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The Belt and Road Initiative: Challenges, Prospects and the Importance of “Soft Infrastructure”

The Belt and Road Initiative: Challenges, Prospects and the Importance of “Soft Infrastructure”. Jurij C. Kofner Research assistant, Advanced Systems Analysis Program kofner@iiasa.ac.at International Institute for Applied Systems Analysis (IIASA ), Laxenburg , Austria.

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The Belt and Road Initiative: Challenges, Prospects and the Importance of “Soft Infrastructure”

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  1. The Belt and Road Initiative:Challenges, Prospects and the Importance of “Soft Infrastructure” Jurij C. Kofner Research assistant, Advanced Systems Analysis Program kofner@iiasa.ac.at International Institute for Applied Systems Analysis (IIASA), Laxenburg, Austria

  2. Transit Railway Container Traffic along PRC–EAEU-EU Routes (2010-2017, TEU thousand) Source: IIASA (2018)

  3. Estimated freight rate elasticity of demand(2011 – 2030) Scenario 1. Rate reduction to “Sea + $1000” Scenario 2. Current freight rate unchanged C Source: IIASA (2018)

  4. Estimated Cost and Duration of Freight Transport by Standard 20-Foot Containers from China to Western Europe Source: IIASA (2018)

  5. BarriersandRecommendations Barriers to international freight transit: • Discrepancy of the regulatory requirements (e.g. length of trains); • Infrastructural bottleneck - insufficient capacity at international border crossing points in the EU and EAEU countries; • Insufficiently harmonized procedures for crossing borders (EU- EAEU); • Different gauges – not as important as one might think! • Specific regulations within the bilateral intergovernmental agreements (quoting of transportations, restriction of a choice of routes) etc. Main barriers are regulations, not physical infrastructure, except Poland. Some recommendations: • International coordination of the development of land transport corridors, including coordination of investment policies. • Investments into infrastructural bottlenecks. We identify three of them: (1) border crossings (China-Russia, China-Kazakhstan, Belarus-Poland); (2) logistics hubs in the EAEU countries; (3) Polish railway infrastructure. Regulatory convergence wherever feasible!

  6. Research project “Improving soft infrastructure connectivity between the EU, EAEU and China” Stock tacking of soft infrastructure: • Freight documents; Customs procedures; Import/export loans: Investment regulations; Technical regulations;E-commerce regulations; Technical aspects of rail connectivity. • Models used • Language • Level of digitalization • Business friendliness • Level of harmonization • “Hard” vs. “soft” infrastructure • Research project together with the German Economic Institute • EU strategy “Connecting Europe and Asia” (September 2018) • Promotion of European regulations, standards, rules, regulations, models, etc.

  7. Thank you for your attention!

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