GRM 2010 GRM 2011

Abstract Details

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New Silk Routes of the 21st Century: Energy, Trade and Investment connectivities across Asia
Paper Proposal Text :

Very substantial and mutually beneficial connectivities have emerged across Asia in the areas of energy, trade and investments, which have replaced the traditional primarily West-oriented linkages that Asian countries used to have through much of the 20th century. These new links are the result of three significant political and economic developments that occurred towards the end of the last century:

(a) high economic growth rates in China and India;

(b) the energy potential of the Gulf and the availability of substantial investible resources, and,

(c) the emergence of the Central Asian Republics as sovereign states.

The massive increase in Asian energy demand has meant that the bulk of Asian oil and gas production is now consumed in Asia, and it is supply from the Gulf and Central Asia that will continue to fuel growth in the the rest of Asia in the coming three to four decades, thus ensuring an enduring energy-based connectivity.

This energy-related linkage is buttressed by burgeoning intra-Asian trade ties: between 2003-2007, increases in two-way trade between principal Asian countries and West Asia were of the order of: Japan-96%; China-366%; ROK-241% and India-729%.

High oil prices, coupled with increased Asian demand, have served to generate very substantial financial revenues in the Gulf countries, which are being utilised to fund major domestic projects in the areas of energy, infrastructure, welfare and industry, even as the countries concerned attempt to diversify their economies and equip their people, particularly the young, to play a constructive role in the knowledge economies of the 21st century. While these national development and welfare projects certainly provide new opportunities for the Asian corporate sector, a more interesting development is the increasing interest among the Gulf countries to direct their investments to Asian countries as part of new "Look- East" policies.

With these new connectivities , which have a mutually beneficial longterm value, Asian countries now have a direct and enduring vested interest in the security of the Gulf. In fact, with ongoing developments in Pakistan, Afghanistan and Iraq,and the emerging Saudi-Iran rivalry across West Asia, the security interests of Asian countries are seamlessly intertwined. These complex intra-Asian developments amidst robust Western interventions to sustain their own interests amidst the uncertainties of the Arab Spring, constitute a unique challenge for Asian policy makers to develop new approaches of accommodation and cooperation that, taken together, could constitute the basis of a new Asian century.