The Treaty on the Eurasian Economic Union (EAEU) was signed on 29 May 2014 by the leaders of Belarus, Kazakhstan, and Russia, and came into force on 1 January 2015. Treaties for Armenia’s and Kyrgyzstan’s accession to the EAEU were signed on 9 October and 23 December 2014, respectively. Armenia’s accession treaty came into force on 2 January 2015 and Kyrgyzstan’s—on 6 August 2015. In January 2015, the EAEU in its full membership officially began its activities. The core objective of the Single Economic Space is the development of a single market and achieving the “four freedoms”, namely the free movements of “goods”, “capital”, “services” and “people” within the single market. The EAEU has an integrated market of 184 million people and a gross domestic product of over $5 trillion.
One year after the formation of the EAEU, in 2016, Iran proposed to the Eurasian Economic Commission the creation of a free trade zone between itself and this economic bloc. After two years of negotiations, an interim agreement was concluded and was signed on May 17, 2018, within the framework of the Astana Economic Forum. This was followed by the “Law on Interim Agreement Establishing a Free Trade Area between the Islamic Republic of Iran and the Eurasian Economic Union and its Member States” passed by the Iranian parliament in June 2019. The importance of this agreement was further underlined by the participation of the former Iranian president Hassan Rouhani in the EAEU summit in Yerevan, Armenia on October 1, 2019. Shortly after that, the EAEU-Iran preferential trade agreement (PTA) was implemented on October 27, 2019, offering lower tariffs on 862 commodity types, of which 502 are Iranian exports to the EAEU.
This agreement significantly increased the trade volume between Iran and the member countries of the Union. In the period between October 2019 and October 2020, the trade volume increased by more than 84%. However, the coronavirus crisis that caused border closures and health restrictions has significantly curbed this growing trend. After the start of vaccination in Iran and the member states of the EAEU and the reopening of borders, the volume of trade gradually climbed and the value of trade between Iran and the members of the EAEU exceeded $1.957 billion in the first five months of the current Iranian calendar year (March 21 – August 22, 2021), marking 96 per cent growth compared to the same period of the previous year.
Indeed, according to Hossein Kakhaki, director-general of the International Cooperation Department of the Islamic Republic of Iran Customs Administration (IRICA), Iran exported over $420.823 million worth of commodities to the EAEU members in this period, 37 per cent more than the figure for the same period in 2020. During these five months of 2021, the top destinations for Iranian exports to the EAEU were:
- Russian Federation ($222.743 million),
- Armenia ($99.683 million),
- Kazakhstan ($63.677 million),
- Kyrgyzstan ($26.981 million),
- Belarus ($7.738 million).
This volume of trade was achieved at a time when the United States withdrew from the Joint Comprehensive Plan of Action (JCPOA) in May 2018 and was following the policy of “maximum pressure” against Iran.
As the agreement was designed to be in effect for 3 years, it is to expire on October 5, 2022. For this reason, the parties have recently begun technical and expert negotiations to upgrade the PTA to a free trade agreement (FTA). In this regard, Iran and the EAEU held their first round of negotiations on upgrading the PTA to a free trade deal in Tehran on July 19, 2021. According to Hamid Zadboum, the former head of Trade Promotion Organization of Iran, the two sides have agreed upon most terms related to the outlines of the PTA; the partner countries have reached an agreement to gradually remove tariffs and duties on most imports and exports in the near future to expand business opportunities.
After the new Iranian government headed by Ebrahim Raisi came to power in August 2021, the process of negotiations between Iran and the EAEU accelerated. Iran’s new president announced “neighborhood policy” and “economic diplomacy” as two main priorities of Iran’s foreign affairs vector. Iran’s change of membership from the main observer in the Shanghai Cooperation Organization (SCO), which took place at the Tajikistan Summit in September 2021, led to promoting this approach by the new Iranian government. Regarding the EAEU, a new round of talks between Iran and the Union was held in Armenia on November 1, 2021. Head of international and trade affairs in Trade Promotion Organization (TPO) of Iran, Mir Hadi Seyyedi said that Iran and the EAEU had previously held seven rounds of virtual meetings to discuss the potential free trade deal and in this meeting two sides reached an initial agreement to extend free trade arrangements to 80 per cent of goods covered in the PTA signed in November 2019.
A very important point to note is that if the EAEU-Iran preferential trade agreement is upgraded to an FTA, the number of items of the agreement will rise to at least 8000, which is sure to set off a massive increase in the volume of trade between Iran and the Union. This could bring much of Iran’s economic and trade potential into the Union. Iran has a total population of approximately 80 million that live in a total area of 1,648,195 sq km.; approximately 74 % of the population live in urban areas with an annual growth rate of 1.97%, making it a major consumer market for the member states of the Union. Iran has fifteen common land or water borders with neighboring countries. Numerous Iranian ports in the Caspian Sea in the north and the Sea of Oman and the Persian Gulf in the south, as well as an extensive road and rail network provide a convenient location to transit goods between Iran and the Eurasian Economic Union. In this regard, Iran has a very good position for the North-South corridor, the Persian Gulf-Black Sea corridor, and the One Belt One Road initiative. In addition to the mentioned capacities, there are also problems and challenges that can negatively affect the process of upgrading the PTA to an FTA and therefore should be considered in the process of upgrading the agreement.
The first problem is the limitations of money transfer transactions between the banking systems of the five member states of the Union and Iran because of the unilateral U.S. sanctions against the country. This has created serious constraints for businessmen and traders on both sides especially for filing letters of credit (LC). Currently, the creation of LC for Iran is done only by “Mir Business Bank” in Russia, which is a Russian bank with a 100% participation of foreign capital; its founder and the only shareholder is Bank Melli Iran. “Mir Business Bank” has three branches in Moscow, Astrakhan and Kazan. But in the other four EAEU member states, Belarus, Armenia, Kazakhstan and Kyrgyzstan, transfers of money by exporters and importers are problematic and take place mainly through exchange offices. The establishment of Mir Business branches in these countries or the use of Russian SWIFT could possibly solve part of this problem.
The second problem is underdeveloped rail communication between Iran and Russia in the Caucasus region. Unfortunately, due to the non-membership of Turkmenistan and the Republic of Azerbaijan in the EAEU, Iran does not have a direct land connection with the Union. And Armenia—although a neighbor of Iran and a member of the EAEU—does not share a border with Russia. In such circumstances, the railway network is very important to overcome this geographical gap, especially since the volume of goods transported by rail is far greater than the land and truck route. Fortunately, in December 2014 the 920-kilometer East Caspian railroad between Iran, Turkmenistan and Kazakhstan was opened in December 2014. It is now an important trade artery that plays an important role in the export and import of products from Iran to Kazakhstan and the eastern regions of Russia. But there is no similar railway network in the Caucasus region, between Iran and Russia yet. As a result of the First Nagorno-Karabakh War, unlike Turkey and Russia, Iran missed its rail connection to the Caucasus. In these circumstances, the Astara-Rasht-Qazvin railway was formed in the framework of the North-South Transport Corridor (NSTC). Astara (Iran)-Astara (Azerbaijan) railway was officially inaugurated in a ceremony held on March 29, 2018; the Rasht-Qazvin segment was opened on 6 March 2019. Therefore, a 164 km-long railway route from Rasht to Astara in the Iranian province of Gilan—located on the southern shore of the Caspian Sea and adjacent to the Republic of Azerbaijan—is the only remaining railway section in NSTC between Iran, the Republic of Azerbaijan, the Russian Federation and India. Since the railway route between Astara to Rasht has not been built inside Iran yet, freight trains at Astara (Iran) railway station will be transferred to trucks or vice versa. Therefore, the completion of the Rasht-Astara railway, which costs approximately $500 million, should be given more attention as an important priority for the three countries of Iran, Azerbaijan and Russia. It should be noted that Russia accounts for more than 80% of Iran’s trade with the EAEU. For this reason, direct rail communication between Iran and Russia can increase the volume of trade between the two countries, especially in western and southern Russia such as North Caucasian Federal District, Volga Federal District and Southern Federal District.
The third obstacle to increasing the volume of trade between Iran and the EAEU, especially in the form of free trade, is the shortage of trucks and wagons equipped with refrigerated containers. This is important because more than 60% of Iran’s exports to the EAEU are agricultural and livestock products. On the other hand, Iran imports products such as meat from the Union, which also require refrigerated containers. The long land route and the very cold weather in the winters of Kazakhstan, Armenia and Russia, as well as the very hot weather in Turkmenistan in the summer have created conditions within which it is not possible to export and import agricultural and livestock products without refrigerated containers. Unfortunately, at present, the number of trucks and wagons equipped with refrigerated containers does not cover the high volume of exports and imports of agricultural and livestock products between Iran and EAEU. Therefore, serious attention should be paid to this issue in the process of converting the PTA into an FTA.
The forth problem lies in the domain of low shipping capacities of Iranian ports in the Caspian Sea, although the country shares a maritime border with Kazakhstan and Russia. The capacity of Turkmen port in Golestan province, Nowshahr and Amirabad ports in Mazandaran province and Anzali and Astara ports in Gilan province are transfer points of more than 40 million tons of goods per year; however, only 6 million tons are currently exploited. Although there are trade links between the ports of Astrakhan and Makhachkala in Russia, as well as the port of Aktau in Kazakhstan, the current capacity is far from its potential. Intensifying commercial shipping in the Caspian Sea, a regular and long-term shipping plan that is predictable and planned for traders and businessmen, and especially the development of Roll-on/Roll-off Shipping (RORO) are one of the measures that can increase the volume of trade between Iran and the EAEU.
The fifth—and perhaps the most important—problem is the lack of adequate knowledge of Iran and the member countries of the EAEU about each other’s markets and economic and trade capacities. Although the situation has improved significantly since the implementation of the PTA in October 2019, the problem of information asymmetry persists. In order to solve this problem, it is necessary to bring up the economic and trade capacities of the two sides in the media, to hold specialized exhibitions with the participation of Iranian businessmen, traders and the member countries on a regular basis. The chambers of commerce of Iran, Russia, Kazakhstan, Kyrgyzstan, Belarus and Armenia should work on strengthening their cooperation. In this regard, the inauguration of Iranian Trade Office in Astrakhan in October 2017 and holding the first exclusive exhibition “Eurasia Expo” in Tehran on July 9–13, 2021, are beneficial and effective actions that need to be encouraged in the future. In this process, it is very important that the new conditions that will be created after the upgrade of the EAEU-Iran PTA to an FTA are clearly explained to the businessmen and chambers of commerce.
Overall, the implementation of the EAEU-Iran PTA is a very important development that has taken place in recent years in Iran’s relations with Eurasia. This agreement has had a very positive effect on increasing the volume of trade between the two sides. But at the same time, it made the weaknesses and problems of this path clear to both sides. Therefore, in the process of upgrading this agreement to an FTA, due attention should be paid to its problems and solutions. Clearly, unless banking, transit and trade infrastructure is established, the prospective agreement will be nothing more than words on paper.
From our partner RIAC
Global Formulations to Create Entrepreneurial Nations
Prolonged economic struggles of the new emerging world are now showing visible gaps in competency levels. Small numbers of countries are trying their best to apply global formulation and become entrepreneurial nations. The vibrancy of “National Mobilization of Entrepreneurialism” can create new economic survival solutions and help the national citizenry create grassroots prosperity.
In search of economic warriors and widely open to global debates and challenges, this is not an academic study but an entrepreneurial response to an entrepreneurial challenge. Henceforth, why is this bold, profoundly constructive narrative inviting collaborative interactions with immediately deployable pragmatic large-scale solutions? Race car drivers need different tracks, tires, and types of cars; let us distinguish between taxi stands and Uber lineups. The entrepreneurial economy is another economy. Allow the entrepreneurial narrative to be decipherable.
The global landscapes: The facts remain that economic development without entrepreneurialism is economic destruction. Political power without economic power is just another circus act. The economic power without balanced mindsets is just another crypto scheme. The dreams of victory without any real value-creation productivity are only election nightmares. Increasing the debt ceiling is not an economic success but a grand economic failure. Abandoning citizenry unable to face global age competitiveness is a mega political disaster. Inabilities to categorize and digitize high-potential SMEs are gigantic economic development failures.
All global economic developments are globally exposed: Mindset imbalances are visible on LinkedIn across Western and emerging economies. The Mindset Hypothesis balances the skilled and educated job seeker mindsets and entrepreneurial risk-taking job creator mindsets. Job seekers build organizations, and job creators start such organizations in the first place. Both mindset balances is a victory; otherwise, what is already visible is a big defeat.
Nevertheless, failing to understand the ‘mindset hypothesis,’ the difference between the job seeker and job creator mindsets is the first step to getting eliminated from any serious dialogue on the subject of SME economic recovery. Failing to articulate the ‘national mobilization of entrepreneurialism’ is the second step to getting eliminated from any economic development activity as a whole—more on Google.
This is already a proven fact and a fundamental failure of banking and governments with their compulsory irrelevant forms and pre-determined measurement of just “small’ as a pre-declared one-size-fits-all answer to all SME issues. Study the greatest global error of economic thinking.
Morticians are happily burying identical coffins in rows; Gardners are perplexed by how many different buds can make how many interestingly different blossoms. SME growth demands strict eliminations of the mortician mindsets but the Gardner. Application of the Mindset Hypothesis is a mandatory procedure.
Is there any financial wisdom left regarding SME culture? Like an aviary surrounded by its mystery, the SME sectors struggle very hard only to blossom further not by ‘special rules binders’ but by mysterious DNA ways. There is no single master rule, reference, guideline, business plan, formula, blueprint, or book explaining why one of them suddenly could become the largest-ever project for the nation. Entrepreneurialism resides in gravity-defying, breaking-all rules, super high-speed turns, and by chance of decisions unfolding while juggling risk management, and this is where the economic models meet real value creation growth. The last 1000 entrepreneurs who created the life-altering global game-changing economic behaviorism that already has brought our civilization where we stand today, and what we must prove to show how much we understand their ‘entrepreneurial mysticism.’ Study the brief history of SMEs
No further proof is required if over a million entrepreneurs have already created over a million original small and medium businesses, and each has grown into creating over a million jobs. Why the lingering fear of identifying at least one Nobel Prize Winner in Economics, whoever built one such creation?
Like a broom, the economy sweeps and collects the dust and debris from the tactical entrepreneurial battlefields. Sometimes, when brilliant, risky notions are being tested, ideas tossed like bone-china porcelain flying around get smashed and create debris; later, they are swept by economic brooms and carefully labeled and jarred as relics for latter-day prophesies. It is an open challenge to economic thinking to come out and define ‘entrepreneurialism’ and why it is such a forbidden land for academia and their economic numbering games.
Was America controlled by economists of the day, or did the national citizenry go wild on business ideas, deploy available natural resources, and apply national mobilization of entrepreneurialism? Study how America, in the absence of economists, became the first and biggest entrepreneurial nation by creating an ocean of SMEs 100 years ago. What a miracle China performed three decades ago, with seas of SMEs now leading globally on all industrial fronts. Observe how India is advancing with the SME revolution, and Indonesia is progressing in the entrepreneurial race.
The entrepreneurial expansions: There are some 50 nations and many powerful trading blocks, all figuring out how to harness the “Entrepreneurial Mysticism” no university in the world could ever fathom and create a magic pill or produce a series of binders to replicate an original entrepreneurial idea. How fast are the ‘population-rich-nations overtaking the knowledge-rich-nations’? Study how, with 500 million new entrepreneurs in China and India alone, plus a billion SMEs in Asia, this global advancement of such economic forces may suck the oxygen of the Western economies in one single afternoon. Where is the ‘preparedness’?
In search of global formulas to create entrepreneurial nations: Beware; all this requires intense work for many years and decades. Just like spelling a long word like entrepreneurialism does not make one instantly an entrepreneur, a crash course in university on ‘small and medium enterprises’ does not make one suddenly a master of the craft. To play in the big leagues as a significant authority in the national economy, mastery of ‘national mobilization of entrepreneurialism’ is mandatory. These are not economic numbering games but real economic development wars in progress. At ease Soldier
Creating new enterprises: If access to finance may be considered a ‘nest,’ it is always the ‘egg’ and hatchery, where all the powers of “Entrepreneurial Mysticism” are hidden. The financial world suited and armed with degrees and over-joyed with creating access to finance but with little or no skills to measure the hatching of the free-range eggs, the sudden emergence of SMEs of our times, in the wild, urban-suburban, close and far, and further away, mini, micro, small enterprise ideas, all by unknown folks, all over the world. How Can Entrepreneurialism Save The World? Special Report – Listen to Audio…
Nevertheless, they must know deeply why and where these eggs come from, where and when and why they are laid, by whom and for what specific motivation at what sacrifice, and what will happen when they are finally hatched. Why does each such egg always start with a unique song and a new tempo, all in different colors and conditions? How the chick grows into a big bird, from cock to ostrich or giant roc.
Is your economy in some trouble? It only takes a day on LinkedIn to check all the top-to-down economic development teams already mandated to foster growth; their detailed profiles speak volumes about mindsets and their direct and indirect experiences on the development of entrepreneurial economies, and if, for some reason, or why, they simply cannot. Most importantly, why are countries still stuck exactly where they started decades ago despite all the available options?
Well, there is a reason why ballerinas do not train Sumo wrestlers, or frequent flyers are never found in the cockpit flying jumbo planes crossing the Atlantic. When architects draw skyscrapers, they are outstanding renderings, as it takes a team of experts on skyscraper building to deliver a new city skyline. If we allow only architects to play around with construction, 50% of skyscrapers will collapse. Jumbos will fall off the sky if they are in the hands of frequent flyers. Sumo wrestlers will be doing Swan Lake if trained by ballerinas. Balancing acts of economics is a highly urgent and very specialized area. The sooner you learn, the sooner you save economies.
Critical analysis: When did your departments last debate such narratives because of the popular annual repeated SME Weeks and plastic award nights or training a busload of SMEs brought us a decade behind? At this rate, it will only take a century to reach a national mobilization stage. Missing grand economic opportunities, for this reason alone, the identification, classification, and digitization of high-potential SME sectors are still not completed after a decade except for only a few nations.
THE 4B FACTOR: Globally, a billion displaced, a billion replaced, a billion misplaced, a billion on hunger watch. If you hear the distant drumming of your restless citizenry marching, an urgent call for solutions is needed. How to create a high-wage & low-tax economy with a real value-creation economy based on real productivity, performance, and profitability
So, how do you advance to the next stage? Here is the formula, openly share it
JOB-SEEKER MINDSET + JOB-CREATOR MINDSET =
ENTREPRENEURIAL ECONOMIC DEVELOPMENT =
The Worldwide Narrative of Expothon: Mastery of new entrepreneurial economic thinking is a new revolution in SME Mobilization. Expothon has been sharing information weekly with some 2000 senior officials at the Cabinet level in around 100 countries for the last 50 to 100 weeks. Soon, a global high-level virtual event series will further advance the agenda; in planning are debates to clarify and table turnkey mobilization options in the coming months. We are constantly adding new talents. Study more on Google.
Open challenge to current economic development models: If it takes ten days to firm up policies to start an SME sector digitization program. It takes 100 days to mobilize and place 1,000 to 50,000 SMEs on digital platforms. It takes 1000 days to bounce in national economic development and global export activities. So, at what speed are the current SME uplifts moving?
Test your imagination: If 10% to 50% of your high-potential SMEs were identified, classified, and digitized for up-skilling exporters and re-skilling manufacturers. Imagine if 10% to 50% could add 10% to 50% growth. Imagine what would happen when you only started with 10,000 SMEs; now imagine if you had 100,000 SMEs on National Mobilization of Entrepreneurialism. This will be the largest group creating economic progress, causing global shock waves. The answer is hidden, why it was never explored, and why it was never executed. Expothon repeatedly communicated with the top economic leadership of over 100 countries during the last many years.
What are the immediate critically missing links in your departments? What levels of rapid-fire training should be included amongst the economic frontline teams, and what national agenda needs streaming to create national mobilization of SME entrepreneurialism? What will your regions do to make new armies of entrepreneurs and nationally mobilize SMEs? Where and when is your next national debate on these hot topics, and most importantly, when will the deep planning start? Study more on Google; the rest is easy.
Uniqlo vs. Indonesia: A Battle of Bargaining Power Position
In negotiations, bargaining power is the capacity to exert influence or negotiate. A country or multinational corporation (MNC) has a stronger position than others in certain circumstances. The ability of a country to control market access and provide additional incentives to encourage market participation are just two of the many factors that influence a country’s strong bargaining position. A country’s position in the value chain, economic development, labor, and ties to major corporations are just a few factors that can affect its bargaining power in the context of global production networks. Doz & Prahalad (1980), note that product differentiation, economies of scale, and technology influence the bargaining leverage of multinational corporations.
The parent company of Uniqlo fashion retail, Fast Retailing Co., Ltd., is headquartered in Yamaguchi Prefecture, Japan. In another study by Coe & Yeung (2015) on global production networks, they see that a fashion retail company controls a global production system by collaborating with partners who supply finalized products according to product specifications requested by export-oriented nations. In addition, the finished products are distributed and marketed with strong trademarks and access to large consumer markets, such as shopping center outlets and online retail. Uniqlo is taking measures to establish partnerships with countries in various regions of the globe, including the Asian region. Uniqlo’s expansion in the Asian region is a manifestation of the company’s economic interest in broadening the scope of product marketing, increasing competitiveness by prioritizing innovation, and establishing a variety of facilities that cater to the requirements of consumers. Under PT Fast Retailing Indonesia, Uniqlo continues to expand in Indonesia.
Merit comparison between Indonesia and Uniqlo
With a population of 278 million, Indonesia has a large and expanding labor force that can encourage the acceleration of production in the Indonesian garment or apparel industry. In addition to its large and productive workforce, one of Uniqlo’s primary advantages is its low labor costs. It is not surprising to see that the Uniqlo brand has collaborated with 17 apparel supplier partners and retail center outlets in Indonesia. The domestic market in Indonesia can also be advantageous for Uniqlo, as the country’s high population will continue to generate demand for clothing.
Considering product differentiation, economies of scale, and technology, Uniqlo has a superior bargaining position. Based on Yuan (2023) research, by cultivating a strong “comfort and simplicity” brand image and actively collaborating with other brands, Uniqlo is able to increase its bargaining power. These strategies have helped Uniqlo achieve success in the fashion industry, increase its capacity to attract and retain customers, and distinguish its products from those of its competitors. According to Bisnis.com (2023), Uniqlo has also achieved economic success in the fashion industry, with a total net profit of IDR 83,2 trillion. By signing an agreement with the International Labor Organization (ILO), Uniqlo enhances its relationship of trust with its production partners and promotes the well-being of workers. Furthermore, Alexandra Santiago (2021), through YCP Soliadiance, reveals that Uniqlo also owns software for supply chain management called Global One (G1) SCM System, which it requires all of its suppliers to implement, and that this digitalization can enhance production planning and reduce production lead times.
Uniqlo’s bargaining position is strengthened in the negotiation process because the company has a great deal to offer Indonesia. For instance, PT Fast Retailing, the parent company of Uniqlo, signed a cooperation agreement with the International Labour Organization (ILO) to promote employment and social protection in Indonesia, funding the program with $1.8 million. One of the goals of this program is to ensure the minimum wage, assist workers in this industry in regaining employment, and enhance their abilities and skills. Uniqlo also collaborates with BUMN to support the development of Indonesia’s renewable energy sector by procuring Renewable Energy Certificates (RECs). In 2019, Uniqlo became the first fashion retailer in Indonesia to use renewable energy from the Geothermal Power Plant (PLTP) in Kamojang, West Java, by signing a Renewable Energy Certificate Sale and Purchase Cooperation agreement with PLN. Based on Antaranews.com (2023), Uniqlo facilitates Indonesian small and medium enterprises (SMEs) by providing SME training and marketing curated products through the “Neighborhood Collaboration” program, so that local Indonesian products are better known.
PT Fast Retailing Indonesia has a greater bargaining position than Indonesia. Indonesia’s bargaining position is quite weak due to the fact that it offers only a ready-to-work population and personnel resources, with no other bolstering factors. The garment industry in Indonesia still faces a number of issues, ranging from the need to import raw materials, which drives up production costs, to labor demonstrations demanding wage increases. This has caused many businesses to relocate to inexpensive nations, such as Vietnam. Indonesia must address its deficiencies create a more business-friendly regulatory environment because a nation’s bargaining position will be enhanced if it meets the requirements of the Global Production Network’s major corporations. If Indonesia has everything required by multinational corporations, it is not inconceivable that many companies from diverse industrial sectors will build facilities in Indonesia.
Overall, both Indonesia and Uniqlo benefit from their respective bargaining positions. Uniqlo provides a variety of benefits to Indonesia, including the protection of labor in production partner companies, the use of Indonesian renewable energy in its production to support the sector, and the promotion of small and medium-sized enterprises (SMEs) through training and the marketing of its products through the Neighborhood Collaboration program. By assisting the SME sector and promoting the use of renewable energy in its partner countries, Indonesia also benefits Uniqlo in terms of human resources that support accelerated production and a positive corporate image. Indonesia can make improvements to increase its competitiveness and attract multinational corporations to produce there.
There are a number of advantages to the presence of multinational corporations in a country, including the following: the presence of multinational corporations in a country can facilitate the creation of new jobs and reduce unemployment rates in the country; there is an increase in expertise for the workforce in a country as a result of the transfer of new technology and management systems, which are unquestionably more effective; and the presence of multinational corporations in a country can i) improve the quality of life in the country; ii) promote economic development.
International Forum for China’s Belt and Road and the Six Economic Corridors Projects
China will hold the third edition of the Belt and Road Initiative Global Forum in October 2023. The Chinese Belt and Road Initiative aims primarily to stimulate and encourage global trade infrastructure. China began its Belt and Road Initiative more than 10 years ago, and it is a global strategic initiative to develop infrastructure, to connect with Asia, Africa, and Europe by land and sea. The “Belt and Road” project, or “One Belt – One Road”, is an international initiative previously presented by China with the aim of developing currently operating commercial transport corridors and establishing new corridors linking more than 60 countries around the world in the regions of Central Asia, Europe and Africa, and it is designed to enhance the development of the trade relations between them, and this in turn leads to the development of trade relations between them and China.
The idea of forming a “Silk Road Economic Belt” was proposed by Chinese President Xi Jinping, and was announced for the first time during his speech in the city of Astana, the capital of Kazakhstan, in September 2013. The first forum was held in 2017, while the second one was held in 2019.
The third Belt and Road Forum for International Cooperation will be held in Beijing in October 2023, and it is expected that three high-level forums will be held on connectivity, green development and digital economy, and six other forums on trade connectivity, people-to-people connectivity, think tank exchange, the Clean Silk Road, and Sub-national cooperation, that is, with other economic blocs such as BRICS and others, and maritime cooperation, in addition to holding a conference for CEOs of major companies and projects around the world. With China officially confirming that the tenth anniversary of the Belt and Road Initiative is an important platform for all parties to research and develop high-level cooperation within the framework of the initiative.
The Belt and Road Initiative is of great importance to Egypt and the countries of the region, given its economic benefits and the investments and various economic benefits it brings. Relations between Egypt and the countries of the region and China have witnessed great development and an important shift in recent years, within the framework of the Belt and Road Initiative as an entry point for developing these relations and establishing more diversified relations between China and the countries of the region. The initiative also provides a great opportunity for cooperation between Egypt and China in the maritime field, because the Suez Canal is part of the maritime component of the Chinese Belt and Road Initiative, and Egypt has extensions with the Indian Ocean and the Mediterranean Sea that facilitate the opening and establishment of new projects between China and Egypt. The Chinese presence in the (Suez Canal Economic Zone) also contributed to transforming it into an industrial zone, with the Egyptian side planning, based on China’s role in transferring technology and expertise to the Egyptian side. The Belt and Road Initiative also gave great importance to the issue of interaction between peoples, especially in the tourism sector, with Egypt expecting an increase in the volume of Chinese tourism during the coming period.
Egypt and all countries of the region also interacted with the Chinese Belt and Road Initiative in a very large way, whether by attending Belt and Road forums or opening the way for Chinese investments in our countries. In addition to the role of the Suez Canal in establishing major partnerships with the Chinese side regarding international navigation and trade through the maritime component of the initiative. The interaction of Egypt and the countries of the region with the Belt and Road Initiative has been positive, and Egypt has benefited greatly from financing institutions within the framework of the Chinese Belt and Road Initiative, such as the Asian Infrastructure Investment Bank, which contributes to financing important projects in Egypt, including: the huge Benban project in Aswan to generate electricity and the solar energy.
China has already announced the participation of 110 countries in the Third Belt and Road Forum in October 2023, in addition to the invitation of the Chinese side to many international economic forums and gatherings. The most important thing for me is the official Chinese media’s confirmation that China did not invite the heads of some Western countries to attend the Belt and Road Forum, given their interference in China’s affairs and obstruction of the growth of its interests. This is precisely what was confirmed by the Chinese newspaper “Global Times”, which is close to the ruling Communist Party in China, by confirming that the vast majority of invitations to attend the forum were sent to leaders of developing countries, while the heads of some developed countries were not included to attend the Belt and Road Forum in 2023. With the Global Times confirming that this was done, because the main goal of the forum is development cooperation between countries, so a number of Western countries in particular were excluded. Knowing that Russian President Putin intends to visit China, and this coincides with the holding of the Belt and Road Initiative Forum in October 2023.
Some Western pressure also came on Italy in particular, despite its previous strong enthusiasm for the Chinese Belt and Road Initiative, with the Italian Foreign Minister Antonio Tajani’s assertion that cooperation within the framework of the Belt and Road “did not achieve the results that the Italian side expected, and his confirmation that many Italian parties It opposes Italy’s participation in the Belt and Road Forum in China in October 2023. Here came the Chinese response to the Italian Foreign Minister, through Chinese Foreign Minister Wang Yi, stressing that the “Belt and Road” plan is a huge infrastructure program similar to the ancient Silk Road of roads. Eurasian trade, and this initiative has borne fruit for Italy, which is the only economy in the “G7” that has signed a memorandum of understanding regarding the agreement to implement a number of Chinese projects in Italy in relation to the Belt and Road Initiative, to end in March 2024.
I believe that the Belt and Road Forum, in its third edition scheduled to be held in October 2023, will be different from previous years, especially with China’s introduction of the economic corridors project, in light of American and Western pressure on it. Before the Belt and Road Forum began in October 2023, China officially announced the signing of cooperation documents related to the Belt and Road Initiative with more than 150 countries and more than 30 international organizations. With Belt and Road cooperation achieving economically fruitful results, such as implementing 3,000 cooperation projects and stimulating investments worth a trillion dollars. Also, since the proposal of the Belt and Road Initiative, the project to build China’s economic corridors has achieved great results, which serve the direction of development for the countries participating with China in those six economic corridors, the most prominent of which are:
The New Economic Corridor for the Eurasian Continental Bridge, which relies on high-speed railways between China and Europe.
The China-Pakistan Economic Corridor, which has entered the second phase of implementing its projects, after the completion of the first phase of the Pakistani Gwadar Port Free Zone project to attract investment, and the cross-border optical cable project between China and Pakistan was completed and opened.
The economic corridor between China, Mongolia and Russia
Indochina Peninsula Economic Corridor
The economic corridor between China, Central Asia and West Asia
The Economic Corridor between Bangladesh, China, India and Myanmar, which is making slow progress
We find that the strongest projects of these six economic corridors are the China-Pakistan Economic Corridor and the China-Mongolia-Russia Economic Corridor, which has achieved many international cooperation plans for its parties. The China-Pakistan Economic Corridor has established a bilateral joint committee as a mechanism for international cooperation for coordination.
On the other hand, the American pressure on China, especially since the beginning of the Biden administration period, has considered China its biggest competitor. Not only did the United States of America pursue a policy of containment against China, but it also attracted allies to Washington to launch the Supply Chain Alliance and the Technological Alliance, which faces major objections from the Chinese, because it imposes many checks and balances in the form of huge challenges facing China. These measures taken by the United States of America, as well as the period of global embargo during the outbreak of the Corona epidemic, exacerbated many geopolitical contradictions along the Belt and Road, due to American pressure on China’s projects in those six economic corridors.
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