Reviving the road
- Landlocked economies in South Asia could benefit from China’s plans to build the 21st Century Maritime Silk Road
Mar 9, 2015-
China’s long march from the historic Silk Road to the second largest economy in the world is an exceptional translation of vision into reality, attributed to the vast knowledge and wisdom of Chinese leaders. If this trend of miraculous economic development continues, China will overtake the US economy by 2018. A recent report published by the International Monetary Fund recently made a sensational disclosure of China’s GDP, estimated to be $17.6 trillion on purchasing power parity (PPP), which surpassed the US’ GDP, projected at $17.4 trillion in 2014. If all goes smoothly, China will be able to break out of the ‘middle income trap’ and ensure a ‘high-income economy’ in the next 20-30 years. China is, therefore, a great opportunity for all developing as well as emerging market economies in South Asia, Southeast and Central Asia, the Middle East, Africa, and Europe.
In this regard, the 21st Century Maritime Silk Road is a prudent strategic initiative launched by China to promote and increase investments and foster collaboration along the historic Silk Road. The Maritime Silk Road initiative was first propagated by Chinese President Xi Jinping in October 2013. China’s proposal to increase trade and infrastructure development is a derivative of the Silk Road Economic Belt. Saarc member countries have already expressed interest in joining either the Silk Road Economic Belt or its oceanic equivalent, the Maritime Silk Road. In addition, Bangladesh, India, Nepal, Pakistan, and Sri Lanka joined China’s Asian Investment Infrastructure Bank, which is expected to act as a major source of funding for the Silk Road infrastructure projects.
The construction of the Maritime Silk Road can generate huge business opportunities for Asia at large, improve the livelihood of its peoples, and serve as a driving force for China and other Asian nations to achieve greater economic miracles. The prime focus of the Maritime Silk Road is to facilitate trade between Asia and Europe and support booming trade between Asia and Africa. The Silk Road is an important feature of China’s current foreign policy. China’s proposal to build the Maritime Silk Road is aimed at exploring the unique values and concepts of the ancient road, enriching it with new meaning for the present era and actively developing economic partnerships with countries situated along the route.
The Maritime Silk Road will extend from Asia to the Middle East, East Africa and Europe, and will mainly rely on East Asian countries from the Association of South East Asian Nations (Asean). It will cover more than 20 countries and regions, which share a broad consensus on enhancing exchanges, friendship, promoting development, safety, and stability within the region and beyond. China has plans to build an open, safe, and effective maritime road that can facilitate trade, transportation, economic development, and the dissemination of culture. The Road will also make good use of the China-Asean Maritime Cooperation Fund and enhance pragmatic maritime cooperation.
On June 5 last year, President Jinping urged Arab countries to join China’s Silk Road initiative. China is the Arab world’s second-largest trading partner now. China’s trade with the European Union, Asean, the Middle East and African countries will double to a staggering $3 trillion by the end of this decade. The Road boasts a three billion population and a market that is unparalleled both in scale and potential to facilitate trade and investment.
The Maritime Silk Road would thus link the entire world through people-to-people-connectivity and greatly help promote trade, investment, technology, industry, tourism, agriculture and biodiversity on the basis of comparative advantages by improving efficiency and governance. It will also be an effective gateway to modernise and industrialise the economy, especially that of coastal countries associated with the Road and will help them maximise the benefits from liberalisation and globalisation.
It is extremely desirable that China play a proactive and lead role in designing a pragmatic strategy and offer benefits to smaller, least-developed and landlocked economies in South Asia like Nepal, Bhutan, Afghanistan and similar other disadvantageously placed nations in other continents which lack direct access to sea. This requires promoting navigation through the oceans and connecting rivers to reduce transportation costs and ensure faster availability of goods at cheaper prices.
The Maritime Silk Road is a brilliant plan to enhance global connectivity and also an economically outstanding proposal to spur growth. The Road, once built, could trigger an economic revolution that would be instrumental to the progress and prosperity of many developing countries.
Dahal is Chairman of Mega Bank Nepal Ltd
Published: 10-03-2015 09:00