakistan, two nuclear powers with a history of tension and conflict between them. These two countries are critical to the peaceful and fruitful integration of Eurasia. The slow, two-year process of India and Pakistan’s admission into the SCO benefited greatly from China and Russia’s mediation, culminating in the historical agreement signed by Modi, Sharif, Putin, and Xi. This is not to mention Afghanistan’s Ghani being at the same table with Modi and Sharif, representing one of the most infamous locations where Eurasian powers have clashed with each other, acting as an obstacle to the integration and development of the region. The main goal of the new SCO organization is a peaceful mediation between New Delhi and Islamabad, and certainly to reach a wider agreement that can include Afghanistan. Kabul is a good example of how the SCO can offer the ideal framework for achieving a definitive peace settlement. This reflects the sentiment that was expressed during the meeting that took place a few weeks ago in Moscow between Pakistan, India, China, Russia, and Afghanistan over the complicated situation in the country. Clearly, there are conflicting interests, and it is only through the mediation of Beijing and Moscow that it will be possible to reach a wider agreement and end the sixteen-year-old conflict.
Afghanistan is a good example of how the SCO intends to support the BRI. In this sense, it is important to note that Moscow and Beijing have decided to engage in a partnership that looks more like an alliance with long-term projects planned deep into 2030. The extent to which Russia and China are committed to common initiatives and projects can be seen in the BRI, SCO, AIIB, and CTSO.
Security and Development
Beijing is fully aware that it is impossible to defeat terrorism without laying the foundation for economic growth in underdeveloped countries in Africa, Middle East, Central Asia and South Asia. Terrorist organizations are generally better able to recruit from populations suffering from low income and poor schooling. The SCO is required to manage and control its members’ most unstable areas (Central Asian republics, Afghanistan, India-Pakistan border, Beijing-New Delhi relations) and mediate between parties. The BRI and SCO go hand in hand, one being unable to operate without the other, as Xi and Putin have reiterated.
The SCO and BRI are both capable of meeting the challenges of economic growth through development and progress. Just looking at the BRI’s major projects helps one understand the level and extent of integration that has been agreed. The Eurasian Land Bridge begins in Western China and ends in Western Russia. The China-Mongolia-Russia economic corridor begins in Northern China and arrives in Eastern Russia. Central Asia will be connected to Western Asia, which practically means China linking with Turkey. The China-Indochina corridor runs from Southern China to Singapore, and the Bangladesh-China-India-Myanmar corridor starts in Southern China and arrives in India. The nearly completed China-Pakistan corridor starts in south-western China and reaches Pakistan. Finally, the maritime route running from the Chinese coast through to Singapore will reach the Mediterranean in Greece or, in the future, Venice.
What is evident is that countries like India, Singapore, Turkey, and Myanmar, just to name a few, do not wish to miss the opportunity to join this initiative that promises to revolutionize trade and globalization as we know it. Today’s main economic problems, as well as the problem posed by terrorism, stem from the lack of economic growth brought on by a globalization that enriches the elites at the expense of ordinary people. The BRI aims to reinvent globalization, avoiding the protectionist drift that many countries today adopt in response to an aggressive and failed approach to globalization. Beijing intends to bring about a radical change to its industries by restructuring its production and boosting its investment in technology, generating more internal consumption, and becoming a country that offers services and not only manufacturing. For this process to be successful, it will be fundamental to reorganize the regional supply chain by transferring production to more competitive countries that will play important roles in sectors such as agriculture, energy, logistics, and industry. Southeast Asia, in particular, seems to offer ideal destinations for transferring Chinese industries.
In this process of transforming a good part of the globe, some countries currently outside of the SCO organization are nevertheless fully part of the integration schemes and will play a decisive role in the future. In particular, Iran, Turkey, and Egypt are the main focus when one looks at their geographical position. The importance of these three countries vis-a-vis the SCO arises mainly from the need of the organization to pursue its work of political expansion and, in the future, to counter militarily the problem of terrorism and its spread. Naturally, countries like Iran and Egypt already devote a large part of their resources towards counteracting the terrorist phenomenon in the Middle East and North Africa. Their entry into the SCO would be seen by many protagonists of the BRI, especially China, as providing the opportunity to expand their projects in areas in North Africa and the Middle East that are currently tumultuous.
This should not come as a surprise since even countries like Jordan and Israel have been taken into account by Beijing for important infrastructure projects related to the transport of desalinated water to regions with a high rate of drought. With Israel, the Chinese partnership is stronger than ever, counting on various factors such as technological development and the expansion of several Israeli ports to connect more Chinese maritime routes with destinations in the Mediterranean like Piraeus in Greece and probably Venice in Italy. Turkey’s entry into the SCO is mainly aimed at gathering the region’s major oil and gas suppliers and consumers under a single umbrella guaranteed by the SCO. These operations take time and a degree of cooperation that is hard to maintain, although the resolution of the situation in Syria, in addition to the crisis in the Gulf between Qatar and Saudi Arabia, could accelerate synergies and easily facilitate them.
The entry of Iran, Egypt, and Turkey into the SCO is inevitable, receiving the strong encouragement of China and Russia, especially as regards the future connection between BRI and other infrastructure projects that are part of the EEU. The advantages are quite obvious to everyone, bringing about greater integration and infrastructure links, the increase of trade between nations, and general cooperation in mutual development. Products can travel from one country to another based on conditions determined bilaterally, something that often favours bigger nations rather than smaller ones. The intention of China’s Globalization 2.0, coupled with a Eurasian revival of the EEU, is to change the future of humanity by shifting the global pole of globalization and development towards the east. The BRI is immense and mind-boggling in its scope, given that it embraces realities ranging from Panama (focused on the extended channel and the Nicaragua project for a new channel) to Australia, passing through Europe, the Middle East, Asia and the Persian Gulf.
Naturally, in this delicate balance, Europe is called on to play a decisive role in the future. The United States, with its “America First” policy, has already burned bridges with the Chinese BRI revolution, and indeed hopes to throw a spanner in China’s works. European countries including England, France, Germany, and Italy have already begun to sign onto various Chinese proposals. It looks as if America’s allies are no longer listening to their former boss. The European Central Bank has for the first time diversified $500 million into Yuan currency, and London, together with Rome, Berlin, and Paris, was present in Beijing for the launch of the BRI. France, Germany, and England sent high-level representations and delegations, Italy directly the Prime Minister. For Europe, the largest exporter to China and the second-largest regional block importing from China, it is inevitable that it will be an integral part of the BRI, looking to reach Iran, Turkey and Egypt for energy supplies and diversifying sources, all within the framework of the BRI.
In this process of Eurasian integration, there are some key countries to keep in mind, but the first steps have already been made with almost indissoluble ties having been made between Moscow and Beijing, as well as the monumental inclusion of Pakistan and India at the same table. With an understanding between India, Russia and China, as well as a lack of hostility to the project in Iran, Israel, Germany, England, Turkey and Egypt, it will be possible to speed up this global change, bringing it to the African countries, Gulf monarchies, South Asian countries, and even South and Central America. Even Washington’s historic allies like Israel, Saudi Arabia, and the EU vacillate in the face of such an opportunity to broaden their horizons with significant gains. As far as their alliance with the United States, in this world rapidly heading towards a multipolar world order, not even Riyadh, Tel Aviv or London can afford the luxury of ignoring the project that perhaps more than any other will revolutionize the future of humanity in the near future. Not being a part of it is simply not an option.
The United States has two diametrically opposed options before it. It can operate alongside the BRI project, trying to fashion its own sphere of influence, albeit smaller than the countries residing within the Eurasian continent; but of course for Washington, simply being part of a grand project may not be enough, since it is used to getting its own way and subordinating the interests of other countries to its own. If the US decides to try and sabotage the BRI with their normal tools like terrorism, it is very likely that the countries historically aligned with Washington in these affairs (such as Pakistan and Saudi Arabia) will be subjected to Chinese economic pressure and encouraged to instead participate in a more positive manner.
Cooperation Against Threats
The main question is the extent to which Chinese economic persuasion will succeed in overcoming US military threats. In this respect, the SCO will be a decisive factor as it expands its influence beyond the Eurasian bloc into Africa and the Middle East. To date, the SCO cannot be considered a military bloc opposed to Nato. Everything will depend on the pressures that the United States will bring to bear on participating countries. Therefore, it is likely that the SCO will evolve to include a strong military aspect in order to counter American destabilization efforts.
It is difficult to predict whether the US will be neutral or belligerent. But considering recent history, American hostility is likely to force Moscow and Beijing into an asymmetric response that will hit Washington where it hurts most, namely its economic interests. Aiming at the dollar, and in particular, the petrodollar seems to be the best bet for advancing the BRI, threatening a massive de-dollarization that would end in disaster for Washington. This is the nuclear option that Beijing and Moscow are looking into, with more than a desire to accelerate this economic shift.
The future of humanity seems to be changing in exciting and unprecedented ways. The full integration of the Eurasian bloc will eventually end up changing the course of history, allowing nations that are currently weak and poor to withstand colonial pressures and broaden their cooperation and dialogue. Peace as a method for developing synergies and prosperity seems to be the new paradigm, contrasting with war and destruction as has been the case in the last decades.
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