16:12 02.08.2021

Author ANTON ROVENSKYY

World-changing infrastructure projects

8 min read
World-changing infrastructure projects

Anton Rovenskyy, Master of International Relations, International Political Scientist

 

The agreement between Germany and the US on the Nord Stream - 2 appears to be one of the key events for the international politics in 2021. A lot of politicians and experts seem to estimate the project as a vital one, however there is a vast variety of other significant infrastructure projects, which may influence global politics and economics even in a more drastic manner. We provide a brief outlook of such projects in the material below.

 

New Silk Way (‘Belt and Road Initiative’)

Announced in 2013, the Chinese New Silk Road (or ‘Belt and Road Initiative’) project gradually becomes the world's biggest transit way, increasing a number of Eurasian countries involved. The economic effect of the project's realization is estimated over USD20 tn, with the PRC to become the main beneficiary.

A number of allegedly unrelated events and processes — be it the destabilization of the countries of Central Asia, the Near and Middle East, protests in Belarus etc. — are partly echoes of the confrontation around the New Silk Road. Nevertheless, the economic potential of the project is so large that any particular political cataclysm is able to call into question its further implementation and the strengthening of China's position in the global arena.

Ukraine can also use the project’s potential in a way more active manner, considering the benefits of its geographic location.

 

Projects in Myanmar

Myanmar, despite the 2021 winter coup d’etat, remains a strategic point for China and India considering the realization of large-scale infrastructure projects.

For instance, Myanmar can provide direct access for the PRC, its largest trading partner, to the Indian Ocean, which neutralizes risks of blocking Chinese transit through the Straight of Malacca. The project for the construction of a deep-water port in Myanmar and a special economic zone, which will be included to the New Silk Road project, is one of the Chinese priorities for the region. As for now, the official Beijing, considering its economic interests, blocks the pressure of the international community on the Myanmar new, post-coup d’etat, political regime.

In return, India is interested in Myanmar as a transit corridor in order to increase its presence on the ASEAN markets. It includes, for instance, the construction of the ‘Kaladan’ transport and economic corridor within the Indo-Japanese partnership, as well as the ‘India-Thailand’ highway.

In the near term, Beijing is set to be the main player in Myanmar economy, considering its profound experience in the realization of infrastructure projects in politically unstable countries. However, one should bear in mind the US interests, which may block such Chinese initiatives.

 

International ‘North—South’ Transport Corridor

In a particular way, the North-South transport corridor, which stretches for more than 7000 km and is set to connect the countries of the North Eurasia with India through Iran, competes with the New Silk Road, being both ‘cheaper’ and ‘quicker’. On the other hand, one cannot exclude the possibility of their mutual development and connection in the future.

The project was launched in 1999-2000, when both public and private actors from India, Iran and Russia had signed a set of respective agreements. As for now, the project is presented as a number of segmented transport sections, which are not connected into a single system due to a number of various reasons.

During the realization of the project, a number of countries, such as the Central Asian states as well as some Gulf monarchies (for instance, Oman is a signatory to a complex of agreements within the project). The main obstacle to the project lies within the lack of resources for the construction of infrastructure and low levels of mutual trade within the ‘India-Iran-Russia’ triangle, the founders of the initiative. By the end of the decade, one will see whether the potential of the North-South corridor will be dully realized. 

 

Northern Sea Route

In recent years, the Arctic region has become a stage for the US-Russia confrontation. In 2019, the Pentagon has presented the Arctic doctrine to the Congress, which also contains the variants to block the Northern Sea Route for both China and Russia. According to the document, Russia plans to use the Northern Sea Route not as an economic project, but as an instrument of influence on the key points and trade routes in the region. However, the scale of cargo shipping across the Route are constantly increasing — by 10 times in a recent decade.

One should point out, the development of the Northern Sea Route is an important element of the competition on the financially reliable LNG market of the Northern Europe, a target for both Russian and American companies. For these reasons, one should wait for a more brutal competition in the Arctic region between the great powers.

 

Nicaragua Canal

The preparatory works for the construction of the Canal, which connects the Atlantic and the Pacific, were launched in the late 2014. By then, the Chinese were considered as the main investor in the estimated USD40-50 bln project. The construction of the Nicaragua Canal would provide significant geopolitical advances for the PRC and would increase the Chinese trade and military expansion in the Central and South America. Obviously, the US are not interested in the project. Having in mind its profound experience in the Third World, the official Washington will use every instrument to block its construction.

However, such a scenario looks rather hypothetical. Nowadays, the Nicaragua Canal is frozen due to the financial problems. Anyway, the restart of such a big project in the international politics is the matter of principle, not the money.

 

‘Istanbul’ Canal

The start of the construction of Istanbul Canal, which will connect the Black and the Sea of Marmara, was launched by the president of Turkey Recep Tayyip Erdoğan in June 2021. The main motivation for its construction lies within the necessity to unload the Bosporus and reduce a number of risks related to the transportation of the explosive cargos. The construction of the canal is planned in 2027.

The main intrigue is whether the provisions of the 1936 Montreux Convention will be effective for the new channel. The comments of Turkish officials on the matter are rather vague and provide a wide room for diplomatic maneuvers of the official Ankara — a typical feature of the Erdoğan’s international relations. The renunciation of the Montreux Convention, considering the Istanbul Canal, which guarantees the free passage of civilian vessels in peacetime, and restricts the passage of naval ships not belonging to Black Sea states, will become an additional instrument of Turkish pressure on the countries of the region. Ankara definitely wants to hold such a trump card, however the number and quality of fallbacks and preferences for Turkey for the use of the Convention remains in question.

 

Leviathan

Leviathan, a natural gas field near the Israeli coast, with the estimated gas reserves more than 500 bln cubic meters, was explored in 2010. In 2019 the countries of the Energy triangle (Cyprus, Greece and Israel) have signed a treaty on the construction of the EastMed pipeline to provide natural gas to Southern Europe, with Italy being the biggest projected customer. In 2020, the gas from the ‘Leviathan’ was provided to Egypt, where it can be transported to Europe as LNG.

One should point out, EastMed project is not under the EU Third Energy Package, and in 2022 the official Brussels has to decide, whether the EU will provide funding for the construction of the project. USA support EastMed, as they consider the project as an alternative to the Russian natural gas in Europe.

However, EastMed is likely to face sharp reaction from Turkey, which in the recent years has become one of the main natural gas hubs in Southern Europe. EastMed will definitely strengthen Turkey’s regional opponents, therefore, one may project a big number of various intrigues considering the project. The dispatch of a Turkish military contingent to Libya in early 2020 in support of the so-called Government of National Accord clearly demonstrates that Ankara will actively discourage attempts to challenge its leadership in the Eastern Mediterranean.

 

TAPI Pipeline

The TAPI (Turkmenistan-Afghanistan-Pakistan-India) pipeline, with the estimated capacity of more than 30 bln cubic meters, has become a matter of interest in the 1990s, but the framework agreement on its construction was signed only in 2010 on the summit of the parties to the project in Ashgabat in 2010. By now, the necessary infrastructure for gas transportation and intake has been successfully built in Turkmenistan and India respectively, with the sections in Pakistan and Afghanistan being the most problematic. The construction of these sections was re-scheduled several times.

Despite the Taliban delegation, which is very likely to come in power in Kabul, holds negotiations with the official Ashgabat, providing all necessary security guarantees for the TAPI project, the start of the construction in Afghanistan is not the matter of the near future.

Nevertheless, TAPI may become one of the ‘construction sites’ for a ‘post-American’ Afghanistan and act as instrument to smooth internal tension for the achievement of a significant economic result. Moreover, TAPI may potentially cool down a long-lasting rivalry between two neighboring nuclear states — India and Pakistan. For instance, India may become the world’s biggest consumer of energy resources within the perspective of the current decade.

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