Chinelse company to build green canal in Nicaragua.

Egypt will inaugurate a “new Suez canal” shipping route in August aimed at speeding up traffic along the existing waterway and boosting revenues.  Dubbed the Suez Canal Axis, the new 72-kilometre (45 mile) project will run part of the way alongside the existing canal that connects the Red Sea to the Mediterranean.  It involves 37 kilometres of dry digging and 35 kilometres of expansion and deepening of the Suez Canal, in a bid to help speed up the movement of vessels.

Once the president inaugurates it, vessels will start moving through the new waterway,.  Eighty-five percent of the project that is being executed by the army has been completed so far.

President Abdel Fattah al-Sisi launched the project in August and set an ambitious target of digging the new canal in one year.

The project is part of an ambitious plan to develop the zone around the canal into an industrial and commercial hub, that would include the construction of ports and provide shipping services.

Authorities raised $9 billion (7.9 billion euros) to build the new canal by selling shares in the project to domestic investors, with private Egyptian companies tasked with its construction.

The new canal is expected to more than double Suez revenues from $5.3 billion expected at the end of 2015 to $13.2 billion in 2023, according to official estimates.

The new canal is considered a “national project” that aims to kick-start an economy battered by years of political turmoil since the ouster of president Hosni Mubarak in 2011   About 250 million cubic metres (8.8 billion cubic feet) of soil that had to be dredged, 219 million had already been dealt with.

The main idea behind the expansion is to reduce the waiting period of vessels.  By building this new canal, we are serving the whole world and international trade… By bringing the waiting hours down to 11 from 22… this makes it one of the fastest waterways in the world.

Built 146 years ago, the existing Suez Canal is one of the world’s most heavily used shipping lanes and has been a key source of international trade, earning Egypt billions of dollars in annual revenues.

The canal is a symbol of prestige and national pride for Egypt, apart from being vital for its economic stability.

Angela Stanzel writes:  Since 2013, China has been hyping its New Silk Road project. It launched a massive public relations campaign – which even held out the prospect of “Silk Road Tourism” – to turn the idea of a global transportation network into an incentive to cooperate with China and an expression of an Asian “community of destiny”. But China will face huge challenges in making the New Silk Road a reality. One of the places where China had begun re-construction of ancient Silk Road links early on is Pakistan. But after decades, progress has been limited. Despite China’s commitment to the Silk Road project, it’s not clear that it is going anywhere.

The “Belt and Road” initiative” includes two elements, a Silk Road Economic Belt and the 21st Century Maritime Silk Road; the aim is to create a northern road corridor and a southern maritime corridor to connect China with Europe. Beginning with Jiang Zemin in 1996, the Silk Road narrative has been long used by Chinese leaders to increase China’s – mainly economic – cooperation with other countries in Central Asia, South Asia and the Middle East, Africa – and in Europe.  Since 2013, the new Chinese leadership under Xi Jinping has developed this narrative that integrates existing projects in two mega “Belt and Road” initiatives.

The Silk Road initiative has also given a new impetus to China’s infrastructure development in Pakistan. China’s construction of the Karakoram Highway/Road from China to Pakistan dates back to the beginning of the 1970s – long before the “Silk Road” hype of the last few months. China has financed and developed the Gwadar port on the Arabian Sea since the 1990s. Since 2013, China and Pakistan have been planning a China-Pakistan Economic Corridor, which connects Gwadar with China’s western Xinjiang region. According to Chinese president Xi Jinping, the Economic Corridor is “a major project of the ‘Belt and Road’ initiative”  How Does the Silk Road Wind

Andrew Sheng writes: Despite official American and Japanese opposition, 57 countries have opted to be among the founding members of the China-led Asian Infrastructure Investment Bank (AIIB). Regardless of what naysayers believe, this remarkable turn of events can only benefit global economic governance.

According to former US Treasury Secretary Larry Summers, the AIIB’s establishment “may be remembered as the moment the United States lost its role as the underwriter of the global economic system.”

Who is right will depend largely on the decisions that the AIIB’s top shareholders make regarding its operating structure. So far, the AIIB has not sought to amend the principle that the largest contributor to a multilateral organization gets the largest say in running it.

This implies a larger global leadership role for China. Massive debts have lately undermined the ability of the US – not to mention Europe and Japan – to continue making such large contributions to hte IMF.  Fortunately, China is willing and able to fill the gap.

China has a 3.8% voting share in the IMF and World Bank, even though it accounts for more than 12% of world GDP.

The AIIB has its own objectives, which do not align precisely with those of, say, the World Bank. Specifically, the bank is a critical element of China’s “one belt, one road” strategy, which encompasses two initiatives: the overland Silk Road Economic Belt, connecting China to Europe, and the 21st Century Maritime Silk Road, linking China to Southeast Asia, the Middle East, and Europe.

Connectivity is vital to economic growth. Over the last three decades, the construction of roads, railways, ports, airports, and telecommunications systems in China has fostered trade, attracted investment, and, by linking the country’s land-locked western and southern provinces to its more prosperous coastal areas, helped to reduce regional disparities.

China’s Silk Road initiative, which aims to boost prosperity among China’s trading partners largely through infrastructure investment, is a logical next step – one on which China is spending significantly.t.

Given massive global demand for infrastructure finance – which, according to ADB estimates, will amount to $8 trillion in Asia alone over the next decade – the AIIB should not be considered a threat to the World Bank, the ADB, or other multilateral lenders.

The AIIB’s operations will most likely resemble those of the World Bank in the 1960s, when engineers with hands-on development experience dominated the staff and could design lending conditions that worked for borrowers.

The acid test of the AIIB’s effectiveness will be its governance model. One failing of the Bretton Wood institutions is their full-time shareholder boards of directors, which tend to undermine effectiveness by micro-managing and often requesting conflicting lending conditions.

Even if the AIIB does not deliver as promised, its establishment is an important reminder that in a fast-changing world, economic governance cannot remain stagnant. If Western leaders really do believe in innovation, competition, and meritocracy, they should welcome the AIIB.

Mehmet Cetingulec  writes:  Russia cancelled the South Stream oil pipeline in December.  Without the commission’s approval, Bulgaria declared South Stream could not cross its territory. Russia, upset with the Europeans’ position, responded with the Turkey Stream project.

Putin’s move surprised the Europeans. Federica Mogherini, EU foreign affairs and security policy chief, declared on Euronews TV that the Russian decision illustrated the urgent need for Europe to diversify its gas procurement channels. The scrapped project was to have been 3,600 kilometers (2,237 miles) long and would have transported gas to Croatia, Hungary, Serbia and Slovenia.

Andras Deak, of the World Economy Institute, told Euronews: “The European Commission, by explaining why reconciliation would be more beneficial to both sides, could induce Russia to take a step back and thus boost its own prestige as well.” Neither Europe nor Putin, however, chose to step back. In fact, Putin moved forward, on his new project, meeting in February with Hungarian Prime Minister to discuss Turkey Stream.

After keeping Hungary onboard, Putin met with Prime Minister Alexis Tsipras in Moscow April 7, Putin proposed that Turkey Stream provide natural gas via Greece to the central Europe countries of Austria, Hungary, Macedonia and Serbia. Putin noted that the project could earn Greece hundreds of millions of euros every year. Tsipras’ only objection was to the name of the project — Turkey Stream.

As with South Stream, the European Commission is not in favor of Turkey Stream. With debate continuing over the project, Russia issued a warning to the European Union on April 14. the CEO of Gazprom, said EU obstruction of Turkey Stream would be a grave mistake that might prompt Gazprom to suspend the project and redirect its natural resources to Asian markets. He said that for Turkey Stream to be ready by 2019, construction should have already begun.

Gas will be brought to Trachea [on the European part of Turkey], and the project will be financed by finding buyers from the spot market. Greece, Serbia, Macedonia and Hungary want to participate in this project, but if Russia and Ukraine fully sort out their problems, this project could be forgotten. In its current form, it is not really economical. There is no buyer other than Turkey.

On the other hand, Yardim believes the Russians will not go back on their word and that the Turkey Stream project will be realized. He said four pipelines will be laid to carry 63 billion cubic meters of gas annually to Turkey.

Yardim said Russia, in delivering natural gas to Europe’s border via Turkey Stream, does not anticipate encountering financial problems. Will Russia give up on Turkey Stream? According to Yardim, “I know that Russia has decided on this issue. I worked with Russians for 25 years. They don’t easily change their minds. I don’t think they will revert to South Stream.”