The Belt and Road Initiative: Implications for the Eurasian Economic Union

Abstract

The Belt and Road Initiative (BRI) is the young, but ambitious strategy proposed and launched by China in 2013. Inspired by the ancient Silk Road, the newly emerged strategy aims to improve infrastructure connectivity on the Eurasian continent by building new road and railway networks or upgrade the existing ones to connect China, Central, South Asia, and Europe. Apart from the transit infrastructure plans, the BRI promises to unleash the economic potential of the participant countries by developing joint enterprises or providing investments in energy, agriculture, technological and other sectors. Due to the billions of dollars in loans provided by Chinese multilateral funds or banks every year, thousands of Belt and Road projects are being developed on the Eurasian continent. Since the independent states of the Eurasian Economic Union (EAEU) are going to play a major role in building key economic corridors to connect China and Europe, the influence of EAEU should not be underestimated. This paper analyzes the aspects of motivation behind the Belt and Road strategy and tries to explain how the course of the initiative is going to influence the countries of the Eurasian Economic Union. The comprehensive and systemic analysis of the economic cooperation between China and the five countries of EAEU illustrates that the Chinese enterprises and investment institutions work actively to foster industrial development and bridge the gaps in transport infrastructure. In fact, three out of six major road networks of the Silk Road Economic Belt are going to pass through the territories Kazakhstan, Kyrgyzstan, Belarus and Russia. Although, the member-states of EAEU demonstrate stable progress in the framework of BRI, Armenia and Kyrgyzstan face risks of economic distress because of the rising amount of infrastructure deals with Chinese companies and growing amount of debt.