The Silk Road Economic Belt is said to be the future of the developing world. Many are wondering what this means and how it can be useful. The Silk Road is actually a series of roads and waterways that connect China, Japan, India, Russia, and Central Asia. These countries along with other developing countries have been working on building roads, railways, and airports for years now, but this is the first time that these areas have been connected by a continuous road. This is an unprecedented achievement in human civilization. One would be hard-pushed to not make a claim regarding the importance of this.
Naturally, when discussing such topics one wants to take a realistic view and examine the possible outcomes of such a plan. If properly implemented, it is estimated that this could raise GDP growth rates in these nations by as much as 45%. That is a phenomenal amount, especially in today’s poor economy. For those who doubt the seriousness of such growth, well, you cannot just look at the economy of these nations and declare their economic future as bleak. That is not realistic at all.
On the other hand, the Silk Road may spell the eventual triumph of free enterprise around the globe. When more countries can freely travel to each other, businesses will grow, capital will expand, and nations will become more stable. Those who doubt that will never see this vision realized are simply not paying attention to what is being said here. Those who embrace such a view will dismiss the potential of the economic powerhouse that the road represents. Those who do take notice will undoubtedly affirm the value of the idea.
To understand the Silk Road as a development program, you have to understand the concept behind it. The road is designed to unite the developing world via a continuous transportation route. Each country along the way will be able to tap into the wealth of that respective region. Ultimately, this leads to economic growth, enhanced regional competency, and a stronger global outlook Silk Road economic belt.
For those who doubt the value of the Silk Road as a development strategy, allow me to explain. On the one hand, there are those who see the current global economic crisis as nothing more than the product of over-connectedness. Such people fail to understand that connectivity is not a bad thing by itself. Connectivity can be a tool for cooperation and it has even been used in promoting trade. Thus, it makes perfect sense that nations that are on the receiving end of connectivity should take advantage of it and develop faster economic growth.
On the other hand, there are those who think that the Silk Road project will simply increase China’s regional power. There are even some analysts who believe that the Belt and Road Economic Belt will reduce the tariffs and barriers that are hindering trade between the Asian countries. In fact, there are already numerous cases where tariff reductions and other barriers have been eliminated due to the development of the road. This means that more goods can be moved across the region without any hindrance or cost.
To make things better, the European Union and Japan are trying their best to help this endeavor. Last year, the EU set up a European Investment Bank to finance investments in key Asian countries. The plan is to make these countries become more marketable. Aside from that, the EU is also planning to boost its economic relationship with the Asian countries through the participation of its member states. Whether these efforts will actually bear fruit remains to be seen but at least they show that the direction of the world economy is not going anywhere.
For those who believe that connectivity alone can propel a nation to prosperity, I have a piece of news to give you. There are two other factors that will push a nation towards economic growth. These factors include internal factors and external factors. Internal factors refer to those within a country and those which can affect the citizens of a country. Externally, we are talking about global events and trends that can affect a country’s economy.