Skip to main content

A ‘European Silk Road’


publication_icon

Philipp HeimbergerMario Holznerand Artem Kochnev

wiiw Research Report No. 430, August 2018 
43 pages including 10 Tables and 17 Figures

FREE DOWNLOAD


The German version can be found here.

In this study we argue for a ‘Big Push’ in infrastructure investments in greater Europe. We propose the building of a European Silk Road, which connects the industrial centres in the west with the populous, but less developed regions in the east of the continent and thereby is meant to generate more growth and employment in the short term as well as in the medium and long term.

After its completion, the European Silk Road would extend overland around 11,000 kilometres on a northern route from Lisbon to Uralsk on the Russian-Kazakh border and on a southern route from Milan to Volgograd and Baku. Central parts are the route from Lyon to Moscow in the north and from Milan to Constanţa in the south. The southern route would link Central Europe with the Black Sea area and the Caspian Sea littoral states.

A state-of-the-art motorway and high-speed railway line with a string of logistics centres, seaports, river ports and airports shall set new European standards, among others in e-mobility. The full extension would constitute around EUR 1,000 billion or approximately 8% of the gross domestic product of the countries situated along its two routes. The costs relative to the EU’s economic output amount to about 7%.

According to a conservative estimate, the European Silk Road could lead to an economic growth of 3.5% on average and an increase in employment of around 2 million along its routes in the course of an investment period of 10 years. Under favourable circumstances and at continued low interest rates, an employment creation of over 7 million can be expected in greater Europe.

The improved infrastructure of the key route could yield significant time savings of over 8% in road transport on the northern route into the central region of Russia alone. On average this would save approximately 2.5 hours, for instance from Vienna. Thus the countries along the northern route would be able to increase their exports to Russia by more than 11%. This would imply additional exports of over EUR 12.5 billion.

The Austrian export industry would particularly benefit from these infrastructural measures. Austria’s exports to Russia would rise by over 14%. This corresponds to about EUR 330 million. The construction projects would create 34,000 jobs in Austria. Under favourable conditions, up to 121,000 new jobs could be created in Austria.

 

Summary

A ‘European Silk Road’

The study concludes that Europe should respond to China’s New Silk Road initiative with a coherent infrastructure network and transport strategy of its own to leverage its economic potential. It should not rely on China’s Belt and Road Initiative (BRI) to achieve this, but invest itself to ensure that it suits European priorities. Nevertheless, a ‘European Silk Road’ can be seen as complementary to China’s efforts. The study finds that the development of a European Silk Road could create 2-7 million new jobs and could increase GDP on average by 3.5% in Wider Europe over a ten-year period. Eastern Europe in particular needs an upgrading of its transport infrastructure. If this is achieved, the boost to incomes and living standards would be particularly significant in that part of the continent, as a ‘big push’ in transport infrastructure investment has the potential to industrialise broad sectors of the economy.

 

Reference to wiiw databases: wiiw Annual Database

Keywords: infrastructuretransportEuropeChinaSilk Roadgrowthindustrialisationinternational trade

JEL classification: H54, O18, R41, R42, L92

Countries covered: Asia, Wider Europe

Research Areas: Macroeconomic Analysis and PolicyInternational Trade, Competitiveness and FDI

Related News

A “European Silk Road”: the case for a “big push” in infrastructure investment

Related Events

Europe's "Silk Road"



https://wiiw.ac.at/a-european-silk-road--p-4608.html

Comments

Popular posts from this blog

The Rise of China-Europe Railways

https://www.csis.org/analysis/rise-china-europe-railways

The Rise of China-Europe RailwaysMarch 6, 2018The Dawn of a New Commercial Era?For over two millennia, technology and politics have shaped trade across the Eurasian supercontinent. The compass and domesticated camels helped the “silk routes” emerge between 200 and 400 CE, and peaceful interactions between the Han and Hellenic empires allowed overland trade to flourish. A major shift occurred in the late fifteenth century, when the invention of large ocean-going vessels and new navigation methods made maritime trade more competitive. Mercantilism and competition among Europe’s colonial powers helped pull commerce to the coastlines. Since then, commerce between Asia and Europe has traveled primarily by sea.1Against this historical backdrop, new railway services between China and Europe have emerged rapidly. Just 10 years ago, regular direct freight services from China to Europe did not exist.2 Today, they connect roughly 35 Chinese…

CPEC Jobs in Pakistan, salary details

JOBS...نوکریاں چائنہ کمپنی میںPlease help the deserving persons...Salary:Salary package in China–Pakistan Economic Corridor (CPEC) in these 300,000 jobs shall be on daily wages. The details of the daily wages are as follows;Welder: Rs. 1,700 dailyHeavy Duty Driver: Rs. 1,700 dailyMason: Rs. 1,500 dailyHelper: Rs. 850 dailyElectrician: Rs. 1,700 dailySurveyor: Rs. 2,500 dailySecurity Guard: Rs. 1,600 dailyBulldozer operator: Rs. 2,200 dailyConcrete mixer machine operator: Rs. 2,000 dailyRoller operator: Rs. 2,000 dailySteel fixer: Rs. 2,200 dailyIron Shuttering fixer: Rs. 1,800 dailyAccount clerk: Rs. 2,200 dailyCarpenter: Rs. 1,700 dailyLight duty driver: Rs. 1,700 dailyLabour: Rs. 900 dailyPara Engine mechanic: Rs. 1,700 dailyPipe fitter: Rs. 1,700 dailyStorekeeper: Rs. 1,700 dailyOffice boy: Rs. 1,200 dailyExcavator operator: Rs. 2,200 dailyShovel operator: Rs. 2,200 dailyComputer operator: Rs. 2,200 dailySecurity Supervisor: Rs. 2,200 dailyCook for Chinese food: Rs. 2,000 dailyCook…

Balochistan to establish first medical university

https://www.dawn.com/news/1366135

The Newspaper's Staff CorrespondentOctober 25, 2017QUETTA: The provincial cabinet on Tuesday approved the draft for establishing a medical university in Balochistan.Health minister Mir Rehmat Saleh Baloch made the announcement while speaking at a press conference after a cabinet meeting.“The cabinet has approved the draft of the medical university which would be presented in the current session of the Balochistan Assembly,” he said, adding with the assembly’s approval the Bolan Medical College would be converted into a medical university.Published in Dawn, October 25th, 2017