Belt and Road Weekly Investor Intelligence #88
It’s been a heavy week for geopolitics as G7 meetings, followed by the BRICS and NATO summits are showcasing how the world is shifting and a new global order beginning to emerge with clear divisions between East and West.
There have been developments in Central Asia too, with an important Caspian Sea summit that paves the way for future influence over EU-Asia trade routes, as well as connectivity developments in Kyrgyzstan, Tajikistan and Uzbekistan, with the latter also embroiled in separatist problems to its Western borders. Finally, we complete the week with our BRI global round up which is full of opinion concerning the G7’s US$600 billion anticipated infrastructure spend.
NATO has issued a ‘Strategic Concept’ statement in which it stated that members consider Russia the “most significant and direct threat” to its security. The bloc also intends to counter China, expand its partnership in the Asia Pacific Region and on the post-Soviet territory, and reinforce its own defense capabilities. We discuss the key points of the new Strategic Concept.
The BRICS nations differ from the G7 in two main factors, most notably in the populations they serve – 3 billion as opposed to the G7’s 987 million (including the EU), and GDP, where the G7’s GDP is currently US$33.93 trillion and the BRICS about US$23.5 trillion. Western economists as a result tend to talk up the G7’s role in global financial strength however the growth rates of both the G7 and BRICS predicted by the IMF suggest that the latter could be responsible for 50% of all global trade by the 2030’s.
Caspian & Central Asia
Western media focuses on table sizes while the Summit discusses Caspian transportation and logistics that affect the EU, Middle-East, India, South Asia and China.
Significant increases of shipping, road and rail transportation necessitate new facilities as Baku booms.
Bilateral trade between Russia and Tajikistan in 2021 reached US$1.13 billion, an increase of 25% over the previous year’s figures. With increases of 70% plus in Q1 2022, if maintained over the year this could result in bilateral trade reaching close to US$2 billion.
Kyrgyz Transport and Communications Minister Erkinbek Osoyev briefed his government on the railway line’s proposed routing and construction at a working meeting this week, presenting a preliminary route that would pass through Torugart, Makmal and Jalal-Abad. The route will connect Kashgar in China though to Tashkent in Uzbekistan.
Uzbek President Shavkat Mirziyoyev has signed an executive order introducing the state of emergency in Karakalpakstan, where riots emerged following proposed amendments to the Uzbek Constitution related to the status of Karakalpakstan.
Belt & Road Initiative
All the latest global headlines about China’s Belt & Road Initiative, with extensive coverage of the G7 commitment to spend US$600 billion on their “Partnership for Global Infrastructure and Investment”.
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