The Western Europe – Western China Megaproject!!

The Republic of Kazakhstan (Kazakh) is the ninth largest country in the world occupying a vast expanse of land in Asia.  A republic within the former Soviet Union, Kazakhstan shares borders with Russia, the People’s Republic of China and countries in Central Asia and is the world’s largest landlocked country.  Prior to the Russian economic crisis, its image in the eye of the world community had been rather positive thanks to the effort over and the result of national development.  But the fact that its major trading partner was Russia made it suffer from the repercussions of the economic crisis.  At any rate, oil and natural gas remain the major industries that generate the country’s revenue.  In 2015, Kazakhstan was ranked as the world’s top ten oil exporters.

Development is on-going in this country that engages in the modernization and restructuring of transport infrastructure, particularly the highway system which bears significantly on international connectivity.  In other words, it is an integration of road transport system linking Europe with Asia and allowing for road access in Asia – also the largest transport hub.  The megaproject involving this Western Europe – Western China (WE-WC) transcontinental road corridor is the result of cooperation signed by the governments of Russian, China and the European Union.

WE-WC Road Corridor measures more than 8,445 km in length, a distance which stretches from Saint Petersburg, Moscow, Nizhny Novgorod, Kazan, Orenburg, Aktobe, Kyzylorda, Shymkent, Taraz, Korday, Almaty, Khorgos all the way to cities in China such as Urumqi and Lianyungang.  More than 2,233 km of it are in Russia, 2,787 km in Kazakhstan and 3,425 km in China.

When compared with the existing routes such as the journey via Suez Canal which takes 45 days and the Trans-siberian train trip which takes 14 days, the trip along WE-WC Road Corridor from Lianyungang Port (on China’s Yellow Sea) to the border area of European countries only takes 10 days.  Given the fact that the megaproject aims to provide logistics services in the three main routes comprising China – Kazakhstan, China – Central Asia and China – Kazakhstan – Russia – Western Europe, one can see that Kazakhstan is becoming the logistics heart of Eurasia economically bridging Europe with Asia-Pacific and South Asian Economic Zone.

The megaproject’s objective is to streamline the infrastructure, economy and politics linking more than 65 countries throughout Europe and Asia involving more than half of world population, 40% of the world’s GDP and 75% of the world’ energy sources, not to mention the project value co-invested by financial institutions the world over, with no other than the World Bank taking the lead at more than US$ 2.125 billion.  As such, it is the world’s most expensive joint venture project.  Construction started in 2009 with completion preliminarily projected in 2014.  However, given a series of factors including labor protests, land dispute, financial corruption and the drastic economic slump in Russia and Kazakhstan, this has been prolonged until 2020.

At present, marine trade between China and Europe is worth more than US$ 600 million which reflects an increase in demand for Made-in-China premium electronics products as well as value-added goods in Europe and an increase in China’s demand for agricultural goods as well as luxurious goods from Europe.  Swift transport is therefore essential for such trade.  With the completion of WE-WC Road Corridor, transport of a huge amount of goods from China and Europe will be possible within ten days’ time (or merely five to seven days from Almaty, the largest city of Kazakhstan, to Warsaw, the capital of Poland) instead of 30 – 50 days by sea and 12 – 15 days by train previously.

A lot of economic feasibilities of this project have been assessed due to the fact that Kazakhstan is a landlocked country occupying a space more than 11 times larger than the United Kingdom and yet having an entire population of merely 17 million, which means a long distance between cities but a sparse population in each city.  The road corridor will certainly close the gap while allowing for a better city link and gradually improved infrastructure as well as inter-city economy and trade.  This is in line with the World Bank’s projection that the country’s transport industry will definitely be enhanced for the benefit of more than half of the country’s population.  Besides, it predicts that more than 30 million tons of freight worth more than US$ 900 million can be transported through WE-WC Road Corridor annually in 2020.

Be that as it may, Kazakhstan aims to become the pillar of Europe and Asia linking the East with the West, the venue of the WE-WC project where one could realize the consequence of how a country braces itself for and embarks on national economic development without hoping to rely only on oil and natural gas which generate the country’s major revenue.  This is because more than US$ 14 billion allocated by Kazakh government for the project are earmarked for logistics infrastructure development in countries with potential international connectivity and future international trade growth.  We might to wait until 2020 to see if the dream of the link between the Yellow Sea and Baltic Sea will come true.  It seems huge business opportunities from all corners of the world are definitely emerging.

Compiled by BLOG.SCGLogistics
Reference and picture credits  forbes.com, worldbank.org, kazlogistics.kz, slideshare.net/RobMactier, nineoclock.ro

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