BRICS Mega Projects will Reshape Global Economic Map

The ongoing megaprojects linking Europe and Asia will undeniably result to the remapping of the world economy. But for whose benefit will it be in the end?

It all depends on our active participation, or we may call it critical collaboration, because we couldn’t always rely on the wisdom of a few timeworn geopoliticians.

We need to let everyone know we are always watching. Individually, it may not be that profound but collectively it has shown to have exerted so much pressure on the “policy makers.”

Ideally, of course, is to have a system where there’s truly a direct participation by the people instead of the representative character of the present. Until then, we need to be vigilant upon the actions of those Middlemen.

The way we see it now is that, at the present, China is just trying to help Russia economically just like it did, or more than it did, on the West with its Collateral Accounts. For China, its most trustworthy friend is always been Russia, and it’s high time for a deeper collaboration between the dragon and the bear.

The Eurasia High-speed Railway mega-project’s benefit to Russia includes:

  • at least 20 million jobs;
  • migration towards sparsely populated regions of Siberia and Far East; to encourage migration towards the Far East, Putin’s government is giving out 1 hectare of land each for free without restriction of its use;
  • territorial coherence
  • geopolitical security
  • foreign investments and technology

That’s the reason why even Germany is trying to convince Japan to leave its Rockefeller controlled economy in favor of the BRICS.

Europe-Asia link megaproject will reshape world economic map, experts tell RT

Published time: April 16, 2015 13:06
Edited time: April 16, 2015 13:42

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A new link between Asia and Europe through Russia will create millions of new jobs and slash travel time between the two by three-quarters. It’s expected to change the world economic map and bring Russia-Asia economic ties to a new level.

The ‘Razvitie’ Trans-Eurasian Belt is a multibillion dollar infrastructure megaproject, led by Russian Railways (RZD). It is expected to create at least 20 million new jobs in Russia over the next two decades. The plan has been in the works for many years, and the economic crisis is the best time to move from words to action, according to Ruslan Grinberg, the head of the Economic institute of the Russian Academy of Science who spoke to RT at the Dialogi economic discussion club in Moscow.

“Crisis is always the appropriate time to realize megaprojects. Economist John Maynard Keynes instructed that if you don’t have demand you should construct Egyptian pyramids in Britain, so that people went to work, earned money. While they are not needed there, we do need them, as they create jobs and a fantastic multiplier effect. One unit of money invested creates at least 1.5 units,” Grinberg said.

The ‘Razvitie’ project includes a number of transport corridors, as well as a huge infrastructure system, pipelines and telecom networks running along the route.

“The project should include railways, motorways and other transport methods, meaning aviation, river transport and all other means that should represent one system creating synergy,” Iwao Ohashi, advisor at the Association of Industrial Parks for Japan and Asia-Pacific countries told RT.

Trans-Eurasian Belt ‘RAZVITIE’ (click to enlarge)


There are two strategic aspects in the project, he said.

“One is a transit corridor between Europe and eastern Asia, established with all the modern and ‘smart’ functions. Second, it’s the creation and the development of a network of industrial economic corridors within the territory of the Russian Federation,” he said.

The project will involve some European countries, like Italy, Austria and Germany, as well as various countries within the former Soviet territory and Eastern Asia, including Japan, South Korea, China, Mongolia, Ohashi said.

“But Russia should keep the door of this project open to any interested country and every interested enterprise, and I’m sure Russia will do that,” he added.

Reshaping world economy

With a minimum cost estimated at $20 billion, the project will bring much more to all of the participant countries and reshape the world economy, experts agree.

“The project can eventually change the world economic map because Russia is going to provide a concrete new stage for businesses in Eastern Asia and Europe. They can choose either sea routes, or the Trans-Siberian route or the so-called China land bridge through Kazakhstan,” Ohashi said.

If Russia implements the project successfully, it’s likely to get a high economic growth rate of 6-7 percent in about two or three years, Ohashi added.

Trade between Europe and Asia will increase by at least 50 percent, and the transportation time will be cut from 45 days to 13, Grinberg projected.

Russia has already cut the time of container shipments between Europe and Asia to about two weeks from 20 days, the CEO of United Transportation And Logistics Company Petr Baskakov told RT.

“But there’s still the potential to cut this transit time by another 20 percent, which will bring land shipments closer to airline shipments in terms of competitiveness,” Baskakov said.

The investment into the ‘Razvitie’ project won’t have a quick return as the first profit could be expected in about 7 years, Grinberg said.

“Anyway, this project is important for the economic growth in Russia’s Far East, as the labor force there is moving away, which is blocking development of the eastern regions,” he said.

Boosting Russia-Asia trade

While economic ties between Russia and Europe have been tight, a scope for bringing the economies of Russia and Asia closer together is tremendous, Ohashi said.

“If you look at the economic relations between Europe and Russia, they are based on energy dependency. It is very clear that if Russia stops supplying energy the European economy will suffer. The Russian market is full of European goods and services, so that interdependency is very big between Russia and Europe. The route will stimulate increased trade between Russia and Asia. The very meaning of this project is that Russia and Asia will increase economic ties,” he said.

Running a business in Russia remains ‘unique’ compared to all other places in the world and the Razvitie project is expected to change this, Ohashi added.

“Other countries are pretty the same, for example Japanese investment into India, Japanese investment to China, to Poland – all is the same. The Russian business space has been qualitatively different from the rest of the world. I believe this megaproject is going to change this, so that Russia can become a part of the world economy,” he said.


New Silk Road Meets Eurasian Union

Golden Eagle Silk Road

Any – exceptionalist – wishful thinking that Russia and China will abandon their solid “win-win” strategic partnership, fully crafted to their mutual national interests, was dispelled by a crucial visit to Moscow by Chinese Foreign Minister Wang Yi.

In Moscow, Wang stressed both Russia’s Look East policy and China’s Go West – which essentially encompass the massive New Silk Road(s) project – “have created historic opportunities for docking the two countries’ development strategies.”

And fully “docked” they are. Russia’s Look East strategy is not only about China. It’s as much about Eurasian integration as China’s New Silk Roads – as Moscow needs Asia-Pacific to develop Eastern Siberia and the Russian Far East.

The always-evolving strategic partnership is not only about energy – including the possibility of Chinese-controlled stakes in crucial Russian oil and gas projects – as well as the defense industry; it’s increasingly about investment, banking, finance and high technology.

Chinese Foreign Minister Wang Yi speaks during the 13th Russia-India-China Foreign Ministers' Meeting, at Diaoyutai State Guesthouse in Beijing

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The partnership’s reach is extremely wide, from Russia-China cooperation within the Shanghai Cooperation Organization (SCO) to the Russia-China stake in the new BRICS development bank, and to Russian support to the Chinese-led Asian Infrastructure Investment Bank (AIIB) and the Silk Road Foundation.

Beijing and Moscow, along with the other BRICS nations, are fast moving to trade independently of the US dollar, using their own currencies. In parallel, they are studying the creation of an alternative SWIFT system – which will necessarily be joined by EU nations, as they are joining the AIIB. For instance, in theory Germany might afford to lose its trade with Russia because of Berlin’s politics – much to the dissatisfaction of German industrialists. Yet Germany simply cannot afford not to buy Russian energy. And for Germany to lose trade with China is beyond unthinkable.

The Trans-Siberian on steroids

Two days after his Moscow visit, Wang went one up as he met Mongolian Foreign Minister Lundeg Purevsuren, stressing that the New Silk Road will develop a “new platform”, a trilateral economic corridor linking Russia, China and Mongolia.

In this photo released by China's Xinhua news agency, a bullet train passes over Yongdinghe Bridge in Beijing Wednesday, Dec. 26, 2012

China to Build 7,000 Km Moscow-Beijing Railway Estimated $242 Bln

What Wang was referring to is the planned Eurasian transport corridor — which will feature a $278 billion, brand new high-speed Trans-Siberian railway connecting Moscow and Beijing, and everywhere in between, in only 48 hours.

So inexorably it was up to Wang himself to connect the dots Washington refuses to acknowledge; “The construction of the China Mongolia-Russia economic corridor would connect China’s Silk Road Economic Belt to Russia’s transcontinental rail plan and Mongolia’s Prairie Road program.”

What we have here, above all, is the China-led New Silk Road(s) directly connecting with the Russia-led Eurasia Economic Union (EEU). China and the EEU are bound to set up a free trade zone. Nothing more practically natural, as this is all about Eurasian integration. The details will be fully discussed when Chinese President Xi Jinping visits Moscow next month, and at the St. Petersburg Economic Forum in June.

The Chinese IP connection

China’s breathtaking Go West policy is also finally unblocking a key Pipelineistan gambit in the New Silk Road; the Iran-Pakistan (IP) pipeline, which was originally the IPI (including India), relentlessly harassed by both Bush and Obama administrations and blocked by US sanctions.

The 560-mile Iranian stretch, up to the Pakistani border, is already finished. What remains of IP – 485 miles, at a cost of $2 billion — will be mostly funded by Beijing, with technical work performed by a subsidiary of CNPC. President Xi is bound to announce the deal in Islamabad later this month.

So what we have here is China actively intervening – “win-win”-style — to facilitate an umbilical steel energy cord between Iran and Pakistan, even before sanctions on Iran are lifted, gradually or not. Call it the entrepreneurial spirit of the New Silk Roads – the South Asia chapter – in action.

Of course there are also myriad benefits for Beijing. Iran is already a matter of national security for China – as a top supplier of oil and gas. The pipeline will go through the strategic Indian Ocean port of Gwadar, already under Chinese management. Gas could then be shipped to China by sea, or – better yet — a new pipeline from Gwadar to Xinjiang, parallel to the Karakoram highway, may be built over the next few years, thus bypassing the Strait of Malacca, which is a crucial objective of China’s complex energy diversification strategy.

And then there’s Afghanistan – which from Beijing’s point of view fits into the New Silk Road project as a resource corridor between South and Central Asia.

U.S. Defense Secretary Ash Carter, right, and Japan's Defense Minister Gen Nakatani speak during a press conference at the Defense Ministry in Tokyo
© AP Photo/ Eugene Hoshiko

China Urges US to Refrain From Belligerent Rhetoric, Actions in Asia

Beijing ideally wants to invest in Afghanistan’s infrastructure development to access Afghanistan’s resources and solidify yet another land bridge from Xinjiang to Central Asia and further on to the Middle East. Made in China products, so far, have to be exported to Afghanistan via Pakistan.

CNPC and the China Metallurgical Group Corp. are already in Afghanistan, investing in the Amu Darya oil river basin and the massive Anyak copper mine. It’s been messy, but that’s a start. Both Russia and China inside the SCO have a profound interest in a stable Afghanistan ripe for business in both the New Silk Road and the EEU. The key question is how to keep the Taliban “satisfied”. Certainly by not applying Washington’s methods.

Meanwhile, the Pentagon’s “proposal” for what new chief Ash Carter describes as “this part of the world” is to deploy – what else – new weapons, from the still-in-production THAAD missile defense system to the latest stealth bombers and cyber warfare units. Eurasian economic cooperation? Forget it. For the Pentagon and NATO – which, by the way, have recently lost a 13-year war to the Taliban – economic cooperation is for sissies.

The views expressed in this article are solely those of the author and do not reflect the official position of Sputnik.

Pepe Escobar traveled to Donetsk at the invitation of German-based media project Europa Objektiv.

Pepe Escobar’s latest book is “Empire of Chaos”. Follow him on Facebook.


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