Politics of the new Silk Road begins

A DNA Analysis

WASHINGTON, DC: China’s and India’s high economic growth, combined with high oil prices is creating a new Silk Road in Asia, according to Middle East scholar and Fellow at the New America Foundation Afshin Molavi. In an Op-Ed column for the Washington Post on Monday, Molavi argues that the new geopolitical and geoeconomic landscape in Asia could also have serious ramifications in US policy.

German geographer Ferdinand von Richthofen first used the term Silk Road in 1877 to define a 8,000-km trade route that spanned China, India, Mesopotamia, Persia, Rome and ancient Egypt and helped lay the foundation for the modern world.

Today, a new Silk Road is being defined, thanks to the geostrategic interests of the US and Gulf countries in Asia, especially India and China.

For instance, trade between the Middle East and other regions in Asia has quadrupled in the past decade, according to a McKinsey report. Dubai’s ruler Sheikh Mohammed bin Rashid Makhtoum recently signed a $20 billion deal with Maharashtra in which his city-state would create three new townships across 40,000 acres.

The deal will not only give a shot in the arm to trade zones in India, but also create over one lakh jobs. “Meanwhile,” says Molavi, “Chinese, Korean, Indian and Japanese companies are active in Middle East real estate, consumer products and industrial investments. China and Egypt — another Silk Road laggard, just now sputtering to life — have pledged to double trade in the next few years.”

The booming economies in Asia, coupled with renewed American and Middle Eastern interest in the region could also have a long-term impact on US foreign policy, Molavi says. “What’s more,” he adds, “Chinese and Indian energy needs will ensure that the GCC region — the equivalent of the world's 16th-largest economy — continues to grow. By 2025, forecasts show, China will import three times as much oil from the Persian Gulf as the United States.”

A great benefit of the new Silk Road is its potential for expanding American security, Molavi says. “Security in the Persian Gulf is now as important to Beijing and New Delhi as it is to Washington. China will no longer be content to perch under America’s security umbrella, and the Indian navy now more assertively patrols the Arabian Sea. What’s more, China and India have far more influence with Iran than we do — and less tolerance for a disruptive war. Many of the Islamic republic’s political elites are also business elites, eager to find a way out of conflict.

Charting a path toward greater integration on the new Silk Road will probably be a more moderating force on the Iranian leadership than isolation. Iran’s president, Mahmoud Ahmadinejad, may not be too concerned, but more powerful conservative establishment players are more interested in stability (and making money) than war.”

It could indeed be that commercial interest could define foreign policy. After all, some of the biggest lobbyists at Capitol Hill during the historic US-India nuclear agreement negotiations were corporations such as GE, Bechtel, Raytheon and Boeing, all of whom could be potential investors in India's multi-billion civil nuclear energy sector.

“Washington might also consider efforts to lure Gulf Cooperation Council to our hemisphere,” Molavi says. “President Bush recently pledged to assist Latin American economic development. Let’s leverage our contacts to link emerging Latin markets to GCC capital networks — creating a global Silk Road. As the new Silk Road grows, more such opportunities will arise. But we might be too busy putting out fires to see them.”