"ONE BELT, ONE ROAD" INITIATIVE IN RESPECT TO AZERBAIJAN

Today's world has entered an era of profound civilizational change, which affects not only the global economy and politics, but also world trade and related international freight transport. Many of the interconnections forged after World War II are breaking down, including the global supply chain that provided fast, reliable, high-quality and relatively inexpensive delivery of goods anywhere in the world. Whether the global transport system will recover after the pandemic, whether it will completely collapse, or whether it will be substantially transformed is a question that concerns many policymakers and economists around the world. That is why the historical experience of international cooperation and mutually beneficial exchange, to which the Eurasian civilization that emerged in the first millennium A.D. belongs, by virtue of its consistency, logic, consistency and integrity, requires rethinking in the context of the problems facing modern civilization.

"The Great Silk Road as a through route connected all the great civilizations of the Old World – China, India, the Near and Middle East and Europe. This vast system of caravan routes lasted more than 1 500 years (from the 2nd century B.C. to the 15th century A.D.) – much longer than other caravan routes. Organization of trade for long distances required special conditions for caravans – crossing points, specialized points of departure for caravans, and so on. conditions – staging posts, specialized bazaars, regime of stable money payments and protection of merchants –foreigners property rights. Many professions worked to serve the trade caravans: interpreters, barters, camel drivers, caravan guards, tax collectors, etc."

As it is known, logistics is the science of optimization of material flows and accompanying services, including transportation. In the pre-pandemic period, the whole system of global freight transportation was formed mainly on the principles of "pull supply chains"

In the era of the Great Silk Road, unlike today, the origin of material flows, consisting mainly of finished goods of agricultural and handicraft origin, was closely connected with the spatial and geographical features and resource specificity of a particular country or territory of particular peoples. In other words, the resource identity of the territories of the countries and peoples of the Great Silk Road was the main factor determining the interest in exchange and justifying the increase in the length of transport routes to deliver more and more diverse goods. The more peoples were involved in international exchange, the more diverse the natural and material content of commodity exchange became, the more trade developed, creating conditions for the development of economic, cultural, technological and other ties between countries and peoples of this part of the world.

Porcelain, silk, paper, bronze and jade products, and later gunpowder and many other goods came to the West from the East. From the West came caravans of wool, glass, wine, and other increasingly diverse goods to the East

Since ancient times, two very different civilizations, Eastern and European, have tried to connect culturally and economically. But this was not easy, for in ancient times there was no path through which the people of China, India, the Arabian Peninsula, Central Asia and Europe could meet and exchange experiences, traders – goods, diplomats and scientists – knowledge and skills. However, more than two thousand years ago, such a path appeared, and today we see that it is impossible to overestimate its contribution to the development of culture, art and economy around the world.

During the preparation of the article, the author used methods including theoretical description, analysis, analytical forecast and modeling.

In the 3rd-15th centuries, the Great Silk Road played a key role in the development of art in various states. For example, the style of Korean Buddhist sculpture, which flourished in the 4th century AD, originated precisely because of the cultural exchange on the roads and trails of the Great Silk Road. Many Chinese and Korean pilgrims made arduous journeys to the Indian subcontinent to visit holy sites, learn about Buddha's teachings, and acquire Buddhist texts and images

However, in the fifteenth and sixteenth centuries, the Silk Road began to lose its influence on world processes. Thanks to the discovery of new geographic routes and the development of shipbuilding, countries shifted from overland routes to maritime trade. Transporting goods by sea becomes more advantageous: less time is spent on maritime traffic, the amount of transported goods increases dramatically, and the cost of maritime transport is more attractive. Thus, the once great Silk Road ceases to exist as one of the key trade routes and remains alive only in the pages of history books.

Attempts by modern states to establish cooperation in trade, tourism and a number of other areas of economic interaction inevitably confront politicians and business representatives with the regional peculiarities of the developed territories. China's New Silk Road project includes the Caucasus, a region that is a bridge between Europe and Asia. China does not seem to pretend to define a political agenda, it is interested only in business. Time will tell how successful this model of integration of the region into a large umbrella project will be. Traditionally, it has been and remains an arena of cooperation and confrontation between the interests of leading states. Experience shows that as soon as a major power expands its presence in the Caucasus, it tries to influence politics, which is inevitable in the end.

The step-by-step detailing of any plans for the Caucasus should be based not only on the current state of the region, but also on its complex historical past. It has repeatedly demonstrated how difficult it is to consolidate the Caucasus from within and to work together to overcome multiple conflicts. Failure to consider local peculiarities or simple ignorance of the rules of Caucasian life has led to the collapse of the plans of leading world players. The intervention of England was exemplary, after Russia's power here had visibly weakened in the aftermath of the revolutionary upheavals of 1917. This historical juncture can be used as a case study to argue both for the uniqueness of the region and for the failures of the Caucasus to be included in the sphere of influence.

The descriptions of Carl Bechhofer, an English journalist, are an important and informative source, explaining the ethno-cultural diversity and historical specificity of the Caucasus region.

He found the Caucasus in a not-so-great period, right in the middle of the civil war. That's why the title of the book

"In Denikin's Russia and the Caucasus, 1919-1920". The very title of the book testifies to the mental separation of the Caucasus from Russia. Bechgofer's work was published almost immediately after his return to England, in 1921.

In general, C. Behgofer covers various aspects of life in the Caucasus during the period of the British military presence. In addition to his impressions of the political and military state of the region, he recorded features of Caucasian life that attracted the foreign eye. He expressed his feelings in the following phrase: "When I returned to England after eight months in southern Russia and the Caucasus, I felt as if I had returned from the grave"

Modern historical science actively uses the imagological approach to study the peculiarities of external perception of a particular space. In this case C. Behgofer's view, as a European, because of the research possibility to see those features and peculiarities, which are not noticed by a resident of the region and which are interesting for a bearer of a different identity. The study from this perspective allows us to shed new light on the uniqueness of the region's socio-cultural space from a new perspective.

The first point of K. Behgofer's stay was Batumi (Batum until 1936). He noted that the locals consider it one of the most beautiful cities in the world. The landscape attracted the Englishman's attention with its beauty and scenic beauty: "Green fertile hills lead down to the endless sea, and behind them the snowy peaks of the Caucasus Mountains are spread out"

The author was critical of the administrative capacity of his compatriots. It is evident that the British officers were unprofessional managers and were unable to set up administrative work. They were unpopular with the population. The journalist cited ignorance of language and local customs as major shortcomings that irreparably damaged the mission. Mediators – Jews, former officers and others - had to be resorted to, who acted amateurishly and hindered rather than helped. As an example, K. Beghofer cited a trial in which the defendant could not prove his alibi to the court because of the unqualified work of the interpreter

To resolve such difficulties, efforts should have been made at a level higher than that of the British administration in Batum. However, no assistance, either organizational or material, was forthcoming from London. All difficulties were resolved according to the laws of war. Thus, crime was slightly reduced only after several public executions

A separate chapter is devoted to a trip to Georgia. The Englishman describes the Georgian population as a charming people known for their love of wine, women, and singing. An unusual situation arose there with the organization of the English administration. The fact is that the British Foreign Secretary J. Curzon appointed Oliver Wardrop, a man who had known Georgia since his youth and had done much to promote its culture in Great Britain, as the first Commissioner to the Transcaucasia with a residence in Tiflis. His attitude was obviously pro-Georgian, and so his appointment angered members of other nationalities. At the level of everyday life in Tiflis, the British were mistrusted. For example, on his arrival in Tiflis at the end of November 1919, C. Behgofer noticed that the luggage of Englishmen was inspected more carefully than that of other citizens.

The British representative in Baku was General John Walton, brother of the British vice-consul in Rostov-on-Don. He was mainly engaged in the oil industry, which is probably why the author of the descriptions says nothing about his activities and their effectiveness.

The North Caucasus had its own peculiarities due to its greater ethnic diversity than the South Caucasus and the particularities of its incorporation into the Russian Empire. Attempts by powers, including Great Britain, to create a buffer state were not successful here. As C. Behgofer aptly put it, "too many cooks have spoiled the broth": the Mountain Republic has not become either a buffer state or a bridgehead for the Pan-Islamicists

Civilizations must engage in dialogues and exchanges without trying to exclude and replace each other.

Xi Jinping project, by 2015, Chinese entrepreneurs had signed 3,987 contracts with companies from 60 countries adjacent to the SREB and SREB routes, for a total of $92.64 billion. Since 2016, the Asian Infrastructure Investment Bank has launched and financed the first phase of investment projects. A number of transport infrastructure projects along the route are currently under design or construction, such as the Hungarian-Serbian railroad or the Jakarta-Bandung high-speed railway.

The economic situation and transport infrastructure of the countries participating in the One Belt, One Road project are not homogeneous (Table 1). Despite their underdeveloped overland transport and logistics infrastructure, many of the countries bordering the SREB on the route from China through Central Asia have strategic resources – oil, gas, and uranium. Oil reserves in Central Asia are estimated at 27 billion tons, second only to those in the Persian Gulf, with inland reserves of 8.5 billion tons. Gas reserves are estimated at 5.5 trillion m3. Kazakhstan has almost a quarter of the world's uranium reserves; there are also large deposits of the metal in Kyrgyzstan, Uzbekistan, and Tajikistan.

According to various estimates, oil reserves in the Caspian Sea and adjacent countries range from 2.3-4.5 billion tons to 5.4 billion tons. Forecasted reserves are estimated at 16 to 32 billion tons, almost twice as large as those of the North Sea and comparable to those of North America. All this creates conditions for effective development of the economies and mutually beneficial cooperation with a unified logistical approach.

Chinese experts, analyzing the current situation, note that the "One Belt, One Road" project, based on the traditions of the Great Silk Road, takes into account all features of the modern economy. In the implementation of the project for the development of trade and economic cooperation of China within the framework of the longest and most promising economic corridor the following directions will be a priority.

Focusing on the export of Chinese capital and technology to foreign markets, rather than on the attraction of capital and technology into the country;

transition from priority development of the eastern seaside provinces to the development of the inland western provinces of the People's Republic of China;

establishing free trade zones with neighboring countries, taking into account the prevailing trend of global regional integration;

free movement of goods, capital and labor (the "three freedoms").

Back in 2013, the leader of the People's Republic of China, Xing Jinping, had an idea based on the historical example of the Great Silk Road: to create three trans-Eurasian economic corridors called the Silk Road Economic Belt, as well as two maritime routes. This project has been proposed to be called "One Belt, One Road". This initiative revives the Great Silk Road, and with it, the cultural and economic ties between the countries.

The question is whether the New Silk Road, like its predecessor, will fall into disrepair, since goods and commodities from Asia to Europe are transported by sea? In today's realities, the relevance of cheap overland transit traffic between the West and China is higher than ever before. After all, today we can observe that relations between the two great powers, the U.S. and China, are rapidly deteriorating, which means that it will become more and more difficult to carry out trade by sea transport.

But what place does Azerbaijan occupy in the New Silk Road system? Our country is assigned the role of a peculiar crossroads of logistic routes. It will be a connecting link between the East and the West. Azerbaijan will become the country which will connect the EAEU and Europe.

It is assumed that when the "Silk Road" is fully functional, about 10% of total trade between China and Western Europe will go through our country, which is about $60 billion, and this amount will only grow every year. This will help our country's economy to reach a new level, and, perhaps, Azerbaijan will cease to be in transition from a developing to a developed country.

Already, eight container trains run in the direction of China-Western Europe-China on Azeri territory. In addition, our country has been receiving investments from Chinese partners for several years. Thus, around $100 million were allocated for the creation of the "Great Stone", and this amount is not final.

At this stage of the New Silk Road development there are many prospects for the development of logistics centers in our country. Azeri businessmen have a wide range of knowledge in the field of European transportations. This will contribute to their implementation in the organization of the movement of goods along the New Silk Road, which will have a positive impact on the economy of our country.

It is worth admitting that there are a lot of difficulties to overcome on the way to implementing the New Silk Road. Many partner countries are not ready to accept China's economic restrictions. However, China's influence in the international arena is so significant that the implementation of the project, the scope of which will forever remain in the regional and global political landscape, becomes possible. This means that the Silk Road will exist, not only to achieve its former greatness, but also to multiply it!

The threat of the new Silk Road for our country could be the growing influence of China: it is important not just to sell raw materials, but to develop high-precision production. Otherwise, it may lead to economic dependence on Chinese partners. It is also worth noting that if Azerbaijan does not develop its logistics centers and infrastructure, the initiative to become a country uniting East and West can be intercepted by the Baltic Sea countries.

For China, the main disadvantage is the uncompetitive price of overland transportations in comparison with maritime ones. The exceptions are those cases where transportation costs are only a small part of total costs. For example, it is profitable to export high value-added goods such as auto parts, electronics, etc.

Thus, thanks to China's powerful economy and its becoming one of the leading countries of the world, the idea of the "New Silk Road" began to materialize, and the results are already visible today. For Belarus, it is a chance to develop its logistics potential, and with it, to bring income and investments to the country.

One of the key advantages of continental cooperation across Eurasia is the opportunity to develop transport potential and related infrastructure. Work in this direction will lead to a number of positive effects, the main of which are the use of the transit potential of countries, localization of industry along trans-Eurasian transport corridors, export development and strengthening of connectivity of intra-continental states and regions. The main players in this process are China, Russia, Azerbaijan, Belarus and EU countries.

A number of EU countries connected to Asia by rail routes, although not en masse, have already begun to take advantage of trans-Eurasian transport corridors. European transport companies, logisticians and consumers of transport services are cautious about the new opportunities of transcontinental transit, and in some cases they do not have sufficient information (including on the terms of transportation, cost, delivery time, etc.).

In the context of transport topics, the SREB is a "history of the container. The main potential of transit transportation within the SREB framework is connected with the use of containers. Container freight traffic is actually the only way to transport goods in Eurasian transit.

Container means cargo safety, standard dimensions, reduced costs of packaging for goods, accelerated rates of loading and unloading, unification of transport documentation and forwarding operations. If the main cargo flow on the China-EEU-EU axis goes by land, it will be in 20- and 40-foot containers (Vinokurov, 2017).

Section 2 presents expert assessments of the impact of the cost factor on the indicators of freight flows switched to the EAEU transport infrastructure (assessment of the elasticity of demand for the transportation of goods in a container by tariff).

The annual UNCTAD report "Review of Maritime Transport", which presents materials on the development of global maritime transport, was a source of information and analysis in the field of maritime transport, Information on levels and trends in maritime container transportation tariffs along the most important routes (North America – APR/China, Europe – APR/China, South America – APR/China, Australia – APR/China, Africa – APR/China, Middle East – APR/China, routes within APR). In addition, the operational information source for container shipping tariffs is the Shanghai Shipping Exchange, which has been publishing relevant indices (Shanghai Containerized Freight Index) since 2009.

In 2016, the volume of trade between EAEU countries and China (in physical terms) reached its maximum level for the last ten years – 130 million tons per year. At the same time, the value parameters of mutual trade turnover on a global scale remain small (despite their growth by 1.5 times over the last decade). The growth of trade turnover between the EAEU and China is almost entirely due to the volume of exports of EAEU countries to China, which increased by 3/4 and reached 117 million tons in 2016. EAEU imports from China are much smaller than exports and consistently amount to about 15 million tons per year Russia, as the largest economy of the Union, almost completely predetermines the structure of foreign trade flows (see Appendix 1 for more details).

According to Russian foreign trade statistics, only about 1% of Russian rail exports to China are delivered in containers (150,000-200,000 tons per year, net). Russian Railways' statistics, which include multimodal export shipments to China (rail/sea or rail/road) into the volume of railway exports, and also take into account the weight of containers themselves, show a higher share of container cargo - at the level of 2-4%.

Analysis of Russian Railways' statistics on exports of rail container shipments from Russia to China, expressed in TEUs (records are kept since 2010), shows that over the seven years their volume has grown by 2.5 times – from 69,000 TEUs in 2010 to 171,000 TEUs in 2016. However, only 10-20% of this container traffic goes through the border crossing with China.