Speech by Dr. Ottokar Hahn

"The Silk Road to Mobility - Uniting Europe and the Pacific 2000+" Speech by Dr. Ottokar Hahn Former EU Ambassador to the CIS Brussels, 18 May 2000

For more than 1000 years, the Silk Road – a system of road linkages of more than 15,000 km in length – has facilitated the trade between Europe and Asia. The flow of goods and the movement of people was guaranteed by powerful states.

It lost its importance in times when the security of transit was no longer guaranteed. This happened for the last time in 1991 with the collapse of the USSR: there was no agreement of the successor states about the free flow of goods along the traditional trade routes (which had been strengthened in the meantime by the addition of railway lines and east-west air connections).

The discussion between the EU Commission and the USSR successor states about the revitalisation of the Silk Road already started in 1992. At the Brussels Conference in May 1993, which brought together trade and transport ministers from five Central Asian and three Caucasian Republics, the TRACECA concept was developed, the Transport Corridor EU-Caucasus-Asia, with the following objectives:

• to support the political and economic independence of the republics by enhancing their capacity to access the EU and world markets;
• to link TRACECA with the trans-European network (TEN) as the shortest distance and potentially the fastest and cheapest route from Central Asia to deep-sea-ship, serving world markets.

The globalisation of the economy, especially the fast changing conditions and the emerging markets of the Caspian and Black Sea, as well as the Caucasian and Central Asian regions, neighbouring China and Japan, require the continuous evaluation of all existing infrastructures and development strategies in the transport sector in view of:

• the future EU enlargement;
• the acceleration of new tradeflows;
• the diversification of cargo transit and supply options.

Such evaluations have taken place regularly since 1993 for TRACECA in working groups and ministerial committees. They culminated in the Presidential Conference in September 1998 in Baku on the "Restoration of the Historic Silk Route". Besides the 16 participating republics, more than 30 countries – including China and Japan – were present, as well as the representatives of 12 international banks and organisations.

The most important achievement of this conference was the:

"Basic Multilateral Agreement on International Transport for the Development of the Corridor Europe-Caucasus-Asia".

A permanent intergovernmental committee in Baku will pursue the goals set by this conference.

The EU and IFI have contributed with substantial sums to the implementation of about 30 projects in the framework of the Silk Road (55 million Euro by TACIS, 250 million dollars EBRD and 40 million dollars IBRD).

UNESCO, too, has recently joined the "route of dialogue".

To sum up, the economic benefits of the revitalisation of the Silk Road are:

• increasing trade;
• increasing tourism;
• improvement of the regional cooperation;
• cheaper transport costs and better efficiency;
• improvement of the investment climate for all areas along the Silk Road.

For CIS, it means additional income.

For the EU, there are comparative advantages because of savings in transport cost and an additional access to the Pacific Rim.

The problems which have to be overcome are less in the field of infrastructure development, and more in the "software" area, that is to say:

• a lack of standard rules and harmonised legislation to be aligned with international agreements;
• security risks;
• corruption;
• a lack of understanding between the various competent authorities;
• and a beggar your neighbour’s attitude which defers trade and tourism away from the region.

The cooperation with professional organisations like IRU will be rewarding for all sides to solve the existing problems and to bring the Silk Road Concept to its full success.

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