With the final declaration of the recent G20 summit that took place in India, a new global project was shared with the world public. According to this project, a new trade route extending from India to Germany will be opened, aiming to become a strong competitor to alternative trade routes that remain in China’s sphere of influence. The isolation of China, which is experiencing political and economic tensions with the West, by the Western alliance led by the US in many areas has long been among the primary agenda items of all diplomats. Thanks to the economies of scale established with Western support, China became a new world pole in line with its global perspective put forward after Deng Xiaoping. Currently, China is the country with the world’s largest production capacity and the largest exporter of the world economy.
At this point, while the West expected China to adopt a line integrated with itself, it is determined to take stronger and concrete steps because China prefers to be on the opposite side of global competition. In this sense, production lines to be shifted to India and new trade routes starting from India emerged as the first steps that come to mind for this purpose. The new trade route between India and Germany is also a reflection of this perspective. First of all, it should be noted that the route of the trade route starting from India will also bypass the Suez Canal. Products arriving by sea to the UAE will be unloaded at the port here and transported by rail to Saudi Arabia, Jordan, and Israel, and from there, products will be loaded again from ports to reach Greek Cypriot Administration and Greece. After Greece, products that will reach Germany via road routes will be delivered to the end consumer. When we look at the details of this idea on paper, there are extremely large dilemmas. First of all, it should be noted that production regions in India need major infrastructure projects to provide access to the port(s) in the west of the country. India needs to fund all of the investments here. In addition, Indian industry must complete an investment much larger than these infrastructure investments in a short time in order to meet the EU’s green transformation demands. If India can complete its green and digital transformation for this purpose, it can really be a very strong alternative against China. However, it is also a question mark whether it has the human resources to plan, implement and manage all these transformations and investments.
The UAE industry, which is based on intermediate product imports, aims to increase its production power by having alternative suppliers. The UAE will achieve quite large gains with this project – if it can be implemented. Likewise, while Saudi Arabia has quadrupled its non-oil revenues in a very short time, it can grow its economy with a perspective similar to UAE’s. Thanks to oil revenues, these two countries may not face the danger of current account deficits while increasing their share in India’s exports. However, it is possible to say that Jordan and Israel, which were not even invited to the G20 summit, are located at the most critical points of the route and do not have similar interests. Moreover, there is no agreement reached with these two countries regarding the announced project. Of course, it is possible for Jordan and Israel to be included in the project with its concretization, but there is currently no cooperation agreement reflected to the public. While there is no rational reason why products to be loaded onto ships again from Israel will visit Paphos or Limassol ports of the Greek Cypriot Administration, project announcements indicate that the Greek Cypriot Administration will also be included. Finally, the sea route part of the route is completed with the arrival of ships at the Port of Piraeus in Greece, but the fact that the Port of Piraeus belongs to China’s COSCO company raises another question mark. It is not possible for China to prevent the use of this port thanks to trade freedoms, but if China prefers to use all the capacity of this port for long periods, it becomes impossible for the Port of Piraeus to yield the desired efficiency, as China hosts most of the world’s largest container ports. “Not to give advice,” but it is not possible to use this part of the route in practice without building a new and larger capacity port in Alexandroupolis.
In summary, it is technically not possible for the Mumbai-Abu Dhabi-Haifa-Paphos-Piraeus-Hamburg route to meet the requirements in the project. Additionally, the route will be a week longer than the Suez Canal alternative, and port loading-unloading costs will also increase the total cost. Insurance costs will increase several times. Since India is not included in the Customs Union, the customs duty to be applied to EU member countries’ orders will be multiplied by the sum of costs such as product price, shipping, and insurance. In this case, the amortization of investments that India needs to make will prevent reaching competitive prices. In Turkey, discussions carried on media and public spaces regarding the project, focus on Turkey being excluded from this project. It is possible to say that these discussions, which are not familiar with the details of the project, have justified prejudices in terms of containing criticisms of Turkish foreign policy. However, when evaluating this project from Turkey’s perspective, it is necessary to be aware of political and economic details. It is also necessary to understand that one purpose of this project is a gift from Western allies to Modi for success in the upcoming Indian elections. It is certain that Indian leader Modi will use this project for political gain in domestic politics. On the other hand, while the advantage of Turkey’s geographical location is indoctrinated starting from our education system, one point is overlooked. While successful examples of economies of scale can deliver their products from east to west cheaply and quickly, Turkey also becomes an open market. While oil-rich countries can finance intermediate and final product imports and grow both their economies and production capacities, it is obvious that Turkey needs to reduce intermediate and final product imports.
Countries that can easily supply the intermediate products we need to sustain our exports can also easily offer final products to our domestic market. In addition to all these, as long as Turkey does not follow a planned and stable production economy policy; it will not see any benefit from being on the trade routes of countries like China or India opening to the West. While oil-rich countries can balance trade by using their natural resources, and technology and patent-producing countries can use their trained human resources, Turkey does not have such advantages. The cost of railways, ports, pipeline and cable lines to be built for the establishment of the India-Middle East-Europe trade route will create a bill of hundreds of billions of dollars. Likewise, the Belt and Road project has economic difficulties to overcome, and establishing the security of the route is also of great importance. In light of the situation and information mentioned above;
1)Relying on a paradigm based solely on the advantages of its geographical location to protect Turkey’s economic and political interests will not always be beneficial; on the contrary, it will cause direct economic damage. Turkey, both due to its geographical location and being a party to the Customs Union agreement, can increase the existing product and service diversity in Western markets and consequently the trade volume in its favor.
2)Turkey must have a planned and stable production-economy policy to avoid new economic problems. Due to the conditions we are in, statist solutions and regulations should be re-evaluated.
3)The trade and pipeline route planned to extend from Basra to Europe, designed by Turkey, Iraq, and regional countries, should not be considered only on the east-west axis. It should not be forgotten that Iranian influence over Iraq needs to be pushed back for this route to be implemented.
4)It is necessary to address competition not only through commodity products but also through different service sectors in relation to the volumes of industrial outputs of production centers such as China and India in global trade. Turkey’s raw material exports to such centers should be reduced following a plan, and product supply to retail markets should be targeted.
5)It is true that Turkey is not defined as a reliable, understandable, and predictable partner by many of its interlocutors. However, this reality should not become a memorized pattern; analyses should not be based on similar patterns. Especially projects that will not provide economic and political benefits even if included should not be approached through these patterns.
