Davos 2016 - Eurasia and the Modern Silk Road

good morning everybody my name is Keshawn Abu Boni and the Dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore and gives me great pleasure to welcome you to this session on Eurasia and the modern Silk Road I think we all aware that Eurasia is becoming more important but the question is why why now and I have my own theories and I suggest three possible reasons one is of course there's a brilliant new book written by Professor Wang Gong Wu who is actually the leading historian in Asia today a title of the book is duration call and he says that before the era of modern maritime European colonization Eurasia was a center of world history forever so what you may be seeing in some ways is the return of history with a natural relation returning to his natural place as the core of human history that's one reason second reason could be geopolitics and what's interesting is that if you look at the timing as you know United States made a pivot to Asia and then China made a pivot to Central Asia now was that a link or was that not a link it depends on your your point of view I suspect that there is may be a policy by China to hedge its bets to be less reliant on maritime routes and to have an equal ability to require you use land routes and so on so forth so that may be one of the factor two and thirdly of course there are of course many new players and this was this is what makes Eurasian story so interesting because there's so many players involved and it's a very complex game it's always been a complex area so to this panel's discussion therefore couldn't be more timely and some of you may be wondering why is somebody from Singapore chairing this panel on Eurasia I can tell you the Lee Kuan Yew School of Public Policy has been actively working with NASA by of University in Kazakhstan to help build the Graduate School of Public Policy there so I've actually been to Astana many times myself so I was on delicate field situation but let's begin our discussion I won't have make lengthy introductions but we have a very distinguished panel the the prime minister of Georgia is with us somewhere left I will not mispronounce your name and am i right it was a maskavich and he's the chairman of the board of directors of Eurasian resource group in Luxembourg and on my stream left but that's not your party that's not a political position is mr. Andre costing the president president and chairman of ETV bank management board in Russia and last but not least we have Sultan Ahmed bin so I am the chairman of DP world from United Arab Emirates so we have a really brilliant panel and the question the first question I'm going to ask them is the obvious one is what what do what do each one of you see is the prospects for regional development in Eurasia today and I'm going to start with the Prime Minister so if you don't mind give us your views of what's happening from a broader perspective in the region thank you very much good morning indeed the Silk Road initiative reconstruction of the economic Silk Road economic belt or as it is called one belt one Road initiative brings new momentum for developing economic ties in on the Eurasian continent indeed Europe needs dynamism from China and from Asian countries and vice-versa Asian countries need new technologies and know-how from Europe so this is a network of different routes developing connectivity between Europe and Asia I can tell you about Georgia that we have recently undertook important changes to modernize our infrastructure to modernize the railway we are completing the highway construction we are working very mostly with our neighbors in order to develop holistic approach in managing southern Caucasus corridor together with Kazakhstan and Central Asian countries recently we had direct trains passing from sangeun province through Kazakhstan Azerbaijan and Georgia towards Europe either through the Black Sea or Turkey so this is developing quite fast and we see increasing demands the direct train from Cynthia province to Tbilisi took seven days the latest train which means that in about ten eleven days Frank and reach from China to Constanza or valgus in Europe which means that for companies who have expensive goods to ship from China to Europe and vice versa it decreases working capital requirement so which is turning this road into a very competitive one but I would like to mention that this is not a rivalry between different roads this is a friendly competition and I think it increases the economic dynamism in on the whole Eurasian continent a continent in bring it brings peace and understanding between different countries in among different countries so it's a project of partnership not competition it's more partnership than competition I can tell you that we have ambitious plans to build a new deep-sea port in Georgia which is called an uglier port which which will be started in the nearest future we have important reform agenda to liberalize further our tax system we are one of the best in easiness of doing business in the world we have one of the lowest taxes in the world and we are going to abolish profit tax in this year and liberalize further our tax administration and do some important changes derived from the free trade agreement with the European Union which means that Georgia with its free trade agreements with the whole region with all the regional countries all the neighbors plus with free trade agreement with all the European Union countries and recently we launched free trade negotiations with China so we are becoming becoming one of the most open economies in the region with very liberal regulations with relatively low energy costs with relatively low labor cost and educated labor so we believe that in this partnership picture giorgia will play its important role but with our important relations with the European Union we are also trying to improve our relations with all our neighbors including with Russia of course we need to decrease political tensions and allow ourselves and all other countries to develop in a less tense environment thank you thank you thank you very much thank you for that very comprehensive introduction I'm very glad you mentioned one belt one road which as you know is a major Chinese initiative I was personally very confused when it first came out because the belt goes across the land and the road grows across the sea well have some confusion about that but I think people are now beginning to understand what one man won one belt one road stands for so mr. Musker which I'm going to turn to you now because you have you know extensive interest in the region you know because that's done well so how what's your perception do you share the optimism of the Prime Minister that this is all partnership and not geopolitical competition first of all we share any optimism with with any countries and any people who could have it but what I would like to say of course there is always competition for most effective most short and the best way how to deliver any product and of course we just discussed yesterday with group people could you imagine let's say to diffract of let's say of bauxite from west of Africa to China $8 $8 from Wade way from West Africa list well let's say from Guinea bauxite China $8 how do you do that so they I don't know not me I am NOT in this business that's why I'm saying yes it's very difficult to to create most effective and long short way from let's say from China to Europe but I agree with you thousand years people try to found this way and they always come to the same way the silk way it it's unbelievable to the imagine hundreds hundred years ago people try to found they go through countries through thousand kilometers to found the way where they could get more more result and it was silk way and way in Kazakhstan twenty five years and we have seventy thousand employee in our company in Kazakhstan and we see great great opportunities great opportunities why let's say 25 years ago when Kazakhstan become independent everybody discuss is it possible to my country successful if you don't have connections with ocean how it could be how you could be integrated to volt economy week without ocean but but now everybody understand the ocean there is China you know or maybe better than water ocean I mean China and because of that of unique geographic location of Kazakhstan because from north is Russia great country 150 million habitants from East it's China that's why more and more we understand the Silk Way there is most stable and maybe most in future best way how to do it and I would say last years more and more coordination with countries which really important to have this role and the of course it's Kazakhstan of course China of course affects their version of course the Georgia of course this Russia that's why that's why I think today today it's great opportunity because ok I told today see way fact very cheap but there is many opportunities when silk way begin to work because it will open new opportunities new new deposit of any minerals new development of a new projects that's why I assume today all all Hawaii interest and coal companies or all people who are interesting to most effective way how to deliver deliver any product from South is not only from China from Southeast to Europe have to focus to see where we are sure we are sure and in Kazakhstan done already done a lot a lot 2,700 kilometers away from West China to Europe it's it's it's let's say vault level example what we have to do to to to implement this ideas that's why we are quite optimistic we're quite optimistic about this opportunity but of course all countries my opinion and Prime Minister here of Georgia will understand me need more coordination and more more coordination and more joint implementation of strategy because countries continue follow their own interests but this still quite possible only in full coordination between countries that's why I would say Kazakhstan today of of this opportunity has a lot a lot of potential that's why I think everybody who would like implement today they ambitious it right played to do it and I wish to everybody to be happy and healthy thank you I think I'm bringing to drown in optimism so Andrei as you know Russia has always played a very very clear fact Russia is many ways the most important player has been for a long time in the region saturation region so your perspectives met a a great deal that I wonder from your perspective whether or not you share all this optimism but I wonder also if you could maybe Andrei try to maybe make a transition in the discussion to us discussing what you see or so some of the problems and challenges that the region faces as you know no region in the world is all about harmony and cooperation there are always challenges so let's surface a few of them so you can get a better understanding of the complexity of Central Asia thank you very much first of all I'd like to say that I think the regional developed and the regional integration is going to play the vital role for the next decades partly because I personally see that the global approach to the problem of for example liberalization of trade and other issues economic are diminishing very much if you look at WTO of course new countries are joining in Kazakhstan is joining now Russia joined recently but for a number of reasons we see no progress on multilateral trade talks just on opposite all the sanction and sanctions and growing competition led to situation when we have probably less liberal regime in global trade and then now on the other hand we see the growing importance of the regional or some region to region agreement like we have trans-pacific agreement on trade and development we are now talking about transatlantic agreement so my view that in the future these regional programs original agreement will play much more important role and to a certain extent replace the process of global urbanization and global development the same is true about the institution's we see number of new institutions like Asian Asian construction Western Bank BRICS new Development Bank's Silk Road Fund so these new institutions been created to focus on specific regional issues and regional development which is I think quite an important new element of course when we talk about problem of Asia or Eurasian development if you look at the map you see that of course Europe and Asia represent on the map one entity but if we talk about the transport logistic if you talk about economic ties of course there's still two quite different entities Russia of course again by by geography by history if you look lies between Europe and Asia and though we always consider ourselves Europeans we're not quite because the very big extent we belong to Asia belong to Pacific and I think for us the natural way of further growth further development is to have better ties with Asia we recognize it partly as we started the process of creating Eurasian Economic Union there were some concern in the West that Russia is trying to rebuild the Soviet Union to a certain extent but but it is not I think just a cognition that the the former Soviet Union republics now being independent countries still have very close ties and relationship and the interdependence and the economy and I think they'll be natural to benefit from from cooperation with among these countries and to create a real integrated economy which I think will benefit all participants but on the other hand Russia is very much welcomed the Chinese initiative the Belden Road initiative we this year already see all of us here now 2015 we sign the some agreement between Eurasian Economic Union and the belt roll initiative and I think we have a lot of potential for Russia being a country between Asia and Europe to benefit from this though of course we still have to see how this concept will be implemented because it's a quite wide range concept of course there's many obstacles on this there's very different countries involved in this cooperation we definitely see China as a dominant force in this process the China which is growing in spite all the problems growing into a leading economic nation and the nation which wants to be a leader in in Asian part and most successful in economic development and in spending money on this project but still we believe that Russia is eager to join this initiative we as I said we very much a view relationship with China as a extremely important for Russia it's our neighbor it's the country with whom we have a quite a big economic ties and we would like to expand this but I don't with China of course the countries like Kazakhstan and other countries in in in Central Asia in caucus region our important partners and Georgia for example I mean I'm I'm proud that in spite all the political difficulties my bank was working in Georgia all through this time why successfully you also had support from the Georgian government and we're very thankful for this because we really want to have a very good relationship with Georgia we think it's important partner for a traditional historical partner and friend for for for Russia so I think there'll be many obstacles but I think this concept will will will will be leaving I think that that is quite important I think all the nations in this region accept the importance of this and see Otto benefits yeah Thank You Andrey I'm glad you mentioned that China has continued to do well because I can tell you walking around Davos so many people asking me is the Chinese economy going to crash and it's you know you saw the communism you saw the Economist cover story with a picture of Xi Jinping riding a dragon that is about to crash and I completely disagree with the Economist cover story Xi Jinping is going to bring the Chinese dragon up and not the Chinese dragon down we'll forget about this next Davos nobody will mention problem with China so we now let's turn to Sultan and I tell her and I think you'll probably bring a different perspective because if you look at the role of UAE and the Gulf region it's focused primarily on what I would call the maritime routes and now with people shifting logistics from maritime routes to transcontinental routes how is that going to affect the logistics business and are you going to stop buying ships and buying more trains thank you very much I'm very honored and pleased to be with you here and this important meeting we are quite interested in in this concept the you mentioned the silk route was all this and that's true because in the it is the one of the main routes of eight-eight that even one of the points of the circuit toward Africa was Dubai the Silk Road didn't develop because developed in the past because maritime transport was not reliable as modern vessels were in the market and development of the steamship the Silk Road lost it is important today of course the revival of this Silk Road we had extensive meeting with our partners and friends in Kazakhstan we are actually advising the government Kazakhstan on the logistic Park in our booth we are managing the Aktau port which will one part of the cargo will go tactile and tobacco and then to probably answer to Iran and to us eventually the Silk Road reduces the time for a container to reach Europe today by sea takes 42 days by train it takes 12 days Wow and there was abundant costs and the cost for you to do all the cost goes down significant causes different object will come to it but the in fact about five six months ago the we tested container from China and the rich Europe in 12 days well the you spoke about the cost and Michael just spoke about course I mean the shipping in the sea and in a very difficult situation now yes there's over capacity yes everybody built big vessels and bigger vessels the market did not adjust you know I just do it so there is over capacity a container from China to Europe used to be fifteen to eighteen hundred dollars today's three to four hundred dollars Wow so obviously they are losing a lot now when you talk about the cost for the Train it's about $4,500 hmm the five thousand so still when you look at why China in our opinion is very interested in this China is facing a few challenges one of the challenges is the rising cost of employment we are in in Qingdao we operate we have a port to an important channel tangent and the anti and we've been facing for the past seven years 20% increase in labor cost and China is realizing that and they are trying to remove the industry from the coastline to inland in fact there is a plan to build a huge industrial area just on the border of Kazakhstan now when that happens then of course the cost of Chinese products coming to you will be less whether you need to travel so many thousand miles but at the moment that cost is here now items of high value and you talk about for example copy machines computers and so on it's 5000 that is nothing because for them the important thing is to reach on time especially some of these items that are and need like Apple for example telephones when they are launching when they need to be there fast so the competition of the train in my opinion will be with the airplanes more than the ship because cell it changes in 12 days you can wait for days you cannot wait 42 days for a consignment rich so I see a huge potential for this and I believe this will not reduce their daily dependence on ships I think the intermodal concept is a fantastic concept whereby a country can utilize maritime road rail and air and with this concept you you you have basically fulfilled all the mode of transportation at the end of the day we are talking about efficiency yeah thank you thank you now I share the optimism that many of you have expressed but if you don't mind I'm going to ask each one of you a somewhat difficult question but please give me very short answers because I think it's time to bring the audience in in a few minutes but my question to you is this you know there's no region without problems and challenges can each one of you just suggest one problem on one challenge that you think will probably surface in the next 12 months and I can guarantee you in any region that be negative headlines in the next 12 months so what will that negative headline be about the Eurasian region in the next one two three or four yes you know so I want to start with you Andre what do you see as a potential problem or challenge that might surface that we may be difficulty solved well I think the process of transition of the economies in Asia for example Chinese now in transit from the export oriented investment to the local consumer services say and and to certain extend the similar says similar cases in other some nations so I think the change the technology will change the change of the economic environment in general and the necessity to change the economy the structure of the economy I think that's a big challenge for new Asian countries yeah no I agree in fact this does you know the slowdown the Chinese economy has brought on commodity prices very sharply you know and so that's one example of a challenge that has surfaced so mr. prime minister what do you see here I know Prime Minister's don't talk about negative things but try no for us I can tell you for our region generally the challenge is a falling oil prices because for a country like Georgia which is less industrialized and which is focused more on trade and commodities falling of the oil prices means the falling of the investment appetite in the oil countries who are the most important FDI providers for Georgia there is why we we are not benefiting from this process we are suffering along with the oil countries so that means that we need to do more extraordinary things inside Georgia like cutting further the budget costs and giving more oxygen to the private sector liberalizing tax system like abolishing tax tax on the income taxing only the distributed earnings which means that we will mobilize more investment resources internally so I think this is where we are now and I think this will be the biggest challenge in the in the next year hmm for us it is a biggest challenge as our friend Alexander once again which mentioned also the challenge is also the cooperation level between these and among these countries because unless we have excellent cooperation and coordination the Silk Road cannot be as effective as it should be so this is another challenge to improve the customs and border crossing procedures and come up with unified unified tariff systems etc etc so this is another challenge but the biggest challenge probably is the falling of the oil prices for everyone in our region ok yeah I'm glad you mentioned low oil prices by the way just very quickly since you mentioned regional cooperation actually at lunch today I'm going to be speaking about ASEAN there's the Association of Southeast Asian Nations and describing how ASEAN has become the second most successful regional organization in the world and I'm going to suggest that Central Asia and Eurasia can look at what ASEAN is doing in some areas so so so mr. Bosch kovitch come on tell us a very difficult problem I will tell you really difficult problem just one hour ago we discussed that we are talking about situations that what we are discussed today it's not crisis its new reality I assume there is biggest problem and biggest challenge why be if it's like that but more and more people sitting it's like that for all countries of this region of say all CIS countries out it has to completely change a reaction completely this country needs reforms serious reforms diversification absolutely different way to do it there is biggest challenge because in this case these countries have to completely change strategy completely there is the biggest change and let's say today in Kazakhstan is great opportunity privatization total privatization and I think it's absolutely the right decision because in possible impossible to continue like it was horse yeah oh I'll get doesn't matter any any impossible to to government to own companies that's why I am saying that is a biggest challenge because if country will not make serious reforms make economy liberal on everybody knows recipe everybody knows but it difficult to implement I think if countries will not do it another one to tears it will be disaster because it's reality there is the biggest challenge good that's excellent I mean privatization is inherently difficult now P I'm going to remind the audience are becoming to you after I hear from Sultan so please prepare short sharp and challenging questions but dopey so make long speeches so SOTA thank you as a challenge I see now we're talking about the Silk Route the in my opinion is the matter of procedures of a clearing cargo of accepting that this cargo is going to go and move with a untouched and inspected in another word for this to succeed we have to reduce the time it takes because in certain countries still the procedure the documentation should be the border procedures yes and should we should have really ideally should have a document that basically everybody except or the same document in the Gulf countries we did this with the GCC countries whereby we have exactly the same declaration or import or Bella wanted so that everybody knows about it second challenge is technology we have to really use the best technology as far as a pre clearing the cargo another word when when a containers coming they should be doing the pre clearing ahead of time and also we should avoid paper it should be really paper electronic because with paper a lot of doubt comes with electronics it is difficult to cheat it's also easy to retrieve information so the custom officer and needs to check something they can instead of asking for document they can find it with a clickable button now I was I I must say I was very impressed with the customs in Azerbaijan they are way advanced as a minor procedure yes we advanced I'm really pleased I mean we we are advancing the why but we we've seen a country that really have almost paperless the ability to clear the ability to to basically pre-clear than inspect this is important because when you talk about the Silk Road you talk about logistics you talk about efficiency at the end of the day how do we cut cost every time they stop every time they delay it's a cost I'm surprised you didn't mention Singapore anyway so the floor is open and would anybody like to us the first challenging questions yes I see a hand at the back please if you don't mind identify yourself and pose your question my name is Jack Evans and I work for summer casino in Kazakhstan first thing I'd like to do is to completely endorse Alexander what you absurd we are in a completely different environment in age today in the whole of the Central Asia region and Atticus applies to virtually every single one of the former Soviet republics and it is this fundamental reform that is required and actually because of the circumstances our we're living in today this is a time when I suspect you can actually do it whereas when we were booming in hundred dollars a barrel I mean it would have been much much more difficult hmm I mean I had the difficulty being in some ways a privilege of being working for the very first of Margaret Thatcher's privatizations in the UK and and I'm talking in the UK at a time when the economy was doing pretty well and I subsequently had the task of shedding 50,000 people as a direct result of privatisation and the drive for greater efficiency cost reduction and to satisfy the shareholders in terms dividend growth and capital appreciation now I haven't seen in Kazakhstan and I haven't seen it anywhere else in our part of the world a real understanding of the consequences of what these changes will bring about and the biggest danger that I foresee in these areas as a result of the fundamental changes that have to take place is the question of social unrest because when you begin to shed employment as will inevitably happen in order to get efficiencies the the key target and in many ways regrettably the easiest target is cutting numbers of people it takes time to take investment out of a business but actually employees are a very sort of easy issue to take and most of these businesses are hugely I mean over endowed with people which is a part of the efficiency of them and to me I mean we need alongside these changes a plan for dealing with the consequences which as I say I really could very easily be very substantial so social unrest okay thank you I think that that's a good challenge should I turn to you and to try and see how do you respond to that I mean let's say we go he mentioned Kazakhstan if you do have this real privatization and a lots more unemployment how do you deal with the social unrest you know this is junior Prime Minister for Monday I'll go tell you first of all first of all I'm very proud to say that let's say a few years ago President Zuma of South Africa came to Kazakhstan and he visit our enterprises and he was completely shocked because he told social package which we give to our employees it's unbelievable and he never so in any in any mining company and in South Africa you see with so many serious and dramatic and and serious company working that's why yes it's big big responsibility but from very beginning in Kazakhstan and leader of Kazakhstan President Nasser vibe he contribute a lot of time - - to be sure that companies who work in Kazakhstan give real social security to people that's why we begin to prepare ourselves to such way when we have to reduce number of people that's why we create serious network of new education centers which will give for people new skills new profession which we will be sure we could we could be sure that people will be busy and we do it we do it but we do it systematically it needs years and years impossible to do it for one month one one year we begin to do it 810 years ago we invest a lot of money to that but today we are quite comfortable because because we know what to do not so many companies could do it but we prepare ourselves because of course with today's reality like we say yes social situation will have more and more tension it is true but we have to ready for that let's say let's say because of you in you are a kind of production which which we will try to have we make diversification and remove people from one kind of enterprise to new one but we do it systematically only only this way could be possible to control social social stability that's a very good point next question ma this again increase yourself please I'm Leonard on the chairman of the European Council in formulations and there's lots to talk about win-win cooperation in this part of the world but I'm being sort of scepticism in there I'd love to hear from the panel where you see the biggest points of tension between the different regional integration projects in Eurasia but one belt one road between the Eurasian Economic Union what Turkey's doing with the European Union is tried to do in your part of the one so mr. prime minister do you want to start any then I'll ask Andrey after that no no it's great I absolutely honestly I would not see any reason for tensions because as it was mentioned they are the one belt one road does not mean virtually one belt or one road it's a network like coronary arteries that's linking Europe and Asia so it means that there are different ways of linking to parts of this continent which means more connections and more opportunities for bringing these regions closer as it was mentioned by the representative of the DP world it means very important especially for high value of goods because time becomes shorter and shorter so I don't see any reason for creating tensions derived from this project I think this is more opportunity for closer cooperation among all these countries and for bringing more peace and of course countries will try to reform themselves countries will try to to be more competitive and routes will try to more competitive and track countries alongside different routes will try to cooperate better among each other which means more competition which means more efficient economies but efficiency increasing efficiency always brings some challenges but these challenges are more internal challenges than international challenges so if countries cope with those internal challenges I think the economy will be more efficient overall on the continent so I don't see any reason for increasing tensions hundred more every I think they they could be a competition of course among Nations which route should be the main avenue and which one should be a small street probably because we've got to two destinations we have Europe we have China a two major economic powers in between there is a country which will benefit from from this route but there's a south north and central route and i think they should because some competition is actually which one was the North route the trans-siberian railway I have Petra cross Russia is it possible go which way through which countries I think it can mean a ghost to the south this other side thanks again so good if you look at the map I'm trying to figure out where you see your competition for the trans-siberian railway no I I think that they actually some countries we should say into going through caucus of course and going them to Europe yeah but you but you know you see competition rather than tensions yeah I don't think intentions I think Russia is saying that Russia loot is had one advantage that you you have effectively one country in between and then quite correctly gentleman mentioned about the documentation and everything and speed speed is quite important and the the ground route is very important because now only fighting four percent of the trade between China and you and the European Union is channeled by land mainly by sea through the Suez channel and of course in order to get to winner a big part of these and to benefit from from the economic belt as we're saying that's quite important yeah yeah I want to build a discussion on challenges and a sort on a question you know I'm told I'm not sure with this absolutely true I hear that the Chinese have actually succeeded in establishing a train route that goes from China to a port in Iran the Train is started already so when that kind of train route starts is that good news for the Gulf region or do you see that as a challenge for the Gulf region let me tell you this when you talk about the China route yes they they are well connected with the Kazakh Rae with the Russian real with the Turkmen sterols and with Iran we deal with Iran Iran either from Turkmenistan through ashgabat or from Aktau to the port one jelly and then Iran has a very good network of railroads so eventually if you think about the Chinese but could come by rail to India hmm by this route really which means it will go to charge a port it will go to basically act ow so go to from Iran to India oops caused by five is apparently absolutely absurd it could happen so basically this is good news for us because there are more routes more connection and you bear in mind there are many landlocked countries yes yes countries that would need this this gives them basically Iran will give them the sea connection yeah and the Revd Europe yeah okay this is me excuse me I found the map there's a three possibility northern that is a western China Kazakhstan Russia in EU central western China Kazakhstan caucus countries like Azerbaijan and Georgia Turkey and EU and the possibility of the South with a China South Asia Iran Indian Ocean okay great I'm glad you brought your research along I see a hand from a lady over there after I we gonna go to a final round of comments please go ahead yes I wanted to ask a question about this the challenges because I also chair or vice chair of the Global Agenda Council on anti-corruption and transparency and so I wondered on two things what as we are excited about the mobility that comes from this opportunity what what is being put in place to assure the issue of corruption that it will be a consistent way of addressing this across boundaries so things don't get too and don't disappear and the second thing is with all the terrorism going on in the world what provisions are being taken to take into account the security of the routes that are being proposed but you're a brave woman you suggested some difficult challenges corruption and terrorism well things that you know I know I you know inner rivalries among the countries with goodwill want to make something happen but there are external threats to that sure I don't know who wants to start mr. prime minister corruption and terrorism well thank you for bringing up this issue because indeed the Silk Road opportunity is a huge incentive in order to clean ourselves from these diseases it is corruption because with corruption it will be absolutely impossible to reach the level of competitiveness which would allow us to propose to the owners of the goods to choose different routes so the elimination of corruption is one of the main prerequisites for choosing one or the other route which means that this is a huge incentive and it incentivizes all the countries alongside different routes to tackle this this problem and their call and also likewise the anti-terrorism activities should be coordinated better and better without this it is impossible to develop this connectivity and mobility between these two parts of Eurasian continent thank you well peace a microphone is right there yeah thanks - boys Anatoly Russia so this everyone knows I literally write this great discussion about this one belt one Road initiative which is definitely strong to a political decision which will probably change the whole landscape from Russia Georgia Koko's Kazakhstan Arab countries in to me personally it's just one country meeting in this discussion is chained so my provocative question to you dr. Marvin is it coincidence now I would say just let me quickly respond to my friend I would say China has been the subtext in much of this discussion and I think if I'm not mistaken the Prime Minister did point out that the slowdown of the Chinese economy is having ripple effects all across the region and it's going to be a big challenge and of course the the I suspect what's behind your question is what are China's job political motives for going into Central Asia is it just purely about economics or is it more than economics and of course I suspect the correct answer is that there is economics and there's more than economics as geopolitical considerations also at play but the thing about the Chinese and this is just my personal view is that they're remarkably patient they're not in any hurry they believe in working slowly gradually and 10 years from now 20 years from now you have a whole new reality and we look at Southeast Asia how China has become our number one trading partner China whenever our number one trading partner then BOOM after it opened up we are now a number one trading partner channel so that that's the changes that's happening so anyway I see I see the clock moving as any one last pressing question this piece and then I'm going to give the panelists two minutes each to conclude so with their reflections on what's the big message then what I could give to the audience on the future before they before our session ends that's basically the last question for all of you for peace mm-hmm then is Kagamine Shepard Scott bellerose so a small remark also one in other countries missing this discussion bellerose especially as a major part of the moon like a northern part of the Great Silk Road so dear speakers what is your opinion about bells like a major trend which part of this nose and part of the Great Silk Road also because now China Group world corporation realizing the builders bigger investment projects at the industrial park near minsk holt gravestone now it's like the major investment proposition republic of bells thank you so I don't know who's under you're attached to his question in Belarus you can't go from Russia to Europe avoiding Belarus so definitely on the on the Silk Road and I think that that's part of of it and also Belarus is a member of Eurasian Economic Union so I think there's definitely a role for the Irish in this process and there's definitely benefit for Belarus from this process and they're always very close while Russia and a good economic partner so we definitely see a role for Belarus as well as for Russia so I think they're no pressing questions I'm going to invite and I'm going to go there maybe in a reverse order among the panelists and so I'll start with you salt and then I'll go to I think Andre then it's a much coverage and then the Prime Minister what what's the final reflection you want to put across to the audience about how you see is a prospects for Eurasia bearing in mind we've discussed the optimistic points we discussed the challenges what unbalance is your vision or what you see coming I might disagree with a lot of things about China we operated China for the past seven years disagree I I disagree with a lot of the news of a China where pessimism on tourism is live in China China is almost six point nine percent growth I mean that's good for anybody early today that one of the biggest growth is in Indonesia is almost seven China's six point nine India things about five no India seven point three million in real India in the seventh birthday in the seven point three yeah I mean so China in my opinion is definitely going to try the circuit China market is strong China had a double-digit growth which anybody can tell you that you cannot sustain double-digit girls it's impossible the Chinese local market is very big is absorbing anything that can produce the economy is good there are pessimism about some Western analyst analysts which I disagree with them we are operating we see growth in our business in China and in all the three locations with that in mind I think the prospect fourth circuit is great and I believe that as we as more and more containers pass through the route you will see the price eventually coming down very good so I'm very positive so very optimistic hundred I also quite positive on this I think we should recognize answering anatoly's question we should recognize China as a leading economic nation and definitely having probably access of facilities for infrastructure development they already held some Olympics in Beijing they will have Winter Olympics in Beijing after that they'll probably have free facilities to build infrastructure anywhere else in the world an Asian and some well so I believe that this process will will take place and I will definitely see some political motivation for this but I think we should recognize the growing role of China and then is outside international expansion particularly with the focus on on Asia and Asia to Europe cooperation so I'm quite positive I think things will take place and there will be development of this process in the next decades so it was much giving I don't know will you like it or not but I'm not so optimistic about China why good the different point of view no no I will tell to you because last 15 years our consumption of all commodities growing four percent per year last 15 years only because of China and let's say in 21st century first new for example iron ore big big deposit garages in Brazil was open 2008 before something similar was opened in 1986 could you imagine 20 years it was not dramatic investment to to hire an aria and it was done because of China and it was hundreds billions investment trillions investment worldwide because of his picked Asian of China and with growing 7% it will be completely all investment cup will be completely stopped because consumption will grow down dramatically dramatically that's why and we are quite active in China we quite not pessimistic we're really let's say worried because let's say 50% of production in China not profitable they donate I have meeting with Chaco just yesterday Chaka the biggest aluminium company of China they continue to produce but they lose money to say let's say cause production for charkha $2,000 per tonne of aluminium they sell 1,300 today and they are not going to stop it then going they are going to build new enterprise that's why today China killer of any any let's say metal origin or mining initiative that's why this big problem big and they're not going to stop such strategy they're not going to stop of course silk royal Silk Road has future of course but I agree with mr. question chairman or VTB the discretion of competition question because there are many way was how to buthe product or any any kind what you have to deliver from southeast that's why competition if we will give in silk rome better condition it will be more safe not that line i agree competition ok mr. prime minister you have the last word but unfortunately we have one minute left i'm sorry thank you I really believe that underlying trend in China is positive despite all ups and downs that they have experienced during the last recent period we believe that the competition which was created by the Silk Road initiative only drives countries towards better future and towards more competitiveness which means reforms which means positive changes alongside all the routes northern central and southern routes so I we believe that this will be a very positive change in on the Eurasian continent which will drive Eurasian economy to us more competitive more efficient economy thank you well I'm glad you use the word competition mr. prime minister because that was what I was going to conclude with and I think at the end of the day clearly there'll be definitely growing competition the region by the competition I think will lead to beneficial results and while there'll be ups and downs I believe that the regions we had this as an optimistic future for the region but I hope the discussion has brought out the complexity of the challenges that they're also the region also faces and this is of course a result of having a very distinguished panel so please join me now in thanking this very distinguished panel for their contributions

Channel: World Economic Forum

Views: 39,137

Rating: 4.7827477 out of 5

Keywords: world economic forum, WEF, Davos, Davos 2016

Id: E8Nqs_8JLis

Length: 59min 3sec (3543 seconds)

Published: Thu Jan 21 2016