Speech by Eva Molnar on behalf of Mr. M. Belka
Executive Secretary of the UNECE

The Silk Road - Linking Europe and Asia through trade
UNECE contribution to the revival of the Silk Road

Dear Ministers, Excellencies, Ladies and Gentlemen,

It is a great honour and pleasure for me to address you at this Ministerial session on the Revival of the Silk Road.

I am particularly pleased to see that this session of the 31st IRU World Congress is convened to address the Silk Road – a link between the Asian, European, Middle East and American economies, as well as to raise the importance of and the need to further remove persistent barriers to trade, transport and tourism along the Silk Road.

I would like to thank the Government of Turkey for organizing this Congress and the Ministerial Conference as well as to the IRU for their continued collaboration with the UNECE in further promoting the cause of road transport facilitation which is increasingly important in today’s globalized world.

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The route was established by the Han dynasty in the middle of the 2nd century BC in order to strengthen its military and political position in the region. Initially, it was used to secure access to the markets in Central Asia following military conquest of this region. This corridor evolved into a network including routes connecting to Northern India, the Black and Caspian Seas, the Arabian Peninsula and Istanbul eventually linking the Roman Empire with the Imperial court in China.

During its long history the Silk Road acted not only as a trade route but also as a means for exchanging information. Over this route travelled the concepts of mathematics and technologies for gunpowder, printing press and even sericulture. The Great Silk Road routes opened up economic and cultural exchanges and brought prosperity to countries along its way.

Trade was conducted by caravans that transported the goods from one border to the next where the goods were sold to a trader of the nationality or ethnic group of the adjoining region. This trader would then transport the goods to the next border. Thus Chinese traders would sell to Central Asians who would trade with Persians. They, in turn, provided the goods to the Syrians who would ship them to the Romans through Greek or Jewish traders. While goods moved slowly under this system, they produced substantial profits for the middlemen with limited risks.

SLIDE 3
Thus, in many ways, for more than thousand years, the Great Silk Road linked many countries through peaceful activities such as trade, culture and spiritual exchange. It remains famous even today due to the opportunities it provided for economic and cultural exchanges between the Western world and the orient and the prosperity it brought to the countries along the route. Today, at the beginning of the 21st century, countries along the Route as well as international financial institutions and the private sector are working together to revitalize and expand the Silk Road to reach out to wider communities.

However, current efforts to revise parts of this network are confronted with problems of political integration, significant financial risk, transshipments at the borders and competing sea routes.

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The historic example of Silk Road demonstrates that economic relations, trade and tourism can not flourish successfully without an adequate infrastructure. This is one of the reasons why European countries just after the Second World War, recognised the necessity to establish an internationally agreed road network in Europe in order to facilitate, develop and promote international transport and trade among themselves. During the past 60 years the UNECE has offered to its constantly growing constituency a unique centre of excellence for developing international regulations, standards and norms as well as a forum to help translate political will and cooperative efforts into action.

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The first notable step in this direction, since the creation of the UNECE in 1947, was a joint Declaration in 1950 which defined the E-road network. This declaration was replaced in 1975 by the European Agreement on Main International Traffic Arteries, named the AGR. The ultimate objective of defined itineraries is to create the most complete grid of international roads and to ensure the continuity and coherence of the network which today comprises some 250 roads with a length of more than 150,000 kilometres. In 2001, the « E » road network was officially extended to the Caucasus and Central Asia but it stopped at the borders of Asian countries. It was therefore important to extend this network beyond the limits of the UNECE region. This was realised in 2003 with the adoption of the Asian Highway Network Agreement in the ESCAP region.

Even though the geo-political realties in Europe have changed significantly since its creation, the AGR technical parameters and objectives pursued by it continue to remain important. The continuous evolution of the network is a clear proof of that, and both itineraries and technical parameters of « E » roads are constantly being updated. The AGR was the first international agreement that specifically defined and set up an international infrastructure network. Since then, other legal instruments completed the transport network: rail agreement (AGC) in 1985, combined transport agreement (AGTC) in 1991 and inland waterways agreement (AGN) in 1996.

Transport movements between Europe and Asia today are in many places blocked by dilapidated roads, non-existing or insufficient railway links, are very often trapped by complicated border controls or stuck in congested ports. This is why the idea of a revitalisation of the Silk Road is so appealing – it is seen as necessary to improve transport connections and expected to enhance opportunities for the land-locked countries of Central Asia and Eastern Europe to reap the benefits from these improved transport connections.

With this objective in mind, the Ministers of Transport and senior officials from 19 European and Asian countries including China, Iran, Russia and Turkey, signed a Joint Statement on Future Development of Euro-Asian Transport Links on 19 February 2008. The Statement endorsed priority projects which have been identified through the joint work of UNECE, UNESCAP and 19 countries from Europe and Asia. The objective of this joint undertaking was to identify new and those inland transport routes between Europe and Asia which need improvement. This exercise resulted in 230 priority projects worth 43 billion $US. These projects aim to overcome infrastructure bottlenecks which currently limit trade between Europe and Asia and could seriously hamper its expansion in the near future. Furthermore, these projects also envisage reconstruction and maintenance work on neglected roads, scarce rail links, congested ports, and cumbersome border crossing procedures.

Mr. Chairman, distinguished delegates,

High-quality transport infrastructure is necessary not only to foster trade and promote economic development, but also to ensure that traffic of goods and people is carried out under safe and secure conditions and in an environment where the conditions of loyal competition prevail.

In this regard, the UNECE played a pioneering role by developing various agreements and conventions aimed at harmonising different rules, norms and standards for the region. Some of them have been globally accepted and implemented, such as those on construction of vehicles and transport of dangerous goods. There are more then 56 transport agreements and conventions administered by the UNECE, and I will refer only to those main ones which are known to you in the area of road transport:

• TIR convention;
• European Agreement concerning the Work of Crews of Vehicles Engaged in International Road Transport (AETR) which is being amended to harmonise its provisions with the EU Regulation concerning driving and rest times;
• Convention on the Contract for the International Carriage of Goods by Road (CMR), soon to be extended by an Additional Protocol which will allow the use of the electronic consignment notes. This Additional Protocol was adopted on 20 February 2008 and will be open for signature on 27 May 2008;
• International Convention on the Harmonization of Frontier Controls of Goods of 1982;
• Agreement on the International Carriage of Perishable Foodstuffs and the Special equipment to be used for such carriage (ATP).

Without these key international instruments, road transport and trade would not have achieved such an impressive growth. However, in order to make the above conventions and agreements really beneficial, two significant conditions need to be met - countries should join these legal instruments and then responsibly implement their provisions.

SLIDE 9 and 10

In this respect, I have to mention two major challenges we are facing today. First, not all countries along the Silk Road have become Contracting Parties to the conventions and agreements. For example, we are looking forward to China's accession. The importance of that cannot be overestimated, given the key role of China in the revitalization of the Silk Route. Second, the implementation of these legal instruments in certain countries leaves much to be desired. Let me stress here that the UNECE is always ready to provide assistance in training and capacity building activities, but, at the end of the day, it is up to the countries to ensure the smooth application of legal provisions.

I am also aware that these instruments do not address all problems and concerns that carriers continue to face today. These include significant increase of fuel prices, problems with visas, congestion at frontiers, limited number of transit authorisations etc.

Slide 10 illustrates one of the challenges – cost of freight and transit time for shipments to and from Central Asia. These costs to three destinations (Benelux, Moscow and Istanbul) shown on the slide as “normal” depict estimated costs for border crossing standards that could be achieved only with standard improvements in border management, customs, visa and other transit conditions.

SLIDE 11

Regional cooperation and integration are essential key for success. Western and Central Europe countries provide many examples of benefits and prosperity from enhanced cooperation and integration which prevailed over centuries-old animosities, differences and conflicts. These and other regional experiences show that regional trade and transport cooperation, economic reforms and liberalization as well as “good governance” reforms provide the most immediate and visible results.

In addition, UNECE is committed to continue to work towards reaching consensus for all those unsettled issues which are in our area of responsibility and competence. These include further facilitation of border crossing and harmonisation of rules in road transport, focusing our attention on the Euro Asian Transport links, including the Silk Road. In this regard, the UNECE will continue to cooperate with UNESCAP, the IRU and other stakeholders. This is certainly expedient, given that Central Asia currently transports a mere 1% of the $ US 1,000 billion-plus trade between Europe and Asia, according to ADB. The creation of transport infrastructure and further road transport and trade facilitation is also highly expedient for the economic development of, in particular, landlocked Central Asian states.

Mr. Chairman, distinguished delegates,

I sincerely hope that your discussions, exchange of ideas and workshops during this Congress will provide an additional impetus and reinvigorate efforts of all stakeholders to ensure that the Silk Road continues to provide a link between economies of Asia, Europe, Middle East, and further with other parts of today’s globalized world. The outcome of this Congress should reiterate the importance of regional cooperation and integration as well as international support to efforts of the countries along the Silk Road to revise this ancient link. Safe, secure, environmentally friendly road transport is one among the necessary preconditions for faster economic development, stronger prosperity, poverty eradication and peaceful co-existence between regions and nations in Central Asia as well as elsewhere in the world.

Your contribution to this challenging but admirable task will always be supported by the United Nations and international community.

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