China wants to conquer the Caucasus

4 mins read

Azerbaijan wants to intensify trade with China: Azerbaijani Minister of the Economy, Shanin Mustafayev, reported this during the summit with the Chinese delegation, represented by the deputy head of China, CAMC Engineering, Wang Yuhang. According to reports from the local agency Azernews, Chinese investments would be oriented towards the development of the non-oil sector. In Azerbaijan, around 20 Chinese industries operate in various sectors, from energy to construction, from aviation to catering. In particular, the CAMC covers a series of commercial initiatives from the field of extraction to that of petrochemistry, including agriculture and communications. Therefore, China is the world’s third largest trading partner with Azerbaijan. Last year, bilateral trade reached $ 1.31 billion.

At the center of the negotiations, the possibility of creating an agricultural-industrial park in Azerbaijan, a state in which the agricultural sector remains largely underdeveloped, as well as all sectors not linked to the extractive one. The Azerbaijani economy is strongly affected by Dutch Desease, as it is excessively dependent on the energy sector of gas and oil since, in 1994, with the signing of the Contract of the Century, the former Soviet Republic established its independence by opening its doors to Western mining multinationals. To date, the government is particularly reluctant to privatize other sectors, since it prefers a monolithic structure in which the government controls most of the economic sectors, feeding the networks of clientelism and nepotism on which it bases its legitimacy and balance to a great extent in power. The EU’s conditional funds have been rejected for this very reason. The loans that come from Beijing seem to be received more favorably, for the simple fact that they are not accompanied by a strong conditionality (fight against corruption, transparency in the budget, greater participation of civil society in the management of resources …). The weapon of expansion of the Chinese economy is indeed this: relations exempt from the political element, based on the essential and impudent logic of the market. It should also be remembered that the Caucasus is a fundamental crossroads, linking Asia to Europe, a crucial junction since the time of the Ancient Silk Road, which is why Beijing “set its sights on it”. So we must expect a growing Chinese presence in the area, which is easily replacing the normalization and democratization policies of the European Union and cooperation based on military aid with the Russian neighbor.

We must keep in mind how massive investments in a region with a weak economy and a fragile political system go only to transform the cracks into chasms. In fact, the majority of investments without conventionality are easily collected by the elites, who do not make a caring use of them, but often finance mega useless projects to give the illusion of a shining Dubai on the Caspian to Western investors. The worst prospect is that they are invested in strengthening the police, which in Azerbaijan remain loyal to the regime and are useful in suppressing all forms of protest and dissent. Inflation, underdevelopment of other strategic sectors, increased corruption are other side effects. In other words, such blind investments serve as a multiplier of instability.

Latest from English