New Silk Road Project founder: Developments in Azerbaijan are significant

Charles Stevens, the founder of The New Silk Road Project tells AzerNews about New Silk Road Project, its economic benefits as well as the role of Azerbaijan in transport projects

Question: Could you please tell us about how your New Silk Road project originated and what it is aimed at? What can you say about the design capacities of the route?

Answer: When I was cycling across Asia, from Beijing to Tehran, the variance in infrastructure development even within a country was striking. I remember one example when we were cycling into Osh on the western tip of Kyrgyzstan. At times, when we were on gravel and unpaved roads the trucks would move at a similar speed to us. There was one time in the Tian Shan Mountains when we did not lose sight of the same truck for two hours. When we hit good quality tarmac it quickly shot off, and, as per usual, we were left to cycle rather more slowly in their wake. The implications this has for transportation times and therefore the efficiency of trade movement is striking. After some research and talking to residents in Osh, I realised that the road development formed part of the massive investment programme under the heading of the Belt and Road Initiative (BRI).

China’s ‘new’ Silk Road, as it is colloquially known, is a development strategy that I have been aware of since early 2015. I had immediately been taken aback by its scale. The minimum predicted investment during the course of the programme is $4 trillion. This dwarfs any comparable strategy by many multiples. After having observed its manifestations in Central Asia, it confirmed that I wanted to launch a project dedicated to investigating this era defining scheme.

The New Silk Road Project’s primary aim is to understand the extent and impact of the developments through first-hand observation. The route was designed with this in mind and to maximize insight into the key crucibles and corridors which will be vital to BRI’s success in the future. Our journey is an investigation into these era defining developments and to understand the impact they may have on the global economic landscape. Upon return, we will publish research, make a short film and produce a paper on our findings for our universities.

Q.: How will the Belt and Road initiative change the entire geopolitics and economy of the world?

A.: This is a good question but it does not have a clear answer. As you know BRI is a long-term strategy and a lot will depend on the success of financing and implementation in the coming years. Several commentators set 2049 as a potential completion date but no one is certain. It suits China’s aims to be vague about its intentions.

From a geopolitical perspective, it is China’s signature soft power offensive. It is trying to woo countries, particularly in the ASEAN region, away from US influence and gain credibility as a benign regional and global leader. With Xi Jinping at the helm, China no longer wants to be just an agenda follower but also an agenda setter. It wants other countries to look to them as a leader. This ambition is particularly pronounced at a regional level.

Significantly, it is a way for China to secure its resource needs for the coming generations. As well as the three pipelines, which have been constructed from gas rich Turkmenistan to Xinjiang province in northwesternChina, there are also lines being built and proposed from Russia. This includes the Altai gas pipeline (proposed) and The Power of Siberia (under construction) pipeline. Together they are estimated to cost $400 billion and involve a 30-year agreement between Gazprom and China Natural Petroleum Corporation with supply starting in Dec. 2019. With the end of China’s One Child Policy and the likely growth of its already 1.3 billion population it needs to secure the resources to cope with demand. In the next 15 years, Chinese energy consumption is set to treble. Given that most of its oil supply passes through the bottle neck of the Malacca Straits, having these alternative pathways provides China with energy security in the case of a naval blockade or other contestations in these waters.

China is also wanting to forge new markets where it can export its products to. This is visible in Central Asia with the Khorgos Free Trade Zone which has been much discussed in the press. It is wanting to offset its internal economic slowdown by exporting overcapacity in state owned engineering and infrastructure companies, so it can continue to build its economy into the world’s largest. BRI does not mark a departure from China’s long term goals of becoming the world’s leading economic player. BRI is helping China find a way to navigate the rocky waters towards these objectives using its grand framework, gentle rhetoric and reciprocal approach.

Q.: Do you think that some countries might be cautious about the growing Chinese influence? Why?

A.: During Theresa May’s official visit to China in January this year, she refused to officially endorse BRI. This is consistent with the approach of some of the West which have taken a more cautious approach towards BRI.

Last year Bhutan, Nepal and Pakistan cancelled three hydroelectric projects worth a total of $20 billion. Many countries it has partnered with are enthusiastic about the idea of Chinese investment as they do not have many options of foreign investment partners. However, this doubling back suggests that when they read small print the conditions maybe less favorable.

Also, at the beginning of last year, Sri Lanka formally handed over Hambantota Port on a 99-year lease to the Chinese. This was not originally meant to be the case but given Sri Lanka’s burgeoning $8 billion debt to Chinese firms this agreement helped to ease the financial pressures the country is facing. Critics however view this as an erosion of Sri Lankan sovereignty and China prioritizing strategic decision making over economics and preexisting agreements. With the establishment of its first overseas military base in Djibouti, advisors and politicians will be keeping a close eye on China’s movements.

Q.: What would it mean for Western European countries to join the Belt and Road initiative? Do you expect more countries to join it in future?

A.: I think it would mark a great success for BRI as a strategy.

With the UK leaving the European Union the economic region has had a jolt to its confidence. Whilst the EU does not have a united policy towards BRI, some countries, particularly in Eastern Europe, have been more receptive. This includes Belarus which is not formally part of the EU but participates in the EU’s Eastern Partnership. At this stage, it would mark a shift in strategic direction and historic allegiances were Western European countries to align more closely with BRI. China has been wise in presenting BRI as a development which is open for any country to participate in – this includes the U.S.

Importantly, BRI is still a very nebulous concept; there is not an official map, list of projects, defined timeline or a clear architectural framework to complement it. There are worries from some commentators that the legal structures and ethical considerations are not yet in place and it is being operated with a degree of expediency. Perhaps if these concerns were more satisfactorily addressed some European countries maybe less reticent.

Q.: Big transport projects implemented by Azerbaijan (Baku-TbilisiKars, North-South, Trans-Caspian International Transport Route) will significantly expand the country’s transit capacities. How would you assess the mentioned transport projects with regards to China's Belt and Road Initiative?

A.: I have been following some of the developments in Azerbaijan closely and I think they are significant. The long anticipated Baku-Tbilisi-Kars line is helping to forge the transport links for a viable Trans Eurasian railroad which passes through Central Asia. With the current electrification of the TehranMashhad line and the wider Iranian network by 2025 this will help increase volume along this link. The Astara Transit Terminal is also an exciting addition to the blossoming North South Transport Corridor. Over the coming years, I believe there will be further growth in the freightage transported from Iranian ports as it drastically reduces the transportation times for good travelling from India to Europe by up to 25 days.

Whilst the North South Corridor is not a part of BRI it plays a wider role in Eurasian integration. It demonstrates that the ‘New Silk Road’ is bigger than just the projects associated with BRI and is not owned by a single country. Azerbaijan is participating in a project to both further economic opportunity and recast Eurasia into a contiguous and coherent whole. As a country, it is well placed to be an important nation along this exciting development.