Indonesia to Russia via CPEC


Dr M Ali Hamza

Changes in population size impacts the consumer market potential.Population forecast assist us to stay in tune with the expected patterns of change, which is the key to strategize, adapt and succeed in the longer term. Therefore, monitoring demographic trends is an essential part of global business strategy for any country offering any sort of goods or services. To put it simply, rise in population triggers the increase in demand, that leads to a bulge in scale of production and pushes toward diversification of production patterns to meet the demand. 

On one hand the swelling in amount of global population appears challenging, but on the other it has all attributes of a positive contributor toward economy. More hands more production, more consumption, and ultimately more economic turnover. The western industrialization took all its advantages due to huge eastern population. Yes, channelizing the use of population for national development is a must. So did China, Indonesia, Bangladesh, Russia, and India do. Therefore, the economies of these countries showed up well, even being among the top ten populous countries in the world.

It is important to know that out of 7.888 billion human beings, 5.74 billion people live in the eastern world.This makes 72.85% of the world population. To clarify: In geography, the Eastern hemisphere is usually considered to be formed by all of Europe, Africa, Asia, Australia and the islands of the Pacific that are west of the International Date Line. However, in history, politics and economics, Europe, Australia and New Zealand is often grouped with America because of their cultural similarities, and collectively they are referred to as the Western World.Anyways, out of 5.74 billion, 4.24 billion: (73%) of eastern population lives in only few countries that exist between Indonesia and Russia like Malaysia, Philippine, Myanmar, Bangladesh, India, Sri Lanka, Afghanistan, Iran and Pakistan.

Besides population, the geographical landscape between Indonesia and Russia is hyper rich in natural resources,crops and livestock. For instance, more than 45% of world’s total wheat production happens only in four countries of the Asia; China, Russia, Pakistan & India.Indonesia is one of the world’s main suppliers of rubber, coffee, cocoa, and palm oil. China, Russia, Saudi Arabia and Iran are among top countries with the most natural resources. Afghanistan & Pakistan are rich in minerals. China, India, Russia, and Indonesia are the countries with most productive mining economies.Moreover, the central, south and south east Asian countries are almost self-sufficient in technology. China, Hong Kong, Malaysia, Philippines, and India are top technology exporters.

This all says that we are more than sufficient for each other, thus require a sense of harmony and structure of connectivity to easily transport our goods and services to each other. CPEC is a well long-sighted connecting route between all the countries from Indonesia to Russia. And that makes it a game changer. Does CPEC really offers higher financial gains and involvement of lesser intermediaries in transportation of goods? to understand we need to re-visit some statistics.

According to a 2021 data, Russia imports Palm & Coconut Oil and Rubber from Indonesia (worth $1.79 B), and Indonesia imports Potassic Fertilizers, Coal Briquettes and Semi-Finished Iron (worth $1 B). Besides lots of goods, Russia mainly imports rubber, electronic equipment, medical apparatus and boilers from Malaysia that worth around $1.8 billion, and in return exported plenty of goods to Malaysia like mineral fuels, oil, distillation products, and fertilizers worth $1.19 billion.Data of the same year reveals thatSouth Korea exported $10.4B to Russia. The main products were Cars, Motor vehicles; parts and accessories and Iron Structures. South Korea imported crude oil, mineral fuels, distillation products, steel and lot more that worth $13.22 billion from Russia.Moreover, other countries of ASEAN (Association of Southeast Asian Nations) like Vietnam, Thailand, Philippines, and Singapore total import from Russia is approximately $5.6 billion and Russian import from these countries is around $2.5 billion in 2021. The trading route of these all transactions is primarily Indian oceanto Red sea, and via Suez canal to Mediterranean sea, turns to Black sea and then the railways or road path. This route is long, expensive and full of many intermediaries. So, what is better option than CPEC that cuts down tremendously the cost of logistics, and taking permission from many countries, thus saves time.

For the sake of an argument; in 2021, China exported $5.48B to Sri Lanka. The main products that China exported to Sri Lanka are Broadcasting Equipment, Light Rubberized Knitted Fabric, and Vaccines, blood, antisera, toxins and cultures.Indonesia exported goods of around $54.5 B worth to China and in return Indonesia imported Broadcasting Equipment, Vaccines and Computers worth $60.4B from China in the same year. Malaysia’s import from China was $55.27 billion and exported products of $47.9 billion worth, in 2021. As China is shifting its major industry to western end: Xinjiang. Xinjiang province is emerging as industry, logistics and economic zone with Kashgar as its capital. Southern &central routes of silk road merge in Kashgar, therefore it is an important transfer hub of the Silk Road and that makes Kashgar the significant and global future trading center. Who does not want to connect with the promising trading hub of the near future? and if south and specially south east Asian countries will use old routes that go all the way from Pacific Ocean to eastern Chines ports and then all the way to Kashgar to connect with silk road, the transportation cost will go sky rocketing.

Furthermore, the total trade between CARs and ASEANs is more than half of billion US$. This trade and its profit margins can be extended through using CPEC. Central Asian Republics (CARs) are an important market. A studyindicates that for CARs, regional approach to the development of infrastructure is important, and policy toward infrastructure development should be associated with a further regional economic integration process.CPEC is a flagship program of greater plan of BRI that is designed to assure regional economic integration.

Above data is a speck of a larger reality. Countries that are between Indonesia and Russia need to re-visit their bi and multilateral economic policies to get the best of CPEC. This makes all responsible.It is not only China and Pakistan who needs to re-adjust but the countries of eastern world have to decide whether to stay dependent on west or enjoy economic freedom through accepting the differences and realizing each other’s strengths. Is it sensible to fuel the economies of people who do not and they never belonged to our side of the world? They were the infiltrators, and they will not stop doing it. It is us who need to be together for the greater good of our side of the world as well as the other.