In 2017 the two countries with the world’s largest economies have been moving in totally opposite directions. The US took steps towards the loosening or severance of its ties to international institutions and arrangements—the UN, the Climate Change Treaty, NAFTA (North American Free Trade Agreement), TPP (Trans-Pacific Partnership) and the six-party Iranian nuclear treaty – and towards making America a more nationalistic, less outward-looking country. China, on the other hand, widened its circle of friends and embarked on projects and started initiatives intended to extend the reach of its diplomatic and economic influence.
By far the largest and most significant of these projects are the Silk Road Economic Belt and the Twenty-First Century Maritime Silk Road—conveniently shortened to One Belt, One Road. In keeping with his expression of profound admiration for China, President Rodrigo Duterte attended the projects’ rollout early this year.
The adjective that first comes to mind when one contemplates the One Belt and One Road projects is imaginative. The proposed One Belt seeks to re-install the Silk Road that made possible travel and commerce during the storied days of Marco Polo and Genghis Khan. Mention of the Silk Road evokes images of trade caravans and human hordes traversing mountains and plains and crossing rivers to bring people and products from the Far East to the Near East and Europe. Many centuries after its existence, the original Silk Road continues to impart its romantic imagery.
Another adjective that quickly comes to mind when contemplating the One Belt and One Road projects is gigantic. They will involve close to 60 countries on three continents—Asia, Europe and Africa – and a host of international institutions, including the Chinese-created Asian International Infrastructure Bank (AIIB). Considering that many of the Asian countries to be traversed by the Silk Road Economic Belt project formed part of the erstwhile USSR (Union of Soviet Socialist Republics), it is obvious that the project would not, for political reasons, have been possible prior to 1991, by which year Ukraine, Moldova and the former Soviet republics in the Caucasus region and Central Asia (Georgia, Azerbaijan, Armenial, Kazakhstan and Uzbekistan) gained their freedom. The Arabian Peninsula and Northeastern Africa will also fall within the ambit of the new Silk Road, as they did with its predecessor.
The third adjective that readily comes to mind when contemplating the One Belt and One Road projects is complicated. The projects will involve the participation and need the support of countries whose political systems range from democracy to dictatorship and whose economic systems range from capitalism to total State control. Thus, the implementation of One Belt and One Road will require, to the greatest extent possible, an apolitical and economically neutral approach on the part of its Chinese sponsor. President Xi Jin-Ping and his Beijing colleagues will have to navigate their way through the varied political and economic systems with utmost dexterity.
For political reasons, the present administration, which is headed by a president who feels profound admiration and strong friendship toward China, was expected to quickly indicate support for One Belt and One Road. The newly elected President Duterte lost no time accepting his Chinese counterpart’s invitation to the projects’ rollout.
But do One Belt and One Road have much economic significance for the Philippines? The answer is No. Most of Philippine trade is with Northeast Asia (China, Japan, South Korea, Taiwan and Hongkong), the European Union and the US. For its trade with Northeast Asia and the US, this country will have no use for the Twenty First Century Maritime Silk Road. And it will have no use, either, for it in Philippine export trade with the EU countries; the shipping routes through the Straits of Malacca and the Suez Canal have been in place for a long time. The Philippines has very little trade with the Central Asian and Caucasus-region countries.
The project to reinstall the Silk Road is an enormously romantic and richly historic undertaking. It deserves this country’s approbation and support. But in terms of economics and trade it has no practical significance for the Philippines.
E-mail: romero.business.class@yahoo.com