The World May Become Interconnected

The main problem of the world economy is the need for interconnection, based on both cooperation and friendship, in terms of economic development. The only way that economic development proceeds effectively is with the essential development of modern infrastructure. Interview with Stephen Brawer, Chairman of the Belt and Road Institute in Sweden.

The main problem of the world economy is the need for interconnection, based on both cooperation and friendship, in terms of economic development. The only way that economic development proceeds effectively is with the essential development of modern infrastructure. Interview with Stephen Brawer, Chairman of the Belt and Road Institute in Sweden.

What are the major challenges the world economy is currently facing?

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Well, I think the main problem is the need for interconnection, based on both cooperation and friendship, in terms of economic development. The only way that economic development proceeds effectively is with the essential development of modern infrastructure. That means that there are, of course, questions around the value of raw materials, which have historically been in the picture. But the true ability to address the major challenges which we have right now are embodied in the Belt and Road Initiative as a vehicle for eliminating poverty through the fundamental basis of infrastructure development. And that deals with a more essential question of physical economy, because infrastructure is dependent on having an actual economic foundation through physical economic development. So, I think that is what the directionality of the Belt and Road has been. As you probably know, there are more than 150 countries that have joined the Belt and Road Initiative in the form of Memorandums of Understanding, and it is obviously totally voluntary. The countries that choose to do it, and the collaboration that occurs, for example, between China and these individual nations that are part of the Belt and Road Initiative, is voluntary. And China does not attempt to impose conditionalities about internal policies in those countries, but simply bases it on the idea of developing these kinds of modern infrastructure, which includes modern transport, modern water facilities, electrification. This is the basis on which you eliminate poverty and achieve world connectivity, which is the objective of the Belt and Road. I think, this is the kind of solution that will address the challenges we have in the world economy today.

How does this approach differ from the Western approach to global development? Western countries also build infrastructure, a lot of different facilities in other countries. What is the main difference between the BRI and the standard Western approach?

Well, as for the Western approach, one must look at it in two ways. One is historically; there have been times when Western industrialization was and has been quite effective, at least internally in terms of US commitment to a concept called “the American system of political economy”, which was defined by founder and first Secretary of the Treasury Alexander Hamilton. But these are not the policies that are dominant in neither the United States nor Western Europe now. Since the end of the Bretton Woods system when American President Richard Nixon removed the dollar from a fixed exchange rate, Western nations have had a floating, so-called dollar-based system, which is not focused in any way on the development of infrastructure. So, it's a mistake to think that Western economies have oriented themselves infrastructure development. They have a massive tendency for speculation and refinancing debt rather than doing major infrastructure investments, which has historically been something that the West could do and hopefully will restart again. But now, under the present international agreements with the IMF, the World Bank, as well as the dollar system, which is being used politically in terms of the situation with Russia, to sanction not only Russia, but countries which the United States disagrees with. And they have these objectives which politically prevent precisely the type of cooperation and development which, for example, China has been doing. And you can see the results; for example, China has helped negotiate diplomatic relations between Saudi Arabia and Iran, who haven’t been political allies, yet have reconciled – both understanding that there is room for economic cooperation. That initial cooperation can hopefully evolve into a real friendship.

How might the world look like if all BRI projects were fully implemented, if the BRI really flourishes? What might the world look like?

Well, look at the map behind me, and you will see that the world may become interconnected. That is the potential. This Idea was initially put forward by the Shiller Institute, who builds off the Eurasian Land Bridge idea, supporting the creation of a World Land-Bridge. But this idea has been adopted in its own way by President Xi Jinping with the Belt and Road Initiative. And this, as I said, is built on the idea of corridors, modern infrastructure. You develop modern capabilities, which are then subsidized by trade which supplies goods, services, infrastructure, capital goods that are necessary for modernization and development. This goes back to the 1800s, when the actual idea was brought out in the United States by the Lincoln Administration for what was then the Transcontinental Railroad. And that was understood: the landmass of the United States would be uplifted economically by having these kinds of transport corridors through the so-called “underdeveloped portions of the nation”. That became the policy of the Russian economic minister, Sergei Witte, with the Trans-Siberian railroad. These kinds of initiatives had been, unfortunately, not fully implemented before, but I think that the world is moving very rapidly towards their recognition, especially with the agreements that have come between Russia and China. These types of agreements are defining a new perspective for global development that is coming from the East at the moment. It is coming from the Asian continent, developing nations in Africa, and in South America. Hopefully in the future, there will be a situation where the Western countries in Europe and the United States will come to their senses and begin to cooperate.

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If we try to move a bit from the global picture to Europe, there is a very common idea among Russian experts that Europe was, in a way, left out of the current wave of globalization, especially since Europe didn't fully recover from the 2008 Economic Crisis. Now, it's suffering a lot because of the current conflict and its economic repercussions. What is the current European outlook on the Belt and Road Initiative? Does Europe see this project as an opportunity to reinvent itself, to change its economic position in the world?

Well, I think this is on the table right now. You have had the recent visit of the French president, Emmanuel Macron, to China. I think it's clear for many European countries that trade with China is a crucial part for Europe’s future economies. The problem is the geopolitics of “dividing the world into blocks”, which is how Western powers are defining it. Europe has clearly suffered on the economic front because of these imposed sanctions. They are not doing a thing to change the circumstances. It doesn't solve the problem, but it has made the economic conditions in Europe considerably worse. But there is, I think, an awakening. You also had the visit, of course, of Olaf Schulz to China. Germany and France being the so-called largest European economies, they are both clearly recognizing the importance of trade with China. This obviously implies the land routes that are part of the Belt and Road projects, because you're going to have successful trade going beyond just maritime trade, which is the cheapest. But it also takes a very long time. It’s not particularly quick. If those kinds of train systems are cutting across the Eurasian continent, then we’re talking about trade and development that would not only be beneficial with China, but it would include a good deal of the Eurasian economic agreements, including Kazakhstan and the other Central European nations. Obviously, the commitment that China made to develop the Belt and Road was very successful in Belarus with the idea of the Great Stone Industrial Park, which is a model of development and cooperation. But again, the functioning of these corridors has unfortunately been affected by the situation in Ukraine. Clearly, if this conflict ended it would basically mean an opening of those types of corridors. So yeah, the question of Europe's future is directly linked to this kind of cooperation. And unfortunately, the general view of the European national governments has not been favorable to the Belt and Road, but they at least have understood the value of trade with China. Hopefully, they will also begin to understand the importance of the Belt and Road, join it, and participate in alleviating global poverty, as I mentioned in the beginning.

What is the role of the Eurasian Economic Union and Eurasia in the BRI? To some, it may seem like the Eurasian Union, being an economic bloc mainly around Russia, may come into some kind of conflict with the BRI, because those are two partly competing projects. Is it a true competition, or can the BRI include a lot of different economic blocs within it?

I don’t think that there will be conflict because of the recent agreements between President Xi Jinping and President Putin. There is clearly a foundation for cooperation as opposed to some kind of unfriendly competition. Now, obviously the Eurasian Economic Union has a certain perspective, which up until now, was mostly defined by Russia and Kazakhstan’s ties to the northern corridor, which could have potential for developing the Arctic region, since it goes across the top of Russia, Siberia. This could clearly involve cooperation even with Japan and China. That would mean cooperation with Scandinavia, especially Finland, Sweden and Norway. I’ve recently read an article that was issued by a Russian news site that they are already expanding Eurasian Economic Commission to a free trade zone which includes Vietnam. I think there is a definite interest from India too. So, the question of the Eurasian development perspective, although it is not exactly the same as the Belt and Road, can clearly be integrated in terms of cooperation. You have, as well, the Shanghai Cooperation Organization, which is also promoting this kind of development in Southwest Asia. These parts of the Eurasian continent, in conjunction with Africa and many other countries that are now interested, define a new global perspective. And it’s time for, in my view, humanity to come to its senses and end this conflict and instead begin to meet the challenges of global economic development. So, coming back to Eurasian development, there is a recent publication by Russian economist, Sergei Glazyev, who recently spoke at the Moscow Economic Forum and is actually minister for integration and macroeconomics of the Eurasian Economic Commission. He has written a new book called “China's Economic Miracle, Lessons for Russia and the World”. There, one sees that rather than falling into the trap of seeing one nation as a competitor rather than a cooperative friend, you have the foundation for a highly successful global-development perspective for the coming period in world history. I think there is a great deal of optimism despite the dangers that are still unfortunately met daily in terms of these ongoing geopolitical conflicts.

I think that we very often hear rhetoric about the BRI being politicized. For example, we can hear Western representatives saying that it’s just a Chinese project that has clear political goals. My question is whether it is possible to avoid this politicization, or is it an inevitable thing with any kind of global project?

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Well, I mean, I addressed these allegations, as well as the Belt and Road Institute in Sweden. My colleague with whom I work with very closely, who’s the vice chairman of the Belt and Road Institute, Hussein Askary, also addressed these allegations. He has written a number of articles which are available on our homepage. It is a propaganda tool to demonize China, and, therefore, to identify the BRI as a new form of colonial expansion on the part of China. There's no substance to this. This is directed against Western populations because they do not have accurate information about what is really going on. The United States has abandoned its more traditional positive role of infrastructure and manufacturing building and has turned towards the direction of pure speculation on money markets, derivatives, and currency refinancing or currency speculations. These have nothing to do with the real physical economy. China is clearly on a different road. And that is why we see a totally unique development in the world and in world history, which is emerging around China's development as probably already the world's most advanced and developed economy. I think the fact that Dr. Glazyev has recognized that this is something that could be, is a very useful perspective for internal improvements and development in Russia, and among other nations. The United States, on the other hand, offers nothing. I did an interview where I mentioned how Janet Yellen went to Zambia and was telling Zambians not to deal with China as she arrived at a modern airport that was built by China. So, you can see the irony with these western leaders who are incompetent in terms of real economic thinking but are serving an agenda that is not serving or delivering anything for the developing countries in the world.

Besides this politicization, what are the main challenges in implementing the BRI? What are the regions where those BRI initiatives faced the most problems? It's such a diverse project trying to unite the entire world economy.

The first thing I would say is that there is a concept that I have mentioned before, a community of “sovereign nation states”. This idea that followed the Belt and Road Initiative, which, by the way, is now a 10-year project. It was begun in 2013 and this year is the 10th year anniversary or celebration of its initiative. We have a perspective for respecting national sovereignty. Not every nation has exactly the same values or historical ideas that others have. The question of how you can find better ways to address and communicate essentially revolves around, number one, addressing, first, the issue of economic development. If one tries to address them solely on the basis of political differences, you will fail and it will not work. They will not succeed in imposing their values on others. This tendency of a so-called “rules-based order” is doomed to failure. So, the alternative is a community of sovereign nation states where you respect the sovereignty of other nations, but work for certain common principles which can be a part of this global development perspective. I will just add that President Xi Jinping just launched a new initiative called the Global Civilization Initiative, which I think is precisely the direction of combining economic development and establishing a foundation for communicating ideas. Even in the case of Western development, I will mention Leibniz, who was an individual who stood for this kind of perspective on friendship and nations. Sometimes it's important that we look at history in order to gain insights as to how to overcome the type of inflamed circumstances where it doesn't appear that there's any basis for agreement. Gottfried Wilfried Leibniz (1646 - 1716) who was a deep philosophical thinker, and who promoted this “friendship perspective” was not alone when he founded the Scientific Academies in Vienna and Berlin. He was also instrumental in founding the Scientific Academy in St. Petersburg. He didn't live to see it, but his friendship with Peter the Great led to the foundation of the Petersburg Academy in 1725. That's a kind of model for how I think the West could begin to reunite in a proper manner with the developing countries, the Asian economies, and certainly with Russia. I think that's the direction we need to go: to combine the economic side of development with a cultural understanding. This is quite crucial in order to overcome these rivalries.

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