Silk Road Headlines_3rd April, 2020

The Corona virus disrupted global trade, disrupted supply-chain distribution is not left untouched. The OECD already announced that the global growth of GDP could drop to 1,5 percent for 2020, from 2,4 percent, as per March 2, 2020 [COVID19: A Long Term Socio-Economic Issue for China’s Belt & Road Initiative?]. The op/ed raises questions about the transparency and equality of gains pronounced by the BRI, and thus China. The author, mr. Andre Wheeler, expects China to recover from this setback. Yet mr. Wheeler is not quite too sure whether the same can be said about the geo-political fallout that impacts the credibility of the BRI. The real test is still to come, when the impact of the virus has subdued.

The situation in Syria also deserves attention. According to dr. Azzizi, Tehran has been trying to draw Bei­jing’s interest to a southern land route linking Iran, Iraq, and Syria with the Medi­terranean and then Europe [Iran’s Multi-Faceted Strategy in Deir ez‑Zor]. This interesting article focuses on how Iran is using its influence to control the Syrian region and to provide economic benefits for surrounding regions and appealing to the BRI-project.

Support for the aforementioned is the International North-South Transport Corridor (INSTC), a trilateral project involving India, Iran and Russia. This multi-modal transportation network is a project with a span of 7,200 km in Central Asia; from Iran to Russia (Astrakhan) cutting in the east of Afghanistan [India and Russia To Connect Supply Chains Via Iran’s INSTC]. According to the article, Russia may facilitate a free trade agreement between India and the Eurasian Economic Union (EAEU), which consists of Russia, Armenia, Belarus, Kazakhstan, and Kyrgyzstan. Already the EAEU has a free trade agreement with Serbia, Singapore and Iran. More integration with ASEAN might be considered.

[Is the revival of Eurasian rail freight short-lived?] The question remains how long the EU will be locked down in 2020. Already, PSA, Fiat Chrysler Automobiles, Renault, Michelin and Volkswagen have shut their production down until the end of March. It is not clear when they will reopen. Reportedly, there are factories reopening in China, and they are exporting. Two major logistical companies, Maersk and MSC, have announced they will close sailings in order to adapt to market demand.

Even though the United-Kingdom is leaving the EU, it is not sidelined on an international level. According to Tom Harper, the UK has a warmer approach to the ‘Far East’ than to the ‘Peripheral East’. This attitude is taken on by more EU-members, e.g. France, and Italy [The Lessons from China’s African Experiences and China’s Bid for Britain’s Post-Brexit Future]. Upgrading the British infrastructure, for example railroads, could pose an interesting opportunity for the BRI. Yet the expansion of airports has met with huge resistance. BRI might benefit from the approach of increasing accessibility to London for resources, (human) capital and goods. The author also raises awareness that local politics might become a hindrance for anyone who bids on the HS2 (High Speed Rail 2 – a highspeed railway link with a span from Glasgow, Liverpool, Newcastle to London).

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By Clingendael