Today.Az » Analytics » The influence of the Caspian Region on Central Asia
29 April 2014 [14:15] - Today.Az
By Claude Salhani- Trend:
Having heard the importance that commerce and trade plays in this region - this region being from the Caspian to the Levant -- some years ago an American magazine sent a team of reporters and photographers to do a major story on commerce and trade in the region.
On their first day on the streets of the bustling capital city, as the reporters made their way through the crowded bazaar, one of them saw a small boy, about six or seven years old, selling packets of chewing gum. The American reporter asked the young boy if he knew how much was one plus one.
Without any hesitation the young lad fired back: "Are you buying or selling?"
The answer may have surprised the American reporter but it was a natural answer for the people of the region who for centuries have handed businesses down from father to son, and who for centuries have turned to commerce and trade which flourished given the strategic location in which they often found themselves, along this important communication corridor on the busy commercial route that became known as the Silk Road.
The Silk Road is as busy today as it was in the days of Marco Polo, when the Italian explorer made his way from Europe to the Far East, and back, carrying spices back to Europe, passing inevitably through the Caspian region and Central Asia.
In fact the Caspian region today plays a far more prominent role linking Europe to Central Asia and beyond. This is true not only from an energy perspective but the Caspian region is also playing an increasingly important role politically, socially, as well as economically.
Only perhaps, given the changes, it should not be called the Silk Road any longer, but rather it should be re-baptized the "Silk Pipeline."
Because if by some miracle Marco Polo was somehow able to return and revisit the region today he would be amazed at the thousands of miles of pipelines that traverse the region, a phenomenon that of course did not exist in the days of the great explorer.
Indeed, the pipelines are in a manner of speaking the modern camel caravans, bringing essentials for a more comfortable life from the "Orient" - read here, Central Asia - to Europe.
Central Asia is today an important zone that is located between Europe and China and through which transits many of the goods destined for the European markets, as it was back in the days of the Silk Road. Only with the difference that that single dirt lane, probably nothing more than a dirt trail upon which the camel trains traveled, has today expanded into The Asian Highway Network (or the Great Asian Highway) a 141,000km network of roads running across 32 countries. It is being built with the intention of improving transport facilities throughout these nations and providing road links to Europe.
The Asian Highway Network is a part of the Asian Land Transport Infrastructure Development (ALTID) project being supported by United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
Add to that airline corridors connecting all major cities in the region and of course the Internet that has further brought the region closer together and closer to Europe on one side and the Far East and the United States on the other.
Central Asia today is gaining prominence, not only from a geographic perspective, because of its strategic location at a major crossroads where not only commerce meets, but where politics converge, crisscross and overlap.
Where else in the world would you get such political undertones and zones of influence and interests as diverse as Russian, American and Iranian? Not to forget the Europeans, the Turks and all other individual states, all vying for the greatest positions in terms of influences in business and economy and political importance.
Central Asia is a region surrounded by major players in geopolitics; just look at the map-Russia, China, India, Pakistan -four nuclear powers right there, and Iran hoping to join that club at some point in the near future. At some point the national interest of these countries is bound to clash over something or other. The region is not without its share of inter-regional disputes, such as which country owns what part of the Caspian Sea or yet existing territorial disputes that hopefully can be solved without further violence.
Last month we came very close to returning to the worst days the Cold War over the Ukraine and Crimea. And while we are still nowhere near a resolution in this issue, we have at least turned the corner and avoided a disaster. But there is still a long way to go.
The Caspian region is not only an oil and gas producer, but it is also a region through which oil and gas transits, coming from Central Asia and heading for Western Europe.
This is an important point as Russia does not permit energy to transit through its territory, so countries that produce hydrocarbon materials are more interested in having their goods transit through the Caspian countries.
Then there is the dark side of business, a scourge that alas has plagued every generation since the beginning of time. I am referring of course to narco-trafficking and the trafficking of human beings, a problem that needs to be given greater attention by the security services of the countries concerned.
These two issues, much like terrorism, require close cooperation by governments concerned, just as they cooperate in the fight against terrorism.
The region has become an area in which all the world is interested and looking at today.
Then in addition to oil and natural gas, some countries, such as Kazakhstan, have uranium and other riches found both onshore and offshore.
Additionally, Central Asia will also play a greater role in regional security as the United States completes its military withdrawal from Afghanistan. How that will change the balance of power in the region remains to be seen.
And what of China, the new kid on the bloc who is rapidly becoming the main consumer of energy in the world, surpassing the United States and Western Europe?
China's economy is growing at an amazing rate. And a growing economy means an expanding thirst for energy, especially oil and gas.
Amidst all these tumultuous changes, when we look at the region and how it is developing, the setting of pipelines through some countries that are not without problems or risk, there is no denying that Azerbaijan, due to its geographic location, political stability and modernization remains one of the safest investment in the Caspian, Caucasus and Central Asian region.
As one Azerbaijani friend put it, "We are the corridor between Europe and the Far East and Central Asia. This is why everyone is interested in us."
And in that corridor you will find some of the business marvels of this new era of commerce and trade, among them the Baku-Tbilisi- Ceyhan pipeline 1,700 kilometers, including about 450 kilometer section running via Azerbaijan, the 250 kilometer section via Georgia and 1,075 kilometer via Turkey.
The length of the Baku-Tbilisi-Erzurum (South Caucasus gas pipeline) is over 700 km.
The gas produced from the Shah Deniz field in the Azerbaijani sector of the Caspian Sea is transported via the pipeline. The gas is supplied to Georgia and Turkey. Azerbaijan also is a buyer of gas.
Last December, a final investment decision was made on the second phase of Azerbaijani Shah Deniz offshore gas and condensate field's development.
Gas from the field will first go to the European market. The gas to be produced within the second phase of the field's development will be exported to Turkey (six billion cubic meters per year) and to the European markets (10 billion cubic meters per year) by means of expanding the South Caucasus Pipeline and construction of the Trans-Anatolian Gas Pipeline (TANAP) and the Trans-Adriatic Pipeline (TAP).
Shah Deniz reserves are estimated at 1.2 trillion cubic meters of gas.
The silk road now carries not only oil and gas pipelines but people like Marco Polo, who if he was to travel in the region today, there are good chances that he would be doing so by rail rather than by camel train and more specifically he would be taking the Baku-Tbilisi-Kars railway that connects Azerbaijan, Georgia, and Turkey.
Claude Salhani senior editor at Trend Agency and a political analyst specializing in the Middle East, Central Asia and terrorism said at the seventh Caspian Oil and Gas Trading and Transportation Conference in Baku.