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Panel 5: Russia and Eurasian Connectivity

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Panel 5: Russia and Eurasian Connectivity
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Transkript: English(automatisch erzeugt)
Okay, but anyhow I think we should start because we're a little bit tight on time so I have to be rather strict. Just so all of you know, lunch will be at 12 for the presenters 12 to 1 p.m and we have to stick to that schedule because afterwards we still have a round table
and that will go from 1 p.m to 2 quarter past 2 p.m still and then basically everyone can get their luggage and will be picked up by the shuttle at 2 30 p.m to go to the main station so that we can make sure that everyone doesn't miss their train which is important I think.
So yeah, let's start right away. Each presenter I will give a short introduction but the beauty of being lost is that basically everyone knows everyone so I can be brief about it. Every speaker has 15 to 20 minutes. Please try not to exceed the 20 minutes. I will help you
to keep the time. I have an orange screen here that I will show to you which means you have five minutes left and I have a red screen which means you have no time left so wrap it up but I'm sure with this crowd we'll be able to manage. Okay, so our first presenter will be
Professor Neil Collins from the School of Humanities and Social Sciences, Political Science and International Relations at the Nazarbayev University in Kazakhstan. Our second presenter will be Dr Andrei Krivorotov, Secretary of the Board at Stockman Development,
AG, expert of the Russian International Affairs Council, Moscow, Russia and our last presenter will be Professor Aleksandar Pichossa, Institute of International Relations, Taras Shevchenko, National University of Kiev, Ukraine. So you may notice that now we have actually a group of people that specialize in the area that sometimes get a little bit overlooked
when we talk about Asia and Europe connectivity and it's a great pleasure that today we actually are able to hear the voices from this particular region on this topic. So without further ado, Professor Collins, you have the floor.
Well Leanne told me to prepare 45 slides for the event and it wasn't until this morning that I read she said four to five slides, so sorry if it will take about 40 minutes, is that okay?
And the important thing about this slide, apart from my name, is that actually the Belt and Road Initiative was announced at Nazarbayev University in Kazakhstan and not in Indonesia, so I can now, haven't made that, but as far as the university is concerned I
should sit down now because that's the only thing that they're interested in. We have two risks come to stand at the fore. So Central Asia has, as our chair has just said, getting renewed initiatives from world powers and the analogy is often used in relation to it
as a reference to the great game, the game between Russia and Britain in this space and as you know the only unifying principle of history is the bricks are to blame.
So there's a new game now, lots of new players, as they're perhaps of the Soviet Union, and new players have got internal and external audiences, so it matters for them to identify, to make their own identity and to be seen as full players.
Now people talk about the European, the Eurasian Economic Union, yes of course that is important, but it's also limited. All of the players in this game want to assert their own
independence and the Belt and Road Initiative is an opportunity for them to do that. So for Kazakhstan in particular where it's a large Russian population and they're very, it's a country very dependent on Russia for trade, the BRI is a really obvious
benefit because it's a counterpoint to Russia essentially and actually I think that the phrase Central Asia is not very useful because it implies a unity of purpose between those
countries which doesn't actually exist. So it's a product of the cold waters notion that it's a unified area. I think we can maybe come back in discussion and in each one, yes China is an obvious benefit, the Belt and Road is an obvious benefit, but in each one
popular sentiment is fairly antagonistic. So this is just to give you an idea of the Russian population of Kazakhstan, they're on the northern border, so all talks about Russian space, all that kind of stuff is received very badly in Kazakhstan, partly why we moved whatever the
capital is now called, I've forgotten, up closer to the northern border and subsidized people ethnic has to go to live in the north because you know we can all spell the word Crimea and
the Chinese interest clearly, there are more Chinese experts here than me so I won't bother too much with this, but clearly Chinese share some interests with the countries I'm going to be looking at but also has some controversies in relation to them as well. So the geopolitical
priorities for China in the area may be countering religious extremism etc. There may be some thought, I'd be interested to hear what colleagues think of this, that maybe the combination of repression and economic development in Xinjiang will make separatism less likely, I don't know what the logic is there, but anyway I'll return to that
if you wish. So the Kazakhstan political elite, they're all in favor of the Belgian border initiative, whatever map you show and I know the fellow speakers are going to show maps from Kazakhstan, we only show one map, it's the map that has all the routes going
through Kazakhstan, all the others are irrelevant, take no notice, Kazakhstan is central, so it wishes to use this initiative to reduce its dependence on oil and natural gas etc.
And the last thing it really wants is for the Belt and Road initiative simply to be trains passing by, you know we don't want to become North Dakota
and we don't want to become Las Vegas either as we were discussing, we want more out of it than transit fees essentially. So this is the map, take no notice of anything else, just the red lines, that's all you have to worry about, you see that they all go through, they all go through Kazakhstan and that's the end of that. It's actually quite difficult to find out which
is the most favored at the moment, we're with a colleague investigating this and we're even talking to railway companies in Kazakhstan, it's not actually yet clear which is going to get the major amount of investment. The latest bets are on the Transcaspian route and there's a lot
of efficiencies have been put in, the last speaker mentioned about the number of days it's taking, well that metric is being used all the time and being refined all the time, so it's an interesting angle. The danger of course is swapping one dependency on Russia for another
dependency on China, so this is an issue and there's a great deal of popular anxiety about China in Kazakhstan, it's one of the few issues where the authoritarian government have
publicly backed down in relation to issues like land rights for China or Chinese workers or heaven forbid Chinese security companies. So the elite yes are on board but the population a lot less so and Xinjiang is an important issue in Kazakhstan because there are so many Kazakhs
in that area and they're also being arrested and imprisoned and it's a really hot issue in Kazakhstan, so I'm surprised it hasn't been mentioned before. The
government tried to present it in terms of the Shanghai Cooperation Agreement which suggests you have to respect other people's sovereignty to the extent that there'd be no, what do you call that, what's the word I want, where you hand over people across the border, extradition, there'd be no extradition, that kind of thing, but behind the scenes as I understand it, the Kazakh
officials are trying to get as many Kazakhs out of the tension camps as possible, the current figures about 2000 have been released in recent weeks. You know we won't bother with President Nozbev because he's not the president anymore, we don't touch paper, you know, just what he said.
Yes, I'll return to this us and them. This is a point that I really do want to make is the only discipline I want to make here is that as far as Europe is concerned, Kazakhstan looks about Europe very favorably because in the us and them distinction
they want people to think that they are like Europe, that their development is like we're not there yet, we may be putting economics before politics, but the route we're going on is to become more like Europe, less like Russia as the obvious point there.
Now, Uzbekistan similarly, they see a great advantage particularly since the death of Karimov in the Belt and Road Initiative, it's the most populous country in the area, borders, all the others, it's committed itself to liberalizing its economy,
but you know half the population under 30, 10% migrated for work, foreign direct investment hasn't come to the country in the same level this has to Kazakhstan, so Uzbekistan looks the BRI in a way and China has already taken over as the largest export to
Uzbekistan and they've signed a comprehensive agreement etc. Now, Uzbekistan keeps the Eurasian Economic Union at arm's length, Russia is always going to be important as for all of these countries and on the new regime
there has been an increase in diplomatic links with Russia, lots of visits etc, but they also have this problem of popular sentiment towards Chinese, so they've had to restrict
visas, they've had to put caps on the number of Chinese workers that can come because the feeling is that China just sends people to work in your area, doesn't create local employment, doesn't create local skills etc, so I was interested to hear in the last session about Africa that people were saying somewhat differently, so let's go.
So, Uzbekistan, smallest, weakest of the states in the area, there are more people in exile than there are in the country, it's very vulnerable to slowdowns in the economy in China and in Russia of course,
its security is threatened by Afghanistan, you know, there's an entirely different, it's a very vulnerable, very vulnerable country and its relations with the other
Central Asian republics are also poor and full of friction. Tajikistan, yeah, they share a suspicious view of potential Islamic extremism, they, like all these countries, they use this phrase multi-vector foreign policy, but partly it is
have as many relationships with as many other countries and organizations as possible in order to stress the lack of dependence on Russia, even though, you know, Russia is the major trading partner, the EU and America have been very active in recent times there.
Yeah, for Tajikistan, yeah, the BNI is much needed investment, if the China-Pakistan corridor
goes ahead, it will go through the country, this will open up for this very poor country, new markets to their south, you know, as well as in China but also, you know, on the Indian sub-continent and will reduce the country's dependence on Russian military terms.
Yeah, that's just saying what you're saying, I think, Russia is at a big scale. The risk, the Center for Global Development picked up Tajikistan as being one of eight countries that it said was at extreme risk of debt problems in relation to this, but it's clear
that the Tajik policymakers think the risk is worth taking, you know, so it was justified. Yeah, Tajikistan, they take the win-win promise, yes, of course, everybody's in favor of the
alliance on Russia. The transport infrastructure north and south of the country is very poor, so the Belt and Road Initiative might address that. Some of the problems are really
technically, I never thought I'd get as interested as I am in rail gauge sizes, but the Chinese want to stick to their gauge because they just see it as coming through, whereas the, you know, the locals would like to see more infrastructure
compatible with their existing infrastructure, so that's a thing, so yeah, an advantage that China has that when it commits, it finances very quickly and it doesn't give all sorts of conditions on the funding that western countries often do. Yeah, again, there's the
anti-Chinese sentiment, which the government has to be wary of, it's less common to all of these countries. Again, to understand poor autocratic country, also difficulties with its
neighbors, tensions with everybody really, and an increased reliance on China, particularly in relation to the pipeline, which they hope will bring new markets for natural gas supplies. They're also ambitious that the BRI will mean new investment in
electric infrastructure around industrial zones. Currently these are, you know, these are major problems for the government, so we rehearsed this, you know, we rehearsed last night, that instantly the very minute I got to the final slide you would show me the orange,
you know, how good was that? So for all of them, yeah, the Belgium Road Initiative is as a significant event. Obviously, as I said in the last session, some of the
influence is going to be political, a different political model to buy with the western model, but in order to get the full benefit of the Belgium Road, there has to be strategies which create entrepreneurial activity in the countries and without that it's not going to have
any sort of major benefit other than the transit route. On that front, I think Kazakhstan and Uzbekistan have played the most effective game really. They are the ones that are
in the position, I think, to benefit the most from it. Their strategies, the BRI augments existing infrastructure strategies in those countries, particularly in Kazakhstan. So the major hurdle, I think, is those two places, Kazakhstan in particular,
is to reassure public opinion of the benefits because there's a lot of skepticism. Only one in six people in question in Kazakhstan, I know none of these countries are great places for opinion polls, but one in six thought that China was a friendly country. So it's hard to
overestimate the negativity, the sinophobia that exists. Anyway, am I okay? Thank you. Some slides are very to the point, discussion of those countries that are, well, lying behind the
label of Central Asia and their perspectives. I think for many of us it's something that we don't hear too much about and it's a very important and good insight. And as we heard, Russia is an important influence in this whole situation. So now I would like to ask Dr.
Krivorotov to give us that perspective to further complete the picture.
Thank you very much for the introduction. Thank you all together. And I will have a PowerPoint with many maps because I think with my experience in international economics and business among
others, I cannot talk about infrastructure and geography without looking at maps. And sometimes it's more near than ever, especially here talking about Russia and Western Europe, because in Europe many people tend to mix up Europe and European with European Union.
Norwegians, Icelanders, Russians will not agree to that. And on many European maps you can see here Russia is kind of big blurred spot somewhere in the right hand side. Why in reality I actually see the need to show, to put it on the map somehow. So here is my country. It's not just the biggest landmass worldwide, covering one-seventh of the
Earth's landmass, stretching over nine time zones from Kaliningrad, the Baltic Sea, to Wuhan out there, which is actually the Western Hemisphere. It's just less than 60 kilometers
of the United States. It is a huge territory and indeed it is Eurasian, that's my very important point. This is roughly the border between Europe and Asia, and unlike the borders between Europe and Africa, or Asia and Africa, this one is actually a matter of convention on how people
agree, because it's actually one continuous landmass and Russia is so historically, ever since 15th, actually ever since the Novgorod Republic in 11th century started moving towards Northern Siberia. That move was later on stopped by Moscow authorities, but when Moscow
centralized state was originated, but in the 16th century Russia started moving through the Urals to Siberia, and just 100 years later Russians were already settled in the great extent shaped the Russian national identity and the Russian history.
And so you see the central or European Russia is just a minor part of that. It is complemented by huge areas in Siberia, but let me show you also another...
Do you see this blue line here? Yeah, that's another very important border, that's roughly the southern border of the permafrost. So as you see Russia is not just a Eurasian country, it's also to a great extent a northern country, and to a bigger extent actually than
the former Soviet Union. So here are some of the key challenges and key potentials we have. Three quarters of our population lives in Europe, three quarters of our landmass is in Asia, something like one half of the gross domestic product of Russia is
nevertheless produced in Asia, especially in western Siberia and oil and gas and some big industrial centers in the southern Siberia and the far east. So this map is basically to show you that the matter of connectivity for Russia is first and preliminary a domestic issue. So it's nothing new for us. I talked to Mr.
Butikofer yesterday and I told him that yes indeed the word connectivity is very hard to translate into Russian. I have vast experience in written and moral interpretation and really I have some troubles with that. It really doesn't follow in our metrics,
but it doesn't mean that we don't have this debate, because if you put it differently, like increasing transport, enhancing transport access to different parts of the country, increasing people's living standard in terms of access to more than ways of transportation and communication, using the Russian geo-economic situation as a big competitive edge of being placed
between the great markets of Europe and great markets of eastern Asia, that's all within the ongoing domestic debate inside Russia. And both in terms of domestic policy and in terms of foreign policy, there is actually nothing new in that.
Just one more explanation. As you see, national resources are, this actually is all Soviet Union, but this is to complement the presentation by my colleagues about Ukraine and Kazakhstan. You see national resources are pretty much spread all over the country, but
they, to say nothing about transportation and other resources, but the actual level of their economic involvement is much much lower. I love this picture because it's more, saying more for themselves than many other economic maps. This is kind of night view of
Russia. You see central European Russia is pretty much saturated with people and electricity. It's not that dense just because the population density is lower. As the further east we go, we see a kind of narrowing, how to put it, belt, going here and with kind of as a fishtail, some people say, because here in Paris it starts kind of
extending. But in the huge areas of Siberia, we see the kind of, you see actually clearly it's a belt as a number of cities along the Trans-Siberian railway constructed in early 20th century. And in the east we also have an add-on called Baikal Amur railway constructed in the last
third of the 20th century. And that's essentially it. Plus in the north, we have the northern sea route, or route, sorry, maybe, which is the other alternative for communicating between the two countries. And this shows us kind of that A, Arctic is as important as south in
eastern, west-east connections as seen with Russian eyes, as to somehow complement Mark with his presentation. And B, you see there are two longitudinal transportation links
we see very few latitude and all. And actually that is a big challenge for Russia, because much of our internal transportation along the huge Siberian rivers, going south-north, which was very active in the Soviet time, has collapsed. Many airports, local airports, have been closed
down, which has actually made connectivity a very important and very painful issue. Ending up with situations back in the 90s was, for example, somebody, a man is working in Siberia and he gets the knowledge that his father died somewhere in central Russia, and he cannot even attend the funeral, because the aircraft,
the air flight cost was twice his month of salary. People couldn't afford that. So please, sorry, I may be a bit pathetic, but I'm talking about realistic issues which we have to deal with. And it doesn't just have the domestic dimension, it also has a foreign
international dimension, both in terms of Russia willing to cooperate with neighboring countries, both with our will to be a major transit hub, because actually Russia is placed as a transit hub between east and the west, and also with Russian wish to participate in this
flourishing of the Asia-Pacific region, the Pacific Rim, which is considered to be the kind of the fastest growing region throughout the 21st century. And the Russian Far East is actually destined to be a kind of gateway to this, in order for Russia to be a part of this
big holiday, I would say. While in reality the Pacific, more often than not, and Russia works to do that, including an Asia-Pacific summit in Vladivostok a few years ago, but on the whole actually the common Russian sentiment is the Far East is not that much a
gateway, but rather a kind of backyard, still forgotten by the mainland. Those guys call Russia Moscow, and Central Russia is the mainland, as if they were living on an island actually. They are much closer connected to China and Japan and Korea to that end than to Central Russia. That's also a challenge. Hence, this is the scope of problems we have to deal with.
Sebastian Bursi asked me to cover if Russia has or has not a connectivity strategy. My answer is basically yes and no, because we do have a number of governmental documents. The latest of them is maybe the special development strategy adopted by the Russian
Federal Government this February, but in Russia, as in many other countries actually, what is said is one thing and what is done is another thing. That's why I will be relying so heavily on maps and showing what is actually being done. And there is a big
challenge that people on the popular level, on the expert level, on the level of the Russian President Vladimir Putin are aware of the big challenges and wish to do something, press on the government, while the executive government, sorry for saying that, is still pretty much kind of inert and passive in many ways, because Russian economic policies are much
more liberal than those of many other countries, including those presented at this table. Our government still maintains market forces will decide everything the best way. We are not going to intervene. The first special development strategy was to be tabled
a few years ago. The first draft was only tabled last year and it was about actually convincing all of the Russian population into 20 huge agglomerations and then people asked what about the rest of the country and the government officials said something like we didn't
think about that, let them just move into the agglomerations. So the special development strategy was revised very heavily but now it's a kind of an conglomerate whatever also wishes from different regions and departments is still a very kind of loose thing within which
you can do quite different things. So I would rely more on the midterm goals because there were very specific issues by the president the day after he was inaugurated last time for the period of 20 through 2024. So I have highlighted some of the keywords. Among other,
you will see comprehensive plan for long-range infrastructure aiming at west-east and north-west cargo corridor, normal sea route, enhancing the economic connectivity of the Russian Federation territory and enhancing the broadband high-speed web communications. Let me just show you what
that's actually the domestic Russian agenda and it is complemented by the Russian international agendas because indeed Russia is a huge country we are and we participate very actively in the Soviet times in a number of international institutions. I will not talk too much about
universal organizations like UN or OSCE or others but let me also get down to more regional levels. First of all the Eurasian Economic Union which has been mentioned has been mentioned several times. This is an organization which was conceived in 2012 and as of January 2015 this huge area with 182 million people population lives actually under a
single market and those of you who are from European Union will recognize many of the words because actually they try to follow the same path with a single market they have a custom we have a custom union and the idea is to establish a full-fledged single market by 2024 or
2025 because for some sensitive issues like fuel, energy, medicines, transportation services, economic policies, financial policies, there has been some kind of transition period but customs union is there already and the move is on. Among others as of 2016 the five member
nations have agreed upon coordinated transport policies aiming to remove any barriers for transportation with all means of transportation by 2025. This organization is basically open to accession. It has signed free trade agreements with Iran and Vietnam and several other countries
especially in central Asia and the southern, eastern Europe are now negotiating similar records because they really want to be part of that common market. More regional
organizations have arctic council in the north which among other have already produced three legally binding agreements. Barrens cooperation in the far north with their own barrens transportation plan which is very closely linked to EU's northern dimension transportation link
and DTL. Black sea economic cooperation with their loss of ideas about all types of trans-baltic lines. Black sea economic cooperation with among other black sea highway. All the three regional organizations have cooperation both on central government level
and on regional government. They also have kind of part of diplomacy very actively involved here. Shanghai cooperation organization it has been mentioned here. It is very unique in the way that it deals with security issues as well. It was actually conceived to do that and it includes countries like China, India and Pakistan. India and Pakistan are now
threatening each other with nuclear bombs and nevertheless they are all here and this is a very useful instrument for problem resolution because there is no counterpart to OSCE in
in Asia. This is this okay five minutes more yeah okay and less but not the less the Asia Pacific cooperation. Well I can let me just so tell me shall we talk on BRI or shall I
show you the specific projects which are now going on because I don't have too much time. Well specific projects specific so briefly on BRI is just kind of Russia and China have had lots of cooperation before and we want to continue that. We understand that Chinese are very pragmatic. Russians are also pragmatic so it's just kind
of a win trying to find win-wins. So specific projects here for example in the railway you have this Trans-Iberian which we thought would be a very natural choice for among others the Chinese and Japanese transit goods. Well in reality what we see is that most of the trains now go through China to Central Russia and then to
to Europe actually bypassing Siberia. This is the latest thing from Sihan to Kovla in Finland and from Kovla I was in Norway last week so the guys told me that
they have already dispatched first two goods from cargo line from container line to from Narvik to Canada the United States. This is okay actually this is also complemented by Mongolian step road initiative and the Kazakh Nur-Lijol or the enlightened roads
initiative. While actually there is not much development to go inside Eastern Russia so Europe Western China car highway is also going to be constructed in a very similar path. We do have some activities in the Far East but it's mainly China-China or China-Japan
connectivity with goods from here delivered to Russian ports and then to Central China and to export. Another project is so-called North-South corridor it has been ongoing since 2002 with not much success because many countries joined it and then
wrote that a new memorandum from the static was signed between India and Russian railways trying to speed up this process bypassing Azerbaijan who wasn't very cooperative but this way they think that they can cut the time of delivering goods from
from India to Europe approximately by half as compared to the sea road through Suez channel. Northern sea routes indeed. Let me just show one thing that the primary source of that is now being generated inside Russia under a
Russian-French-Chinese project called Yamal LNG. It is a huge endeavor and in reality so this is the volume of transportation. This all soviet 12x5 was 7.5 million
so it was after a lengthy fall it was exceeded thanks to this project alone and this wallet was more than doubled last year and the red spot is actually the transit. So actually until 2012-13 Russian authorities were hoping and Russian shipping alliance were
hoping for transit as a major cable driver for northern sea route but then the transit started falling while domestic cargo flow started to increase so no more actually Russians will be very happy to see lots of transit cargo but we actually don't rely on that
and by 2024 this cargo has to increase from 20 to 80 million tons. Our federal ministries have shown that it is actually doable and without that much reliance on transit but eventually including huge investments where we need to invest in involved investments from from abroad. There are lots of pipe. Let me just skip it. All pipelines and gas pipelines
you see much construction is going on. I will be happy to comment on that if you need afterwards. So here is the actual connectivity that is being created connecting
west and east to Europe and Asia. But to sum up, I would say that central Russia, European Russia is getting increasingly involved in acting and potential transit corridors from south-eastern Asia specifically from China and eventually from India to Europe and through
northern Europe to America. Eastern Russia is getting increasingly involved in Asia-Asia connectivity but if you look at the actual Russian landmass, the huge issue of supplying Siberian, which is actually Asian, resources to Europe and even more important for us
in the Russian transport link, they still remain responsibility and domain of Russia. Just if I may just watch one small minute. Let me just kind of... I work for the business. I like to talk to top figures. This is the transport plan which was designed last year
for the next six years for developing the Russian infrastructure. As you can see here, there is one specifically transit-oriented project Europe to Western China corridor which I have shown you on the map with something like 60 percent government financing. There are those
blue projects, they are all both transit and domestic oriented with government paying just between three and twenty three percent of the investments, the rent being covered by private Russian and foreign investors. And these greens are primarily domestic connectivity. So
you see it's a split between these and for these domestic connectivity issues, the government is going to pay somewhere between 83 and 100 percent of that. So it basically means that for Russian government, domestic connectivity still remains more an issue of regional and social policy rather than of actual money making. But as it is, you see it's more or less kind of
balanced. I have to stop here and I will be happy to answer. Thank you. That's a rich presentation. Let's just move on to our last presenter who will be giving us a short glimpse into the perspective of the often overlooked Eastern European countries to
complete the picture that this panel has been painting. Thank you very much. My presentation is logical continuation or Russia is a part of logical continuation of my presentation. So the role of non-European
countries. We discussed this before my visit to here. What would be interesting to develop? What topic? And this is a very interesting topic for me also, because we are
talking about East, West, different types of connections, but still there are countries which are not part of some integration processes. So we are partly, but still we are non-European, non-customs union or for example non-Russian economic union, etc. So we are still
somewhere, we are trying to join European Union or we are not trying, so it's very difficult to identify the strategy and this is a problem. Yesterday also we were talking about platform
of cooperation and maybe for non-European Union countries Asia and Europe cooperation through Asia-Europe meeting could be one possible platform to cooperate and in terms of geopolitics, in terms of politics, national politics and national attitude, it could
be a very good platform without, you know, without pushing on politics, national politics. So this is a very sensitive issue for us. Talking about countries, non-European
East-European countries are Moldova, Belarus and Russian Federation. Also we need to talk about Georgia. It is very close and through Black Sea region and Black Sea it is very involved.
Also in some way Turkey, because this is a gate to Black Sea and also to Mediterranean Sea for this region, so we need to take it into account. Bulgaria, Hungary, Czech Republic, Slovakia, Romania and Poland are a part of European Union, but they are also very important part for this
connectivity process in terms of energy resources, in terms of transportation, etc. Balkans, Montenegro, Serbia, Albania, Croatia, Bosnia and Herzegovina are also by some scientists and politicians included to Eastern European countries or South Eastern European countries
and also Baltic. So I want maybe to say several words in each of these categories, but I think they're very important and yes, the professor Mishra in some way brought it, these areas
transport, energy, business, environment, education, investment, culture and information on people-to-people level, on government level, so these are like main areas, but of course we could continue with that. Historical background, very fast, this is ancient Silk Road, you can see
it was, so it was centuries ago and it works, there were of course another centers and other hubs, many few people know the names of these hubs who are not in history, but still we have
Asia, we have Central Asia, we have European countries and we have the Caspian Sea and Black Sea on this map. So here is the development of these routes with the territory of now what is non-EU East European countries. Here you can see this main area is
this Constantinople or now Istanbul, here it is and now it is very important as we said and after that we have a way to the north, so this route calls Varagian trade routes or is from Norway, which is now Norway and Sweden to
Mediterranean Sea and these routes are actually working now, so after a thousand years it is working, but still the concept is another different. On this slide also you can see
I decided to put it to the presentation, because here we have this sea land and mainland connectivity, so this is Black Sea region, Caspian Sea region, Baltic Sea region and all these three seas are very important in terms of connectivity when we are talking
about non-EU Eastern European countries, but also Baltic countries and different countries in the region. So this is very very old trade routes from 10th century, 11th century, more than 1000
years, but still the importance of these routes and interconnections are very important. So this is one of the main ideas when we are talking about Eurasian connectivity, we are talking not about 10 years, 20 years, 30 years, we are talking about centuries. This is not
long-term perspective, this is extra long-term perspective and investment that should be made and are made now will be made, will influence further generations of people who will be living after us in the territories. 19th century Black Sea region
developing very fast grain trade after oil, oil trade through Black Sea to other countries through Georgia, and Georgia is very important in terms of energy, as I said. 20th century influence of Balkan wars, Cold War, the construction of Donavo Black Sea canal, which was a very
important infrastructure project, late 20th century region experienced first stages of economic transition, so it was after collapse of Soviet Union, and last decade of the century brought
kind of stability to the region. 21st century, no new Eastern European countries strategic geopolitical positions situated, been situated on the crossroads. Here you could see the traffic density map of Black Sea, Odessa and Novorossiysk, two main points from
for this part of northern Black Sea, on the southern part we have Constantinople, here Burgas, we'll see in the next slide, in Bulgaria and Constance in Romania, so it's very density
trade lines and it will be developed, and now it's developing. Here Europe Asia transport routes, existing transport routes, and Dr Pirotov also showed us the main directions of these routes, so it's also quite intensive transportation. In terms of platform, in terms of framework,
the development of connectivity processes, and first of all transport connectivities are now under Euro-Asian transport links concept and platform. United Nations economic
commissions for Europe developed this concept, and you could see different phases, three main phases of the development of this network, and involved in countries that are involved in this project. Belarus, Georgia, Republic of Moscow, Russian Federation and Ukraine are the part of
the project, and this is very important that we have mapped all these routes and countries take their actions to develop. On the other hand here you can see very famous from The Economist slides of Belt and Road Initiative and Professor Su and a lot of other presenters show us this
maps. If to combine these maps or these routes, they are very very connected, and the concepts are very very connected, but so what we need, we need to integrate the ideas and
I will talk at the end about platform of that. So these are main nine transport corridors for railway transport under ETL. Almost all of these corridors includes at least one non-European country, so of course Russian Federation is on the top, because
all these transportation corridors go through it, but still Georgia, Moldova and Ukraine and Belarus are a part of the system. You can see here, and for us it is very important to
develop this railway transportation system in terms of export and transit of natural resources which we produce and also raw materials and other types of goods. Railway transport shows
the increase of exploitation and what we need to say and what we need to add. Military conflict on the eastern part of my native country of Ukraine influence transit, so from the part of
or from the eastern border, now we are blocked, so we have trade embargo between Russia and Ukraine and these transport corridors are not working and Russian Federation built interlink routes on their own territory, so for us as Ukraine it is
a challenge and we need to work on this issue in the near future, not to ruin the connectivity and of course to use in full capacity the transit potential. Road transport, road transport is very important, of course it is not as developed as railway, 286 bilateral road
transport agreements, 12 countries of Eurasia including five eastern European, non-eastern European countries as a part of this initiative. What is interesting, trade and transport operation between
China and European countries were not performed until 2017 through road ecosystem, only by railway and of course maritime shipping, but after 2017 it was possible in 2018 to transport directly from
China to European Union using the road system and the efforts from the involved countries now are quite high to develop this road transportation system. Here you could see interconnections between countries of Asia and non-eastern European countries in terms of
road transportation, cargo road transportation and very few white spots, so almost we could find a way how to transport from country to country our cargos and also I need to
say that we have increasing in these flows of road transportation through transport corridors now and this is especially for small and medium enterprises. Of course huge companies, multinational companies or private state companies they use railway, for them
taking into account scale of operation it is better, but small and medium enterprises they use this road infrastructure and for them this is very important. Water transportation,
97% of cargo by their volume and 70% of cargo by their value was transferred by the sea when we are talking about non-eastern European countries. The main ports as I mentioned in Ukraine, this is Port Adiesa, in Russia it's Novorossiysk and in Georgia it's Poti and Batumi.
Also very important is Varna, Constanta is the biggest port in Black Sea now in terms of cargo operations and Trabzun in Turkey, this is Black Sea region. You could see from the statistics Port Novorossiysk and Port Adiesa have approximately the same
cargo flows, but still as Russia, as Ukraine doing so, we are renewing and modernizing this port infrastructure. Air transportation is growing also especially in terms of
passenger connectivity and people connectivity and cargo. So all these transport issues are developing. Investment processes in terms of non-European countries or transport investments are under pausing because of the political instability
and political tensions between the main actors, so political confrontation. Very important connection with Balkans and Black Sea through the European trans-European network of transportation.
Not to spend more time on that, you could read it in my abstract and in the presentation, but still European Commission for the last 10 years made quite an effort to develop
this connectivity between Balkans and Black Sea and I think this is very good in terms of developing cooperation between the EU and non-EU European countries, not only for energy because energy is the main scope area for that, but also for cargos.
I was thinking with which slides to finish and so I decided to conduct very fast SWOT analysis to discuss the roles of non-European countries in Asia-Europe connectivity. First of all,
we have a beneficial geographical position and I like the maps and visualization of Professor Kirov, because without this geographical position we could not tell that we have it.
The beneficial cost of leasing, building, production, etc. now especially when we have depreciation of our currencies, of all currencies in non-European countries, this is extremely profitable, so economic reasons. Competitive prices for resource and energy sources,
still very competitive. Qualified personnel, including those who master several languages, so education is another sphere, I'm very short in time, but as for example at our Institute of International Relations students, obligatory studied two foreign languages, they know Russian
and Ukrainian, the Ukrainian is Mazatang, so four languages at least they have, a lot of our students six languages, because they have two extra, with special emphasis to Arabic and Chinese now, so this is very important. Proximity of approaches to doing business, common background
and opportunity to use system of connections built after Second World War, social spirit of development, not only for former Soviet countries, but also for Soviet bloc, socialist countries, and this is still working.
good or bad, but still it exists. An opportunity to make more flexible trade and investment policy than in EU countries. So we don't have any obligations and this provides us opportunity to be more flexible in terms of investment, for example, in infrastructure.
When we are talking, for example, about road initiative and discuss it. Existence of free economic zones, especially for Moldova, Republic of Moldova and Belarus. Openness to foreign direct investment. Business environment gradually becomes more favorable in terms of taxation and registration procedures. So it's liberalization to all our countries.
Economies are becoming more digitalized. Potential in the field of energy and alternative energy. Interconnectivity. The existing, of course, outdated in some way. Common transport
and energy infrastructure from the Soviet period of time, along with business infrastructure based on the same principles, as I would say. Weaknesses. First of all, it's high level of political risk, a puckling between politics and business. So it's oligarchy. But still we could manage, we know how to do that. Instability of development institutes. Yesterday, we a
little bit discussed this issue. So institutionalization should be made. Often low efficient strategic development planning. At Ukraine, I should say, we have strategies, but implementation of these strategies, very weak. Disproportions of economic growth comparing Russia and
other Eastern European countries. For example, Russia invests 60 billion US dollars to infrastructure. We, and Moldova especially, could not afford to invest by ourselves, but by our state
budget that kind of money in infrastructure and connectivity. Reduction in the supply in labor market. This is a common problem. Aging and migration. So, we prepare a very good specialist and they prefer to work in European Union or
United States. So what to do? Not prepare them, so quality. We'll see. Widespread bureaucracy and corruption. We are fighting, but maybe not so successful. Two more minutes. Low purchasing power in the domestic markets of the state. Brain
high immigration rates, I said. Existing of non-government controlled areas. Import dependency in strategic areas. For us, it is energy. Resource-oriented economies. Lack of some natural resources. Expect Russia, especially energy resources. Low amounts of R&D investment.
Very low amount of government services. Opportunities. The last one. Not the last. Launch of mutually beneficial investment development project. Development of transport infrastructure. Cooperation in energy field. Unification of efforts in
purpose of insurance security in the region. Expansion of corporations here of education, creation of educational program universities and teaching specialists in the field of Euro-Asia connectivity. Very important. In terms of culture and in terms of education. And now under Erasmus Plus, from European side and from support from national government,
for example Chinese government, we have, we start this cooperation in terms of Euro-Asia connectivity, research and educational field. All state needed an increase in added value in production. So development of production capacities is very important for us. Participation in global value and supply chains. Common R&D projects also. And
this reads influence, of course, confrontation between Russian Federation, Ukraine and Western states. So we are in the middle between Russian interests and Western interests. And how to cooperate and how to develop fruitful cooperation. It is a question and it should
be answered. Negative consequences of divergence in policies of neighboring countries. Confrontation between Russia and Ukraine, including escalated situation in Black Sea and Sea of Azov. So this is also a challenge for transportation and cargo flows. Dependent on the
action of the states with more stable and developed economies and stronger geopolitical influence and power. Lack of reforms in all other countries may result the outflow of foreign capital and loss of state's confidence in country, liability and credibility. And this is the
last words, conclusion, future of connectivity. I think the main task is to find and develop a pattern of interaction with maximum consideration for the interests of the participants to receive benefits from development of mutually and multilateral beneficial cooperation. And talking about non-EU East European countries, I need to say that we need
to talk in terms of real politics, as yesterday we discussed this concept. So economic interests, culture, education and through this cooperation, development of the dialogue,
multilateral. I think this is the way. Thank you very much. Ask our panelists to come back to our panel for a quick Q&A. We have 10 more minutes and I'm sure there are a couple of questions that the audience would like to ask. We do it the
same way that we did in the panel before that. I will gather the questions and then we will have a quick answering round. Who would like to start? Yes, Mark. Thank you to the panelists and my question is pretty much an open question to the
panel. On the subject of transportation, on the subject of all the new transportation infrastructure that is being planned for Russia, for Central Asia, for Eastern Europe, the question that's being asked quite a bit in Norway, Northern Norway, they're asking the same thing, to use the Latin term to whom the good. So in other words, which sectors, which areas,
which economic areas, people versus goods, do you see as the priority for those who might make use of these new transportation links, those that have been created and those that are currently being planned? Thank you for the opportunity. I have two questions.
First of all, the issue of Chinese sentiments and the Chinese sentiments because of the increasing Chinese workers,
also the potential of foreign debt created by the Asia between your countries and your region. So I'm just asking to know what kind of response, regardless of what I have
to deal with this issue, because this is something also happened to my country today. So not only in Indonesia, I think I just read some of the recent references, except that the same situations. So they believe that the other is the interest of a
geostrategic and economic offer to China. So the second question, I think I would like to address with the second of the senators. I'm just curious to know, taking into account the external player influences to the region. So how's the initial theme of your countries
to balance all these interests? So in context of the connectivity and the spatial, taking into account the final conclusion on Professor Bicosa, how could you perceive the future
initiatives that came to make the balancing system among Paris in terms of the big powers that play in the region? Thank you. Okay, I think there was one more question.
Yes, thank you. Maybe just one point to tell. All of you mentioned history, identity, culture, and also there was a reference to the Soviet-Russian education system. So is it possible for China to somehow jump into filling the void and to replace Russia? Or is there a path to
development of connectivity in Central Asia and Eastern Europe? So that means that due to language, due to shared history, it's unlikely that China might replace all these
old infrastructure projects. So that might be an alternative structure, but a rather weak one. Yeah, well this fits quite well. Apparently the Russian-Chinese relationship is extremely important to me. So we have the Eurasian Economic Union, which can be considered
as a counter-alternative to the European Union's approach. At least this is what many in Brussels perceive of it. And we have Chinese interest via the Belt and Road Initiative.
Will the Belt and Road Initiative and the EU, is there room for convergence? Is there room for real convergence? Is that the kind of normative and also economic ideas? Will they meet? Do you see any likelihood here? Or is this
due to the forces of the YAL Politik? One more question at the back. So in Kazakhstan, the President has been trying to promote this identity policy.
Is that impacting BRI projects or is that impacting also Chinese relationships? Okay, great. And I think if there are no more questions, we go over to the answering round.
And I think we can start the other way around this time. So please. Yeah, first question to whom we build the infrastructure. And this is a very important question. And I plan to tell some words on the round table, but I'll do it now.
So yesterday we discussed with Professor Pasha the role of multinational, Japan multinational companies in terms of infrastructure development. Multinationals are extra great in terms of developing connectivity. We know these theories and practical examples and they are super connected. But they don't
share this expertise and knowledge because this is their competitive advantage. They internalize it, all this knowledge and connectivity inside the mechanism of their operations.
So the continuation of this process is relocation of production. Relocation of production from developing countries to developed countries close to the market under the influence of industry for zero, as you mentioned, connectivity in that process. So they have expertise, they have production capacities in developing countries, but now they don't need these capacities
because robotization, optimization and other parts of industry for zero provide them opportunity to produce close to the market, as close as possible. Reshoring as a new concept in terms of international production, but not offshoring or
outsourcing as it used to be. So developing countries, they don't have infrastructure, now they're not very interested in multinational corporations in terms of their resources, in terms of human resources and natural resources. What should they do in that context and how
to find the place in the new global economy? This connectivity and first of all transport infrastructure provides them an opportunity to be a part of this global production, global economy
through the better infrastructure. So maybe multinationals would think it is still better to cooperate with developing countries because question of logistics is not so
important, but it is easy and convenient to transport, it could work. And Christine Lagarde
several times talked about the role on different developing countries and the problems connected to this transition period. So we build this connectivity, first of all, for developing countries to help them. And I'm representative of developing countries, very weak, unfortunately,
now I'm kind of fragile. So if we have transport connectivity, first of all, and energy connectivity, and educational connectivity, for us this is a chance for the further development. If not, we kind of isolate it. So this is an answer. How to balance interests?
I think this is a very difficult question, but still, first of all, we need to build trust and all of our presenters, almost all presenters, tell these words with trust, and we could build this trust when we will say directly what we want and what we have. So
how we could cooperate? And only in that process of dialogue and mutual trust we could build and balance this cooperation. Unfortunately, now we don't have this trust.
So we have hidden agenda, and we try to find hidden agenda in every process. Maybe it is, maybe there is hidden agenda in every issue, but still, so building the trust is the first step to balance the interests. And education and culture,
first of all, very important. And this is very connected to a third question. Could China replace Russia, for example, on the territory of Ukraine in terms of infrastructure, culture, and everything? Now we are western oriented, so not Russia and not China. On the one hand,
we have the process of new Ukraineization, so it's very to national roots and Ukrainian language, for example, so not Russian language. Russian language officially banned everywhere, but Chinese won't replace, and it could not replace in some perspective,
for example, Russian language in everyday use, of course. Chinese culture, as a part of soft power, first of all in cuisine, is good in some way. But all our students, I'm talking about
young generation, they are western oriented. European Union, United States, as a main scope, and only last years we have increase in attention from young people to China, and also education and cultural exchange is very important in this process.
We will see how the situation will develop. My idea is that we need to cooperate with all actors, and what connectivity means for us, it's interaction, and we should build this interaction mutually beneficial and fruitful. Thank you so much. Let's just move forward,
keep it concise, so that we don't have to go hungry. Okay, let me start with Sebastian's question, because it's most fundamental. Indeed, Russian and Chinese relations are very tight and very multifaceted, and they always started long
before the Belt and Road Initiative, especially with the so-called Big Treaty of 2005, about very multifaceted cooperation. Between the two countries, we also cooperate within the BRICS format, Brazil, Russia, India, China, South Africa, within China Shanghai Cooperation Organization,
within Russia, China, India Triangle, launched by Prime Minister Primakov in 1998, and other formats, plus lots of bilateral cooperation. We are not military allies, and we don't plan to be, but also do have lots of cooperation on the military side, including
joint military exercises, first of all, to combat terrorism attacks from third countries, which is very, very relevant for Central Asia, for the region where we live, because not all of our borders are very safe toward that. So Belt and Road Initiative fell into a very
good kind of scope of Russian-Chinese relations, and regarding its relation to EU, there was a declaration by a summit between President Putin and Chairman Xi Jinping in 2016 about a conjugation of Belt and Road and EU. The first step was this Treaty on Trade and Economic
Cooperation sign in 2018. It's not a free trade zone, but it is a rather comprehensive document. Russian experts understand that they are very outspoken in the Russian
media, that it is not just about unity, but it's also a number of challenges for Russia, because really, okay, on the top political level, we have very good relations between the two state leaders, and we have very good political climate, and we have the wish to cooperate. When we go down to operational level, to specific projects, to specific activities,
then Russia is very often lagging behind, so people say that we do have lots of opportunities, but if Russia doesn't use these opportunities, this would actually be Russia's being playing a subsequently lower role and somehow kind of eventually, in the worst case, kind of making
Eurasian Economic Union just a kind of original organization within the Belt and Road. It's not eventually the case which is going to be, but the very fact that the Chinese cooperation with each of the EU countries may at some moment be more attractive for them than
cooperation inside the EU. This is just to your question, Nella. In many respects, first of all, the economic and investment sphere, but also in many other areas, this scenario is also evaluated, and the main thing for Russia is actually to work, to work hard, because as academician
Glazev, who is actually President Putin's advisor for economic cooperation with former Soviet Union, he put it very bluntly, the way he usually does, there will be nothing good of Russia-China cooperation, because the Chinese government is willing to invest, and the Russian government is willing to spare money and transfer them into dollars and send them abroad.
This may be a bit kind of exaggerated but very realistic viewpoint, so overall impression of Russia needs to work hard in itself, and it's also direct relevance to Mark's question, because Russia doesn't want to serve as a kind of transit hub alone, kind of for goods passing through
the territory, which is also the case with the Northern Sea route, with many transit ships trying to pass through southeastern Asia to Europe without actually even entering any single Russian port. So Russia gets all the risks of environmental impacts without actually
with very few kind of income, just for the icebreaker capacity, and that's it. That's not the desired development path, so what we really need to do is to increase the
value creation inside Russia, so that Russia does generate much of the goods to be transported, plus it would serve the international transit as well. That's actually the logic behind all the Russian governmental documents. Thank you. Thank you. Okay, so you have the last word for this panel, please. Just on the first question about which economic
areas, that's something which, you know, we're looking into. Michael Porter and the board model is very influential in Kazakhstan, quite a number of the cabinet ministers went his class in Harvard. It's unbelievable to hear them talking about diamonds and clusters and
all that kind of thing. So yes, they're very definitely looking at the worst thing that wants to have the trains passing through, full in one direction, empty in the other direction, you know, that kind of thing. So which areas? The Kazakh government and the Uzbek as well are looking at agriculture in particular. They feel that the faster delivery,
that the BRI will facilitate, will open up markets for them. So already there has been some success in there, and I give this as a very small example, but linseed, for instance,
which is big in flax in Belgium now, Kazakhstan is the biggest supplier thereof, and the European Union is the biggest customer for Kazakhstan at the moment. So yeah, lots of things are being tried, maybe logistical services, you know, letting the trains come and then going in
the different directions by unpacking and repacking, that would be one of the things. Well, already Porsche are sending cars through Kazakhstan, so we're looking at maybe assembly because of the cheaper labor element. So this is a whole big topic in itself, you know, spend a whole day doing that, I would be grateful. I'll maybe send you the draft article
on Porter's model that I'm working on at the moment, because I'd really be grateful for your feedback on that. In relation to the debt crisis, I forgot to ask me about the debt crisis, but yes, it's clearly more of a problem for some of the five states than others. It's not particularly
an issue for Kazakhstan or Uzbekistan, but for the others it is. It's just the calculation, is the risk worth taking? And in the end, will they have to concede territory? Or, you know, it's at that level already there's been some settlement of border issues, you know, which there may be other settlements of border issues as a result. Somebody asked about
Kazakhstan and the identity thing. Yes, of course, that's important. As you know, Kazakhstan is a 550-year-old state. I'll give you the official line. And we're busy creating
history around it. I might be Irish, so I'm used to that creating history thing. A thing about the BRI though, however, might be relevant to this, is that the infrastructural developments related to the BRI are going to turn up lots of archaeological and historical
artefacts. And in some ways they may challenge the official narrative, you know, about the nomadic whatever, etc. So I'm very interested in how we're going to handle that part of the project, you know, the archaeology, if you like, of the BRI. And I don't think
enough attention is being given to that. And I think there's an opportunity for Europe, sitting there was an economist yesterday, I forgot the name of the economist. I thought he made a really good point that a lot of this is about competitiveness. And Europe may well have a particular competitiveness and infrastructural development, which is
sympathetic to environmental and historical and archaeological things. So I think, you know, I'll take lots of ideas back to Kazakhstan, but that's one that I definitely will work on. But yes, you've got the changing of the alphabet, you know, the adoption of
English as the third language again, whatever. But going back, it relates to your point, will China replace Russia? No. For all the rhetoric, when you go back and you turn the TV on, it's Russian TV. But if you go to the hockey game, it's against the Russian side, you know,
it's, you know, the Confucius Institutes. Yeah. Why do they bother? Of course, there are a lot more, there are a lot more scholarships and things to go to China so that, you know, there will be an increase in influence, but replace Russian influence? I don't think so.
We're ambivalent in the non-countries in the Eurasian Economic Union, are ambivalent about the Union because we don't want it to develop like the European Union and have institutional force. So in other words, the free trade market thing, you know, the
taking away from barriers, yes, but no institutions as exists in the European Union that would in any way compromise the sovereignty of the political institutions of the member states. So I think that there's a, there is a kind of a, yeah, as far as it goes, but no further element in that.
And again, I emphasize that the Belt and Road for lots of these countries is seen as a way of decreasing the influence of Russia, you know, of having pipelines that don't go through Russia, of supplying gas to Europe, which doesn't go through. And that's, we shouldn't
maybe be talking about that in Germany because, you know, you're so fond of getting stuff from Russia and the pipelines, but we may be offering an alternative, but it's no different from other countries. You don't want to be dependent on one market, you don't want doing one supplier, of course, of course, that's the logic for all of these countries. And the opening up,
just on the last point, then thinking East, West, you know, Europe, etc. But actually, the parts of the Belt and Road will open up the Indian subcontinent, will also be important for some of the Central Asian countries, because that's a whole new, if the Pakistan
corridor could be developed safely and continues, then that, you know, for Turkmenistan, that is very big. Tajikistan, these are important issues. And if I may, just a very small comment. But very, very small. Very, very small. Really need to get going. It's about the EU. It formally has a supernational border called Eurasian Economic Commission,
but its competence is much slower and is going to be much narrower than the European Commission, because the national sovereignty is still very important. But we have the EU court and we have Eurasian Commission. And the important thing about this union is that it is very open. It's open for accession by anybody who wishes.
That's all, again, very similar to the Belt and Road initiative. That's what makes the two organizations practically compatible. Thank you. Great. So we might continue that during lunch. Thank you, panel. Thank you, audience. And enjoy your lunch. We'll see each other again at 1 p.m. sharp to finish up.