The Silk Road was one of the first models of peaceful coexistence of different countries, cultures, peoples and civilizations of Eurasia. For a long period the trade and cultural interaction between Europe and Southeast Asia went via this road. To use this unique set of historical, economic, cultural and communication qualities of the silk road in the new century as a path of political and economic progress is a historical duty of a modern civilization. Currently, global economic integration is developing rapidly. In this regard, in order to deepen regional cooperation, the project the Economic belt of Silk road was created, along which about three billion people live. The article discusses the prospects of bilateral economic relations between Iran and Kazakhstan on the background of a new economic strategy of China under the name «One belt and one road» whose objectives are the development of the North-Eastern regions of China and the integration of neighboring Eurasian States. Confrontation between the West and the East, the US and NATO against Russia, Iran and China is growing. There is a disintegration of the former system of checks and balances, and international institutions are not able to guarantee peace and stability. The examples of this are the armed conflicts in Afghanistan, Iraq, Libya, Syria, Yemen, which killed hundred thousands of innocent civilians, and millions of people became refugees. The author writes about the docking of the projects «One belt and one road» and the Iran-Kazakhstan relations as an opportunity for all participants and analyzes the benefits that it will bring.
Introduction
The Great Silk Road is a unique phenomenon of the history of mankind, its desire for unity and exchange of cultural values, the conquest of living space and commodity markets for the goods. This largest transcontinental trade route, which linked Europe and Asia in former times, stretched from ancient Rome to Japan’s ancient capital of Nara. The real beginning of the great road, which connected the caravan routes, laid from Central Asia to the West and South, and the roads leading from China to East Turkistan, goes back to the middle of the II century BC, when the countries of Central Asia, socalled the western region, was first open for China.
The Great Silk Road contributed to the strengthening of diplomatic relations between the countries of East and West. Renewal of the use of the Silk Road at the international level started in the middle of the II century BC. Since that time the caravans laden with silk went through Kazakhstan and Central Asia to the West. The main intermediaries in the trade of silk were Sogdians (the Central Asian and Central Asian parts of the path) and the Persians who controlled way from Paikend (near Bukhara) to Syria. The main buyer of silk was Byzantium. Until the defeat of the Sassanids by the Arabs the border between Turkic possessions in Central Asia and Iran remained unchanged. All these years, with more or less regularity, caravans with silk and other goods went to the west through Iran, Khorezm, the Volga region.
After the conquest of Central Asia, the Turks owned a large part of the trade route from China to the Mediterranean countries – the Great Silk Road. Due to the trade through the Silk Road in the year of 568 diplomatic relations between the Turkic khanate and Byzantium were established.
Establishment of diplomatic relations contributed to the development of trade. Only with the beginning of development of sea trade routes of the Great Silk Road gradually began to decline. For the first timethese caravan routes were called «silk» by a Venetian merchant Marco Polo, the first European, who reached the borser of the Chinese Empire. The term
«Silk Road» was introduced by a German researcher Ferdinand Richthofen in 1877 in his fundamental work «China». The Great Silk Road was the road not only of trade caravans, it was the road of spreading cultural achievements of the peoples, spiritual values, religious ideas. Along the caravan routes scientists and researchers traveled for centuries.
In the twenty-first century with geopolitical changes in the world the importance of the Silk Road has only grown.
Based on these, the aim of this article is to evaluate the prospects of Iran-Kazakhstan relations in the framework of the New Silk Road, the initiator of which is China.
The study used historical, comparative, functional and factor analysis methods, and expert assessment method. In general, the use of different methods, including general theoretical, allows a comprehensive analysis of the development of bilateral relations between Iran and Kazakhstan within the framework of the project «Economic belt of the Silk Road».
Main part
On September 16, 2013, speaking at Nazarbayev University in Astana, President of China Xi Jinping in his keynote address expressed the idea of creating «economic belt of the Silk Road» as a new form of deepening cooperation between China, Central Asia and Russia (Nurseytov). This idea has caused a strong resonance not only among politicians and political scientists, also in the community of economists and experts as, as the leader of China for the first time put forward the foreign policy initiative that influences the prospects of economic development of the whole Eurasian continent .
Chinese President Xi Jinping, speaking about the international role of modern China, figuratively said that the Chinese lion is awake ... but it is «peaceful, friendly and civilized lion», which will not harm anyone maliciously. China proposed a new diplomatic philosophy based on the idea of a «community of common destiny», the concept of «a new type of relations between the powers», the policy of good neighborhood with surrounding countries on the basis of «friendship, sincerity, mutual benefit and inclusiveness.» (Chjan Vey, 2015).
«One Belt and One Road» will be a huge platform, ready to accommodate everyone and open to all countries. Many analysts call the initiative «One Belt and One Road» a Chinese «Marshall Plan» (Zarubezhnye uchennye:11). However, the main difference between the «One Belt and One Road» from the «Marshall Plan» is, that China, implementing its initiative does not seek hegemony in Asia and in the world. Instead, it seeks cooperation with other countries in the development and thereby achieve «joint gains» with their partners. Another difference is, that any country, regardless of their political regime or adherence to a Western-style democracy, can join «One belt and one road». China understands the basic needs of the majority of developing countries, for which development is of high priority. And they do not want to develop in the shadow of the policy imposed by the West. But the key difference is, that in contrast to the «Marshall Plan», the concept of «One Belt and One Road» is more attractive, this initiative is open to the whole world and therefore has a great support in the international arena (Chjan Vey, 2015).
Lately the initiative has not just been a concept but a great international project, which is a huge economic interest not only for China, but for all countries located along the Great Silk Road, including the Republic of Kazakhstan. Before such projects aimed at the revival of the Central Asian region have been advanced by Russia, US, EU and Japan.
Later, the Chinese leader being on a visit to Indonesia, proposed to the countries of South-East Asia the project «Marine Silk Road of the XXI century», which, together with the project «The economic belt of the Silk Road» formed a new longterm strategy of China «One belt and one road».
The countries of the Silk Road in modern conditions attract China with arranging high-speed transit deliveries of goods to the countries of Europe the main solvent and capacious market in Eurasia for the sale of Chinese goods, and with the presence of a variety of natural resources (oil, gas, metals, grain, etc.).
New Chinese initiative, according to the available information, can pursue three strategic objectives:
- expansion of international and regional trade;
- creation of international transport corridors from China to Europe and the Middle East through the territory of Kazakhstan and Central Asia;
- gradual economic development of China in Central Asia as a strategically significant
To achieve these objectives, the key challenges for China are:
- development of trade and economic cooperation, removal of many barriers and restrictions in international and bilateral trade, the creation of a favorable climate for investment;
- construction of the Eurasian transcontinental network of railways and highways, allowing the use of different international transport corridors flexibly;
- comprehensive deepening of trade-economic and transport-logistic China ties with the countries located along the Silk Road, especially with the Central Asian countries;
- connection of all parts of the Great Silk Road through advanced transport and infrastructure and communication networks, as well as the development of the pipeline system;
- expansion of the export of Chinese goods for which China has excess production capacity in the country, especially in its western provinces (overproduction of steel, aluminum, photovoltaic equipment, wind generators, etc.);
- mutual settlements between participants of the Silk Road with different currencies (Nurseytov).
Eurasian countries, located along the Silk Road, can be roughly grouped into five regions, and a specific role of each is defined by China within the framework of the initiative.
First of all, as an outpost of expanding trade and economic ties with Europe, Russia, Turkey and Iran the Central Asian region is highlighted, including Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan and Turkmenistan. Kazakhstan and Central Asia as a whole have a significant geostrategic position in Central Eurasia. These countries have storehouses of precious metals, ore and metallurgical raw materials, energy resources. It is the region where the geopolitical and economic interests of the world’s largest centers fall (Russia, China, US, EU and others.). The countries of the region cooperate with China closely, supply energy and natural resources.
At the same time, Central Asia is a huge market for finished products, the consumer potential of which will increase with the development of its natural resources and the growth of the population’s welfare. Chinahasapotentialforfurtherdevelopment of bilateral and multilateral cooperation with these countries. Economy of China and the five Central Asian countries are of complementary character.
The second region includes Iran, Iraq, Jordan, Syria, Saudi Arabia, Turkey and other countries in West Asia. In this case, power industry of these countries provides production and export of oil and gas resources for China. The region is considered to be a potential market for Chinese goods.
According to some experts, China was pushed to this by the US policy in the region, in particular, the signing of the Trans-Pacific trade partnership agreement with a specific anti-Chinese subtext, as well as US actions on signing a trade agreement with the EU in order to reduce trade opportunities of China with Europe (Sultanov, 2015: 19). In addition, China leverages landlocked countries’ desire to overcome its geographical isolation and make use of transit opportunities. Its peculiar feature is the development of economic cooperation in the continent, not only through the construction of transport infrastructure, but also through the elimination of trade barriers (without which the infrastructure will have no result) (Sultanov, 2015: 20). In case of the settlement of these two sets of problems, there will be an increase in mutual trade in the region and the role of national currencies enhances, especially the Chinese yuan, in the mutual economic transactions.
China will also be able to solve the problem of backwardness of its sparsely populated and economically less developed inland provinces, from Inner Mongolia to Xinjiang autonomous district.
Silk Road Fund and the Asian Infrastructure Investment Bank (AIIB) – New financial institutions created by Beijing will operate within the framework of EPSR (Economic Partnership of Silk Road) to implement the transport projects in Central Asia and the South Caucasus.
Co-foundersofthe Fund«Silk Road» of 40 billion dollars are the Central Bank of China, Development Bank of China, as well as other state-owned banks and state corporations. It should be stressed that the transport component of EPSR is built on the existing financial framework, which had developed in Central Asia before initiating the project. But to implement the projects AIIB began to join other banks of development. For example, it jointly with the European Bank of Reconstruction and Development (EBRD) will finance the construction of a road in Tajikistan. AIIB also joined the project of the World Bank and the EBRD on financing the ring road in Almaty. This shows that China is willing to work on the project management – through cooperation with reputable and experienced organizations. But these issues caused some difficulties for some countries that have acceded to AIIB. Beijing mainly focuses on rail service, for the fact that usually along the railways not only logistics and shopping centers, but also new production appears (Nurseytov).
One of the directions of a New Silk Road for China is the part, passing through Central Asia and South Caucasus. The development of the Central Asian and Caucasian transport infrastructure is necessary for faster access to the European, Iranian and South Asian markets. On this evidence the most important area is the connection of transport systems between the Caucasus and Central Asia. The route, which will connect China and Kazakhstan via the Caspian Sea with Azerbaijan, Georgia, Turkey, and with Europe (bypassing Russia), was developed in 2013 and was named «Silk Wind» (Nurseytov).
The second Southern corridor: South-Eastern Europe – China and South-East Asia through Turkey, Iran, Central Asian countries and Kazakhstan (in the area of Dostyk – Aktogay – Almaty – Shu Arys – Saryagash). It should be noted that the site Saryagash – Arys – Kandagach – Ozinki a destination in Russia is of great significance for regional transit and transport within the Eurasian Economic union (EAEU) (Sultanov, 2015: 21).
For Beijing the direction of Iran and South Asia is also important. It has already participated in the construction of the railway through Kazakhstan and Turkmenistan to Iran «Uzen – the state border of Turkmenistan», which provides an exit of Kazakhstan via Iran to the Persian Gulf seaports. A new route shortens the road from north to south for more than 600 km. Now it enables China to carry its goods in a southern direction. Over half of exporting wheat and flour from Kazakhstan was delivered to the Central Asian countries. Beijing needs Tehran, because by 2035 China’s oil consumption will increase from the current 6 million to 13 million barrels per day. And Iran after the removal of international sanctions is increasing its oil production.
Most importantly, China reformatted its foreign policy. Another manifestation of reformatting the foreign policy of China has become an active intervention of China in the affairs of the Middle East, where China historically had never really aspired. It welcomed the accession of India and Pakistan to the Shanghai Cooperation Organization. Beijing is interested to get Iran involved in the organization as well. Ci Tszinpin was the first president to visit Iran after the lifting of international sanctions (Кuzmina). Iran concluded an agreement on cooperation with China, which enables Chinese traders to use
Iranian territory for the export to Europe.
The agreement, which was signed between the customs authorities of Iran and China, is part of an ambitious Chinese plan to revive the ancient Silk Road.
On the basis of the plan, Chinese goods will be sent to the southern ports of Iran, and from there in transit will be delivered to Europe by land. The route, which is made for this scheme, will be much shorter than the ancient Silk Road.
Preliminary questions for the project were agreed upon during the visit of Chinese President Xi Jinping to Tehran in January 2016.
The Iranians have called China a «faithful friend» of the country, as during the years of sanctions, China has not only ceased trade relations with Iran, in spite of all the difficulties in the economy of the Islamic Republic, it remained the main buyer of Iranian oil. Of course, the advantage of the situation is that China replaces the high-quality European goods on the shelves. On the other hand, money for Iranian oil is not coming into the country, but remained trapped in Chinese banks.
On February 11, the first freight train on one of the initial segments of the Silk Road, moving along the route China-Kazakhstan-Turkmenistan-Iran crossed the Iranian border. The project sponsor is the investment company «Tiananmen». Silk Road will strengthen China’s role throughout the Eurasian region owing to the contracts signed with the countries of the region.
China also intends to provide an unprecedented interest-free loans or two percent. Some countries even provide grants. According to the Iran-China agreements, China will provide Iran with an interestfree loan for the development of a fiber optic cable network in the country and the development of highspeed rail lines and rail segment Tehran-Mashhad.
Iran and China are seeking to strengthen their partnership in such a way as to increase their influence in the region. Iran never considered China as an imperial hegemony, as the West is trying to interfere in the internal affairs under the pretext of establishing democracy and human rights. On the contrary, China remained a partner even during the years of sanctions.
China is also pursuing its strategic goals. The military defense of Iran by China provides a direct influence on the Middle East and the Persian Gulf, which is considered a zone of US influence. In the long term we can talk about the naval presence of China in the region under the pretext of ensuring the safety of maritime energy paths in the Persian Gulf. Now in the world there is an unprecedented stir around the Iranian market, which has great prospects for the country to get out from economic and political isolation. Large international companies are making great efforts to participate in the economic projects of Iran. It is clear that Kazakhstan does not intend to remain aloof from the process. However, our country and the international business community will have a difficult and lengthy process of establishing the interrupted economic relations with Iran.
It is difficult to overestimate the importance of cooperation between our countries in such vital areas as the joint settlement of the legal status of the Caspian Sea, regional cooperation, issues of short and profitable way of Kazakhstani goods to the world’s oceans, as well as trade and economic cooperation (Iran is one of the main consumers of Kazakhstani grains, metals and other commodities).
The Republic of Kazakhstan and the Islamic Republic of Iran as the neighboring states and constructive partners continue to develop successful cooperation in such international and regional markets, as the United Nations (UN) Conference on Interaction and Confidence-Building Measures in Asia (CICA), the Organization of Islamic Cooperation (OIC), the Shanghai Сooperation Оrganization (SCO), the Еconomic Сooperation Оrganization (ECO) and others.
In addition, Tehran in the next few years will be mainly engaged in the restoration of its real economic potential. However, industrial, technical and agricultural possibilities of the Islamic Republic, as well as its logistical advantages which are important to neighboring countries, including our country, believe that Iran will be one of the most attractive emerging markets in the world in near future.
After the removal of sanctions from Iran the interest of companies in this country to Kazakhstan is increasing, as well as the interest of our companies to the Islamic Republic of Iran. In this regard, it is worth mentioning that the local companies have a number of significant advantages in the Iranian market.
Firstly, economic relations between the two countries did not stop in the years of sanctions, turnover remained at a good level, even managed to establish investment cooperation.
Dozens of small and medium enterprises of Iran are operating in Kazakhstan. Kazakhstani companies are not limited to trade and economic relations, but also carry out investment projects in Iran. The evidence of this is the fact, that the Kazakhstani company «Eurasia Gold» has invested in one of the mining deposits of Iran about $ 70 million, which is the largest foreign investment in the economy of the country during the years of sanctions.
Secondly, in Iran there is a very favorable image-atmosphere for us. In particular, Iranian officials have repeatedly said that Kazakhstan, even in difficult times of crisis and sanctions did not break ties with Iran, and in the post-sanction period Kazakhstani companies would have advantages in this country. Therefore, Kazakhstani businessmen are welcomed, and all the necessary conditions for their work are created.
Thirdly, a beneficial transport-transit conditions, which have been formed in the past few years can play a positive role in the development of bilateral relations. At present, when the western states are imposing sanctions on Russia, increasing tensions concerning the relations of our northern neighbor with other states in the region, the issue of using Iran’s transit potential, which gives countries an access to the market of Arab States, Iraq, India and Pakistan through the Persian Gulf, is becoming more urgent. In its turn, Iran is interested in the supply of goods to the countries of Central Asia, Russia and China via Kazakhstan.
In this regard, it is of particular importance to put into operation a new railway line Zhanaozen – Kyzylkiya – Bereket – Etrek – Gorgan, which runs through the territory of Kazakhstan, Turkmenistan and Iran, Joint-stock company «NC «Kazakhstan Temir Zholy» has started a work in Iran on several logistic projects, related to the construction of cargo terminals in the port of Bandar Abbas and the station Inche-Burun in the north of the country. This railway line opens new opportunities for Kazakhstan to develop cooperation with Arab countries of the Persian Gulf, Africa and the countries of South and South-East Asia.
The work done by 2020 will advance Kazakhstani transport system to a new level that will give impetus to an increase in transit traffic and will attract up to 5-7% of the potential volume of cargo from China to Europe (Еrzhanova, 2015).
More than 13 thousand kilometers of the route can be reached in just 13 days, while the shipping takes three times longer. At the moment, the main task of the participants of a «new Silk Road» is to increase competitiveness.
Experts estimate that by 2020 the volume of trade in the region will increase by 1.5 times – from $ 800 billion in 2014 to $ 1.2 trillion, while trade between China and the countries of the European Union will increase from 615 800 billion dollars, and freight traffic – up to 170 million tones (Еrzhanova). Transit flows are growing at a good pace. Last year, the transit of goods through the transport corridors of Kazakhstan amounted to about 18 million tones, by rail – 16.1 million tones, by road – 1.5 million tones, by sea – about 100 thousand tones (Aktau port), and transit revenues reached more than a billion dollars.
Due to the reorientation of the cargo in the East West by 2020 it is planned to attract about 10 million tones in the Trans-kazakhstani routes, and in general to increase the volume of transit twice.
In addition, the volume of traffic on the line Uzen – Bereket – Bolashak – Gorgan (928 km) during the five years is supposed to increase to 15 million tons (including transit – 5.8 million tons, export of Kazakh – 7.3 million tons, imports – 1.9 million tones).
Mohammad Gharavi Anna, a board member of the railway of the Islamic Republic of Iran, said in his speech, that with the idea of the New Silk Road Kazakhstan hit the mark.
Transport corridors, which pass through the territory of Iran can be a bridge between the East and the West, the North and the South. The most important of them is the international corridor «Asia – Europe». It began in China and passes via Kazakhstan, Uzbekistan, Iran, Turkey, Bulgaria, and further to Germany.
Another corridor connects the South and East Asia. It can be extended from Turkey and Iran through Pakistan to India, right up to the border of Bangaldesh and the Southeast Asia.
The third corridor is «Iran – Iraq.» Its Iranian part is under construction, the remaining length of 35 kilometers will be put into operation in 2017. Iraqi part with 550 kilometers length will have been finished by the end of 2018 (Аmreev, 2016).
Large-scale alternatives are open to the countries in the region on the corridor «North – South». Now it is used for the combined transport of goods to the Caspian Sea and further to Russia and northern Europe.
The part Iran – Turkmenistan – Kazakhstan with 928 kilometers length, which was put in service last December, has reduced the time and cost of delivery of goods to the Persian Gulf. This strategic corridor will regularize trade between the countries of Central Asia and Russia and bring out goods to international waters in the next decade (Еrzhanova, 2015).
During the study of this topic the following conclusions are made:
It was revealed, that China’s new strategic policy creates conditions for the development of IranKazakhstan relations. It is necessary to take into account the important fact, that China welcomes investments of foreign companies to the country’s economy and the development of infrastructure and industry of the Silk Road countries.
It was found, that the PRC has consistently realizes the development programs of the poorest areas of its territory, expansion of foreign trade and the strengthening of yuan in global trade due to the development of new transport corridors, the main of which is a new Silk road – One belt and one road. At the same time Beijing, building, for example, overland trade route to Europe, is not limited to one direction, but uses all possible ways, one of which is the southern way. Fortunately, this country has sufficient resources, as well as existing and specially designed for this purpose financial institutions.
It was determined, that participation in the development of economic corridors of the Silk Road would allow Iran and Kazakhstan to make use of the benefits and results of this ambitious project, and improve foreign trade activities and promote national economy.
Conclusion
Thus, the apparent priority of Kazakhstan in interrelations with Iran today is to establish a new paradigm of economic and trade cooperation between the two countries in the new regional context.
The New Silk Road is expected not only to give an additional impetus to a large-scale cooperation between Kazakhstan and Iran in various fields, but also to be an important milestone in the development of regional cooperation in new geopolitical conditions.
References
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