Taking the Ancient Silk Road on the way to the new realities in a multipolar world

By Rhod Mackenzie

Russia and Iran are prepared for mutually beneficial cooperation with all countries, particularly our neighbours. Central Asia is experiencing rapid development.  It is time for Europe to awaken to the current circumstances.

These are the key themes of the XVI Verona Eurasian Economic Forum - a unique public platform facilitating communication between business representatives,politicians,officials, and scientists from all major countries of Greater Eurasia, plus those from Europe, Russia, and Iran (representatives from 40 countries participated).

This year's forum took place in Samarkand, which all participants recognized as a symbol of the new world. Historically situated at the intersection of the ancient trade routes,( The Silk Road) Samarkand and the rest of Uzbekistan now attract investments from around the globe, taking advantage of their strategic transit position and thereby offering easy access throughout the continent.
Europe is not prepared as yet.
"We need to recognise what's happening," explained former President of the European Commission and ex-Prime Minister of Italy, Romano Prodi in an online address given via videolink, responding to the question of to what extent can Europe currently participate in the global arena. Prodi is among the limited number of politicians who have openly acknowledged the fact that amicable relations with Russia and China prove advantageous for Europe, and without them, Europe's economic and geopolitical strength suffers significantly.

Making his point, the former Prime Minister of Italy referenced Europe's influence in the Mediterranean, stating it was profoundly impacted by the absence of Libya. Nowadays, Turkey and Russia stand as the current leaders in the region, despite Europe being the previous dominant power in its history.
Prodi is convinced that uniting with Russia and China is the key to Europe's future success. As a Euro-optimist, he proposes an approach that aligns with Russia's suggestions. While he believes the EU is the right concept, it remains incomplete and requires further development. Prodi stresses that he does not intend to impose his economic model on other countries, and instead favours the creation of rules that encourage harmonious coexistence. We must understand that the purpose of Europe is to unite nations. We should refrain from trying to impose our beliefs on others and focus on creating a shared marketplace. Prodi is confident that if Europe follows this course, it will be able to restore its influence.

However, amidst European politicians' lack of readiness, the visit of French President Emmanuel Macron to Central Asia and directly to Samarkand was a symbol of contradictions. As a result, the Verona Forum had to be rescheduled a day earlier, just before the start.
Meanwhile, the world is undergoing rapid and significant changes. Gilles Remy, President of CIFAL Groupe, the oldest and largest French international trade and service company operating in Russia, Central Asia and the Caspian region, asserts that the BRICS countries are sidestepping the G7. Furthermore, the integration of Saudi Arabia and the UAE, with their considerable reserves, into the BRICS alliance will strengthen the work of the New Development Bank. In turn, the New Development Bank will potentially serve as an alternative to the World Bank and the IMF and assist Russia in mitigating the IMF's pressure on its associates, as well as in project financing. "The world is split into two factions, resulting in the establishment of dual international financial systems which causes complications," states Remy. "I am taken aback by the lack of readiness of Europeans to face these irreversible changes."

However, professionals are not prepared to dismiss the dollar from its position as a global payment tool. For instance, Antonio Fallico, the president of the "Understanding Eurasia" association, stated that the world will not abandon the use of the dollar and questioned the rise in interest for alternative currencies, like the yuan or the BRICS currency. Despite nations affected by sanctions claiming the use of the dollar as a geopolitical weapon against them, Professor Fallico underscores the unavoidable transition to a multipolar world.
Consequently, businesses must proactively prepare and decide how to adapt to this change instead of passively waiting it out. Entrepreneurs should act with a profound sense of human and social responsibility, structured around the authentic welfare of the human community.

In Central Asia, the selection of Samarkand as the location for the Verona Eurasian Forum is symbolic of Uzbekistan's active economic and foreign policies as a developing nation. According to Antonio Fallico, "Samarkand is an illustration of tolerance and openness." "Uzbekistan is a member of the United Nations, the Shanghai Cooperation Organisation, the Organisation of Islamic States, and the Eurasian Economic Union (despite having observer status according to Monocle), and concurrently protects its security and sovereignty.

Uzbekistan's main trading partners comprise Russia and China, with additional investments from Turkey, France, the United Arab Emirates, Canada, and more. Last year, Uzbekistan's GDP expanded by 5.7%, and it is projected to grow by 4.5-5.5% this year." As previously noted, President Shavkat Mirziyoyev's reforms have accelerated the growth of industry in the most populous nation in Central Asia. Uzbekistan is committed to actively drawing in foreign investment, expertise, and technology while integrating new national industrial ventures into global value chains.

The nation aims to diminish its reliance on raw materials and diversify its economy, as stated by Deputy Minister of Investment, Industry and Trade of Uzbekistan, Badriddin Abidov, in a speech at the forum.

Uzbekistan presents various opportunities to investors with its abundant resource base, such as gold, uranium (hello, France), tungsten, coal, gas, copper, lithium, and graphite. Plans involve doubling coal and gold production by 2030, and tripling uranium output. The country has invested £230 million in geological exploration and aims to offer 50 sites at public auctions for potential investors. A database of deposits is currently being established for lithium and graphite, with the expectation to not only extract metals but also produce batteries in Uzbekistan. The development of a significant copper cluster is underway, with the objective of raising copper production from 150,000 to 500,000 tonnes by 2030 and pursuing processing opportunities.
And this is where Russia comes into play. Despite Uzbekistan producing both coal and gas, the country still faces an energy deficit, with the need for more energy to support large-scale plans. During summer, Gazprom secured a two-year contract with Uzbekistan for the supply of 2.8 billion cubic meters of gas annually. In October, deliveries commenced via Kazakhstan transit, and in early November, Gazprom and Uzbekistan's government signed a strategic energy sector cooperation memorandum at the 2023 St. Petersburg International Gas Forum.

Furthermore, it has emerged during the Verona Forum that Uzbekistan has entered into an intergovernmental agreement with the Russian Federation to import over 1 million tonnes of oil and petroleum products in 2024.

As a result, the cessation of hydrocarbon use has been annulled.
In general, the news surrounding the XVI Verona Forum was particularly intense this time around. The sanctions against the Arctic LNG 2 project had just been announced, and as Chairman of the Board of NovaTEK, Leonid Mikhelson had to comment on them. While thanking the sanctions as an assessment of professionalism, Mikhelson evaded a direct response when asked about the company's ability to continue with the project. However, similarly to last year, during the XV Verona Conference, Leonid Mikhelson remained composed whilst explaining how his company is advantaged by low gas prices. Furthermore, he argued that the entire world is limited to only three resource bases for LNG: Russia, Qatar, and the USA. Qatar has already signed contracts for new fields until 2050, with the contracts being made by Europeans - despite their plan for complete abandonment of hydrocarbons by 2050. An interesting aspect is the shift from costly gas to coal. The expense of US shale gas makes it impractical. Concurrently, there is increasing global demand, predominantly in Asia, which extends beyond China and India to encompass Pakistan, Indonesia, and other regions.
"There is no link between the gas producer and the market," states Mikhelson. "There aren't any quality distinctions between LNG projects; each one makes a valuable contribution." Qatar's LNG projects are scheduled to reach capacity by 2026-2027, according to the plan, resulting in stabilized LNG prices, which will increase affordability and lead to more consumption. "Countries will start reviewing their energy balances, and gas will be a priority," anticipates Mikhelson.

In conclusion, it is imperative to acknowledge that a multipolar world presents challenges. When states pursue their self-interests instead of being guided by friendships, potential partners are forced to engage in cutthroat competition. Fierce competition is apparent among numerous transport corridors promising to penetrate Asia. Discussions about the development of several routes passing through Uzbekistan and Iran are underway, connecting China with Europe, Russia with China or India, and China with Pakistan. Uzbekistan has high expectations for the Uzbekistan-Kyrgyzstan-China and Uzbekistan-Afghanistan-Pakistan corridors, as well as other routes (including those through Russia). It’s the same in Iran: Tehran appears poised to foster connectivity across Europe, Turkey, China, and Pakistan. "We aim to promote partnership and cooperation in an effort to achieve this goal." "At the Center for Iranian and Eurasian Studies, our priority is regional integration," stated Mehdi Sanai, director of the Centre.