Is there potential for creating a Eurasian value zone or Greater Eurasia as an economic pole?

Is there potential for creating a Eurasian value zone or Greater Eurasia as an economic pole?

Three cost zones

In the previous material “What do economic poles look like in facts and figures”, the state of foreign trade relations was examined in some detail, which allows us to say that today we have three full-fledged cost zones.

Chinese: the economy of China and the countries of Southeast Asia, with a foreign trade turnover of 13,37 trillion or 42% of global trade. At the same time, the depth of penetration of countries into trade with each other is 48%.

American: the economy of the USA, Canada and Mexico, with a foreign trade turnover of 7,44 trillion or 23% of global trade. The depth of penetration of countries into trade with each other is 65%.

European: European Union, Southern Balkans, Britain, Norway, Switzerland and Turkey, with a foreign trade turnover of 8,76 trillion or 27% of global trade. At the same time, the depth of penetration of countries into trade with each other is 50%.

There are no analogues of such trading systems in the world yet, and here we, in fact, see the very “poles” that are discussed by different authors on different platforms.

The United States, having cross-trade turnover between the European and its own value zones of 12%, almost completely controls the military and political sphere of Europe, which allows them to count on a potential merger into one supercluster. Actually, this is discussed directly and openly, officially and expertly.

China, on the contrary, from the point of view of military-political control, does not have such a base in the Southeast Asian countries, but has a trade dominance in trade with the Southeast Asian countries (from 22% and higher by country). Beijing is trying to compensate for its military-political influence through the conceptual ideas of the “Community of Shared Destiny” and the network of “One Belt, One Road” projects.

There is little doubt that with complete Tolstoyan “non-resistance” on the part of Europe, its political elites will come to the creation of a single value cluster with the United States. This will ultimately give, and IMF forecasts here only provide additional argumentation, two cost macroeconomic zones, controlling 52% (American-European) and 42% (Chinese) of world trade.

At the same time, the penetration depth of the Chinese will still be the same 48%, while that of the Euro-Americans will decrease slightly - to 43%, since the US has higher trade diversification than the backbone of the economies of old Europe.

Each side sees the development of these structures differently.

China aims to include Russia, Central Asia, Azerbaijan, Iran and the northern part of the Middle East (Iraq - Syria - Lebanon) into its value zone, while having Africa as an additional resource base and potential sales market.

The United States aims to decouple the entire Middle East from Iran, connecting it with the Indian markets into a third macrocluster, a balancer. Prevent China from completely including the Central Asian economy in its zone, and join the Transcaucasus to the European trading system, preserving the position of North Africa as the EU's raw materials sector and strengthening the import of raw materials from South American countries.

Everyone is paying attention to the issues of Ukraine and Taiwan, now Israel has been added, but in reality, the United States and Taiwan have reduced trade turnover by almost 40% and continue to reduce it even in the field of high technology. The base is trade and value, and foreign policy maneuvers do not always directly correlate with these processes.

Pole of Russia

Knowing the positions outlined above, let’s try to describe our Russian position at this “celebration of life.” Judging by the “One Belt, One Road” summit in Beijing, Moscow intends to work vectorially not to the East, but to the South. We don’t want to go to the Chinese macrocluster (or we don’t want to yet). The question arises about what model of creating your own separate “pole” between two cost “monsters” is possible and realistic. We see that China is not the United States; Beijing does not put pressure on Moscow like the United States does on Europe, allowing everything to take its natural course.

Let's see how trade relations are built between Central Asia, Iran and Russia. We don’t have that many countries, so the indicators don’t need to be compiled to the same extent as in the previous material.

And here it is necessary to make an obligatory remark that the cost zone does not necessarily have to be described by mega-indicators. For example, the United States has a common “own” value zone - this is about 20% of world trade turnover; we and Belarus also have a common value zone - very small, but our own. Another question is how this value zone feels between large millstones, what are the development strategies and reserves.

It is also important that Russia still trades hydrocarbon raw materials as its base. This is a “raw materials curse,” but in some cases it’s not really a curse, since the value of 1 dollar spent on oil is higher than 1 dollar spent on an iPhone. Water in general also costs pennies, but what happens if you remove water from sale?

Foreign trade of the countries of Central Asia (or in the old fashioned way - Central Asia) fluctuates around a value of 0,205 trillion. dollars. At the same time, trade within the region is less than 5% of the total - 0,010 trillion, trade with Russia: ±0,041 trillion (20%), with Turkey and Arab countries - 7,3% each (0,015 trillion), China - 0,052 trillion (25 %) and the European cluster 0,047 trillion or 27%.

Due to sanctions and falling prices, Russia’s foreign trade has decreased to 0,758 trillion from the record year (and apparently the last record-breaking year) of 2022 – 0,850 trillion. Structurally, it looks like this so far: European trade - 0,260 trillion (30,6%), Turkey - 0,063 trillion (7,4%), India - Pakistan - Bangladesh: 0,026 trillion (3,1%), China - 0,190 trillion ( 22,4%), Southeast Asia - 0,094 trillion (11%), Africa and Latin America - 0,020 trillion and 0,025 trillion (2,4% and 2,9%), Middle East and Israel - 0,029 or 3,4%. Trade with Belarus is growing decently - 0,50 trillion and 5,9%, and quite indecently with Iran - 0,004 trillion and 0,5%.

If it were not for sanctions, then we could even be happy about 20% of mutual trade with Central Asia, since in 2018–2021. the numbers were 30% lower. But the problem is that if with Belarus we are based on trade turnover of domestically produced products (by the way, in 2010–2018, a third there was “re-export”; now it is based on production), then growth in Central Asia is associated with parallel imports.

On the one hand, in theory, we can simply issue targeted loans worth $45 billion to residents in Central Asia in order to increase the level of trade turnover within these countries with Russia to 50%. However, this will not be a value zone, but a Central Asian trade hub for remaking nameplates, re-gluing boxes and re-stuffing packing lists. Actually, we will not increase our foreign trade turnover either, since we will be covering the shortfall in turnover from European trade.

The second bottleneck of our mutual trade is that the entire total trade turnover of the Central Asian countries relative to the total Russian one is 5%. For Southeast Asian countries, relative to China, this is above 25%; for Mexico and Canada, relative to the United States, this is above 23%.

It cannot be said that the situation with the creation of the Eurasian value zone looks hopeless. If we take average statistics, then to obtain a result in a 7-year cycle in the form of production (and trade) of products in joint ventures, taking into account the growth of the Central Asian economies of 6% per year, to increase domestic turnover to 50% or +45 billion dollars (t i.e. increase in trade in own products) capital investments of 92 billion and a subsequent system of revolving credits are required. That is, it does not look like something overwhelming and unbearable. It will even be possible to send some migrants back to work there later.

But China is going to build exactly the same thing there, and partially sell what it produces to us in our own markets. The Central Asian countries themselves will not refuse to deal with either the European zone and Turkey, or even less so with China. And other players wouldn’t refuse. Europe buys the most and has the most luck (27%), but does not seek to increase its share, China gives 25% of turnover and is ready to increase its share to 50%, Russia has 20% of turnover, but does not provide programs similar to Xi’an the summit in May of this year.

Then capital investments must somehow be included in the overall growth of consumption in the region and, above all, in our country. Moreover, such indirect, and in some cases direct competition with China will inevitably raise the question of additional investments in infrastructure, since you are building and electrifying the route more for yourself than for your good neighbor.

Now China offers approximately the following in the region: China invests in logistics, industrial production and consumption, Russia provides this with additional raw materials and generation, creating additional and stable income for itself. But in trade we will receive imports from the region that are in fact Chinese.

Which option is better?

Create your own cost zone by getting involved in competition with China, or go for the Chinese option. In fact, based on the current negotiations and contracts, it looks like we have agreed to the Chinese option. If we take an analysis of the speeches in Beijing at the “One Belt, One Road” forum, then we are talking about the option of “gnawing through” the construction of a common cost zone “Greater Eurasia”.

If we talk about the poles and cost zones, then Iran is asking to enter our markets; its market is almost 90 million people. The total trade turnover in foreign trade is $100 billion, of which 60% are the markets of China and Southeast Asia, 20% are the Middle East, 4% are Russia and 2,5% each are the countries of Central Asia and India. Iran plans to increase trade turnover with India to $30 billion, but these are raw materials supplies that are more competitive with us than vice versa.

Taking into account the Central Asian countries, at the current sad 6,5 billion dollars, the total trade turnover with Iran will have to be raised not just significantly, but very seriously - to 47-48 billion dollars. This requires a corresponding addition to Central Asian capital investments of $96 billion and similar reserves for working loans. It should be noted that Iran is a unique food hub in the Middle East. Through the grain deal, Turkey filled its entire north with flour, and the flour could have been ground both in Iran and here.

Does it seem unrealistic to create your own “northern” or “central” value zone, which will work between the millstones of the trading megasystems of the West and the East?

In money, this is $27–30 billion per year in capital investments for five to six years and $23–25 billion in revolving loans annually from the third to fourth years of the program. No, it doesn’t look like it, especially if you look at the projects that were financed by us for years and for years disappeared somewhere. It doesn’t look like it will be financed on even a minimal share basis. The corridor “to India” with a turnover of hundreds of billions looks unrealistic and incomprehensible, but its own cost zone does not.

Your own zone of value is stability and independence, which, on occasion, can be converted into geopolitics. This is not synonymous with sovereignty in a world that is divided into large clusters, but an important support for independent decisions. And it is very important that the calculated potential for this still exists. It is even surprising that it is possible based on the indicators. Usually in our time it is just the opposite.

But what’s sad is the passing of time. Such initiatives should be accompanied by the elaboration of issues like the Chinese declaration at the Xi'an Forum, as well as a value and conceptual framework akin to the Chinese ideas of the “Community of Shared Destiny.”

The author recently with interest analyzed the results of the “One Belt, One Road” forum in Beijing, where Moscow not only did not follow the ideas of the “Community of Shared Destiny”, but directly stated that it was returning to the concept of “Greater Eurasia”. And taking into account the millstones this concept falls between, it was very interesting to look at both the millstones themselves and the potential of the value of the Eurasian zone in numbers. Strange as it may seem at first glance, the potential of the project is not illusory even between the millstones of such a scale.

How much time we have to provide our neighbors with a program of this kind will most likely be determined in the coming days at the APEC summit. The summit will be devoted not so much to regional issues as to a discussion of the principles of coexistence of the American-European and Chinese clusters.

If the parties come to a framework agreement, which is not predetermined, then China will become more active in Central Asia, and we will simply face the fact that the Chinese cluster has become “Chinese-Russian.” This option is prescribed in the IMF analytical documents.

If such agreements or prototype agreements are not concluded, then the next six months can be tried, among other things, to be spent on a program like the “Russian Xi’an”.

If it doesn’t work out, and again everything traditionally moves “to the right,” then you will have to forget about your cost zone and build their concept together with the Chinese, and pragmatically put aside your ambitions.
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  1. +4
    16 November 2023 05: 07
    About ambitions, I liked them, which suddenly have to be put aside pragmatically
    1. +3
      16 November 2023 12: 11
      and we will simply face the fact that the Chinese cluster has become “Chinese-Russian”.

      Simply "Chinese" because:
      The respected author offers a completely sound and implementable idea. However, the mental level of those who were tasked with carrying out all this will not allow this to happen.
      The director of the administrative department of the Ministry of Finance transferred 3,8 million rubles to a telephone scammer. The swindler introduced himself as a bank employee and convinced the official to move his money to a supposedly safe account.

      Telephone scammers stole 1,2 million rubles from the Deputy Head of the Federal Tax Service (FTS) of Russia, Svetlana Bondarchuk.

      Are you talking about the global redistribution of trade? laughing
  2. +1
    16 November 2023 06: 40
    . If it does not work out, and again, according to tradition, everything will move “to the right”, then you will have to forget about your cost zone and build their concept together with the Chinese, and pragmatically put aside your ambitions.

    Well, when did anything work out in the economy? Recall the main strategic objectives and national goals, such as the May Decrees (2012-2020) and National Projects (2019-2024). Happened?
  3. +8
    16 November 2023 06: 54
    but in reality, the United States and Taiwan have reduced trade turnover by almost 40% and continue to reduce it even in the field of high technology

    And the trade turnover between China and Taiwan remains quite significant (almost 1,7 times higher than that with the Russian Federation).
    We don’t want to go to the Chinese macrocluster (or we don’t want to yet

    Judging by the range of goods that surround the vast majority of us, we are already “flying with a whistle” into this macrocluster, and everything else is just words and intentions...
    In money, this is $27–30 billion per year in capital investments for five to six years and $23–25 billion in revolving loans annually

    If all problems/projects were solved by routine allocation of funds... As a rule, a lot more is needed.
    How much time do we have to provide this type of program to our neighbors?

    It was 30 years...
    I think about five to seven years, no more. Then the round of American-Chinese confrontation will enter its most acute, possibly hot phase (there will be no time for pro-Jects).
  4. -4
    16 November 2023 07: 17
    We were simply thrown out of two cost zones - American and European - but this did not become a disaster for Russia, for some reason. Strangely enough, the Russian economy has shown stress resistance to external factors, reasons beyond its control.
    1. +10
      16 November 2023 07: 36
      Quote: tralflot1832
      but for some reason this did not become a disaster for Russia.

      We know why. Imports have been replaced. On the Chinese!

      True, if something happens, China will have no one to replace it with.
      1. -4
        16 November 2023 08: 09
        Stas157 We are not alive by the Chinese alone if we look at Russia’s foreign economic activity. Sometimes the CU and other operators are allowed to publish reports on foreign economic activity. They do not transport oil and grain from Russia by containers.
        1. +6
          16 November 2023 09: 27
          Quote: tralflot1832
          Stas157 We are not alive only because of the Chinese if you look

          Recently looked at the hardware store... everything is Chinese! Even self-tapping screws, not to mention screwdrivers and axes. The spoons and forks are cool, my brother and I recently grabbed them on sale. Whose do you think it is? I haven’t seen any Russian ones at all.

          So I started thinking. Will we survive if “China” suddenly collapses? After all, we import everything. Cars, computers, TVs, telephones, household appliances, components, machine tools... And everything is mainly from China.
          1. 0
            16 November 2023 10: 51
            Stas 157 On the shelves you see goods from group B (the so-called galoshes), I’m still working and I see goods from group A. About which Putin said: We had a great defense industry created by our grandfathers and fathers. (which we produce ourselves and not only from Chinese components). Russian nails, self-tapping screws, bolts, nuts, drills are not difficult to find, but it will be somewhat more expensive. I myself was beside myself once when my key for 32 “came apart” in size. I just took this key, bent it in a vice and brought it to a meeting with the boss. The head of the purchasing department had a pale appearance and an upset heart; our operation department had no more problems with the tool.
  5. +7
    16 November 2023 08: 22
    There are too many ifs in the article. And there are no options, and “if not,” then what?
  6. +6
    16 November 2023 08: 26
    The “Russian Pole”, to our great regret and shame, is absolutely impossible. Such a pole needs two strengths that are available to the leader and, so to speak, the “master” of this pole. The first is a fair amount of military force, since the other poles will constantly test the edges for strength, and the participants will squeeze out of each other what they have to. Both sides will need to be mercilessly hit on the paws, and they must always understand that another blow will follow as soon as they forget. It is there.
    And the second is economic power and the ability to steer the economy. There is not even a trace of this; no amount of advertising and retention of the remnants of the Soviet military-industrial complex with little modernization will change the real situation. This is a consequence of the main reason for the completely hopeless situation, namely, the absolutely inappropriate composition and completely inappropriate ideology of our existing elite. So we completely and completely missed this historical chance, and there are no prerequisites for the fact that we will be able to do anything at the time of the formation of a new world configuration. There is simply no one to do it. THESE guys are basically incapable of the necessary movements, and nothing else is visible in the waves.
  7. +2
    16 November 2023 13: 32
    Here you need to understand that economic zones are not something immutable; their borders fluctuate in accordance with changes in the military-economic potential of the leading players. Right now, the United States is blurring its former economic zone towards China, and 60 years ago the economic zone of Europe in Africa was blurring towards the USSR in the same way.
    So there is no need for fatality, it is inappropriate here. Build up your strength and you will have a zone.
    1. 0
      16 November 2023 21: 39
      Quote: Conjurer
      Build up your strength and you will have a zone.

      And the existing forces will be complacent and watch you grow, right?) Yes, that zone was blurring towards the USSR. The USSR paid for this moment a price that no one in the world had ever paid. A sea of ​​blood and a mountain of bones of their best people. Only so that after a couple of generations all this is mediocre... eh...
  8. +1
    16 November 2023 14: 17
    The unification of the EU and the United States into a transatlantic alliance is unlikely due to the intra-class contradictions of big capital, and even more so after the creation of the European Army and the creation of a European military-industrial complex under it, which is associated with various production secrets. Then the EU would have thought a hundred times about relations with the United States after their sabotage of the Nordic Streams and other channels for the supply of cheap energy resources, which does not reject close allied relations in the presence of common interests. In the foreseeable future, the USA and the EU are two world centers.
    The political economic potential is steadily growing, and the program of relying on the domestic market and external economic expansion by reducing the spheres of influence of the first two - the USA and the EU - leads to inevitable “friction” between the three world centers and the redivision of the world into spheres of influence.
    Any tectonic movements of the three world centers will inevitably give rise to “splinters” in the form of regional centers, one of which could be the Russian Federation in the event of victory, as great and honored citizens say, in the war for survival with the collective West in Ukraine. In the meantime, there is a process of gradual “plucking” of the Russian Federation in the Transcaucasus - Georgia, Armenia, Azerbaijan and in Central Asia - Kazakhstan, Uzbekistan, Turkmenistan with its gas potential, through investments in the mining and processing sectors of the economy. The rebellion in Kazakhstan, financed by Western investors, in order to tear it away from the Russian Federation even required the deployment of CSTO troops. It is clear that this was only the first “test of the pen”, especially since after the collapse of the USSR, fertile soil arose in all post-Soviet state organizations due to the emergence of national classes of the bourgeoisie and the implementation of nationalist policies - the state language, the Latin alphabet, the revision of history, the creation of national heroes and etc., etc. They are doing everything to isolate themselves from the Russian Federation as far as the economic interests of the local national bourgeoisie allow.
    As one well-known wealthy former citizen of the Russian Federation said, offer a price that is impossible to refuse, and whoever can offer such a price will serve the nationalist capital.
    1. 0
      16 November 2023 21: 42
      Quote: Jacques Sekavar
      Union of the EU and the US in a transatlantic alliance is unlikely

      It's crazy!) With your connection)) Actually, the United States tried to unite with the EEC quite a long time ago. They found out that the EU could subjugate them, they realized it, so now the United States is actually eating up its former allies, and what they certainly are not going to do is enter into an alliance with their snack. How can you not call your sandwich an ally and friend...
  9. +2
    16 November 2023 14: 20
    Apart from Belarus and Iran, the article does not mention a single country that is ready to join “our cluster.”
    And this is not by chance.
    No one is burning with desire for something.
    Even members of the EAEU - Armenia, Kazakhstan and Kyrgyzstan.
    1. +4
      16 November 2023 14: 43
      I am more surprised that Iran is turning around so slowly and so creakingly. We have not been able to sign a new trade agreement for 5 years. It would seem that times have changed and all this traditional foundation should reduce its influence, but no. Time, not time, the cart hardly moves. And it seems that at the political level everything is declared as it should be, Iraq and Iran have been designated, but at lower levels everything is so tight.
      1. +2
        16 November 2023 17: 47
        I am more surprised that Iran is turning around so slowly and so creakingly.

        Objectively, it turns out that Russia and Iran are competitors in world trade.
        And no political statements or wishes can cancel this.
        Unless you trade at a loss for political purposes.
      2. 0
        5 hours ago
        The material is generally interesting regarding the selection of statistics, but there is a problem that has not yet been solved - taxes, punishment of officials and climate.
        There is no snow in China (where there is industry), around 15 thousand death sentences for government officials per year, and low fees and taxes compared to the Russian Federation.
        Iran has a huge reserve - to abolish religious madness, and give equal rights to women to study and work, and not to wear rags on their heads.
        The fatal disadvantage of the Russian Federation is the poor climate with costs for snow removal and heating, high fees and taxes, and the “certification” of many business sectors.
        Overcoming the climate disaster of the Russian Federation ... would be possible, but this is a mega-project of the USSR level, which will cost sums comparable to the withdrawal of the Russian Orthodox Church from the economy and the volume of corruption over several years.
        More realistic is the construction of new nuclear power plants and the nationalization of all types of energy supply, with strict prescribing in the Criminal Code the extent of the excess of the tariff for a person or enterprise over the selling price of the nuclear power plant. This will dramatically reduce the cost of at least electricity. If for exceeding the price of energy an official is imprisoned for life or killed, and the family is deprived of citizenship and expelled from the country, there will be a chance for industrial development.
        In this vile climate, automation of production and the operation of factories in three shifts, around the clock, is the only solution. Since heating costs do not depend on the number of working hours - whether machines work 8 or 24 hours - heating is the same
  10. 0
    22 November 2023 13: 34
    Thanks to the author, a wonderful, well-reasoned, thought-provoking analytical article. My opinion is that Russia does not want to join the Chinese project - this is correct. First of all, for the reason that for centuries Russia, and later the USSR, were the dominant powers, and psychologically we are not ready to take second positions. But being the locomotive of the EAEU and developing the southern direction is also not possible. In addition to agricultural and raw materials resources, the military-industrial complex and the atomprom, it is necessary to somehow develop the industry. And here are the inconsistencies. With modern liberal, and even previous socialist social styles, only state, mostly monopoly, industry is possible. And these are high production costs, low profitability, product quality is not up to the mark, difficulty in modification and the impossibility of switching to the production of new products, and a bunch of other problems. But the main question is whether Russia’s budget will support its industry, and what will be left of it after that? The social worker will definitely suffer. Another way to develop the industry is to rely on the private sector. Theoretically this is possible. You can attract it with government support, preferential interest-free loans, leasing, etc. But this is not enough . it is necessary to change the social system, at least in that part of society that is employed in industry. From the liberal model to return to the patriarchal one, which was in Russia before the 1917 revolution. I'll explain why. To keep production under control, at the lowest cost, you need discipline, your own traditions, customs, continuity of generations, and most importantly, have worthy heirs. The liberal model of society cannot provide this. Where is the guarantee for a wealthy participant that, having married, his chosen one, in the event of a divorce, will not cheat him out of his fortune, money and will not leave him without heirs, which often happens. What kind of traditions and continuity are there? In my opinion, one of the traditions of the liberal model is. This means changing husbands and having children from each husband. This is both a tradition and a business at the same time. And all this will lead to everything, I can’t imagine. A fact from history, the first families on earth appeared with the beginning of the development of agricultural production. Wealthy private owners needed heirs to survive the inheritance of land, pastures, and surplus production. Otherwise, everything would not make sense. And the classical family is a patriarchal unit of society.

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