HUG Magazine 2019 EN - Issue 2. (№14) by PAIGEO - Pallas Athene Innovation and Geopolitical Foundation

2019

HUNGARIA N G EOPOLITICS

Redefining the 21st-century geopolitical role of the East-Central European region: Let us â&#x20AC;&#x153;placeâ&#x20AC;? Hungary together on the political and economic world map again! We, Hungarians have always known more about the world than the world about us. Now, we can play a decisive role in world politics again, or in geopolitical terms, occupy a strategic geographical place in the world.

HUNGARIAN GEOPOLITICS

HUG 2019 2

The geopolitical situation of Central Europe An Introduction to the â&#x20AC;&#x153;16 + 1 Cooperationâ&#x20AC;? hungary, as a pioneer of the bri The importance of the New Silk Road 2019/II.

ISSN 2498-647X

to the V4 in the global economic space The scientific basis of the ecological civilisation

FOREWORD

The age of Eurasia A new world order is emerging, the global economic centre of gravity has shifted to the east. The Atlantic era of about five hundred years is being replaced by a new land age, the age of Eurasia. Eurasia, which has been connected for thousands of years in both geological and geographical terms. 11 comprehensive scientific disciplines have together proved that there was first a Paleolithic and then an ancient Silk Road leading from the Carpathian Basin to the North China Plain. As a transport route, this contiguous area, that is 8 million square meters of steppe belt and 16 million square meters of plains enabled the most important innovations, philosophies, languages, music, and motives to create a constant connection. Just like in subsequent historical ages, this route has now revived and again represents the most important transportation, trading, economic, technological, digital, knowledge and cultural connection. The age of the sea is followed by that of the land, which began in 2013. Globalisation is replaced by a new technological era, and China, which has announced an ecological civilization, creates the opportunity of long-term sustainable economic growth and a peaceful infrastructure project, which leads through Eurasia, and our region: Hungary and the Carpathian Basin. And Central and Eastern Europe plays a key role in this. In the 21st century, connectivity and complexity are the most important concepts. In this new world order, we must recreate our maps because this age is not the era of America or Europe but that of Eurasia. The weaker Europe is, the stronger Eurasia becomes. Since the announcement of the Belt and Road Initiative in September 2013, 125 countries and 29 international institutions have joined it and 170 partnership agreements were signed worth around 1000 billion USD. The Belt and Road Initiative aims to place the axis of world economy from the oceans back to land, and restore and rebuild the former economic, political, and cultural role of Eurasia. This is a network which can be flexibly extended in space and time and it is a win-win cooperation fostering a peaceful rise of countries. The Silk Road connects the actors who form the new stage of globalisation. In his book entitled Ancient Hungary â&#x20AC;&#x201C; The rise of the peoples of the Carpathian basin and the Silk Road,

Attila Grandpierre states that the rise of the people in the Carpathian Basin is closely linked to the rise of the peoples of the Silk Road. Hungary was the first to announce the Eastern Opening policy, to join the New Silk Road, to sign a partnership agreement within the framework of the BRI, to adopt the agreement on currency swap, and to launch a joint programme in the framework of an educational cooperation. Budapest and Hungary have become the true gate region of the New Silk Road, and developed into a Central European economic centre of gravity together with the Visegrad and the 16+1 countries. In our HUG issue published in the autumn of 2017, we presented the achievements of the Silk Road and realised while doing so that it is more important to China and to the international scene that we show how our Central and Eastern European region has developed over the past decade and become an increasingly important geopolitical actor. Therefore, in this special edition we are presenting through the Visegrad and the 16+1 cooperation the connection between Hungary and the BRI as well as all the results we have jointly achieved since the announcement of the Belt and Road Initiative. Yours faithfully,

Norbert Csizmadia Pallas Athene Innovation and Geopolitical Foundation Chairman of the Board of Trustees HUGâ&#x20AC;&#x2122;s Editor-in-Chief

table of contents

The geopolitical situation of Central Europe

Central and Eastern European Countries in the Multi-polar World of the 21 st Century

An Introduction to the “16 + 1 Cooperation”

Budapest Guidelines

Prime Minister Viktor Orbán’s Address at the Meeting of the Central Bank Governors of China and Central and Eastern European Countries

Hungary on the Path to Economic Convergence

102

hungary, as a pioneer of the bri

108

The importance of the New Silk Road to the V4 in the global economic space

116

A Hungarian compass between East and West

124

The Europe of the future is emerging in our region

128

The significance of geography in the multipolar world order of the 21 st century

138

The geoeconomic significance of the “New Amber Road”

148

Establishing the Budapest– Warsaw axis

156

Rail freight transport between China and the European Union on the New Silk Road

164

Companies managing rail freight services between China and Europe

172

The New Silk Road and the ancient Eurasian civilisation

184

The scientific basis of the ecological civilisation

THE GEOPOLITICAL SITUATION OF CENTRAL EUROPE

Exploring the geopolitical situation of Central Europe in the context of geopolitical theories Author: GrĂŠta Czene

It is difficult to define the notion of the Central European region, because its historical, ethnic, cultural and geographical borders are not identical with each other. In certain periods of the development of the European spatial structure, Central Europe played the role of a buffer zone, and continuously was the scene of rivalries between European major powers. When exploring the historical development of the European continental space, it is revealed that there were periods when the forces maintaining the borders of the Central European region were destroyed, and the region integrated into geopolitical units, usually in a divided form. There is no agreement on the boundaries of Central Europe; there are as many viewpoints along which the notion of Central Europe is defined as there are authors.

DEFINING CENTRAL EUROPE In the 19th century, Karl Ritter saw the essential feature of this region in its distance from the seas, and identified Central Europe with the German-Sarmatian-Russian plain land between the Rhine and the Volga rivers. He was followed by Albrecht Penck, Alfred Hettner, who already defined Central Europe as a territory under German influence, and this view was also adopted by French geography. From the middle of the 19th century, the political and cultural definition of Central Europe was coined; the notion of Mitteleuropa was created to provide an economic hinterland for Germany in the works of politicians, thinkers (e.g. (pl. Friedrich List) from the 1830s, but significant works on the topic were also published in the years before the First World. The concept of Mitteleuropa relates to a Germany-centred economic macro-space reaching out to the southeast, crossing the boundaries of the space designed by the pan-German movement. The political significance of the region grew after World War I, as the revolutionary

transformation of Russia deprived France of its eastern ally that could serve as counterweight to Germany on its east side. In Europe divided in the Cold War era, the concept of Central Europe became meaningless, as the Iron Curtain was actually drawn along the centre line of our region, and our region was transferred into the category of Eastern Europe. It was the eighties when this spatial concept appeared in the public discourse again, especially as a result of distancing from the East cognitively, and after the regime changes this also manifested in the political cooperations of the community, demonstrated by the Central Europe Initiative (CEI), the free trade association (CEFTA) and the foundation of the VisegrĂĄd Group. In recent years, there has been a sharp increase in the number of Hungarian surveys and studies on Central Europe, which obviously suggests that focus of professional interest has shifted onto this cluster of countries. Several theories have been formulated to define Central Europe as a macro-region, and meticulous work has

been done to reveal the previous territorial features of this cluster of countries. The studies also indicate that there are significant differences in marking the macro-region. One group of researches focusses on the countries of the Visegrád Cooperation (V4), formed in 1991 (the Czech Republic, Poland, Hungary, Slovakia); several others also include Austria in the image of Central Europe. Other analyses also add the eastern provinces of Germany to the macro-region, Bavaria maybe, Slovenia, related to the West-Balkan, and Romania, thus they talk about a broader Central Europe. Tibor Baráth argues that geographical and political-historical boundaries were rarely identical in Central Europe, and the region has never been characterized by a permanence of borders. Central Europe, as a historical-political geographical space can be called a natural region shaped by various geographical, ethnographic, political and cultural factors, which can be described very vaguely in geographical terms. An essential element is that its external boundaries are not sharp, the region usually gravitates toward Germany, and its territory is dominated by the traditions of the Christian-German cultural area. In her study, Csilla Dömők means the area between the Rhine and the Vistula, stretching between the Western Alps and the ranges of theCarpathian Mountain, between the Baltic

“There is no agreement on the boundaries of Central Europe; there are as many viewpoints along which the notion of Central Europe is defined as there are authors.” Sea and the Adriatic Sea in relation to Central Europe in an extensive approach. Nonetheless, she classifies Austria, the Czech Republic, Slovakia, Slovenia, Croatia and Hungary as central areas in a strict sense. Péter Miletics and Viktor Pál mean – on the basis of political geographical viewpoints – the following countries by Central Europe: Germany, Austria, the Czech Republic, Slovakia, Hungary, Slovenia, Lichtenstein and Switzerland. In their opinion, Romania is too attached to the Balkan, and considering the dividing and space-maintaining forces of geographical features, the Carpathians cut the Romanian state into two, increasing the insecurities of a regional division of

Central Europe

space. Ferenc MezĹ&#x2018; believes that Central Europe as a phrase cannot be defined on the basis of simple natural geographical criteria, because it exists so much in the realms of identities and sentiments that other dimensions must be called upon, such as economy, cultural geography, history, politics, social structure, etc. MezĹ&#x2018; argues that the region has always existed in the crossfire of current policies, as the theories formulated about it have always served the ambitions of a particular power. For my part, my starting point for the definition of Central Europe is not limited to geographical location and civilisational traditions exclusively, but I define the region on the basis of interactions between geographical and political structures, which means a broader Central Europe. The notion of Central Europe, disappeared from the political vocabulary between 1945 and 1989, has been reborn by today, and the Central European identity has resurrected from its state of suspended animation, and the states of the region identify themselves with it. The US Department of State has stopped using the name Eastern Europe in its office functions with regard to the fact that the name, which artificially divided Europe into two, no longer has legitimacy, and the name with which the

states of the regions denotate themselves should be used. Due to changes taking place after 1989, the dissolution of the bipolar world order and the eastern expansion of Euro-Atlantic structures, my definition of Central Europe includes Austria, the eastern provinces of Germany, Hungary, Ukraineâ&#x20AC;&#x2122;s Lower Carpathian region, Poland, the Czech Republic, Slovakia, Romania, Serbia, Slovenia, Croatia and certain parts of Bosnia and Herzegovina. Thus it is clear that there are as many definitions of Central Europe as there are authors, although they all agree in one thing: it is hardly possible to give an accurate definition, an unambiguous and undebatable geographical classification. CENTRAL EUROPE IN GEOPOLITICAL THEORIES The whole of Central Europe has never been permanently covered by any imperial territory, it has always been characterized by internal territorial division. Practically, the region has never been organised into a completely uniform unit, has never constituted an independent and long-lived geopolitical field of forces, has never realised the organic integration of an empire, a cultural area. Each historical moment when a pow-

THE GEOPOLITICAL SITUATION OF CENTRAL EUROPE

er attempted to unify the region, triggered a bilateral pressure of rim states, the aim of which was to conserve the multipolarity of the region. From a geopolitical perspective, a buffer zone of small states is a significant part of the region, the possession of which is considered to be a key to being a major power by one of the most significant Anglo-Saxon thinkers, Halford Mackinder. Let us think of his famous theory, ‘Who rules East Europe commands the Heartland; who rules the Heartland commands the World-Island; who rules the World-Island commands the world’. Thus, according to Mackinder, the Heartland was unprotected from the west only, on its Eastern European frontier, therefore Eastern Europe is of key importance for Mackinder. If the ruler of the Pivot Area enters into alliance with Germany, such alliance evolves that is invincible by Britain, thereby control over the Rimland is gained, and who rules the Rimland rules the Heartland and who controls the Heartland can expand its influence over the whole world. However, if the British Empire gets hold of a crucial part of Eastern Europe, neither Russia nor Germany represents a threat to it and its global power status is ensured. Mackinder regarded Eastern Europe, which he called ‘strategical addition’, as a part of the Heartland. Eastern Europe, filling the power vacuum and divided into

small states, obtained major significance from the viewpoint of rivalry between continental and sea powers, that is the changes in international affairs. Mackinder argues that ‘West Europe, both insular and peninsular, must necessarily be opposed to whatever Power attempts to organize the resources of East Europe and the Heartland.’ According to another significant thinker, Samuel P. Huntinton, the patterns of cohesion, disintegration, and conflict in the post-Cold War world are shaped by culture and cultural identities, which at the broadest level are civilizational identities. The clash of political ideologies within civilizations has been replaced by a clash of religions and cultures between civilizations. By civilisation, Huntington means the highest level of cultural grouping, the broadest level of a cultural identity, and he differentiates between eight civilizations on this basis: Chinese, Buddhist, Japonic, Hindu, Muslim, Orthodox Christian, Western Christian, Latin-American, African, and their boundaries do not always correspond with state borders. Several states are cleft between two civilizations, or are seeking to affiliate with another civilization; Huntington puts them into a separate category of ‘lone countries’, including Turkey, Haiti, former British colonies in the Caribbean, and Ethiopia. Israel could be considered a unique state, but it is extremely close to Western civilisation.

Central and Eastern Europe

Visualisation of the Heartland theory, highlighting the significance of Central Europe

Huntingtonâ&#x20AC;&#x2122;s civilizations

THE GEOPOLITICAL SITUATION OF CENTRAL EUROPE

The eastern frontier of western civilisation

According to Huntington, the structure of conflicts has changed, conflicts have evolved along fault lines, which have become characteristic of mainly Muslim and Western countries. Huntington thinks that Europe is in a particularly difficult situation, because the longest dividing lines can be found within this continent, and they are considered to be the most dangerous by Huntington. Hungary is situated on the boundary of the Western and the Orthodox civilisation, on the east border of Europe, which, according to Huntington, lies on the line which divides Western Christians from Muslim and Orthodox peoples. The historical antecedents of this line should be sought in the time zone between the dissolution of the Roman Empire in the 4th century, and the foundation of the Holy Roman Empire in the 10th century. There has been a borderline here for at least 500 years: it starts in the north, runs across the area that separates present-day Finland from Russia and Russia from the Baltic states (Estonia, Latvia, Lithuania), passes through the western territories of Belarus, Ukraine, separates Greek Catholic western parts from Orthodox eastern ones, runs across those parts of Ro-

mania where Transylvania with its Catholic Hungarian population is situated, goes all the way down to former Yugoslavia intersecting it at the point where Slovenia and Croatia border on the other republics. Naturally, on the Balkan this line corresponds to the historical borderline between the Austro-Hungarian Empire and the Ottoman Empire. Thus, Europe ends where Western Christianity ends and the world of the Islam and the Orthodoxy begins. This is how Huntington defines Europeâ&#x20AC;&#x2122;s cultural borderline. Michael Howard argues that areas that once formed a part of Western Christendom, i.e. the eastern territories of the Hapsburg Empire, Hungary, Czechia and Slovakia, Poland and Germany, belong to Central Europe (or Mitteleuropa). Howard reserves the term â&#x20AC;&#x2DC;Eastern Europeâ&#x20AC;&#x2122; for those regions that developed under the aegis of the Orthodox Church: the Black Sea communities of Bulgaria and Romania which emerged from Ottoman domination in the 19th century. The geopolitical importance of the region is not disputed by Zbigniew Brzezinski, either. Going back to Mackinderian traditions, Brzezinski thinks that Europe is the

France’s and Germany’s spheres of geopolitical interest

bridgehead of the vast Eurasian landmass, and preserving this, as well as extending US influence directly affects US security. Brzezinski’s map, however, clearly displays that the Central and Eastern European region is situated at the intersection point of France’s and Germany’s spheres of geopolitical interests. France has historical traditions about claiming the leading role of Europe, and this special vocation, generated by a deeply felt sense of historical destiny, has important political implications. The sphere of geopolitical interests, depicted on the map, includes the Iberian Peninsula, the northern shore of the western Mediterranean, and Germany up to East-Central Europe. As Brzezinski argues, that is not only the minimum radius of French security; it is also an essential zone of French political interest.

Germany, however, knows the real limits of French power, as France’s economy is much weaker than Germany’s, and its military power is unable to protect Europe independently. In order to construct Europe, Germany has been willing to propitiate French pride, but in order to keep Europe truly secure, it has been insisting on a central role in European security for the United States. Brzezinski argues that Germany obviously plays a leading role in Central Europe, and by acting as the main sponsor of a larger and more united Europe when the European Union was enlarged, it has gained particularly strong influence in Central Europe. In their book entitled The Unquiet Frontier, Jakub J. Grigiel and Aaron Weiss Mitchell argue that over time, possessing or neutralizing Central European territories was a necessary condition for Russia’s great power sta-

THE GEOPOLITICAL SITUATION OF CENTRAL EUROPE

Frontier allies of the United States in the world

tus, and on the peak of its power, when it directly controlled them, Russia was more than a simple power: it was a Eurasian superpower that had adequate resources to shape its external environment and project its power through its territorial gateways. This way Russia was the only power that threatened the USA, but without these territories Russia is just one of the large Asian countries. As the Central European allies of the United States have been inserted in front of Russia’s western frontiers, its geopolitical growth is confined between boundaries, and therefore Russia can be called a large but essentially quarantined country. SUMMARY In the period that has elapsed since the dissolution of the bipolar world order, our region has undergone a great transformation: we have joined the North Atlantic Treaty Organisation (NATO), and we have become a Member State of the European Union. With these steps, we have become entrenched in the pillars of the Trans-Atlantic world order, but we try to remain members representing sovereign national statehood. This task is not an easy one as on the borderline between the West and the East, in the magnetic field of the great powers’ spheres of influence it is hard to re-

tain this kind of sovereignty. As Krisztina Szőcs writes about Central Europe, Central Europe is not closed, cannot be closed in terms of its openness toward West and East, not only historically or geographically but also intellectually and culturally. Due to its central position, Central Europe is the scene for political, economic and cultural movements between East and West. Due to its central position, it also functions as a dividing line, a borderline; a border that separates the East from the West and vice versa, the West from the East The ideas of the above-mentioned authors reflect that the history of Central Europe is not only about a century-old struggle between nations and empires, and we shall not forget that both world wars were triggered in Central Europe. Then emphasis was placed on the centre, and subsequently peripheries decided about its fate. Lines of power radiate from the centre towards the edges, and then from the edges towards the centre, and a sense of a perpetually moving, incessantly changing and transforming intellectual world evolves. Thus, whatever happens in this middle region, it never remains a regional problem – this is the lesson we can learn from the thousand-year long history of Hungary and the Central European region.

Central and Eastern European Countries in the Multi-polar World of the 21st Century

Transition from being the 20th century’s Buffer Zone between East and West to the “bridge region” of Eurasia in the 21st century Author: Ágnes Bernek

When it comes to defining the geopolitical role of the Central and Eastern European region, the main question is usually whether it belongs to the West or to the East. The West and East distinction is still the basis of our thinking about the international geopolitical space, although the closing of the Cold War Period in the 1990s has made the international distinction based on this logic pointless. Still, is it possible at the beginning of the 21 st century that the Central and Eastern European countries change their traditional geopolitical attitude, especially their entrenched stereotypic approach about “looking up to the West and looking down on the East”? By 2018 it has become evident that in place of the unipolar world, built on the global political and economic hegemony of the USA and the Atlantic field of power, there is a new multi-polar world on the rise. In the USA’s global role of “first among equals” has now come to end and geopolitically it can be stated that spatial diffusion of power has begun. What will the multi-polar world be like? Since this evolving multi-polar world is still lacking a regulatory framework, the extremely volatile nature of our world can primarily be traced back to the so-called systemic geopolitical threats. With China becoming the second biggest national economy of the world, political and economic models and eco-

nomic approaches other than the Anglo-Saxon set of rules of world economy are also gaining ground. The socalled non-Anglo-Saxon world is already taking shape (though, for now, in co-existence with the Anglo-Saxon world). Thus, the dominance of the traditional “Western” world is highly questionable. The “grand geopolitical chessboard” of the 21st century, however, has transformed profoundly, and due to the 2008 crisis of the European Union and other European countries the world’s centre of gravity has shifted to the Pacific field of power. The “grand strategies” of the 21st century are, by now, investigated solely in the light of the

geopolitical interests of three political world powers, namely the USA, Russia and China. The globe is turning and every forecast seems to suggest that the 21st century will see the downfall of Europe. And in addition to that, slowly but surely, the Eurocentric world view is going to change, thus bringing about a shift in the interpretation of the traditional North–South and West–East division of the international order. That is, in cartographic terms, the zero point will change and the world will no longer be interpreted only through Brussels and Washington but through Beijing and Moscow, as well. Therefore, we must work out a new geopolitical view of space. In spite of that, we are witnessing a renaissance of the orthodox (traditional) geopolitical approach. Indisputably, the most often cited writer of present-day geopolitics is the British geographer Halford J. Mackinder (1861-1947). The most important terms of geopolitics, namely “Heartland” and World-Island are products of Mackinder’s work. “Who rules East Europe commands the Heartland; who rules the Heartland commands the World-Island; who rules the World-Island commands the world." (H. Mackinder, 1919. p. 186.) In recent geopolitical studies the quotation is regularly used in the sense that whoever rules the “Heartland” commands the world. In the 21st century the “Heartland” is placed in the Central Asian region, though in the wake of the Ukrainian events more and more people call attention to the fact that Eastern Europe remains a key player in world politics. In the 21st century the “Heartland” can be defined as the “clashing point” of the geopolitical field. In his political analysis of Europe and Asia Mackinder tried to find out what kind of connection might there be between geographical and historical processes and major events. Mackinder coined the political concept of Eurasia which does not only suggest that Europe and Asia constitute a single unit geologically, but more importantly, that the nations and states of Europe and Asia form the centre of world power. In the quotation above the term “World-Island” refers exactly to Eurasia, the largest continuous continent of the planet. The concept of Eurasia is one of the most disputed nowadays. In the western half of Europe even the sheer existence of the concept is denied and it is usually

equated with Russia or the rebirth of the Soviet Union. In Hungary, in the stereotypical way of thinking characteristic of the Cold War era, Europe is equated the West and Eurasia is identified with the East. The well-established political motto, always re-emerging during V. Putin’s visits to Hungary, that we have to make a choice between Europe and Eurasia, is fundamentally flawed both geographically and geopolitically. The reason for that is that Europe in its own right is not a separate continent either geologically or geographically. Even Alexander Humboldt defined Europe as the enormous western peninsula of Asia. The reason why we consider Europe to be a separate continent is rooted to a greater extent in its history, culture and its perception. H. Mackinder described the world’s political structure as a unit consisting of the American continent and the World-Island. Even though everything is in motion, the fundamental question remains the same: Will Halford Mackinder’s World Island ever take shape as an actual geographic territorial unit and will we be able to investigate global political relations in terms of the World-Island—American continent dichotomy in the near future? Will the USA’s policy of containment continue, and if so, how will it actually thwart the creation of a strong economic and political relationship between Europe and Asia? Will a new Eurasian supercontinent be created through the ever-intensifying economic cooperation between Russia and China? What is the new multi-polar world going to be like and what will be the role of Hungary and the Central Eastern European region in the currently evolving Eurasian supercontinent? In the 2000s – from the beginning of V. Putin’s tenure as president and the economic and political consolidation and rise of Russia – the concept of Eurasia was solely associated with Russia’s geopolitical endeavours. Consequently, a post-soviet interpretation was attributed to it, and the Western world ultimately saw the dangerous prospect of the Soviet Union’s rebirth in Russia’s Eurasian geopolitical strategy. It was not by chance that the concept met utter rejection in the countries of the Euro-Atlantic field of power, and that they entirely dismissed the possibility of creating a new European–Asian alliance and field of power with the Russians at its forefront. In 2013, with the introduction and implementation of the “New Silk Road” infrastructural and economic development programme, however, the concept of Eurasia

was assigned a new, primarily economic interpretation, and definitively surpassed its post-soviet imperial meaning. This is because for the first time in history there is a realistic economic chance for Europe and Asia to become a single economic field of power, for the eastern end of Europe and the western half of Asia are, in effect, merged. This also means that while earlier the concept of Eurasia was accepted geologically around the world (with the exception of Russia), by now the concept has acquired a new political and economic interpretation. What will be the geopolitical role of the Central and Eastern European region on this new evolving Eurasian continent? From a European perspective it is the periphery of the EU, the eastern half of the European con-

cooperation of V4 member states with other countries of the Central European region and with countries of the Western Balkans and those involved in the EU’s Eastern Partnership Programme (primarily Belorussia, Moldova and Ukraine).iThe current Hungarian presidency programme carries on the foreign political endeavours of the Polish presidency. The prime goal of the Hungarian presidency sub-programme, called “Regional Visegrad”, is also the strengthening of relationships between the countries of the V4 and Western Balkans. Furthermore, it aims to increase the role of the V4 in elaborating and substantiating the EU’s policy on further expansion through the strengthening relationship with the countries of the

tinent. But will this region assume a new geopolitical role and will it become a “bridge region” between Europe and Asia? Will it be able to free itself from being caught between West and East? In order for the Central and Eastern European countries to become successful on the long term, they should strive towards becoming a strategically important geographical spot, that are “bridge states” in the multi-polar world of the 21th century. In the current

Eastern Partnership.ii But the great question for the years to come is whether the V4 will expand or not? Will other countries be involved from the region? According to my prognosis for the future the V4 group ought to be transformed into a V7 partnership. Croatia, Slovenia and Austria should be added to the cooperation, and consequently, a new framework of 21st century Central European cooperation should be established.

period of “deglobalisation” and ever-strengthening macro-regions, intensifying the cooperation among the countries of the Visegrad group and establishing a Eastern-Central European economic field of power underpinned by a new north-south infrastructural corridor could serve as a suitable basis for Hungary, too, for adopting a considerably more independent foreign policy strategy. The necessity for the creation of this Central and Eastern European North-South economic (and political) power field has already appeared in the post-World War I. settlement plan of Józef Piłsudski, Polish marshal. Piłsudski coined the term of Intermarium which referred to a closer cooperation between the countries of the region, stretching from the Baltic to the Adriatic and Black Sea, with the aim of retaining their independence. The three highlighted elements, the actual drivers of the new Central and Eastern European economic force field are the following: 1. The Visegrad Cooperation signed in 1991 originally aimed to shorten the process of the Euro-Atlantic integration. Since then, the V4 has become a recognized political “trademark”. The period of the 2016/2017 Polish V4 presidency was the first time during which the Visegrad Group set very serious political goals: intensifying the economic and political

2. The Three Seas Initiative has been launched with the aim of establishing a new North-South link in the Central and Eastern European region. This initiative has set the target of establishing new economic relations between the Baltic, the Adriatic and the Black Sea. The Three Seas Initiative was initiated by Croatia and Poland. The first summit took place in Dubrovnik in the summer of 2016, the second summit was organised in Warsaw in the July of 2017. The main aim of the initiation is to establish a new NorthSouth energetic corridor, stretching from the Baltic Sea to the Adriatic Sea. Its Northern “gate” would be the Świnoujście LNG (liquefied natural gas) terminal in northern Poland, while its Southern “gate” would be the Adriatic Sea LNG terminal in the island of Krk planned to be constructed by 2019. 3. The so-called “16+1” cooperation between China and 16 Central and Eastern European countries has been announced in 2011 during his official visit in Hungary Wen Jiabao, former president of the People’s Republic of China. Its aim is to create a new platform for establishing more intense economic relations with Central and Eastern European countries. The “16+1” transregional platform was officially brought into life in 2012 at the Warsaw summit and since then a Prime Ministerial summit has been organised annu-

Central and Eastern European Countries in the Multi-polar World of the 21 ST Century

ally by the 16 CEE countries and China. In November 2017, the summit of the “16+1 cooperation” took place in Budapest. However, beyond these three initiatives and forms of cooperation, the evolving Central and Eastern European economic force field is also suggested by the fact that the missing transport sections of the five Trans-European Transport Network (TEN-T) affecting our regions are now being built. The key question is how the TEN-T transport corridors can connect to the main routes of the economic zones of the Chinese New Silk Road. The two European gates to the mainland routes of the economic zone of the Chinese New Silk Road are Terespol/Brest in Poland/Belarus and Záhony in Hun-

1. Central and Eastern Europe – From being “trapped” between East and West to becoming the “bridge region” in the 21st century’s multi-polar world – aims of the study and hypotheses

gary. However, the European gate of the 21st Century Maritime Silk Road is definitely the Port of Piraeus in Greece. At the same time, it is indisputable that a new geopolitical approach, a new geopolitical attitude should be created so that a new Central and Eastern European economic force field can actually emerge for all players of the political, economic and business life. If a couple decades from now in the future we were asked where the Central and Eastern European regions is, what will be our answer? At the eastern end of Europe or in the centre of Eurasia instead?

Though, it should be noted that these are no longer the right questions to ask in the 21st century. These questions belong rather to the traditional North–South and West–East division that was prevalent during the second half of the 20th century. In the 1980s, with the former German Chancellor, Willy Brandt playing a leading role in its conception, the so called Brandt Report was published which depicted a North–South divide with regard to the existing global political and economic discrepancies. The so called Brandt Line divided the globe into developed northern and developing south-

When it comes to defining the geopolitical role of the Central and Eastern European region the main question, usually arising, is whether it belongs to the West or the East? What is more important, the fact that it is the eastern frontier zone of the Atlantic field or more so that it is the westernmost bridgehead of the Eurasian field currently in the making?

The China-centered, Chinese-language world map

The Eurasian continent

ern countries along the 30° north latitude. However, during the Cold War the developed northern world was subdivided into the western capitalist world and the socialist eastern bloc (The Soviet Union and the socialist Eastern European countries) opposing it. The West–East division still forms the basis of our present-day thinking about the geopolitical field, despite the fact that as a result of the regime changes that started from the 1990s the world has become unipolar, and the international division constructed upon Cold War logic has become obsolete. What is more, due to the emerging markets of the previously underdeveloped southern states even the North–South classification has become irrelevant. So much so, that the developing country denomination is no longer used in the global political and economic discourse of the 21st century. It is also imperative to point out that the underlying idea behind the traditional geopolitical interpretation of geographical directions is that the European continent’s central position in the world is self-evident for us. Thus on the world maps we use Europe is always in central position. Consequently, it becomes clear that the North–South and even more so the West–East geopolitical approach is rooted in the fact that we investigate the 21st century’s geopolitical field exclusively from the perspective of Europe. The “grand geopolitical chessboard” of the 21st century, however, has transformed profoundly, and due to the 2008 crisis of the European Union and other European countries the world’s centre of gravity has shifted to the Pacific field of power. The “grand strategies” of the 21st century are, by now, investigated solely in the light of the geopolitical interests of three political world powers, namely the USA, Russia and China. The globe is turning and every forecast seems to suggest that the

21st century will see the downfall of Europe. And in addition to that, slowly but surely, the Eurocentric world view is going to change, thus bringing about a shift in the interpretation of the traditional North–South and West–East division of the international order. That is, in cartographic terms, the zero point will change and the world will no longer be interpreted only through Brussels and Washington but through Beijing and Moscow, as well. Therefore, we must work out a new geopolitical view of space. But in the case of the Central and Eastern European region shaking off the Cold War “shackles” of being caught between West–East is a daunting task. In the wake of the annexation of the Crimean Peninsula in March 2014, due to the standoff between the USA and Russia East-Central Europe has once again gradually become a buffer zone, like so many times throughout history. On the flipside, the multi-polar world currently in the making provides new geopolitical opportunities too. Instead of the “age-old” West–East-based geopolitical thinking we need to adopt a new approach. This will allow for a profoundly new interpretation of the relative geopolitical situation of Central and Eastern Europe in the near future. On the other hand, despite all its inherent risks the evolving multi-polar world provides new geopolitical opportunities too. In my view, the global economic and political role of East-Central Europe and the members of the Visegrad Group in particular could be that of a mediary between the major economic and political power fields in the 21st century. From an economic perspective this could bring about the dominance of transport services and intermediary activities in the field of business and finance in the region. Ideally, Hungary could become a hub for logistics for both western (pri-

Central and Eastern European Countries in the Multi-polar World of the 21 ST Century

marily from North-America and Western Europe) and eastern (predominantly from Russia and China) transnational companies. In my opinion, in order for Hungary to become successful on the long term it should strive towards becoming a strategically important geographical spot, or in geopolitical terms a “bridge state” in the multi-polar world of the 21th century. The evolving Eurasian supercontinent provides an opportunity for that. As a result of the intensified cooperation between Russia and China a new Eurasian field of power is on the rise but the main question is what Asian-European political and economic relations will be like and whether the European continent will constitute a part of Eurasia or not? Can a country as small as ours have its own foreign trade and foreign policy strategy? In the current period of “deglobalisation” and ever-strengthening macro-regions cementing the Visegrad Cooperation and establishing an East-Central European economic field of power underpinned by a new North-South infrastructural corridor could serve as a suitable basis for adopting a considerably more independent foreign policy strategy. The basic concept of the study – the so-called new Eurasia paradigm. Its most important elements are the following: Ø I n the 2000s – from the beginning of V. Putin’s tenure as president and the economic and political consolidation and rise of Russia – the concept of Eurasia was solely associated with Russia’s geopolitical endeavours. Consequently, a post-soviet interpretation was attributed to it, and the Western world ultimately saw the dangerous prospect of the Soviet Union’s rebirth in Russia’s Eurasian geopolitical strategy. It was not by chance that the concept met utter rejection in the countries of the Euro-Atlantic field of power, and that they entirely dismissed the possibility of creating a new European–Asian alliance and field of power with the Russians at its forefront. Ø I n 2013, with the introduction and implementation of the “New Silk Road” infrastructural and economic development programme, however, the concept of Eurasia was assigned a new, primarily economic interpretation, and definitively surpassed its post-soviet imperial meaning. This is because for the first time in history there is a realistic economic chance for Europe and Asia to become a single economic field of power, for the eastern end of Europe and the western half of Asia are, in effect, merged.

Ø T his also means that while earlier the concept of Eurasia was accepted geologically around the world (with the exception of Russia), by now the concept has acquired a new political and economic interpretation. This will have a profound effect on the general view of the world. Instead of the permanent West–East contrast we will have to take new regional levels into consideration. Ø B ut what will the regional organisation of the 21st century Eurasia look like? Instead of the traditional centre-periphery relation what will the new relationship of interdependence between Eurasian regions be like? Can the buffer-zones of the past actually be transformed into “bridge regions”? Does Central–Eurasia exist? In what ways is it different from the traditional concept of Central Asia? Ø W hat will be the geopolitical role of the Central and Eastern European region on this new evolving Eurasian continent? From a European perspective it is the periphery of the EU, the eastern half of the European continent. But will this region assume a new geopolitical role and will it become a “bridge region” between Europe and Asia? Will it be able to free itself from being caught between West and East? The main objective of the study is to contribute to laying the conceptual, current political, diplomatic and economic diplomatic foundation of the Central and Eastern European regions role as a “bridge-zone”. 2. The evolving multi-polar world of the 21st century – a precarious vision of the future „In the current global economy only two things are certain. First, it is uncertain. Second, the USA is the leading economic and political power of our time.” Excerpt from an interview conducted in 1998. Interviewee: André Kostolany (1906-1999), stock market expert. If we asked André Kostolany today in 2017, he would probably give the following answer: „In the current global economy only one thing is certain. It is uncertain.” By 2018 it has become evident that in place of the unipolar world, built on the global political and economic hegemony of the USA and the Atlantic field of power, there is a new multi-polar world on the rise. In the USA’s global role of “first among equals” has now come to end and geopolitically it can be stated that spatial diffusion of power has begun. As a result the liberal economic model and the American model of democracy are both

Changes in US Outward FDI as per direction in 2015 - Based on figures of FDI outward stock

losing of significance. Though Barack Obama claimed on numerous occasions that “democracy is our brand”, it is apparent that the American model of democracy does not fare well outside the Anglo-Saxon world. Furthermore, it is also obvious that nowadays the USA’s global engagement is ahead of changes. Though, these days it is hard to decipher the geopolitical strategies applied in the foreign policy of U.S. president Donald Trump, the American approach is going through a fundamental change. The question is whether Trump and the political and economic elite close to him can actually drive the systemic change of the world and Western society within? What will the multi-polar world be like? Since this evolving multi-polar world is still lacking a regulatory framework, the extremely volatile nature of our world can primarily be traced back to the so-called systemic geopolitical threats. It is indisputable that the post-World War II. framework of the world economy and world politics is in dire need of a change in the 21st century. The actual power of “developed countries” in the traditional sense is declining and big emerging markets have become decisive factors in the world economy. With China becoming the second biggest national economy of the

world, political and economic models and economic approaches other than the Anglo-Saxon set of rules of world economy are also gaining ground. The so-called non-Anglo-Saxon world is already taking shape (though, for now, in co-existence with the Anglo-Saxon world). Thus, the dominance of the traditional “Western” world is highly questionable. A new era of “deglobalisation” has been emerging recently in which regions and regional markets are obtaining more and more significance beside the world’s global market. These regional markets are still managing and shaping their sphere of interests only on a continental or regional level and not on a global scale. For great powers and big emerging markets geostrategic thinking and the construction of macro-regional fields of power has become more important than in the past. The socalled “imperial thinking” has re-emerged as the central element of the major powers’ geopolitical endeavours. What is the spatial organisation “Pax Americana”, that is, the “American Empire” like in the 21st century? With regard to Hungary, the most crucial issue is the nature of the future role envisaged for the East–Central European region within “Pax Russica”, namely in the “Russian Empire” currently evolving on the geographical level of the

Central and Eastern European Countries in the Multi-polar World of the 21 ST Century

Eurasian continent. Moreover, if the 21st century world economy’s centre of gravity shifts to the Pacific field of power then it will restructure the major fields of power overarching the continents and most of all the relationships between them. Though the world is going through fundamental changes, the several-decades-long opposition of the Cold War that ended in the 1990s still lives on in our political thinking and in the conceptual framework used for the study of international relations. Up until now, we have not been able to part with associations of Cold War. Consequently, according to general view, Russia is the arch enemy of the Anglo-Saxon world. The beginning of a new era reminiscent of the Cold War seems to be lingering above us due to the 2014 annexation of the Crimean Peninsula by Russia. In this era the opposition of the West (Euro-Atlantic field of power) and the East (Russia) is becoming starker, the Western world is imposing a plethora of new sanctions against Russia and NATO is increasing and intensifying its military presence in the East-Central European region which has once again became a buffer-zone. Nonetheless, Russian national consciousness and the declaration of Russian independence and geopolitical strategy is much stronger than it was a few years ago. American experts on foreign policy repeatedly state that “Russia as an enemy is more important to us than as a friend”. It is indisputable that the “Russian card” is one of the pivotal elements of American media communication. And underpinning all these ideas is the age-old Cold War principle of “containment” elaborated by George Kennan in 1947. The cornerstone of Truman’s National Security Act of 1947 was to prevent by any means possible (possibly without starting a war) the further expansion of the Soviet power sphere. There seem to be no change in this regard; the USA’s attitude towards Russia and every Eurasian economic/political organisation is till the same. However, establishing the new geopolitical role of the Central and Eastern European region and that of Hungary is an extremely challenging task, since this transitional period – an era of transition from a unipolar to a multi-polar world characterised by the competition and power display of major powers – is very dangerous in terms of national security. The political and economic institutions of the Anglo–Saxon world are no longer fit to properly uphold world order and global economic-political stability. The emerging markets (especially the BRICS countries) are not nearly strong enough, and most importantly, they do not form a strong enough alliance either economically or politically to be able to lay the foundations of a new world order. At the same

time the contest between major powers also triggers the weakening or even the elimination of power control over the various spheres of interest. It is an obvious fact that in countries where American influence has declined the expansion of the Russian and/or Chinese sphere of interest has started. Nonetheless, security risks are dramatically increasing due to the evolving power vacuums, and countries or regions uncommitted to either of the power-based spheres of interest as of yet. An example of that are the chaotic Iraqi situation and the unresolved Syrian conflict that followed the withdrawal of American troops and which led to the declaration of the Islamic State on the border of the two countries in 2013. The huge influx of refugees arriving into Europe from early 2015 was also mainly the result of the unresolved Afghan, Iraqi and Syrian conflict and the rise of international terrorism primarily associated with ISIS. 3. Eurasia – the orthodox interpretation of the World-Island “Who rules East Europe commands the Heartland; who rules the Heartland commands the World-Island; who rules the World-Island commands the world." (H. Mackinder, 1919. p. 186.) It is apparent that the evolving multi-polar world of the 21st century is in need of new a geopolitical approach and new geopolitical concepts. In spite of that, we are witnessing a renaissance of the orthodox (traditional) geopolitical approach. Indisputably, the most often cited writer of present-day geopolitics is the British geographer Halford J. Mackinder (1861-1947). The most important terms of geopolitics, namely “Heartland” and World-Island are products of Mackinder’s work as is indicated by the above quotation. In recent geopolitical studies the quotation is regularly used in the sense that whoever rules the “Heartland” commands the world. In the 21st century the “Heartland” is placed in the Central Asian region, though in the wake of the Ukrainian events more and more people call attention to the fact that Eastern Europe remains a key player in world politics. In the 21st century the “Heartland” can be defined as the “clashing point” of the geopolitical field. Mackinder’s most famous study is “The Geographical Pivot of History”. He presented it at the meeting of the Royal Geographical Society on 25th January 1904. In his political analysis of Europe and Asia Mackinder tried to find out what kind of connection might there be between geographical and historical processes and

The boundary between Europe and Asia: the Ural Mountains

major events. Mackinder coined the political concept of Eurasia which does not only suggest that Europe and Asia constitute a single unit geologically, but more importantly, that the nations and states of Europe and Asia form the centre of world power. In the quotation above the term “World-Island” refers exactly to Eurasia, the largest continuous continent of the planet. The concept of Eurasia is one of the most disputed nowadays. In the western half of Europe even the sheer existence of the concept is denied and it is usually equated with Russia or the rebirth of the Soviet Union.

In Hungary, in the stereotypical way of thinking characteristic of the Cold War era, Europe is equated the West and Eurasia is identified with the East. The well-established political motto, always re-emerging during V. Putin’s visits to Hungary, that we have to make a choice between Europe and Eurasia, is fundamentally flawed both geographically and geopolitically. The reason for that is that Europe in its own right is not a separate continent either geologically or geographically. Even Alexander Humboldt defined Europe as the enormous western peninsula of Asia. The reason why we

The Pivot Area and the Inner and Outer Crescent – Mackinder 1904

Central and Eastern European Countries in the Multi-polar World of the 21 ST Century

The Steppes of the world

consider Europe to be a separate continent is rooted to a greater extent in its history, culture and its perception. Eurasia is the largest continent of the planet. Its overall territory is 55 million square metres which amounts to 37% of the world’s land surface. The entire are of the American continent is “only” 43 million square meters which makes up 28% of land areas.ii This comparison is of great significance because H. Mackinder described

the world’s political structure as a unit consisting of the American continent and the World-Island. While studying the civilizational conflict between Europe and Asia, Mackinder stated that the Pivotal Area of the world’s history is the huge Russian territory stretching from the Urals to the Pacific Ocean, “which is inaccessible for maritime transport, but in the past it lay open for chivalric nomads, and today its railway

network is under construction.” On Mackinder’s map the Pivot Area is surrounded by a big inner crescent, where we find Germany, Austria, Turkey, India and China. The outer crescent is formed by Great Britain, South Africa, Australia, the United States, Canada and Japan. Mackinder finishes his study, “The Geographical Pivot of History” on the following note: “...it may be well expressly to point out that the substitution of some of some new control of the inland area for that of Russia would not tend to reduce the geographical significance of the pivot position. Were the Chinese, for instance, organized by the Japanese, to overthrow the Russian Empire and conquer its territory, they might constitute the yellow peril to the world’s freedom just because they would

to the continuity of the Eurasian Steppe (reaching from the Great Plain in the Carpathian Basin through Ukraine, Russia, Kazakhstan, and Mongolia to the historical Chinese region Manchuria). This great Steppe of the ancient world served as the foundation for the major trade route of medieval times, the Silk Road (for its northern stretch to be more precise), through which the nomad shepherds and caravans connected the eastern and western halves of the Eurasian continent.

add an oceanic frontage to the resources of the great continent, an advantage as yet denied to the Russian tenant of the pivot region.” This quotation also refers to the fact that the geopolitical stake involved in China’s 21st century “One Belt–One Road” infrastructural

vides, characterised by dry climate, the surface area of which is 4 million square kilometres. The region includes Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan. Owing to the former ancient Silk Road the region was one of the major routes of contemporary world trade. The area, formerly denoted as Turkestan in the 18th and 19th centuries, was later brought under Russian control and with the birth of the Soviet Union its countries became soviet member states. These states gained their independence only after the fall of the Soviet Union, in 1991. Besides the delineation used in physical geography and the country-based demarcation, in the Hungarian literature the area is often denoted as Inner Asia, which designates a more extensive, predominantly culturally and historically defined region. This is an endorheic region of roughly 8 million km2 encompassing temperate steppes and temperate deserts. Culturally and economically speaking, its most distinctive feature is the presence of cattle herder nomadic tribes who lived encircled by sedentary agricultural communities. This dichotomy – nomadic herding and the agricultural lifestyle of desert oases (especially cotton production intended for export) – is still the main traditional economic feature of the region’s countries. The economic development of the five Central Asian countries is highly dependent on the production of crude oil, natural gas and mineral resources. With the exception of Turkmenistan the countries are member states of the Commonwealth of Independent States (free-trade area) and the Shanghai Cooperation Organisation (forum for political cooperation). Furthermore, Kazakhstan is one of the founding members of the Eurasian Economic Union, brought into existence in 2015. Kyrgyzstan, another country in the region, also joined the union. The “heartland of heartlands”, that is, the very core of

development plan is enormous because if it becomes reality then for the first time in history the three oceans will be successfully connected. This will render it viable to access the seas from Eurasia, that is, from the World-Island, so in other words, in the 21st century China, considered to be a land-based power, and its allies could subdue the western sea powers. The Urals are considered to be the eastern border of Europe, however, in physical geographical terms the mountain range is not a natural but an artificially designated continental border. This is also supported by the fact that the Eastern-European Plain located on the western side of the Urals and West Siberian Plain on its eastern side are similar in every respect geographically. The Urals flatten to a hilly region in the south the majority of which belongs to the Steppe region. This area stretching from the Urals to the Caspian Sea – more specifically the Mugodzhar Hills and its eastern part, the Turgay-Gate – has always been of great significance with regard to transport routes. The region’s geopolitical importance is described by Halford Mackinder in his study as follows: „Through the Steppe on the other hand there came from the unknown recesses of Asia, by the gateway between the Ural mountains and the Caspian Sea, in all the centuries from the sixth to the sixteenth, a remarkable succession of Turanian nomadic peoples — Huns, Avars, Bulgarians, Magyars, Khazars, Patzinaks, Cumans, Mongols, Kalmuks. Under Attila the Huns established themselves in the midst of the Pusstas, in the uttermost Danubian outlier of the steppes.”vi In other words, this geographical gateway is the key

Central Asia or Central Eurasia - the prominent stage of the “grand geopolitical game” The Central Asian region is the central part of Eurasia; an endorheic region isolated from seas by drainage di-

Central and Eastern European Countries in the Multi-polar World of the 21 ST Century

Central Asia - The prominent stage of the "grand geopolitical game"

The concept of the Hungarian Pavilion: The Tree of Life - Astana Expo 2017 (The Future Energy)

the 21st century’s Eurasian supercontinent, is without doubt Kazakhstan. As Nursultan Nazarbayev, Kazakhstan’s president put it, it is the “Heart of Eurasia”. The new capitol (from 1997) of the country, Astana (which means capitol in Kazakh) is aspiring to become the business/financial centre of the region. This is also exemplified by the fact that this year’s summer Astana

Border crossing at Khorgos hosted the EXPO 2017, the theme of which was future energy and renewable energy sources. Kazakhstan is the 9th largest country in the world and largest landlocked on the planet. Its geopolitical situation is excellent. In the north it shares borders with Russia (longest land border in the world with 7644 km), in the west it is bordered by the Caspian Sea (which is actually a lake, since it is an endorheic basin), its eastern neighbour is China, while in the south it borders Uzbekistan, Turkmenistan and Kyrgyzstan. Horgos/Khorgos located at the China-Kazakhstan border is the remotest geographical location from open sea in the Eurasian continent. In Halfrod Mackinder’s interpretation sea powers always subdue landbased powers, however, this “most land-based” location in the world might emerge as the “geopolitical winner” in the 21st century. This is because the biggest commercial road freight terminal of Western China is being constructed (and already partly in operation), within the framework of the Kazakhstan-China cross-border cooperation, between Khorgos and Horgos, on the Kazakh and Chinese sides of the border respectively. This terminal connects Western China with Central Asia and Europe, thus playing a major role in the commerce of Central Asia. This project is globally perceived to be the largest urban, and commercial and logistics hub construction project in the new Silk Road Economic Belt. Kazakhstan is currently the 48th biggest national econ-

omy in the world (based on its total GNI – nearly 200 million USD). The record-scale boom of the Kazakh economy started in 2000 primarily thanks to the enormous increase in crude-oil production and export. The Karachaganak oil field located in the north-western part of the country is considered to be the largest in the world. In 2001, a pipeline, crossing the Caspian Sea, was opened in the second most promising oil field of the country, in Tengiz, thus considerably increasing export capacity. According to estimates, Kazakhstan possesses the 12th largest crude-oil and the 15th largest natural gas reserve in the world. Currently, the country is the 10th largest crude-oil and the 19th largest natural gas exporter on the planet. Crude-oil and natural gas products account for 60% of its entire export, and its biggest sales market is China. Its import comes primarily from Russia. Besides hydrocarbons the country has considerable uranium (estimates suggest that the world’s biggest uranium mine is in Kazakhstan), copper and zinc reserves. Precious metals make up 20% of its export. Thanks to the above, high-value working capital investments are pouring into the country (predominantly from China, Russia and the USA). The overall value of investments in 2015 amounted to nearly 120 million USD. January 31, 2017 President Nazarbayev announced the third stage of Kazakhstan’s modernisation, the five main pillars of which are the following: technological modernisation of the economy, technological development of traditional industries, further development of the country’s mining industry, complete restructuring of the agricultural sector and making it the leading sector of economy, joining the new Eurasian logistics infrastructure and the construction of its vital elements within the country. Taking all the above into account it can be stated the main objective of the country is to become one of the top 30 national economies in the world by 2050! East of the Mugodzhar Hills, enclosed by the Urals and the Caspian Sea, and the Caspian Lowland lies the Turan Depression. Its original geographical name was West Turkestan, after the Turkish speaking peoples that had lived here. From 1924 it was called Soviet Central Asia and then after the dissolution of the Soviet Union in 1991 it was named the Turan Depression. This region is part of the West Asian lowland characterised by ergs, clay deserts and huge salty lakes in its endorheic territories. The name Turan is of Persian origin, formerly used to denote the home of the peoples who lived

Central and Eastern European Countries in the Multi-polar World of the 21 ST Century

Astana – The capital city of Kazakhstan

north and east of ancient Persia. This is of outstanding significance, for The Hungarian Turan Society (also called The Hungarian Asiatic Society), in essence, can actually be considered as the historical antecedent of Hungary’s current Eastern Opening policy. The interpretation of the denomination Turan was always a subject of dispute while the Turan Society existed.ii Geographers used the term “Turan” in a purely geographic sense and were fierce opponents of imbuing the idea of Turanism with a scientifically utterly unsubstantiated linguistic, cultural or political interpretation. Pál Teleki wrote the following in the 1918 January-February issue of the society’s journal, Turán: “ Turan is a geographical concept to me, a type concept, the concept of the Central Asian Steppe with its agony under the vicissitudes of the fluctuating climate and its grapple with the desert...” Despite the endeavours of the most prominent figures in geography, Turanism eventually acquired a political charge, and its ideology became especially forceful in the wake of the 1920 Trianon peace dictate and promoted the “search for allies in the East after the treason of the West”. During the First World War with considerable government support – from May, 1916 – The Hungarian Turan Society was transformed into the Hungarian Centre for Eastern Culture with the purpose of establishing a stronger re-

lationship with peoples of the Turanian language family (with Turkey and Bulgaria in particular). The former Eastern Trade Academy which operated as an independent entity between 1899 and 1920 is of great importance with regard to Hungary’s current foreign trade strategy, the Eastern Opening. Students of the institution were specifically trained for promoting trade with countries in the Balkans and Anatolia. Trade conducted in these regions was supported by contemporary state policy by establishing trade offices in the prominent economic hubs. These offices also served as consulates in the respective states. Since the students of the Academy were granted considerable scholarhips, and could expect to build a serious career in foreign affairs/ trade after graduating the Academy, which admitted 25 people annually, was heavily oversubscribed. The most outstanding scholars of the era taught at the Academy, including, for example, Gyula Germanus who was the professor for Turkish and Arabic languages. Unfortunately the Eastern Trade Academy has sunk into oblivion by now, only a handful of documents dealing with its operation are accessible. In American geopolitics exerting political control over the Eurasian field of power has always been a pivotal element of exercising power globally. In the 20th century, for example, in the work of Brzezinski the political

concept of Eurasia crops up as the “Eurasian chessboard” and it sums up the geostrategic objectives of the US as regards Eurasia.v Brzezinski states the following in his book, “The Grand Chessboard”: “Hence, the issue of how a globally engaged America copes with the complex Eurasian power relationships – and particularly whether it prevents the emergence of a dominant and antagonistic Eurasian power – remains central to America's capacity to exercise global primacy.” In this book Brzezinski sees the following prospect as the one posing the greatest threat to America’s position of global supremacy: “Potentially, the most dangerous scenario would be a grand coalition of China, Russia, and perhaps Iran, an "antihegemonic" coalition united not by ideology but by complementary grievances.” In Brzezinski’s 2012 interpretation the two main pillars of the USA’s grand new geopolitical strategy is the “greater West” and the “new East”. The “greater West” refers to the USA’s primary objective of strengthening the West and along these lines recruiting Russia and Turkey as the USA’s allies. Though this interpretation from 2012 has already become irrelevant with regard to Russia. Brzezinski’s term, the “new East” encompasses China, East and Southeast Asia, and in his view these are the regions with which the U.S. should form a new comprehensive and balanced network of relationships. The “grand geopolitical chessboard” of the 21st century is going through fundamental changes, and owing to the evolving multi-polar world there are new “pieces” appearing on the board who will bring new rules to the game. Even though everything is in motion, the fundamental question remains the same: Will Halford Mackinder’s World Island ever take shape as an actual geographic territorial unit and will we be able to investigate global political relations in terms of the World-Island—American continent dichotomy in the near future ? Will the USA’s policy of containment continue, and if so, how will it actually thwart the creation of a strong economic and political relationship between Europe and Asia? Will a new Eurasian supercontinent be created through the ever-intensifying economic cooperation between Russia and China? What is the new multi-polar world going to be like and what will be the role of Hungary and the Central Eastern European region in the currently evolving Eurasian supercontinent? 4. Russia and the geopolitical school

of Neo-Eurasianism “In the past 20 years, our partners have been trying to convince Russia of their good intentions, their readiness to jointly develop strategic cooperation. However, at the same time they kept expanding NATO, extending the area under their military and political control ever closer to our borders. And when we rightfully asked: “Don’t you find it possible and necessary to discuss this with us?” they said: “No, this is none of your business. Those who continue insisting on their exclusivity strongly dislike Russia’s independent policy. The events in Ukraine prove this. They also prove that a model of relations full of double standards does not work with Russia.” Excerpt from V. Putin’s address at the conference of Russian ambassadors and permanent representatives on July 1, 2014. Since 2000 Eurasia has been a central element of Russia’s new geopolitics, for Neoeurasianism, that is, the creation of a new bipolar world order – i.e. Eurasianism vs Atlantism – , is of utmost importance in their efforts to obtain world supremacy. This Russian Eurasian geopolitical field is so decisive that V. Putin too made allusions to it in his speech at the presidential inauguration ceremony, May 7, 2012: “...our determination in developing our vast expanses from the Baltic to the Pacific, and on our ability to become a leader and centre of gravity for the whole of Eurasia.” The mastermind and the “leading figure” of Russia’s new geopolitics is Aleksandr Dugin, who in 2002 created his own party, the Eurasian Movement. Thus, Mackinder’s political term has become the ultimate “keyword” of Russia’s current geopolitical direction. Since Eurasianism has a long history in Russia, Dugin labelled the current Russian geopolitical direction as Neoeurasianism. Neoeurasianism is in stark contrast with Atlantism and the ultimate aim of Russian geopolitical endeavours is the creation of the multi-polar world! Dugin outlined the theory of Russia’s new geopolitics in his book titled the “Foundations of Geopolitics”.ii On the basis his work the most important features and objectives of Russian geopolitics are the following: Ø Instead of a unipolar system of world politics, controlled from the Atlantic field of power, the creation of a bipolar system of world politics is needed, and Eurasia must be re-established as a dominant centre of world politics; Ø The champion of Eurasianism (or Neoeurasianism

Central and Eastern European Countries in the Multi-polar World of the 21 ST Century

The physical geography and borders of Russia

to be more specific) is Russia whose primary goal is the conclusion of Pan-Eurasian agreements with the leading powers of Asia (Japan, China, India) and the Asian member states of CIS; Ø Russia is not “merely” a state or a regional power but a world power the primary aim of which is the creation of a Russian Empire; Ø Establishing new types of economic relations with the states of the European continent (primarily with Germany and countries of East-Central Europe) is central to the creation of Russia’s economic sphere of interest. To date, the movement of Eurasianism has received a strong institutional basis in Russia. In January 1, 2015 Russia, Kazakhstan, Belarus and Armenia joined forces and established the Eurasian Economic Union. Kyrgyzstan became the fifth member of Eurasian integration in August, 2015. Geopolitically the main question concerning the creation of a new Eurasian field of power is whether Russia is going to be able to find allies in the future, and the most essential part of that question: what is the Russian-Chinese relation’s course of development going to be like? In this respect, arguably the most significant event was the meeting between the Russian and Chinese president in Moscow, May, 2015. On May 8, 2015 (a day before the Victory Day military parade commemorating the 70th anniversary of the end of WW II.), Russia and China officially signed the deal on the Eurasian Economic Union and the New

Silk Road Economic Belt cooperation.ii This is much more than a simply economic agreement because the deal outlines a common major investment and infrastructural development plans. What is the world like from Moscow? The Eurasia map attached demonstrates what major regions Eurasia can be divided into in accordance with Russian interests and geopolitical goals. The central area or in Mackinder’s terms the “Heartland” of the map is Russia, China, Central Asia and Mongolia. This central area is surrounded by four belts or geopolitically speaking “rimlands”. These rimlands are the following: Ø The zone consisting of Turkey, Iran, Afghanistan, Pakistan, and India; Ø Europe – from Western Europe to the Russian border; Ø Southeast Asia, South and East Asia – from the western border of Myanmar to Japan; Ø The Middle East – North Africa, the Arabian Peninsula, Syria, Lebanon, Jordan, Israel and Iraq. Therefore, China, Middle Asia and Mongolia are central to Russia’s geopolitical endeavours and to the new Russian Eurasian space in the 21st century. The question is what kind of allies Russia can find in the four “rimlands” and in what direction it can expand its economic and political influence. The most important platform for the cooperation of

The main geopolitical regions of the Eurasian supercontinent from the perspective of Russian geopolitical strategies

Russia and China is the Shanghai Cooperation Organiztaion, founded in 2001. The founding members of the organisation also include the “Heartland-countries” of Central Asia, that is, Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan. In 2017 the political significance of SCO increased considerably, it expanded further as two other states, India and Pakistan, joined its ranks and became full members of the organisation. This is why Russian political analysts often call it the “G8”. The great questions for the near future are the following: when will Iran join the SCO and when will Turkey, currently a partner country of the organisation, become a full member? It is beyond dispute that the SCO can be regarded as the most important organisation of the evolving Eurasian supercontinent. The map shows the member states of the two main organisations of economic integration in the evolving Eurasian supercontinent – the Eurasian Economic Union and the Association of Southeast Asian Nations – , and those of the aforementioned Shanghai Coopera-

tion Organization (SCO). It can be observed that only a handful of Asian countries have not joined either of the three organisations so far: Turkmenistan (which in the past had a contentious relationship with Russia due to the conflict around the gas pipeline construction, however, the parties have already started settling their differences); Nepal and Bhutan, North Korea, South Korea and Japan (which can be regarded as an American ally in the region). The idea of the Great Eurasian Partnership was conceived by V. Putin at the International Economic Forum in Saint Petersburg, July, 2016. The map exemplifies which already operating major organisations would serve as a basis for the planned new Eurasian cooperation. According to the Russian plans the Greater Eurasian Partnership could get under way in 2018 in the form of a multi-level integrational model; it is envisaged to come into being as a new type of international network. 5. 5. China’s “One Belt, One Road” initiative

Central and Eastern European Countries in the Multi-polar World of the 21 ST Century

Great Eurasian Partnership

and the new Eurasian paradigm But what does the world look like from Beijing? China’s ancient name is Chung kou which means “Middle Empire”. This, without doubt, refers to the fact that China has always considered itself to be centre of the world, and it still does today. In 2016 the USA produced 24% of the world’s total GNI, while China came in second with 15%. In the same year, among the world’s 500 biggest companies there were 132 American and already 109 Chinese corporations. As a side note it should be pointed out that in 2016

Russia was the 11th biggest national economy in the world (despite all the Western sanctions and low oil prices) but it produced only 2% of the world’s total GNI, and there were altogether four Russian companies in the world’s top 500. It follows clearly from all the above that the creation and shaping of the new Eurasian supercontinent is mainly contingent upon China’s endeavours. It can also be stated that Russia will never engage in a rivalry with China, it is in its interest to form an alliance with China, as strong as possible. The most important factor in the creation of a 21st

The main routes of China’s “One Belt – One Road” development programme as of March, 2017

century Eurasian Supercontinent is, without question, China’s ambitious plan of constructing the New Silk Road Economic Belt – One Belt One Road. In 2013, in Astana, Kazakhstan (the “Heartland of Eurasia) Xi Jinping announced the trade and infrastructural development programme that would connect Eastern and Central Asia with Europe, thus making the Eurasia of the 21st century become reality. The three main routes of the New Silk Road Economic Belt on the land: 1. The route connecting China with Europe going through Central Asia and Russia; 2. The route connecting China with the Middle East going across Central Asia; 3. The route connecting China with South-east Asia (and the countries of the Indian Ocean). The two main sea routes of the New Silk Road Economic Belt: 1. The route connecting China with Europe through the South China Sea and the Indian Ocean; 2. The route connecting China with the southern region of the Indian Ocean through the South China Sea; It can be stated geopolitically that the routes will

allow the creation of a new Eurasian field of power in the 21st century. Moreover, the route will create unique, unprecedented opportunities for infrastructural development in the countries it crosses. Thus, Mackinder’s concept of the World-Island could actually become reality in the broadest sense, that is, the economic power field of the three continents (Europe, Asia, Africa) might be brought into life. This will raise the possibility of the USA losing ground in the World-Island and having its power gradually limited only to the American continent. There are six main areas of development connected to the 5 routes listed above. These rimlands are the following: 1. The so-called “New Eurasian Land Bridge” development area. The basis of this is the railway connecting Lianyungang in Jiangsu province beside the Yellow Sea and Alashankou, in Xinjiang province, Central China. This city is located in the vicinity of the Dzungarian Gate, the most important Kazakhstan-China border crossing which was already one of the main mountain passes used by nomad tribes during the Migration period. The westernmost point

Central and Eastern European Countries in the Multi-polar World of the 21 ST Century

The six major development zones of China’s “One Belt – One Road” development programme

of the development area is the port of Rotterdam in the Netherlands. As part of the “One Belt” programme China has taken under the construction of direct rail freight lines between Chongquing and Duisburg, Wuhan and the Czech Melnik and Pardubice, Chengdu and the Polish Lódz, and between Zhengzou and Hamburg. 2. The “China – Mongolia – Russia” development zone. The three states, located in the zone, signed the agreement in order to strengthen their trilateral cooperation in the near future at the conference of the Shanghai Cooperation Organisation in Dusanbe. According their plans they will renovate Russian railways in the area, and in addition to that, build the so-called “new Mongolian Steppe route” within the framework of their cooperation. 3. The “China – Central Asia – Western Asia” development zone. It will connect China with Turkey through the five Central Asian countries and Iran. Accordingly, China signed a cooperation agreement with the five Central Asian countries which dictates that these countries harmonize their strategies of national development with objectives of the New Silk Road development programme. 4. The “China –Indochina” development zone. Chi-

na concluded a new cooperation agreement with five countries of the Indochinese Peninsula. This agreement and the “Greater Mekong Subregion Economic Cooperation” programme form an interconnected unit. Within the framework of these programmes the construction of several railway lines and highways was set forth. 5. The “China – Pakistan” development zone. Its main objective is to connect the Central Chinese Xinjang province with Gwadar port city in Pakistan through railways and highways. 6 The “Bangladesh – China – Myanmar” development zone. In May, 2013 China signed a mutual development deal with India, and subsequent to that in December, 2013 the deal was extended to include Bangladesh and Myanmar. The financial resources necessary for this enormous Asian infrastructural development (a development of such volume, comprising the whole continent is unique and unprecedented in the era of post-World War II world economy) are provided predominantly by the Asian Infrastructure Investment Bank (AIIB), which was proposed by China and was declared open for business in January, 2016. Currently it has 77 members; Hungary joined AIIB June 26, 2017. According to official reports

Europe Kirov

Perm

Moscow Hamburg Rotterdam / Antwerpen

Minsk

Berlin

Warsaw Kiev

London Lille / Brussels Paris

Cologne

Nuremb.

Salzburg MĂźnich Salzburg

Pardubice

Vienna

Chop Budapest

Alterau (New Sarai)

Belgrade Skopje Sofia

Istanbul

Ankara Yerevan Tabriz

Venice

Antiochia

Rome

Damaskus Cairo

Teheran Bagdhad Basra

Mediterranean sea

Arab Peninsu

The sixth improvement was to announce and build the Silk Road, i.e. the One Belt, One Road initiative

Siberia

Yekaterinburg Omsk

Novosibirsk

Yakulsk

Northern Corridor

Krasnoyarsk Tayshet

Skovorodino Chita Heihe

Irkutsk

Astana

Ulaanbaater Aktogay / Alataw Pass

Khabarovsk

Manzhouli Suifenhe

Saksaulkaya

Harbin

Central Corridor

Ă&#x153;rĂźmqi

ula

Lop Nor

Wuwei

Niya

Taxila

Xian

China

Mashhad

Shenyang / Fushun

Lanzhou

Holan (Kholan) Balkh (Bactra)

Changchun

Bejing / Tianjin

Tashkent Khujand (Kokand)

Vladivostok

Erenhot

Turpan

Jlayuguan Samarkand

Sevelskaya Gawan

Tianshu / Guyvan

Lianyungang

Zhengzhou

Xuzhou Nanjing

Shanghai

Wuhan

East China Sea

Changsha / Zhuzhou

South Corridor Karachi Tamluk

Hanoi

Barygaza

Shenzhen / Hong Kong

Masulipatam

South China Sea

Bengal Bay

Singarpore

The Port of Piraeus as the European gate for the 21st-century New Maritime Silk Road

of the bank, the number of members will reach 85 by the end of the year, that is, almost a half of the world’s nearly 200 nation-states will have joined this new infrastructure bank come end of 2018. From a geopolitical standpoint it is important to stress that the USA in not a member (the USA promotes the primacy of the World Bank in the field of international developments) and nor is Japan which sees the AIIB proposed by the Chinese as a rival of its self-established Asian Development Bank. 6. Central and Eastern European

Countries on the “grand geopolitical chessboard” of the 21st century The state of Central and Eastern European countries on the “grand geopolitical chessboard” of the 21st century can be elucidated based on the following power matrix. I took Brzezinski’s 2012 interpretation, namely the “greater West” and the “new East” paradigm as a basis, as does the power matrix, however, I replaced the expression “new East” with the concept of “Eurasian supercontinent”. The reason for this change is the

Geopolitical power matrix in respect of the Central and Eastern European region

Central and Eastern European Countries in the Multi-polar World of the 21 ST Century

Central and Eastern Europe from above

fact that it is much more relevant for the Central and East-Central European region. The present and future geopolitical situation of Central Eastern Europe is highly dependent on the prospective relationship of the Greater West and the Eurasian supercontinent. If the global political environment, which is currently constructed upon the American principle of containment and consequently on the Russophobia of the Atlantic field of power, remains unaltered then there will be very few opportunities for East-Central Europe and inherently Hungary to free themselves from being trapped between West and East. Based on the matrix the most important geopolitical questions of the near future with regard to Central and East-Central Europe are the following: – Will the foreign policy strategy of the Trump admin-

istration change with respect to the East-Central European region and what kind of policy will NATO adopt with regard to the region? – What will the political future of the European Union be like? Or does the conflict of the EU’s nation-states foreshadow the creation of the socalled “Russo-German” Europe? – Will there be another “Eastern enlargement” in the EU? When can we expect the states of the Western Balkans (especially Serbia which is of paramount importance geopolitically) to join the EU? – How will Russia’s role change in the future and what will the Eurasian Economic Union-European Union relationship be like?

– What role will the East-Central European region play in the geo-economic strategy of China? Will the New Silk Road Economic Belt lead to the creation of the new Eurasian supercontinent, economically speaking? 7. Central and Eastern Europe or East-Central Europe – the issues of denomination and geographical restriction and the problematics associated with the classification of the countries in the region The Central and Eastern European or in other words the East-Central European region has no clear-cut geographical borders; therefore, it is disputable whether such a region can be distinguished geographically within the European continent at all. On the other hand, the countries in the region are all characterised by three main physical geographic features, namely, their landlocked position, geographical conditions favourable for agricultural activities and the lack of energy carriers. However, even the denomination of the region raises some issues. In the news about world politics the region is usually called Central Eastern Europe which, following the logic of the Hungarian language, denotes the middle of Eastern Europe, so in physical geographical terms it is defined as the centre of the East European Plain. Consequently, the name is incorrect because we consider the region to be the eastern half of Central Europe, that is, East-Central Europe. The question of whether we can consider the Baltic region or the Balkan Peninsula as parts of Central Europe is another issue. Based on the definition used in physical geography, Central Europe, a European macro-region, stretches from the Rhine to the edge of the East European Plain in a west-east direction, while from north to south it extends from the North Sea to the roots of the South European peninsulas. The border of Central and Eastern Europe is the imaginary axis that can be drawn from the Bay of Gdansk to the ranges of the Eastern Carpathians. East of this line lies the East European Plain with its area of about 4.5 million km2 which is roughly half of the entire continent. Though, the fact remains that Central and Eastern Europe has no actual natural borders. The macro-regions of Central Europe include the Central European fold and thrust belt (the German, Polish and Baltic Plain and the German, Czech and Polish mid-mountains) the Alps, the Carpathians and

the Carpathian Basin. The Carpathian Basin covering about 330 thousand km2s is a very unique geographical region indeed, for it is the most homogeneous and most clearly definable landlocked macro-region in Europe. The Balkan Peninsula, already regarded as a part of Southern Europe, borders Central Europe at a 1200 km long stretch in the north, therefore it is difficult to differentiate from the Central European macro-region. But the Balkans is of paramount strategic significance, for it serves as bridge to Anatolia from which it is separated only by two narrow straits, the Dardanelles and the Bosporus. These two narrow straits have always possessed great importance throughout history, since the way out from the Black Sea to the Mediterranean leads through them. Despite the denomination and the geographical demarcation – or maybe exactly because of these – the area of Central and Eastern Europe is regarded as a historical region. The unique historical development of the countries in the region has already started in the 15-16th century when – owing to their geographical location – they were left out of the great geographical discoveries. The global trade’s centre of gravity shifted to the countries bordering the Atlantic Ocean and the countries located in the heart of the continent gradually became peripheral/semi-peripheral to world trade. In these countries the industrial revolution started only in the 19th century, much later than in the western half of the continent. The basis for the capital accumulation, necessary for industrialisation, was agricultural goods production which took advantage of the favourable physical geography of the region on the one hand, and the food export to western countries of the continent on the other. As a result of World War I. the borders of national states were fundamentally changed in the region. Austria-Hungary ceased to exist and several independent nation-states were formed in its place. The Second World War laid waste to the countries of the region. Subsequent to WW II. the region was set for a “unique” course of development. The victory of the Soviet Union also meant the expansion of its political sphere of interest to several countries over the globe. Due to the politically-based division of Europe after Wold War II. Albania, Bulgaria, Czechoslovakia, Yugoslavia, East Germany, Poland, Hungary and Romania were all forced to create a socio-economic system between 1945 and 1949 in which the Soviet Union’s model of socialism had to be taken over mandatorily. The most important present-day economic and social problems of Central and Eastern European countries

Central and Eastern European Countries in the Multi-polar World of the 21 ST Century

The countries of Central and Eastern Europe – 2017 Population million – 2017

GNI billion USD – 2016

GNI/capita billion – 2016

NATO year of accession

The EU and the Eurozone(€) year of accession

Czech Republic

10.7

186

17570

1999

2004

Poland

38.5

481

12680

1999

2004

Hungary

9.9

123

12570

1999

2004

Slovakia

5.4

16810

2004

2004 – € 2009

Estonia

1.3

17750

2004

2004 – € 2011

Latvia

1.9

14630

2004

2004 – € 2014

Lithuania

2.8

14770

2004

2004 – € 2015

3.0

4250

2009

Visegrad Group

Baltic states

Southern European states Albania Bulgaria

7.1

7470

2004

2007

Romania

21.5

187

9470

2004

2007

2009

2013

States of the former Yugoslavia Bosnia and Herzegovina

3.9

4880

Croatia

4.3

12110

Macedonia

2.1

4980

Kosovo

1.9

3850

Montenegro

0.6

6970

Serbia

7.1

5280

Slovenia

2.0

21660

5600

2017 2004

2004 – € 2007

Former Soviet states of the European continent Belorussia

9.6

Moldova

3.5

2120

Ukraine

44.0

2310

A table created by the author based on data acquired from World Bank World Development Indicators originate from the change of regimes that started in 1989-90. The most crucial issue of this era is the accession to the European Union which can be interpreted as the manifestation of belonging to a reunified European continent after the fall of what was considered to be the symbol of Cold War, the Iron Curtain. Based on their geographical location, history, events of the 1990s and their belonging to the Atlantic field of power the 20 countries of the region can be classified in the following manner. But is the traditional classification applied in the table above still valid today? Is belonging to the Euro-Atlantic field of power still the most important criteria of

classification? What kind of sub-regions can the countries be grouped into based on their geography, history and geopolitical situation? And the most important question is what future role the 20 Central and Eastern European countries will play in the evolving multi-polar world of the 21st century? The classification of the 20 countries in the table as Central and Eastern European is somewhat similar to the so-called “16+1” cooperation between China and 16 Central and Eastern European countries. In 2011 during his official visit in Hungary Wen Jiabao, former president of the People’s Republic of China, announced plans for creating a new platform for establishing more

GDP per capita (PPP) of the EU NUTS2 regions in 2015 as a percentage of the average regional economic development for the EU-28 intense economic relations with Central and Eastern European countries and with the region itself as a whole. Based on the Chinese definition of the East-Central European region the countries belonging to this group are the ones “trapped” between the Western European and Russian spheres of interest. Thus, Belarus, Moldova and Ukraine are excluded from the 20 examined countries based on the Chinese definition of 16 Central and

Eastern European countries. Furthermore, the Chinese efforts for promoting peace and avoiding conflicts did not allow the inclusion of Kosovo either. The “16+1” transregional platform was officially brought into life in 2012 at the Warsaw summit and since then a Prime Ministerial summit has been organised annually by the 16 CEE countries and China. The main goal of China is to strengthen its economic re-

Central and Eastern European Countries in the Multi-polar World of the 21 ST Century

The imports of Central and Eastern European countries from China and Hong Kong as a percentage of GDP for the countries, 2016

lationship with the countries involved and to further expand the cooperation to the fields of science, technology, education and culture. China’s ultimate goal, however, is to improve its cooperation with the countries in the region to help implement its ambitious “One Belt – One Road” programme for the 21st century the aim of which is establishing a new Eurasian field of power. It is imperative to point out that for China it would also entail strengthening relationships with the entire region and not with the individual countries. Nevertheless, it is still unclear to what extent the Chinese “16+1” formation will contribute to the creation of a new Central and Eastern European field of power in the 21st century. In November, 2013 at the Bucharest summit the countries agreed on elaborating a medium-term programme for the “16+1 cooperation”. In December, 2014 at the Belgrade summit the members decided to adopt the directives of the “EU-China 2020 strategic agenda for cooperation” and EU-law as the basis of the “16+1” cooperation. This was the date when the agreement on renovating the Budapest-Belgrade rail-

way line, the first large-scale infrastructural project of the “16+1 cooperation”, was signed. Furthermore, the parties agreed on the creation of sectoral coordination centres: the China-CEEC Tourism Promotion Agency in Budapest and the China-CEEC Investment Promotion Agency in Warsaw and Beijing. At the Suzhou summit in November, 2015 the institutional framework of the “16+1 cooperation” was solidified definitively. In order to strengthen their economic cooperation the parties agreed to improve the railway link – taking the transportation of goods between Lodz and Chengdu as an example – between the two regions. The customs clearance facilitation cooperation mechanism between Greece, Macedonia, Serbia and Hungary came into force in order to promote the seamless transportation of goods from the port of Piraeus to the EU (China-Europe Land-Sea Express Line). The parties showed support for the plan ensuring the cooperation between Adriatic, Baltic and Black Sea ports and their accompanying industrial parks, and the connection of these ports with economic corridors (Adriatic-Baltic-Black Sea Seaport

Countries of the "16+1 Cooperation"

Cooperation). The most important achievement of the Riga summit that took place in November, 2016 was the foundation of the China-CEEC Investment Cooperation Fund. The parties agreed that they would harmonize their infrastructural developments with the routes of the Trans-European Transport Network. The China-CEEC Secretariat on Logistics Cooperation was established in Riga and it has its own virtual platform too(www.ceec-china-logistics.org). The parties support the second large-scale infrastructural project of the mechanism which is the modernisation of the Budapest-Belgrade railway line. In November 2017, the summit of the “16+1 cooperation” took place in Budapest. At the final press conference (November 27, 2017) Viktor Orbán evaluated the summit as follows:

„We confirmed the recognition that a new world order is taking shape around us – both politically and economically. In this new world order the role of Asia and China has increased significantly, and will continue to increase in the future. Asia and China have also become a determining factor in terms of finance and technology. Central Europe welcomes this development. In our view, the strengthening of the Chinese economy also offers great opportunities to the countries of Central Europe. Unfolding before us are the signs of a success story: the success story of cooperation between the countries of Central Europe and China. There is enormous growth potential in the Central European region. You can see this potential if you study the Central European region’s economic growth figures. In this cooperation system, eleven of us are Member States of the European Union, while five of us are not yet members. In

Central and Eastern European Countries in the Multi-polar World of the 21 ST Century

Leaders of China and the 16 Central and Eastern European countries at the Summit of the "16+1 Cooperation" in 2016

Hungarian Prime Minister Viktor OrbĂĄn at the 16+1 Summit

terms of the future, the key question is whether we can involve the Central European countries in the European Union and the other five countries aspiring to become members in overarching long-term economic projects, investments and developments which will lead to the rise of the entire region. In order for this region to be able to grow, we need external resources in terms of technology and financing. Existing European resources

are no longer sufficient on their own. We therefore welcome the fact that, as part of the new economic world order, China wishes to be present in the growth and development of this region. We have reviewed the most important projects in which this cooperation manifests itself. From among these, I should mention the modernisation and development of the Belgradeâ&#x20AC;&#x201C;Budapest railway line. This is a flagship project with future strate-

gic significance for freight traffic along the Silk Road within the One Belt One Road Initiative. Today we had the opportunity to hear about projects and development plans which will create “win-win” situations: situations in which every participating party will be a winner. What we have achieved today is beneficial for China, beneficial for the European Union, and also beneficial for the countries of Central Europe.”

Countries of the Visegrad (V4) Cooperation

Concerning the classification of the 20 countries included in the table, it is apparent that there is only one group not based on geographical location or shared history. This is the Visegrad Group which was established to promote political cooperation after the regime changes in the 1990s. In Visegrad, February 15, 1991 – following the example of the meeting between the Polish, Czech and Hungarian rulers back in 1335 in Visegrad – Václav Havel, the president of Czechoslovakia, József Antall, Hungarian prime minister and Lech Wałęsa, president of Poland signed the Visegrad Declaration. By signing the declaration the leaders of the three countries (now there are four member states due to the 1993 dissolution of Czechoslovakia) stated that they would closely cooperate on their way towards European integration. Since then the V4 has become a recognised political “trademark” or in marketing terms a “brand” and in the international literature and diplomacy these countries are now called the Visegrad Four. The V4 countries have already achieved their goals set in the 1990s and joined the EU in 2004, moreover the Czech Republic, Poland and Hungary became member states of NATO in 1999 while Slovakia joined the military organisation in 2004. One of the biggest achievements of the Visegrad Group is that in 2000 the International Visegrad Fund was established in Bratislava. The main objective of the Fund is to promote the cooperation of V4 countries in the field of education, science and culture. What is more, nowadays the Fund supports programmes intended to strengthen the relationship of V4 countries with the neighbouring states. The main goals of V4 countries coming into the 2000s were the preservation of Central European countries’ identities and the assertion of their common interests. The migrant crisis peaking in 2015 only strengthened the capacity of V4 countries to assert their interests both within and outside the EU. But of course, this is connected to the EU’s political crisis (will the EU ever become a strong political union or will national sov-

ereignty still serve as its foundation in the near future; what kind of solutions can European integration offer for the migrant crisis and how great is the opposition of the individual nation-states in this regard). Nowadays the opposition of the V4 countries within the EU is most apparent in the issues of the mandatory migrant resettlement quotas and the interpretational differences between the EU and Central European countries concerning the model of democracy. Though in this regard there is a discrepancy between the Polish and Hungarian interpretation and the Czech and Slovakian standpoint. The period of the 2016/2017 Polish V4 presidency was the first time during which the Visegrad Group set very serious political goals: intensifying the economic and political cooperation of V4 member states with other countries of the Central European region and with countries of the Western Balkans and those involved in the EU’s Eastern Partnership Programme (primarily Belorussia, Moldova and Ukraine). The current Hungarian presidency programme carries on the foreign political endeavours of the Polish presidency. The prime goal of the Hungarian presidency sub-programme, called “Regional Visegrad”, is also the strengthening of relationships between the countries of the V4 and Western Balkans. Furthermore, it aims to increase the role of the V4 in elaborating and substantiating the EU’s policy on further expansion through the strengthening relationship with the countries of the Eastern Partnership.

Central and Eastern European Countries in the Multi-polar World of the 21 ST Century

But the great question for the years to come is whether the V4 will expand or not? Will other countries be involved from the region? From a geopolitical standpoint the expansion of the Visegrad Group is indeed by all means justified because in order for the Central and Eastern European countries, currently divided by great powers, to form a new and strong region both politically and economically, they will have to acquire significantly more dominance and strength. The 2017 Czech and Austrian general elections do fall in line with these efforts. According to my prognosis for the future the V4 group ought to be transformed into a V7 partnership. Croatia, Slovenia and Austria should be added to the cooperation, and consequently, a new framework of 21st century Central European cooperation should be

The headline target of the Trans-European Transport Networks (TEN-T) is to interconnect the road transport infrastructures, to establish high-speed rail networks on the whole European continent and to standardise air transport and air traffic management systems. The EU’s 1996 and 2001 transport development plans for creating trans-European networks attached particular priority to the establishment of seaports, inland ports and intermodal terminals. Later, the 2013 Review of the EU integrated the TEN-T network structures with approximately thirty related priority projects and it also identified nine TEN-T Core Network Corridors. The EU set 2030 as the target date for the implementation of the projects relating to the creation of core networks. The following map illustrates these nine Core Network Corridors of the EU: Five out of the nine Core Network Corridors pass across or touch the border of the Central and Eastern European region.

established. 8. The EU’s five TEN-T (Trans-European Transport Networks) Core Network Corridors passing through the Central and Eastern European region and their organisational impact on economic space, with special regard to the Chinese „gates” of the region In accordance with the Maastricht Treaty of 1992, the European Union has created Trans-European networks (TEN) in the areas of transport, telecommunications and energy, and has started to develop these specific networks in order to promote the functioning of the internal market, to contribute to the establishment of economic and social cohesion and to ensure the interconnection between the EU’s central areas and the peripheral regions. The latter are landlocked regions, or regions which do not have any islands. All this means that the aim of the TEN concept is to connect the existing national and regional networks, to build up the missing sections and to remove the bottlenecks between the national networks, as a result of which networks could be created encompassing the whole European integration, or, in broader sense, the whole European continent. A further objective of the TEN programmes is to extend EU networks to Central and Eastern Europe and to the Mediterranean countries.

Three of these corridors are West-East corridors, which are the following: Ø the Rhine-Danube corridor; Ø the Mediterranean corridor and Ø the North Sea-Baltic corridor. There are also two North-South TEN-T corridors; these are the following: Ø the Baltic-Adriatic corridor and Ø the Orient/East Med corridor. From the perspective of the Central and Eastern European countries, usually two critical remarks are made on the TEN-T transport corridors. Firstly, they are dominated by the networks determined in the West and the aim is merely to supplement and extend these networks to Central and Eastern Europe. Therefore, the establishment of transport networks within the Central and Eastern European region is not regarded as a priority. Secondly, the existing funding conditions (individual project financeability) enable the consolidation of formerly established networks exclusively and there is little prospect that new structures will be built or established. For the Central and Eastern European region it means that since it is the eastward extension of the TEN-T West-East corridors that prevails in the EU transport directives, these TEN-T networks contribute only partially to the creation of a 21st cen-

TEN-T Core Network Corridors of the EU

tury North-West economic field of power in Central and Eastern Europe. In other words, the current TEN-T network structure does not take into consideration the aspects of the enlarged EU’s spatial organisation. Instead, it reinforces the central role of the Western European “core region”. However, the enlargement of the EU is not the only reason why the 21st century transformation of the TEN-T corridors has become a key issue. It is important for China’s Silk Road Economic Belt, too. The main question is to what extent can the EU transport corridors which traditionally focus on Western Europe be transformed in such a way that they fit the transport network of the emerging Eurasian field of power; that is, in such a way that a new single Eurasian transport network is created, including the land and maritime routes of China’s Silk Road Economic Belt. In this case, the task would be to find the place where the EU TEN-T corridors could be connected to the two Chinese routes, that is, the land route (passing through Central Asia and Russia) and the

maritime route (across the South China Sea and the Indian Ocean) connecting China with Europe. However, the idea that the EU could be seen as a part of the Eurasian field of power has not been included among the EU’s official resolutions yet. Moreover, for the time being, the EU’s official leaders and opinion formers reject the concept of Eurasia itself as well. Nevertheless, considering the Central and Eastern European region to be a part of the Eurasian field of power is of paramount importance for us, as it is the only way to break free from the “captivity” of the West and the East and to become a bridge region in the 21st century. In the case of the EU, the fact that there is an increasing number of EU development programmes in which the candidate countries for EU accession are also included can be regarded as a step forward. As regards the Central and Eastern European field of power, the EU’s so-called macro-regional strategy is of outstanding importance. The concept of macro-region has no uniform definition. It can be

Central and Eastern European Countries in the Multi-polar World of the 21 ST Century

The five TEN-T Core Network Corridors in the Central and Eastern European region

used to describe country groups of international importance (such as the EU, APEC and the Eurasian Economic Union), specific countries or it can also refer to regions within a specific country which belong to a particular large area. According to the EU definition, given in 2009 when the EU Strategy for the Baltic Sea Region was adopted, the concept of macro-region refers to territorial units encompassing those regions of various countries which display common cohesive features and have special mutual political, economic and cultural relations. After the adoption of the EU Strategy for the Baltic Sea Region, the EU devised three further macro-regional strategies: the EU Strategy for the Danube Region (2011), the EU Strategy for the Adriatic and Ionian Region (2014) and the EU Strategy for the Alpine Region (2016). The macro-regional strategies involving 19 EU and 8 non-EU countries have become an integral part of the EU policy framework. The objectives of the strategies are entirely consistent with the EU’s political priorities; they reinforce the various EU policies and are built on the framework of cohesion

policy. Macro-regional strategies enhance the value of the cooperation dimension within the cohesion policy. They provide space for multi-sectoral, multi-country and multi-level governance even for nonEU Member States. They can play a significant role in the mitigation of the potential adverse effects at the EU’s external borders and in promoting the reinforcement of relations between these countries and the EU. The basis of the EU macro-regional cooperation comprises a number of points. These are the following: Ø Macro-regions are large gravitational regions based on real internal relation systems; Ø The basic prerequisite for the cooperation is commitment at national and regional level; Ø It is characterised by a participatory process and multi-level governance efforts; Ø Within the framework of cooperation, specific activities are carried out, which are implemented as common projects; Ø The implementation of macro-regional strategies is carried out by creating coherence with the existing EU legislation and policies.

Macro-regions of the European Union

Central and Eastern European Countries in the Multi-polar World of the 21 ST Century

The EU’s fundamental principle adopted for macro-regions is based on the principle of the ‘three NOs’, according to which: Ø The strategy provides no new EU funds. There could be additional international, national, regional or private funds, although the emphasis is on the better use of existing funds; Ø The strategy requires no changes to EU legislation; Ø The strategy does not establish new structures; it is implemented by existing bodies, whose complementarity must be maximised.

The Rhine-Danube (TEN-T) Core Network Corridor

Macro-regions can also be interpreted as the joint development of areas based on geographical location and geographical features. From a geopolitical point of view, the question is the following: to what extent can macro-regional development strategies exceed the different historical developmental paths of countries and areas belonging to macro-regions and whether these strategies are able to soften or change the Cold War rhetoric, which is based on the West-East division. However, it is undisputed that the EU’s macro-regional strategy leaves room for the 21st century spatial reorganisation of the Central and Eastern European region, which will be based on economic cohesion and not on political divisions. In the following section, we analyse those five major Core Network Corridors of the EU which pass across the Central and Eastern European region. The analysis focuses on the potential new economic spatial organisational forms this region might or will take due to the impact of the corridors. The Rhine-Danube corridor The Rhine-Danube corridor is the most significant WestEast transport corridor of continental Europe. Following the route of the Danube, it runs from Strasbourg through Southwest and Southeast Germany towards Central European cities. It connects Vienna, Bratislava and Budapest with Bucharest and the easternmost point of the corridor is in Constanta, at the most important Black Sea port of Romania. The second, northern branch of the corridor links Frankfurt, Prague, Žilina and Košice and its easternmost point can be found at the Slovakia-Ukraine border. The main issue of this transport corridor’s future development is to further develop transport routes which connect Germany with Central and Eastern European countries. The basis of this main transport route is the Rhine-MainDanube waterway (Europa Canal), where vessels can sail from Rotterdam, located at the North Sea, to Constanta,

located at the Black Sea. This trans-European waterway is the longest inland waterway in the world, which is 3 434 km long. Together with its river stretches, the length of this waterway system is 12 000 km. The establishment of this waterway system required substantial water engineering work on the originally non-navigable sections of the Danube and the Rhine. Furthermore, between the Main and the Danube, a navigable canal has been built. This 171 km long waterway connects the Main with the Danube from the Bavarian Bamberg to Kelkheim. The canal was completed in 1992 and the plan was to construct 29 dams on the Rhine-Main-Danube waterway, out of which 14 have already been built. These dams create a 607 km section meeting the waterway parameters, thus enabling undisturbed navigation.i The fact, that the EU adopted the Strategy for the Danube Region in 2011, which is the second macro-regional strategy of the EU, contributes significantly to the development of this transport corridor. This strategy is the macro-regional development strategy and action plan of the countries and regions of the Danube River Basin. The strategy was developed by eight EU Member States: Austria, Bulgaria, the Czech Republic, Hungary, Germany (Baden-Württemberg and Bavaria), Romania, Slovakia, Slovenia, and six non-EU countries: Croatia (which was not yet a Member State), Serbia, Bosnia and Herzegovina, Montenegro, Moldova and Ukraine. As, with the exception of Austria and Germany, the countries participating in the strategy for the Danube region are countries which acceded to the European

The territory of the EU Macro-regional Strategy for the Danube Region

Union through the enlargement policy of the EU (2004, 2007 – eastern enlargement; 2013 – Croatia) or Western Balkan countries involved in accession negotiations or Eastern Partnership countries; this macro-regional strategy is also regarded as the symbol of the new, enlarged EU. From the aspect of economic partnerships, it can be considered to be the growth axis of Central and South-East Europe. The map above demonstrates the macro-regions of the Danube. Based on this map, we can conclude that this area can be regarded as a significant sub-region of the Central and Eastern European region. This sub-region is based on physical geographic features and goes beyond the political approach which focuses on distinguishing countries that are members of the Euro-Atlantic field of power and non-member countries. The Rhine-Danube Core Network Corridor and the Danube region are of paramount strategic importance for Hungary, as, due to its geographical situation, its history and its current EU-membership, half of the export of goods are carried out within the framework of this transport corridor. The reason for that is that traditionally, the Danube is the most vital physical geographic link between the West and the East of Europe. As the map below outlines, there are four destinations (countries of the Danube) which contribute to the fact that the value of Hungary’s merchandise exports exceeds 5 million USD. These priority destinations are the following: Germany (value of all merchandise exports: 28.9 billion USD, accounting for 28.1% of Hungary’s total volume of merchandise exports), Romania (value of all merchan-

dise exports: 5.3 billion USD, accounting for 5.2% of Hungary’s total volume of merchandise exports), Slovakia (value of all merchandise exports: 5.12 billion USD, accounting for 5.02% of Hungary’s total volume of merchandise exports) and Austria (value of all merchandise exports: 5.1 billion USD, accounting for 5.0% of Hungary’s total volume of merchandise exports). This most important West-East transport corridor of the European continent is ahead of an outstanding technical development, since the first European ‘Hyperloop’ train line is planned to connect Vienna, Bratislava, Budapest and Košice. Hyperloop is a vacuum tube train, which is planned to reach supersonic speeds (1220 km/h). In March 2016, the CEO of the Hyperloop Transportation Technologies (HTT) signed an agreement with the Slovak Minister of Economy to build the Hyperloop transport line connecting the four cities by 2020. As the map below demonstrates, the transport time between these cities would become significantly shorter, as a Bratislava-to-Vienna route would take only 8 minutes and a Bratislava-to-Budapest journey only 10 minutes. This new, today still almost incomprehensible mode of transport will establish a direct link between the large cities of the region and might create new spatial organisational forms, as well as spatial connections. Obviously, there are a lot of people who are sceptical about this revolutionary new technology. However, it is beyond doubt that this Hyperloop technology would practically eliminate geographical distance. This is particularly important, as the Central and

Central and Eastern European Countries in the Multi-polar World of the 21 ST Century

The main destinations of Hungaryâ&#x20AC;&#x2122;s merchandise exports in 2016 and the offices of the Hungarian National Trading House in 2017

The planned Hyperloop route for the 2020s connecting Vienna, Bratislava, Budapest and KoĹĄice

Eastern European economic field of power has two major growth axes: the Vienna-Bratislava economic axis and the Warsaw-Berlin growth axis (where the Polish government also plans to construct a Hyperloop railway). The latter will be discussed later. The Mediterranean corridor The Mediterranean (TEN-T) Core Network Corridor

The approximately 3000 km long Mediterranean transport corridor is the second most important WestEast axis of the EU’s TEN-T networks. It connects the south-western Mediterranean region with the Hungary-Ukraine border. It runs from the southernmost point of Spain, the Strait of Gibraltar, along the coastlines of Spain and France, crossing the Alps it goes through the northern part of Italy and continuing through Slovenia and Croatia it enters the territory of Hungary. The easternmost point of this Mediterranean corridor is Záhony, at the Hungary-Ukraine border. The Mediterranean corridor is significant also because it connects the western Mediterranean region with the EU’s core region. In Spain this transport corridor has not only a coastal

route, but also another one, which connects Madrid with the coastal areas. The 621 km long high-speed railway line (designed for speeds above 300 km/h) connecting Madrid and Barcelona was opened in 2008. Formerly, a Madrid-to-Barcelona route took five hours; today, however, the same route takes only two and a half hours, thanks to this high-speed railway. There is a high-speed rail line in France as well, which connects Marseille and Lyon. One of the largest investments of the Mediterranean transport corridor is the construction of a new railway line between Lyon and the Italian city, Torino. A key part of this investment is the construction of a new, 57 km long tunnel through the Alps. This new railway line, which would be a new border crossing, is expected to be ready by 2028. The modernisation of the railway networks in those areas of Slovenia, Croatia and Hungary where the Mediterranean corridor crosses the countries is only a long-term plan of the EU. The EU Strategy for the Alpine Region, adopted in 2016, is related to the Mediterranean corridor. However, this strategy concerns only Slovenia out of the 20 Central and Eastern European countries. The Alpine region is one of the richest regions in the world. Moreover, thanks to its unique geographical and natural features, it is one of the most economically dynamic, innovative and competitive regions of Europe. The strategy concerns about 80 million people and 48 regions in the seven countries of the Alpine macro-region. Five out of these seven countries are EU Member States (Austria, France, Germany, Italy and Slovenia) and two countries are not members of the EU (Liechtenstein and Switzerland). The reason why this transport core network corridor is of major importance for Hungary is that Záhony, located at the Hungary-Ukraine border, is the eastern gate of the EU and also one of the western gates of the New Silk Road Economic Belt’s New Eurasian Land

The territory of the EU Macro-regional Strategy for the Alpine Region

Central and Eastern European Countries in the Multi-polar World of the 21 ST Century

Bridge development zone. Thus, Záhony can be regarded as one of the key strategic geographical locations of the new Eurasian field of power. Záhony is an important station of the East-West rail transports, which is the junction of the European “standard gauge” and the eastern broad gauge railway networks. Transhipping, made necessary by the 89 mm difference in gauge between the two systems, has been going on since 1948, that is, for over 60 years. The land transhipping complex, often referred to as the eastern gateway to Hungary, has a total area of 84 km2. With its 260 km long standard gauge railway lines and its 140 km long broad gauge railway lines, it can be regarded as a large-size complex with large transhipping capacity also at European level. Its principal activity is transhipping cargo arriving from the Commonwealth of Independent States and countries beyond via Ukraine’s Csop (Záhony) and Batyevo (Eperjeske) border crossing points in cars on broad gauge (1520 mm) railway into standard (1435 mm) gauge cars. Now, however, Záhony may be granted a new role through China’s New Silk Road economic project, as, in the near future, one of the major routes of the transport of goods between China and the European continent will pass through Záhony. Thus, Záhony can become the logistics hub of Chinese goods. In accordance with the agreement, concluded in November 2017, to develop the Chinese-Hungarian logistics cooperation; in the near future, a certain part of the flow of goods coming from China into the EU will be transported into Hungary, and the goods will be distributed to the Central and Eastern European region from this country. In order to attract Chinese railway container traffic to Hungary, the Ministry for National Economy of the Hungarian Government designated an area of more than 17 000 square metres, in the free enterprise zone of Záhony, as a customs free zone. Currently, this is the only customs free zone in Hungary, which can make the region an attractive industrial location again and plays a pivotal role in making the Záhony region an international freight and logistics hub. From the aspect of import duties, taxes and import measures of the commercial policy; goods within the customs free zone are to be regarded as goods outside the customs territory of the EU. Therefore, in such zones any kind of industrial, commercial or service activity is permitted, under the conditions laid down by customs legislation. This means that businesses are allowed to carry out activities involving the storing, processing, selling or the purchase of goods. If a certain investment is carried out in a customs free zone, there are no duties or national taxes payable on goods

imported from abroad; thus, the costs of economic activities planned to be carried out in an industrial area are lower. Furthermore, capital allowances can also be ensured, because the imported means of production are also exempt from duties and taxes. However, the key to Záhony’s genuine future development would be to establish a direct railway link between Záhony and Horgos/Khorgos, located at the China-Kazakhstan border. Currently, this China-Kazakhstan Border Cooperation is globally regarded as the biggest largest urban, and commercial and logistics hub construction project in the new Silk Road Economic Belt. Khorgos, located on the Kazakhstan side and Horgos, located on the Chinese side of the border, constitute the largest commercial road freight terminal of Western China.This terminal connects Western China with Central Asia and Europe, thus playing a major role in the commerce of Central Asia. In Horgos, a Border Cooperation Centre is being built, which is suitable for trade negotiations, presentations of goods, carrying out sales and transportations and organising various regional or international economic and commercial conferences. The prevailing trade policy of the region is a favourable bilateral trade policy; the citizens of China, Kazakhstan and other countries can stay for 30 days in the centre without a visa, together with their commodities and cars. The North Sea-Baltic corridor The North Sea-Baltic (TEN-T) Core Network Corridor

The EU’s North Sea-Baltic transport corridor runs from Helsinki, connects the ports and the most important cities of the three Baltic States, and following the traditional West-East corridor, it passes through Warsaw,

The planned route of Hyperloop in Poland connecting Warsaw, Lodz and Wroclaw and a picture depicting what the Polish Hyperloop is planned to look like

Lodz, Poznan and Berlin, continuing towards the major ports of the North Sea, that is, towards Hamburg, Bremen, Amsterdam and Rotterdam. Thus, it connects the most important ports of the European continent with Poland and the Baltic States. The entire transport corridor consists of 5 947 km of railways, 4029 km of roads and 2186 km of inland waterways. One of the corridor’s most important projects is the construction of a new, high-speed railway, running from Tallinn (Estonia) towards the Lithuania-Poland border, continuing to the Polish city, Bialystok. The plan is to extend this railway line to Warsaw. Since this transport corridor ensures a link between Eastern Europe and the busiest ports of Western Europe, it is of key importance for the New Silk Road Economic Belt, more precisely for its development zone, called New Eurasian Land Bridge. At the Belarus-Poland border, opposite the Belarussian city of Brest, in the Polish city of Terespol; a logistics hub, that is, basically a new city is being built with Chinese capital investment exclusively. The Polish city of Terespol is often referred to as one of the major cities of the New Silk Road already today. In the near future, it will be one of the main directions of the Chinese flows of goods. However, Terespol’s importance can be definitely connected to Brest’s transhipment complex on the opposite side. Similarly to Záhony, Brest is also a transhipment station where the broad gauge railway, built in the Soviet era, meets the European standard gauge railway line. From the aspect of transport geography,

Brest has an excellent location, as it is located on the main railway line connecting Moscow and Minsk. Furthermore, in the Soviet era, a highway was also built between the two cities. As already mentioned above, the second Hyperloop railway line within the Central and Eastern European region is planned to be constructed in Poland, on the Warsaw-Lodz-Wroclaw route. It would connect the capital of Poland, Warsaw, with the manufacturing and technology centre, Wroclaw, over a of 415 km stretch. While a “traditional” journey from Warsaw to Wroclaw takes 3.5 hours, thanks to the Hyperloop railway, it will only take 40 minutes in the future. The first section of the Hyperloop route in Poland is planned to be built between Warsaw and Lodz, as Lodz is a major European logistics hub of the Chinese New Silk Road Belt. The Polish gate of the New Silk Road’s land route is the city of Terespol, opposite the Belarussian city of Brest. According to the plan, a new railway line is to be built between Terespol and Warsaw, there should be a Hyperloop railway line connecting Warsaw and Lodz, and the North Sea-Baltic TEN-T corridor runs from Lodz, through Poznan right up to Berlin. The implementation of this plan would be extremely significant, as one of the most important growth axes of the Central European region is the Warsaw-Berlin axis. Another plan of the company Hyper Poland is to construct a Hyperloop railway line connecting Warsaw with Krakow. This line would be of particular impor-

Central and Eastern European Countries in the Multi-polar World of the 21 ST Century

tance for the other Visegrad countries and would significantly contribute to the establishment of a new Visegrad economic field of power.i The company Hyperloop One plans to construct two new railway lines in Europe which are closely connected to the North Sea-Baltic TEN-T corridor, as well as the Central and Eastern European field of power. The first one would connect Helsinki with Tallinn over a length of 90 km. This journey would only take eight minutes. The second plan is to construct a 1991 km ring line in Germany on the Munich-Berlin-Hamburg-Frankfurt-Stuttgart-Munich route. This transport corridor is closely connected to the EU Strategy for the Baltic Sea region which was first adopt-

The major aim of the Macro-regional Strategy for the Baltic Sea Region is to develop the whole region around the Baltic Sea into a leading region at a global level. This strategy is based on four fundamental pillars: 1. To make the Baltic Sea Region environmentally sustainable. 2. To make the region prosperous (through the more effective coordination of research and innovation and the EU laws). 3. To make the region accessible and attractive (by improving the transport systems and energy supplies, which is a great challenge, in view of the low population density and the peripheral nature of certain parts of the Baltic Sea Region).

ed by the European Council in 2009. Thus, this region can be regarded as the “flagship” of the EU’s macro-regions. As the figure below demonstrates, the Baltic Sea macro-region consists of 11 countries, eight EU Member States: Denmark, Estonia, Finland, Germany (the States/ Länder of Berlin, Brandenburg, Bremen, Hamburg, Mecklenburg-Vorpommern, Schleswig-Holstein and Lower Saxony - only the NUTS II region of the Lüneburg region), Latvia, Lithuania, Poland and Sweden, and three non-EU countries: Belarus, Norway and Russia (St. Petersburg, Arkhangelsk Oblast, Vologda Oblast, Kaliningrad Oblast, Republic of Karelia, Komi Republic, Leningrad Oblast, Murmansk Oblast, Nenetsky Autonomous Okrug, Novgorod Oblast and Pskov Oblast).

4. To make the region secure (through the more effective joint surveillance of shipping, public health, crisis management etc.).

The territory of the EU Macro-regional Strategy for the Baltic Sea Region

The fact that Russia and Belarus are also partner countries, increases the geopolitical importance of the Baltic Sea macro-region significantly. The Baltic region is of key importance for Russia because of the Nord Stream pipelines of Gazprom. The reason why the Nord Stream pipeline of Gazprom is significant is that it brings gas under the Baltic Sea directly to Germany, without passing through Ukraine. Germany is the biggest purchaser of Gazprom’s gas and this pipeline reveals how excellent the economic relations between Russia and Germany are today, which have been improving since the 2000s. From a geopolitical point of view, it can be regarded as the new, 21st century Russian-German economic axis. The Nord Stream 1 pipeline was inaugurated on 8 November 2011, which transports natural gas from the city of Vyborg, located at the Finnish-Russian border, to Greifswald in Germany. The Nord Stream company is a joint venture whose majority shareholder is Gazprom, holding a 51 percent stake. When the construction of the South Stream pipeline was stopped in the first half of 2015, the Nord Stream joint venture concluded an agreement to build the Nord Stream 2 pipeline with a length of 1200 km and a planned annual transport capacity of 55 billion cubic metres. The construction is planned to be completed by 2019. The planned total annual transport capacity of the Gazprom 1 and Gazprom 2 pipelines is 110 billion cubic metres of gas. In April 2017, five big European energy companies (ENGIE, OMV, Royal Dutch Shell, Uniper and Wintershall) signed an agreement with Gazprom to cover 50 per-

The Nord Stream 1 and the Nord Stream 2 pipeline of Gazprom

cent of the costs. This is of paramount importance, as Gazprom plans to complete 80 percent of gas transportation to Europe on this route; thus, in the near future, Ukraine would lose revenues by no longer playing the role of a transit country. The Baltic-Adriatic corridor The Baltic-Adriatic (TEN-T) Core Network Corridor

The EU’s Baltic-Adriatic transport corridor is of paramount importance for the Central and Eastern European region, as this North-South corridor connects Poland, which has a coast along the Baltic Sea with Slovenia and Italy, which have a coast along the Adriatic Sea. One of the transport corridor’s major long-term developmental goals is the establishment of the missing infrastructural links between Poland, the Czech Republic and Slovakia. The corridor has two starting points in Poland. The first one is Szczecin, whose seaport is in Swinoujscie (the LNG terminal, which was opened in 2016, is located there), and the second one is the busiest seaport of Poland, Gdansk (Gdynia). The transport corridor starting from Szczecin runs through Poznan and Wroclaw to Ostrava in the Czech Republic, continuing through Pferovo and Brno to Vienna. The corridor starting from Gdansk connects Warsaw, Lodz and Katowice, and passing through the Slovakian cities of Žilina and Bratislava it also reaches Vienna. From Vienna and later from Graz, one of the transport corridor’s branches runs towards Italy, where passing through Udine it reaches Venice, where it establishes a transport link between Venice, Padua, Bologna and Ravenna. The second branch of the corridor starting from Graz runs towards Ljubljana and establishes a transport link between the Slovenian port of Koper and the Italian port of Trieste.

Central and Eastern European Countries in the Multi-polar World of the 21 ST Century

The countries and the three basic principles of the Three Seas Initiative

However, it is important to note that this corridor only partially contributes to the establishment of a new Central and Eastern European North-South economic field of power, since it does not concern Hungary and Croatia. Instead, it strengthens the transport links between Poland, the Czech Republic, Slovakia, Austria and Italy. The Three Seas Initiative has been launched with the aim of establishing a new North-South link in the Central and Eastern European region. This initiative has set the target of establishing new economic relations between the Baltic, the Adriatic and the Black Sea. Therefore, as opposed to the TEN-T corridors of the EU, this initiative does not aim to establish a relationship (on a residual basis) between the former EU Member States and those Eastern countries which acceded to the EU in 2004. Instead, its objective is to create a new economic field of power where the aim is indeed the development of the given geographical area and the establishment of transport links with Western Europe is not a key consideration. The Three Seas Initiative was initiated by Kolinda Grabar Kitarovic and by Andrzej Duda. The former is the President of Croatia, which has the longest coastline

along the Adriatic Sea (5 835 km), and the latter is the President of Poland, which has the largest national economy out of the Central and Eastern European countries and a 440 km coastline along the Baltic Sea. The first summit took place in Dubrovnik in the summer of 2016. The 12 participating states were the following: Poland, Estonia, Latvia, Lithuania, the Czech Republic, Slovakia, Hungary, Austria, Romania, Slovenia, Croatia and Bulgaria. Although Romania and Bulgaria, which have a Black Sea coastline, are members of the Three Seas Initiative, one of the most problematic issues is the establishment of stronger economic relations with the Black Sea region. The big question is whether Ukraine (with a 2782 km Black Sea coastline) will play a role in this initiative at all. This Three Seas Initiative is very similar to the 16+1 initiative by China. As opposed to the Western Balkan countries, Austria is not part of this initiative. The second summit was organised in Warsaw in the July of 2017, which was attended by the President of the United States, Donald Trump, who interpreted the Three Seas Initiative as the Central and Eastern European regionâ&#x20AC;&#x2122;s independence from Russia, more precisely from Russian natural gas deliveries. In his

speech held in Warsaw he said Russia was the country posing the biggest threat to the safety of the Central and Eastern European region and he confirmed that NATO was ready to protect the region against any kind of Russian aggression. However, the motivation for Donald Trump’s visit to Warsaw was geo-economic, rather than geopolitical, as the first American LNG Carrier, the Clean Ocean, had arrived at the new LNG seaport of the Polish city of Świnoujście at the beginning of June, several weeks before the US President’s visit to Warsaw. The key question of the near future is what role LNG shipments from the US will play besides or instead of LNG shipments arriving primarily from Qatar. At the end of July, after the visit of Don-

The planned North-South energy gas corridor

ald Trump, the US House of Representatives voted in favour of imposing new sanctions on Russia. These sanctions concern all the energy companies of Russia and even those European companies which participated in Russian energy investments. Obviously, it affects primarily Gazprom’s investment in the Nord Stream 2 pipeline. The third summit will take place in Bucharest in 2018. Thus, while the first two summits were organised in a country of either the Adriatic or the Baltic Sea, the third summit will be held in Romania, which has a Black Sea coastline. The Świnoujście LNG (liquefied natural gas) terminal in northern Poland was inaugurated in 2015 and put into operation in 2016. The terminal, which was began to be built in 2011 with a budget of EUR 830 million, should have been ready by the middle of 2014. In the presence of President Andrzej Duda, the gas terminal was named after Lech Kaczynski, a former Polish President, who died in the Smolensk plane crash in 2010. Lech Kaczynski initiated the establishment of the gas terminal back in 2006. Due to the delay of the project, there was a need for the modification of the contract regulating the delivery of Qatari liquefied natural gas (LNG), which had to be transmitted through the terminal. On the basis of the modified contract, the gas which is not used in the Polish terminal can be sold by the gas transporter on other markets, too. Currently, there are two gas storage terminals with a capacity of 5 billion cubic metres, which cover approximately one third of Poland’s annual gas demand. The Świnoujście LNG terminal is a project supported by the EU. It is a part of a North-South gas corridor, leading to the Croatian island of Krk, where an Adriatic gas registration terminal is planned to be constructed The Polish gas pipelines running from the Baltic LNG

terminal will transmit gas to Gdansk, which is also a Polish seaport, and to Lwówek, located in northern Poland. Furthermore, it will be possible to deliver gas from the Polish gas pipelines to Germany, Slovakia, the Czech Republic and Ukraine, through the existing gas interconnectors. The operation of the terminal is limited, as the Nord Stream pipeline, inaugurated in 2011, which crosses the maritime routes leading to this terminal, makes the transport of LNG ships with a draught of more than 13.5 m difficult. Besides the northern, Baltic terminal in Poland, another terminal is planned to be constructed in the south, in the island of Krk. It is the Adriatic LNG terminal, which is expected to be ready by 2019 and to work with an annual capacity of 6 billion cubic metres. The terminal in the island of Krk would ensure the natural gas supply of the Polish, the Czech, the Slovak and the Hungarian market as well and it is also expected that there would be gas deliveries to Ukraine, too. Thanks to these two terminals, it would be possible for the first time to establish a new North-West energy corridor in the Central and Eastern European region, running from the Baltic Sea to the Adriatic Sea. Thus, instead of depending on Russian gas, gas import from global markets could be geographically diversified for the first time. The figure above demonstrates this particular NorthSouth energy corridor, focusing on the plan of establishing a Polish-Slovak gas distribution centre. The Orient/East-Med corridor The Southeast-Northwest Orient/East-Med transport corridor establishes a transport link between the busiest seaports of Greece (and Cyprus) and Germany. More precisely, it will establish a link only in the future, as the southern and the middle parts of this TEN-T cor-

Central and Eastern European Countries in the Multi-polar World of the 21 ST Century

The Orient/East-Med (TEN-T) Core Network Corridor

ridor still require large-scale developments. The maritime route of the corridor starts from Larnaca Port in Cyprus, continues to the island of Crete and turns into a land route at the port of Piraeus in Greece. One branch of this transport corridor connects Athens and Piraeus with important cities located in the western part of the Greek Peninsula. From here, passing through the city of Thessaloniki, it continues to the Bulgarian city of Sofia. From Sofia, one branch of the transport corridor runs towards the port of Burgas, while the main branch of this TEN-T corridor continues from the Bulgarian city of Vidin to Romania. It enters Hungary at Lőkösháza, which can be found on the route between Oradea and Arad, and continues to Budapest through the Békéscsaba-Szolnok route. Then, from the direction of Bratislava and Vienna, it continues to the Czech Republic and at Děčín, on the Prague-Mělník route, it enters Germany. In Germany, one of the main routes passes through Berlin to the port of Rostock. The second main route runs to the port of Hamburg and Bremen through Leipzig and Magdeburg. This transport corridor runs through EU Member States exclusively; therefore it makes a detour towards Bulgaria and Romania. However, the traditional Western Balkan route (as well as the migrants’ major land route) follows the geographically shortest route from Greece through Macedonia and Serbia to Hungary. The newest map of the EU’s TEN-T transport corridor already includes the new planned branch of the Orient/EastMed corridor, the Thessaloniki-Skopje-Pristina-Belgrade-Budapest route.

The rehabilitation of the Budapest-Belgrade railway is of paramount importance for the commercial relationship of China and the EU, as, thanks to the maritime route of the Chinese Silk Road, the goods shipped to the port of Piraeus, from where they should be delivered to Western Europe, can be transported through Macedonia, Serbia and Hungary, which will be the fastest way. The rehabilitation of Serbian section of the Budapest-Belgrade railway began last November. After the modernisation, the journey between the two capitals will take only three hours, instead of the current eight-hour journey time. The project is financed by China. The railway rehabilitation project is important from a number of aspects, since this is the first cross-border project that will be implemented within the framework of cooperation between China and 16 Central and Eastern European countries, and this is the first tripartite agreement that has already been signed and whose implementation has already been started. Furthermore, it is also unique, because China, an EU Member State and a non-EU country take part in this project together. The project is executed by the China Railways International and the China Communications Construction Company and it is planned to be completed in three years. After the renewal, the trains will be able to run at a speed of 200 km/h on the first 20 km section and they will be able to run at a speed of 120 km/h on the rest of the section. The average speed of the trains on the whole Serbian section will be 120-180 km/h. So far, the speed has barely reached 70 km/h. In order to build a double track electrified railway line between Budapest and Belgrade, a 350 km railway section has to be renovated, out of which 166 km runs through Hungary and 184 km passes through Serbia. Besides passenger traffic, this railway line will also be suitable for freight transport. The complete rehabilitation and modernisation is planned to be finished by 2023. The call for proposals for the design-build procurement procedures concerning the section in Hungary between Soroksár and Kelebia (which is a 152 km railway line) appeared on the website of MÁV (Hungarian State Railways) on 27 November 2017, which was also the day when the 16+1 Forum of China and the 16 Central and Eastern European Countries commenced in Budapest. As analysed above, the land route of the Chinese New Silk Road Economic Belt has two European gates, the Polish/Belorussian Terespol/Brest and Záhony in Hungary. However, the European gate of the 21st century Maritime Silk Road is obviously the Greek port of Pi-

raeus. The Chinese state-owned company, COSCO, began to operate the container port in 2008. In February 2013, the railway line of the port of Piraeus was connected to the European rail network and since then, it has been functioning smoothly. In August 2016, COSCO bought a 67 percent stake in the port of Piraeus from the state-owned company, the Piraeus Port Authority; thus COSCO has become the majority shareholder. The state-owned COSCO is China’s largest and the world’s fourth largest marine shipping company. This year an estimated 3.4 million containers will be unloaded at the port of Piraeus by this company. Currently, COSCO sends three trains a week from Piraeus to Hungary and through Hungary to Central Europe. Through the construction of the Budapest-Belgrade railway line, Hungary would have a realistic chance of becoming the Central European distribution centre of the Chinese products delivered by sea. In 2016, the port of Piraeus was the 8th biggest container port in Europe; however, according to the forecasts, it could become Europe’s largest container port by 2030. 9. Central and Eastern Europe as the “bridge region” of the 21st century’s Eurasian supercontinent – towards a new geopolitical frame of mind The most optimistic scenario with regard to our region is that Central and Eastern Europe will become a “bridge region” not only between Western and Eastern Europe but between Europe and Asia too. Will the Eur-

asian supercontinent ever become reality? It is beyond dispute that by now the Eurasian supercontinent of the 21st century has already started taking shape, primarily because of the intensifying economic cooperation between Russia and China. However, the main question is what Asian-European political and economic relations will be like and whether the European continent is going to constitute a part of Eurasia or not? Despite all its inherent risks, the multi-polar world currently in the making provides new geopolitical opportunities, too. In my view, the global economic and political role of East-Central Europe and the members of the Visegrad Group in particular could be that of a mediary between the major economic and political power fields in the 21st century. From an economic perspective this could bring about the dominance of transport services and intermediary activities in the field of business and finance in the region. Ideally, Hungary could become a logistics hub for both western (primarily from North-America and Western Europe) and eastern (predominantly from Russia and China) transnational companies. In my opinion, in order for Hungary to become successful on the long term, it should strive towards becoming a strategically important geographical spot, that is, a “bridge state” in the multi-polar world of the 21th century. Can a country as small as ours have its own foreign trade and foreign policy strategy? In the current period of “deglobalisation” and ever-strengthening macro-regions, intensifying the cooperation among the countries of the Visegrad group and establishing

Central and Eastern European Countries in the Multi-polar World of the 21 ST Century

a Eastern-Central European economic field of power underpinned by a new north-south infrastructural corridor could serve as a suitable basis for Hungary, too, for adopting a considerably more independent foreign policy strategy. The necessity for the creation of this Central and Eastern European North-South economic (and political) power field has already appeared in the post-World War I. settlement plan of Józef Piłsudski, Polish marshal. Piłsudski coined the term of Intermarium which referred to a closer cooperation between the countries of the region, stretching from the Baltic to the Adriatic and Black Sea, with the aim of retaining their independence. The “grand geopolitical chessboard” of the 21st century is going through fundamental changes, and owing to the evolving multi-polar world there are new “pieces” appearing on the board that will bring new rules to the game. Even though everything is in motion, the fundamental question remains the same: Will Halford Mackindr’s World Island, that is, the Eurasian continent ever take shape as an actual geographic territorial unit and will we be able to investigate global political relations in terms of the World-Island–American continent dichotomy in the near future? In my view, in order for the Central and Eastern European region to be as successful as possible in the evolving Eurasian power field, it is indispensable for the citizens of the region to change their traditional, entrenched, Cold War-like perception of the world and adopt a fundamentally new geopolitical way of thinking. One of the main elements of this is profoundly changing the way we perceive Russia. For Hungary the realistic assessment of Russia, and learning as much about it as possible would be of great importance, regardless of the actual global political situation. Furthermore, it is also imperative that we profoundly change our “entrenched” stereotypical way of thinking about “looking up to the West and disdaining the East”. Instead of the general and fundamentally flawed common simplifications (e.g.: the Eurasian Economic Union is the enemy of the European Union), we have to adpot a new geopolitical view. We have to accept the existence of the multi-polar world and the evolution of a new 21st century Eurasian continent, and most important of all, we have to accept that Hungary is a bridge state between the western half of Europe and the eastern half of Asia. But can we change our way of thinking in the years to come? Can we adopt an “eastern way of thinking”? The differences between Eastern and Western way of

thinking and strategy can be interpreted in terms of the differences between the games chess and go. Chess is a typical example of a zero-sum game since the victory of one player entails the defeat of the other. Therefore, chess is about total victory, its aim is to mate the opponent: to attack the king of the opponent and to put him into an impossible situation. In other words chess is about the final, decisive battle. Put into everyday terms, it means either white or black, either the West or the East, the USA or Russia will emerge victorious. In essence, the Cold War era was reminiscent of a game of chess. It is no coincidence that in American geopolitics the scene of global politics is called a chess board – after Z. Brzezinski’s term. On the contrary, the game wei qui (its Japanese name is go) is about prolonged warfare. If translated word by word the name of the game means “board game of surrounding”. The principle of the game is strategy itself, the strategy of encircling. In his book about China, Henry Kissinger describes the characteristics of Chinese strategy, different from those of Western strategy, through the book of Sun Tzu, “The Art of War”. According to Kissinger “Hence the task of a strategist is less to analyse a particular situation than to determine its relationship to the context in which it occurs. No particular constellation is ever static; any pattern is temporary and in essence evolving......Sun Tzu uses the word “shi” for that quality, a concept with no direct Western counterpart.” But will we be able to use this Chinese way of thinking in the future? Do we have the ability to apply the shi approach, that is, the method of constantly adopting to the ever-changing situation, in economic and political strategy? Are we able to redefine the geopolitical position and strategy of the Central and Eastern European region in the 21st century by using the shi approach? In my view, getting acquainted with the strategic principles and rules of wei qi (go) provides a useful basis for the creation of this novel mind-set and new set of strategies. The four strategic principles of the game serve as the main foundation and guideline for creating long-term strategy. These are the following: 1. Principle of counterattack: As the saying goes, the best defense is good offense, and this is also valid in go. If we adopt a defensive strategy then the game will go exactly the way the opponent planned it.

Therefore, it is advisable to reply to an attack with a counterattack, if missing out on defense will not harm us. When conducting a counterattack, our move should always force an immediate response from the opponent. Therefore, always try to initiate first. 2. Principle of containment: If we can isolate the territory of the opponent from other parts of the board then we will be at an advantage. The isolated territories will not able to affect the course of the game later on. Thus, in given situations, it is worth making smaller sacrifices. 3. The principle of resilience: We should strive towards achieving our goal, however, we should always take note of the opponent’s moves. It might become necessary to make a change of plans at some point. This also implies, that as long as it is possible that the move of our opponent changes the game fundamentally, we should only make preparatory, tentative moves. 4. The principle of reducing losses: Even our best plans might be thwarted by out opponents. In this case, it

is crucial for us to have an opportunity to minimize casualties. The so-called ten golden rules of wei qi (The golden rules were compiled by Wang Jixin, a renown Chinese wei qi player who lived in the era of the Thang dynasty (618-907)) provide assistance in the tactical implementation of long-term strategies. Ten golden rules of wei qi: 1. Greediness is not victorious! 2. Be unhurried to enter opponent’s territory! 3. Take care of oneself when attacking others! 4. Discard stones to gain sente! 5. Abandon small to save big! 6. When in danger, sacrifice! 7. Make thick shape, avoid hasty moves! 8. A move must respond to the opponent’s! 9. Against strong positions, play safely! 10. Look for peace, avoid fighting in an isolated or weak situation!

AN INTRODUCTION TO THE “16 + 1 COOPERATION”

AN INTRODUCTION TO THE “16 + 1 COOPERATION” Author: Viktor Eszterhai

“16+1 Cooperation” is a trans-regional platform created to intensify the relationship between China and 16 Central and Eastern European countries. The summit of Prime Ministers involved in the mechanism will be hosted by Hungary in November, 2017, therefore it is worth examining the history of the “16+1 Cooperation” and the peculiarities of its operations as well as the occurring problems and challenges.

ANTECEDENTS During his official visit to Hungary in 2011, Wen Jiabao, former Premier of the State Council of the People's Republic, declared China’s commitment to improve relationships with Central and Eastern European (CEE) countries, and also announced the establishment of a new mechanism for this purpose. A year later, the platform named “16+1 Cooperation” was formed by China and 16 CEE countries in Warsaw. The 16 CEE countries participating in the mechanism include: Albania, Bosnia Herzegovina, Croatia, Macedonia, Montenegro, Serbia, Slovenia, Bulgaria, Romania, the Czech Republic, Hungary, Slovakia, Poland, Latvia, Lithuania and Estonia. The “16+1 Cooperation” fits China’s attempts of recent years to establish new international institutions in order to increase its influence in global politics. Another important feature of the “16+1 Cooperation” is being part of “One Belt, One Road”, China’s ambitious foreign policy plan. HISTORY OF THE “16+1 COOPERATION” At the summit of the Prime Ministers of China and the CEE countries, held in Warsaw in 2012, the Member States of the mechanism adopted the “Twelve Measures”, which defined the main goals of the cooperation, with setting up a Secretariat subordinated to the Beijing-based Ministry of Foreign Affairs being the most important one. China

announced to create a $10 billion special credit facility, part of which can be drawn down in the form of preferential loans to implement joint projects, primarily in the field of infrastructure, green economy, etc. CEE countries can apply for project funding at Chinese financial institutions (National Development Bank of China, Export and Import Bank of China, Industrial and Commercial Bank of China, Construction Bank of China, Bank of China, China Citic Bank). The parties agreed to establish a development fund of $500 million, and the member states planned to increase trade between the region and China up to $100 bn by 2015. The agreements provided for further cooperation in the field of finance, tourism, culture and science, and China promised to grant scholarships for 5,000 students in the region in the next five years. As the most important outcome of the summit held in Bucharest in November, 2013, the parties laid down that the heads of government of the countries concerned would meet on an annual basis to overview the results of the cooperation and to define the direction of future progress. They also agreed to develop the medium-term programme of the “16+1 Cooperation”. Regarding economic cooperation, a decision was made on holding investors’ and scientific forums, and establishing the chamber of commerce of China and the CEE countries, which the member states can join on a voluntary basis. Several new forums were announced in

the field of science and education (China-CEEC high-level symposium of think tanks, China-CEEC Young Political Leaders› Forum, China-CEEC Education Policy Dialogue, etc.), and preparing for establishing coordination centres in various fields was also agreed upon. Finally, Hungary, Serbia and China announced to jointly modernise the railway line between Budapest and Belgrade. At the summit in Belgrade in December, 2014 the parties declared to regard the principles of China 2020 Strategic Agenda for Cooperation and EU legislation as the foundation of the cooperation. The first large-scale infrastructure project of the “16+1 Cooperation”, i.e. the modernisation of the Budapest-Belgrade railway line, was signed. At the summit, the parties declared to support the establishment of the China-CEEC Business Council in Warsaw, which the regional economic organisations would join on a voluntary basis. a decision was made to form the first industrial coordination centres, the China-CEEC Tourism Promotion Agency in Budapest and the China-CEEC Investment Promotion Agency in Warsaw and Beijing. In the summit held in Suzhou in November, 2015 the institutional operations of the “16+1 Cooperation” was ultimately consolidated: the Chinese party and the international coordinators prepared the National Coordinators’ Meetings, during the summit the parties agreed on the place of the next

meeting, discussed the goals of the community and reviewed the implementation of earlier plans. The Suzhou Guidelines emphasised the further strengthening of the relationship between the “16+0 Cooperation” and the EU, identifying the China-EU Connectivity Platform in addition to earlier mentioned forms of cooperation. The fact that “16+1 Cooperation” is handled by the Chinese party as an integral part of the Government’s grandiose “One Belt, One Road” plan was confirmed, therefore the Memorandum of Understanding signed by Hungary and China was given special emphasis. In order to strengthen trade relationships, the parties acknowledged to develop the railway link between the two regions, following the example of the already working cargo railway transit between the cities of Łódź and Chengdu. The Cooperation in Facilitating Customs between Greece, Macedonia, Serbia and Hungary was launched in order to transport goods as smoothly as possible from Piraeus Port to the EU (China-Europe Land-Sea Express Line). The parties supported the plan ensuring the cooperation between the Adriatic, the Baltic and the Black Sea harbours and related industrial parks as well as their connection with economic corridors (Adriatic-Baltic- Black Sea Seaport Cooperation). The joint Medium-term Agenda of the platform was adopted, ultimately consolidating the fields of cooperation: economy; connectivity and infrastructure; industry and processing industry; agriculture and forestry; science, research

and environmental protection; culture, education, youth exchange, sport and tourism; health, and finally local-level cooperation. The most important outcome of the meeting held in Riga in November, 2016 was the establishment of the China-CEEC Investment Cooperation Fund. The parties agreed to align their infrastructure development with the routes of the Trans-European Networks (TEN-T). The China-CEEC Secretariat on Logistics Cooperation was established in Riga, which received its own virtual platform (www. ceec-china-logistics.org). The parties support the modernisation of the Belgrade-Bar railway line, the second large-scale infrastructure project of the mechanism. CHARACTERISTICS OF THE “16+1 COOPERATION” The experiences of recent years have revealed that the “16+1 Cooperation” has many interesting characteristics, which distinguish it from other international institutions. The first important characteristic of the “16+1 Cooperation” is that it is operated according to a consciously loose institutional arrangement. Typically, each country decides to join the work of the mechanism’s organs on a voluntary basis. The mechanism has three levels: 1) forum of heads of states 2) a level related to expert discussions and major fields of cooperation (e.g. infrastructure development, agriculture) 3) and finally, the most important level is represented by a central organ, the Beijing-based Secretariat, continuously liaising with the embassies of the countries concerned (supervising the performance of initiatives and the fulfilment of commitments, summoning meetings, formulating topic proposals). This loose institutionalisation meets the interests and motivation of the participating countries and facilitates focussing on areas serving the improvement of cooperation. Furthermore, it is especially important that it makes the mechanism also more acceptable by the EU, diminishing critical voices according to which China aims at creating its own international institution within the EU. Interestingly, loose institutionalisation–although it is traditionally a characteristic of weak organisations–has an undoubted advantage under the rapidly changing global circumstances of the past decade: it makes the mechanism more flexible and result-oriented.

Another characteristic of the Cooperation is a conscious recognition of the heterogeneity of the participating countries. 11 of the 16 CEE countries are Member States of the European union (EU), while 12 of them are members of the North-Atlantic Treaty Organisation (NATO). These 18 countries have very different geographies and histories; their only common historic feature is

“The experiences of recent years have revealed that the “16+1 Cooperation” has many interesting characteristics...” their former membership in the Socialist Bloc. The recognition of heterogeneity is an imperative for the feasibility of the “16+1 Cooperation”. The fact that it does not force compulsory homogeneity on its member states, however, somewhat increases its efficiency. It is beyond doubt, however, that in the future China–maintaining the present institutional frameworks–should further divide the sixteen countries into internal blocks (Baltic countries, West and East Balkan, Visegrad countries), for the sake of more effective operations. Third, “16+1 Cooperation” has become such a common regional forum that necessarily brought East-Central European countries closer to each other. As yet, this has not substantially decreased the traditionally Western European focus of the region, but, in the long term, is expected to contribute to the strengthening of a kind of regional identity. Considering the political processes within Europe, its significance in a longer term should not be underestimated. The fourth characteristic is the dominance of economy, although the Cooperation covers almost all areas of the relationships. The most important aspects of economic relationships are represented by the financial cooperation (preferential loans or investments) and infrastructure support (such as the Budapest-Belgrade railway line). Typically, the bodies and forums of the economic cooperation

AN INTRODUCTION TO THE “16 + 1 COOPERATION”

are the most active and significant, such as the China-Central and Eastern Europe Business Council and the China-Central and Eastern Europe Business Forum. The focus of the relationship on economic cooperation promotes the result-orientedness of the two organisations. The character of the “16+1 Cooperation” well reflects the pragmatic, less value-based feature of China’s foreign policy, which is also suitable to increase the acceptability of the mechanism within the EU. The fifth characteristic is the planned framework of the “16+1 Cooperation”, which was clear already at the time of foundation (e.g. Twelve Measures), but took an institutionalised form only after the summit held in Suzhou, completed by the medium-term schedule of the mechanism. The typically result-oriented nature od the platform is further enhanced by setting the goals and monitoring progress. Sixth, the engine of the Cooperation is China, while the CEE countries are unable to adopt a unified stance. On the one hand, this asymmetry is most discernible in the creation and operation

of institutions. China consciously considers the interests of the countries taking a lesser part, but in practice there is strong competition between the states of the region for winning Chinese investments, which is not very likely to change in the near future. The seventh characteristic is that the “16+1 Cooperation” emphatically does not conflict with the European Union, but even “complies with its relevant laws and decrees”. The “16+1 Cooperation” must comply with the legislation and strategic documents of the European Union (China-EU 2020 Strategic Agenda for Cooperation). It is extremely important to emphasise this to prevent criticism against the mechanism. The 16+1 Cooperation”, however, is not entirely free from political purposes, and is more than merely an international economic institution. Finally, thanks to the “16+1 Cooperation”, the cooperation between CEE and China fits China’s other new mechanisms, coordinating the state-level relationships between Vhina and other regions (e.g. Chna-Africa Cooperation Forum), which refers

AN INTRODUCTION TO THE “16 + 1 COOPERATION”

to the fact that the Chinese government builds its transregional institutions according to a kind of pattern, providing a basis for the operations of “One Belt, One Road”. ASSESSMENT OF THE “16+1 COOPERATION” In some Chinese opinions, the “16+0 Cooperation” is one of the most important diplomatic outcomes of China’s policy on Europe, which may also serve as an example for other regions (or even the EU). Other experts highlight that the cooperation has produced significant results within a relatively short period of time, and has proceeded to the next phase of development: while priority was formerly given to creating the institutional frameworks, now giving them substance has become important. By contrast, some experts believe the feasibility of the cooperation is questionable, due to the different historical pasts and political situations of the sixteen countries. Undoubtedly, the goal set at the establishment of the mechanism, namely to increase the trade between China and the CEE region to $100 bn, has not been achieved: China’s export amounted to $42.2 million in 2015, -while its export form the 16 countries amounted to $14.1 million. The data reveal that trade is still strongly asymmetric, the attempts to make SMEs of CEE countries appear in the Chinese market have proven to be futile. Another disappointment, primarily for CEE countries, was that no surge of Chinese investments could be observed despite the “16+1Cooperation”. The lack of green field investments is an especially sore point, which are extremely popular tools of internal policies because of their job-creating capacity. Despite critical voices, however, the “16+1 Cooperation”, is still assessed predominantly positively by the governments of the CEE region, primarily owing to the “One Belt, One Road” project, which is optimistically considered a suitable tool for the region to break out from its semi-peripheric position within Europe through the expansion of trade. Actually, the greatest danger for the “16+1 Cooperation” is posed by the EU. Although the Cooperation is not a priority theme (in contrast with the issues of trade, investments and human rights, etc.) of the EU-China relationships, according to some

leading circles of the EU (and governments of its Member States, e.g. Germany) the region does not need a new channel outside the EU to manage relationships with China. This guideline applies to Member States as well as the five Balkan candidate countries. Within the EU, usually three concerns arise in connection with the “16+1 Cooperation”. According to the first concern, the joint projects within the framework of the mechanism – especially the infrastructure investments and their form of funding – are in conflict with the legislation of the EU. Those who take this viewpoint think that the projects re not transparent, violate the internal market regulation of the EU (public procurement, environmental impact study, technical standards, etc.). These are the reasons why the European Commission is examining the flagship project of the Cooperation, the modernisation of the Budapest-Belgrade railway line. Second, critical voices claim, the mechanism does not meet European principles and values, and does not follow the model which is represented by the EU in the CEE region. Third, China is trying to drive a wedge within Europe and implement the “divide and rule” principle with the mechanism, critical voices warn. Some extremist views regard the “16+1+Cooperation” China’s Trojan horse. All these critical remarks – may they be exaggerated and partly stem from the preservation of the CEE market – should be kept in view to ensure the further development of the “18+1 Cooperation”. SUMMARY The “16+1 Cooperation” has undergone significant development, and become an operating transregional platform. The institution can be regarded such a flexible and pragmatic mechanism which, on the one hand, has substantially improved the relationship between China and the CEE region, and which, on the other hand, provides guidance to operate the relationships between China and other regions within the frameworks of “One Belt, One Road”. For all these reasons, it may serve as the model of cooperation between the EU and China in the long term, especially if the USA continues to move away from the EU. All this, however, is on condition that the “16+1 Cooperation” responds effectively to the countless challenges that it is facing,

The 6th Summit of Central and Eastern European Countries and China

The Budapest Guidelines 79

The Budapest Guidelines Author: Viktor Eszterhai

The 6th Summit of Heads of Government of Central and Eastern European Countries and China was held in Budapest on 27 November 2017. This analysis aims to present the main events of the “16+1 Cooperation” on the basis of the Budapest Guidelines drafted at this meeting. In the first step, this analysis examines the stances taken in the Preamble, and then it discusses the points adopted by the Member States.

Preambulum The most significant forum of the “16+1 Cooperation” is the Summit of the Heads of Government of 16 Central and Eastern European Countries (CEE) and China, which is arranged every year. According to the Budapest Guidelines, each country was represented by their Heads of Government, except for Albania and Romania represented with their Deputy Heads of Government. This reflects that the Summit is actually judged as a high-priority regional event by the countries of the CEE and the cooperation has become one of the key political forums in the region. NAME Viktor Orbán Li Keqiang Denis Zvizdic Boyko Borissov Andrej Plenkovic Bohuslav Sobotka Jyri Ratas Maris Kucinskis Saulius Skvernelis Zoran Zaev Dusko Markovic Beata Szydlo Ana Brnabic Robert Fico Miro Cerar Senida Mesi Paul Stanescu

Participants at the 6th Summit of Heads of Government of Central and Eastern European Countries and China. Besides these 17 countries, representatives of Austria, Belorussia, Greece, Switzerland, the European Bank for Reconstruction and Development and the European Union were also present as observers. The involvement of these countries and institutions is not a coincidence. Given the heritage of the Habsburg Empire, too, Austria traditionally fosters a close relationship with the region, and the idea of involving the country in the mechanism has already popped up thanks to

COUNTRY Hungary China Bosnia-Herzegovina Bulgaria Croatia the Czech Republic Estonia Latvia Lithuania Macedonia Montenegro Poland Serbia Slovakia Slovenia Albania Romania

POSITION Head of Government Head of Government Head of Government Head of Government Head of Government Head of Government Head of Government Head of Government Head of Government Head of Government Head of Government Head of Government Head of Government Head of Government Head of Government Deputy Head of Government Deputy Head of Government

the active economic relations. The attendance of Belorussia can be justified for two reasons: first, it also has a close relationship with the neighboring CEE, connecting the region to Russia as a natural corridor. Second, the country itself is also a significant site of Chinese investments. The presence of Greece was not a surprise either: several of its neighbors are active participants of the “16+1 Cooperation”, while Greece is directly involved in one of the flagships of the mechanism, the Budapest-Belgrade railway, as the railway line would connect the Port of Piraeus with the market of the EU. The Swiss interest is due to the tight economic relation maintained with the CEE Region and the potential investment facilities of the “16+1 Cooperation”. The attendance of the European Union is also evident because 11 countries out of the 16 CEE countries are EU Member States. On the other hand, involving the EU in the mechanism as an observer might decrease the skeptical judgement against the mechanism among certain EU decision-makers. The primary interest of the European Bank for Reconstruction and Development is to find interesting projects for investments, coordinating them with the European Commission’s Infrastructure Development Program (European Commission’s Investment Plan for Europe), better known as “the Juncker Plan”).

The Budapest Guidelines put special emphasis on the Budapest venue of the 6th Summit (Warsaw, Bucharest, Belgrade, Suzhou, Riga), so the five-year-period is perfect for checking the earlier results. This is also reflected by the document listing the results of the five years (Five-year Outcome List of Cooperation Between China and Central and Eastern European Countries).It is important to highlight the results because there are voices that consider that the “16+1 cooperation” has not lived up to the expectations (the best-known example is that the trade between the CEE Region and China should have been increased to USD 100 billion by 2015 according to the plans, but it hardly exceeded USD 50 billion at the time of the target datevii). It is no coincidence that the Budapest Guidelines emphasize one should not focus only on economy when evaluating the cooperation because the relations of transport and logistics, culture and the human sector, which already have numerous results, are also important. The Budapest Guidelines highlight that the platform is committed to supporting multilateralism and international institutions such as the United Nations Organization and the World Trade Organization. This is significant because, on the one hand, similarly to the earlier guidelines published

annually, the participating states intend to ease the anxieties that China’s international institution-building ambitions – as well as the “16+1 Cooperation” – undermine the role of international organizations. On the other hand, this is some kind of determination to the world, mainly in relation to the anti-globalization efforts in the USA, whose losers might be both China and the extremely open CEE Region. It is not by chance that according to the text the “16+1 Cooperation” aims to maintain the openness of the global economy. The Budapest Guidelines state that the “16+1 Cooperation” fulfils an important and positive role in the China-Europe relations and deepens the “comprehensive strategic partnership” between the EU and China”ix. This is of great importance because of the above-mentioned negative perception that can be experienced at EU decisional level with respect to the 16+1 Cooperation”. In light of the sources, criticism primarily has three aspects: the projects implemented under the mechanism do not entirely harmonize with the EU regulations; China’s regional presence challenges the exclusiveness of the Western model in the CEE Region; and finally, the mechanism undermines the unity of the EU. Therefore, the Budapest Guidelines highlight that they aim to establish a “united, stable and prosperous Europe”. To deepen trust, the Budapest Guidelines also state that the 16 CEE countries and China are committed to follow the strategic documents and objectives specifying the EU-China relations such as the EU-China Agenda 2020, the EU-China Connectivity Platform, the European Commission’s Investment Plan for Europe and the EU-China Comprehensive Agreement on Investment being discussed. The Budapest Guidelines lay down that the “16+1 Cooperation” is closely related to the “One Belt, One Road” plan, which was first announced by Chinese Premier Li Keqiang in Belgrade in 2014 and has been mentioned in the Guidelines every year since then. The “One Belt, One Road” is most popular among the CEE states as the infrastructure investments to be realized under this initiative are supposed to considerably improve the accessibility of the region, which will help them break free from their peripheric economic status. Second, it is essential for China that the CEE countries lay down their commitment towards the “One Belt, One

Road” because its judgement, similarly to the “16+1 Cooperation”, is rather mixed within the EU, primarily for certain EU Member States such as Germany, so common front may form the EU attitude in the longer run. The Budapest Guidelines has marked the main path to be followed in the future as follows: “deepening economic, trade and financial cooperation for win-win development”. This sentence contains two noteworthy aspects. First, the issue of the financial cooperation between the CEE and China is included, although it received less attention as an economic topic before. This change is primarily due to the fact that Hungary as host country has made the most significant financial progress in the bilateral relations with China, which the parties could assess as a model to be followed by the other 15 countries, too. China especially urges on the deepening of financial relations, partly owing to the central efforts to internationalize the RMB, and partly because it is relatively easy to achieve results in this fields, as the Hungarian example also shows, contrary to the endeavors to increase investment and trade, which are often hindered by the economic structural features of the 16 CEE countries. Second, one of the high-priority elements is the mutually beneficial principle of relations. Over the past years this issue has received considerable attention and criticism owing to the “16+1 Cooperation” for primarily serving the interests of China. Therefore, it is essential to emphasize the mutual benefits for the affected parties. Nevertheless, it is worth mentioning that the Chinese party does not necessarily interpret mutual benefits as equal share from the benefits, but it rather means that the relationship offers advantages to both parties, so China does not exclude that the implementation of a project would be more beneficial to China than its partners. It is also obvious that China is responsible for checking to what extent the CEE countries have their interests in mind (e.g. the feasibility of each project). Finally, the last article set forth in the Preamble of the Budapest Guidelines lists the above-mentioned norms concerning the “16+1 Cooperation”, including the principle of “transparency, fairness, reciprocity and mutual benefits”, which are entirely connected to the international norms and the EU’s legal provisions according to the document. This point is significant because the parties emphasize

The Budapest Guidelines

that the “16+1 Cooperation” has not been established to undermine the international order or divide the EU but to exploit the mutual advantages. POINTS ACCEPTED The 7th Summit of the Heads of Government of Central and Eastern European Countries and China will be hosted by Bulgaria next year. Up to present, Bulgaria has belonged to the less active countries within the cooperation, which among others is due to its underdeveloped economic relations with China. The high-priority issues of the meeting to be held next year will probably include the Chinese export of agricultural products, because the sectoral coordination center for the “16+1 Cooperation” (16+1 Association for Agriculture Promotion) is located in Sofia. Cooperation Plan and Coordination Concerning the topic of cooperation plan and coordination, the parties have agreed to further realize the purposes of the Medium Term Agenda and announced their need for the preparation of the plans concerning the 2021-2025 period, which is highly important for the future of the “16+1 Cooperation” with actual purposes to be implemented. The formalized process of the mechanism has been confirmed again, under which the so-called national coordinators will hold discussions in China in the first half of the year, and then the final decisions will be passed in the host country of the Summit in the second half of the year. No change has taken place in the decision preparation mechanism: the Ministry of Foreign Affairs of the People’s Republic of China prepares the points of the Summit through the Secretariat operating in Beijing, in consultation with the embassies of the countries involved. It is still an important feature of the mechanism that each country and their institutions continue to decide on joining its work on a voluntary basis. Trade and Investment As for trade, the Member States aim to keep on consolidating bilateral trade based upon the regulations of the World Trade Organization, while for the investments the EU-China Comprehensive Agreement on Investment to be adopted in the future shall apply. Both are significant partly because of the above-mentioned ambitions highlighting that China’s institution-building is not contrary to

the prevailing international order and enhancing the EU’s trust towards the “16+1 Cooperation”. In addition to that, the World Trade Organization is a well-organized and tested regulatory system that is known to the participating states, so the Organization can enhance the efficiency of the cooperation among the Member States of the “16+1 Cooperation”. However, referring to the rules of the World Trade Organization is definitely an implicit concession for the Chinese party, as it is not the World Trade Organization but the common trade system and policy of the EU that serves as the basic reference point for the 11 EU Members. Although the wording is justified with respect to the five non-EU Member States, it will not be satisfactory for Western Europe and the European Commission. The key role in coordinating and preparing the economic relations is still fulfilled by the China-CEEC Business Council. The parties support a large number of international exhibitions and events (e.g. China International Import Expo, China International Consumer Goods Fair). These are considerable for the CEE states primarily because they are provided an opportunity to promote their products towards potential Chinese partners, increasing the export of the CEE countries and decreasing their trade deficit with China, which criticism is often mentioned about the “16+1 Cooperation”. The Budapest Guidelines expressly highlight e-commerce as one of the potential fields of cooperation. E-commerce may offer mutual benefits: Chinese companies possess the services providing a platform for the small companies of the CEE countries to enter the Chinese and the global markets. Central and Eastern European SMEs, which are dominantly in national property but are often underdeveloped, are expected to be involved in the “16+1 Cooperation”; however, this objective has not been achieved yet in recent years. Actually, both the foreign trade deficit and the low-efficiency presence of the SMEs of the CEE countries arise from the economic structure of the region, so they cannot really be remedied by the accepted points. Connectivity The Budapest Guidelines confirm that the projects of the “16+1 Cooperation” - besides the “One Belt, One Road” - are harmonized with the relevant documents and institutions of the EU, including the EU-China Connectivity Platformvi,

the Trans-European Transport network (TEN-T) and the Eastern Partnership programs. Beyond economic rationality, another aim is to build trust within the EU, limiting the potentials of hindering the realization of the projects, as it happened during the first significant regional project, the reconstruction of the Budapest-Belgrade railway. In the longer run the Member States hope that the EU will have a more supportive stance, as the projects of the EU and the “16+1 Cooperation” overlap considerably. Concerning the actual projects, the Budapest Guidelines mentions the Budapest-Belgrade railway, stating that China, Serbia and Hungary took significant steps for its realization. Formally, launching the public procurement procedure for the restoration of the railway section in Hungary can be considered a milestone: a precondition for the implementation. The public procurement procedure was significant because earlier the European Commission had objected to the failure of this. Therefore, after the closing of the tender procedure the former obstacles can be eliminated and the construction may start in 2020. Other actual projects include a plan supporting the establishment of the railway connection between the Ports of Rijeka and Koper with Hungary, and – based upon the recommendations of the feasibility studies – the extension of the Belgrade-Budapest railway line through the Ports of Montenegro and Albania. The projects are related to the China-Europe Land Sea Express Line and the Port Area Cooperation, aiming to create a modern connection between the Baltic, the Adriatic and the Black Seas. To improve the relations of transportation, the “16+1 Cooperation” aims to make the standard of the connectivity service in the CEE more efficient by harmonizing border-crossing and customs rules, increasing the connectivity of the railway network and supervising the cooperation opportunities of the existing logistics centers. The parties realized that the customs regulations should be harmonized with the EU rules (EU-China Agreement on Cooperation and Mutual Administrative Assistance in Customs Matters,EU-China Strategic Framework for Customs Cooperationx) in order to increase efficiency. These high priority aspects can reduce the disadvantages arising from the fragmented infrastructure network of the CEE countries and the differing customs regulations of the EU and non-EU Member States.

Cooperation on Industry, Energy, Science and Technology The Member States endeavor to enhance the earlier cooperation in the fields of industry, energy, science and technology under the coordination of Slovakia. The actual measures include the establishment of common laboratories (e.g. the virtual technological transfer center in Slovakia) and joint events such as the 3rd 16+1 Conference on Innovation Cooperation, which will be held in Sarajevo in 2018. For the reasons described earlier, the Budapest Guidelines have tried to strongly involve the SMEs in the industrial and technical cooperation, so the purpose of organizing a CEE-China International Small and Medium Enterprises Fair has appeared in China. Financial Cooperation One of the most central fields of the Budapest Guidelines is financial cooperation, which has been affected by the above-mentioned fact that out of the 16 CEE countries it was Hungary that had managed to make the most significant progress towards the deepening of financial relations with China. The second phase of the China-CEEC Investment Cooperation Fund was established, supplementing the first fund of a far more modest extent (nearly USD 0.5 billion). This activity is expected to be extended with the regional investments of the Silk Road Investment Fund, also including the CEE Region taking a central role, mainly in relation to the infrastructure investment opportunities of the Western Balkans Region. The China-CEEC Inter-Bank Association was founded, and the financial institutions of the affected states can join this Association on a voluntary basis. The Secretariat is directed by the China Development Bank, while the establishment of the regional coordination center is managed by the Magyar Fejlesztési Bank. Hungary’s leading role is shown by the fact that the China-CEEC Central Bank Governors' Meeting will be organized in Hungary in 2018. Agriculture, Forestry and Environment Protection Cooperation Undoubtedly, agriculture is one of the most successful fields of the “16+1 Cooperation”: China seems to be a proper market for the relatively cheap and high-quality products. Accordingly, the Budapest Guidelines lay special emphasis on

The Budapest Guidelines

the promotion of regional products (e.g. China International Agricultural Products Fair, 13th Chi-

closing

na-CEEC Agrotrade and Economic Cooperation Forum, etc.). Successful presence requires the harmonization of national standards, quality and health requirements. In order to access the market more efficiently, the affected parties will examine the possibility of supporting sales on e-commerce platform for the distribution of their products. Finally, the parties promote the establishment of an International Agricultural Demonstration Park in Bulgaria (Plovdiv), which serves as the regional coordination center for the “16+1 Cooperation” in the field of agriculture.

Finally, the Budapest Guidelines summarizes how the plans announced in Riga in the previous year have been realized. This is a highly important feedback mechanism to the “16+1 Cooperation” that shows the depth of the cooperation and facilitates the establishment of realistic objectives in the future.

People-to-People Contacts Regarding the numerous cultural, educational, scientific and tourism exchange programs, the Budapest Guidelines clearly highlight exchange programs related to the media (e.g. Year of China-CEEC Media Cooperation). The exchange of youngsters and young leaders is also important because it is a precondition for the consolidation of the “16+1 Cooperation”. The Member States have agreed that the deepening of tourism relations necessitates the representation of the CEE States as a single brand name. This suggests that the Member States start to prefer collaboration among small states in the competition for Chinese tourists rather than fighting alone with each other or countries regarded as larger tourism destinations. Health Cooperation As for health, Budapest Guidelines devote special attention to the “16+1 Cooperation” as the forum of the international distribution of traditional Chinese medicine. In addition to that, it has been recorded that the CEE Region might play an important role in the cultivation and production of Chinese medicinal herbs. All this urges on the deepening of the regulation, whose institutionalization will be outlined under the China-CEEC Drug Regulatory Cooperation Forum hosted by the Czech Republic in 2018. Local Cooperation Concerning local relations, one of the high-priority issues of the Budapest Guidelines is the deepening of the relations between local governments and local enterprises, with numerous forums such as the 3rd China-CEEC Capital Mayors Forum in Serbia.

summary To sum up, it can be stated that the “16+1 Cooperation” has become a key institution within the CEE Region and its importance is obvious on the basis of the Budapest Guidelines, too. The investigation of the Budapest Guidelines clearly reflects the development of the past years, including the problems and challenges to be shown and the further possible development trends. Despite the criticism received from outside and inside, the “16+1 Cooperation” has become an institutional framework whose use is more and more beneficial for the participating states.

“To sum up, it can be stated that the “16+1 Cooperation” has become a key institution within the CEE Region and its importance is obvious on the basis of the Budapest Guidelines, too. The investigation of the Budapest Guidelines clearly reflects the development of the past years, including the problems and challenges to be shown and the further possible development trends.” 85

16+1

Meeting of Central Bank governors

Prime Minister Viktor Orbán’s address at the meeting of the central bank governors of China and Central and Eastern European countries Good morning, I have just been given permission to speak in Hungarian. Allow me to welcome you all, Before I start my address, I would like to say that I’ve just come back from Shanghai, where I witnessed a moment in world history which I would like to call your attention to. If, say ten years ago, anyone had said that we would be able to attend a conference where the Chinese, the World Bank, the head of the World Trade Organization and the head of the IMF, would seek to defend free trade and multilateralism against an unspecified, important player in the world economy, if anyone had told us this ten years ago, we would have had laughed out loud. It clearly indicates the scale of changes taking place in the

world that today perhaps only we Eastern and Central Europeans would find this somewhat intriguing, as China has become such an established player of the world economy that today its role as a champion of multilateralism and free trade does not surprise us at all. I also warmly welcome the Governor of the People’s Bank of China, because next year will be the seventieth anniversary of the establishment of diplomatic relations between our two countries. This is not a world record, but it puts us among those countries which earlier than yesterday began to recognise that one day China would have world economic and world historical importance. This cooperation and friendship over the course of seventy years is a major advantage in Chinese-Hungarian relations. And please excuse my bias when I extend a

special welcome to my friend Mr. Isărescu, the Governor of the National Bank of Romania, and who reminds us of the heyday of our youth back in 2000, when the central bank governor was prime minister of his country, in parallel with my premiership. Welcome back to Budapest. Ladies and Gentlemen, Allow me to welcome you all here to the Castle District of Buda, which is an ancient spiritual and political centre of the Hungarian nation. You can see that our ancestors did not lack shrewdness: this site on which they chose to build – which for several centuries was where the most important thoughts and decisions were conceived – has views not only to the West, but also to the East. It has a complete panoramic view, which has encouraged those working here to gather information from every direction before adopting decisions which are important for Hungary. This is of particular significance today, because if someone only looks in one direction, they will be unable to make decisions which enable them to position themselves appropriately in the currently unfolding world order. And, Ladies and Gentlemen, the Central European countries and the closely associated Balkans region have the firm commitment, plan and optimistic vision for this region – Central Europe and the Balkans – to be winners in the decade to come. Ladies and Gentlemen, This is the first time that the central bankers of our sixteen countries and China have held a joint conference. We have already done a great many things, but we have never met in this configuration. This is despite the fact that we have long suspected that, sooner or later, we would reach a level at which it would no longer be enough to concern ourselves solely with trade and investment issues: that the moment would come when we would also need to seek cooperation in the field of finance. Ladies and Gentlemen, The fact that this has happened is due in large part to the prominent, initiating and decisive role played by György Matolcsy, the Governor of the Hungarian National Bank, who has organised this conference. We are grateful to him for this. If we look around at ourselves, Ladies and Gentlemen, we can see what a widely diverse group we are. I’m not just talking about the fact that a variety of governments operate in our sixteen countries, but also about the diversity of currencies we use for payment and in settling transactions. Here we have Estonia, Latvia, Lithuania, Slovenia and Slovakia, who are members of both the European

Union and the eurozone. Here we have the Czech Republic, Poland, Romania, Bulgaria, Croatia and Hungary, who are members of the European Union, but are not in the eurozone. They have diverse positions on whether or not to become members – and if so, when. You are well aware that Hungary is one of the more cautious of these: we want to become an integral part of the European community, whilst at the same time remaining open to other regions and communities, and this approach must also form part of our decision regarding the euro. And then we also have here with us our friends from Albania, Bosnia and Herzegovina, Macedonia, Montenegro and Serbia. They represent an extremely rapidly developing region, but they are neither members of the European Union nor the eurozone. Here I would like to make it clear that the Central Europeans – including Hungary – are the most firmly committed to the cause of the countries of the Balkans region gaining EU membership. We would like to see a rapid and vigorous enlargement, with the lead being taken by Serbia and Montenegro, whom I believe are the closest to becoming EU members. And this diversity is brought to a peak by the fact that with us here we also have China – the currency of which will in the future also be a force to be reckoned with. If I’ve understood the Honourable Governor’s request correctly, my task this morning is to somehow open this conference, but not from the point of view of a central banker – there are enough of those here today. So my task is to attempt to call your attention to a few things that seem to be important from a political perspective. The first thing I would like to mention is that at the time of the financial crisis in 2008 it became clear that we were heading towards a new economic world order. Some had already made this claim earlier, but it was the 2008 financial crisis that made it clear that we were on the cusp of a new era. Ten years have passed since then, and here we are now in 2018. With due modesty, I think we may venture to say that we can now see the outlines of the world we will live in over the next ten to twenty years. Already at this point in time we can categorically predict that the unipolar world order will be replaced by a multipolar world in which new players, new cooperation schemes and new values will emerge and gain ground. The second thing I would like to draw your attention to is that both Hungarian and other EU politicians think that globalisation will continue, but its internal balance of power will shift: ever more power centres will rise, cutting increasingly large pieces for themselves from the world economic pie. First among these rising new centres is China. I say to the Honourable Governor that if he reads Western European analyses on China, he will fre-

quently see claims that the country’s success is merely temporary. It is difficult to determine how much of this is sober analysis and how much is wishful thinking, but I believe that the past ten years have proved that the rise of the Chinese economy is not a temporary phenomenon. China will be a fixed star in the period ahead, and will be a major player in the world economy for a very long time. This is how we, too, should perceive China – and this is how we should approach it in the future. Among the shifts within globalisation’s internal balance of power I must mention the fact that in Europe, too, a new centre has emerged: Central Europe. God willing, it will be joined by the Balkans region, meaning Central Europe and the Balkans together: in other words, us. In Western Europe there is a consensus that over the next five to ten years the Central European region will be the growth engine of the European economy. We will be the economically fastest growing group of countries in Europe. Our advantages are not cyclical, but structural. These countries are innovative, have low taxation, and their workers have excellent abilities and qualifications. We are an important part of the European economic engine. This is particularly true of Hungary, and we feel that we have reason to look forward to the coming years with confidence. I would also like to draw your attention to the fact that, in addition to historical relations and geographical relations, economic relations will also clearly come into being between the two rising power centres: China and Central Europe. The two regions will be increasingly connected to each other. The Chinese de-

clared as much when they announced that they would like to create a single economic area through the “One Belt, One Road” programme. To our ears the term may sound strange, but we are talking here about building Eurasia. Whenever we talk about the future of Europe, there are three concepts on the table: Eurasian, Euromerican and Eurabian. Each of these has a lot of truth in it, but undoubtedly it is the Eurasian concept which is the most novel and most attractive from an economic point of view. This involves no less than China and Central Europe forming part of a single contiguous geographical region. By rail it may be possible to travel and transport any goods between China and Central Europe in two weeks. If we are able to build a rapid rail link from the Greek ports to Europe, this journey will be even faster. What I mean by all this is that in the future we should consider Eurasia not only as a clearly existing geographical fact, but also as an economic area. Ladies and Gentlemen, Naturally one may argue that the countries of the European and Asian parts of Eurasia stand on different ideological foundations. If I look back on the past ten years, however, I have to say that this is not important. The western half of Europe is learning more slowly than its Central European half, but eventually everyone will realise that we must adopt an approach to China that is free from ideology. We must accept that we are different, we organise our lives differently and we lead our countries in different ways. The task is not to judge – we should leave

Prime Minister Viktor Orbán’s address at the meeting of the central bank governors of China and Central and Eastern European countries

that to the pen-pushers. The job of decision-makers is to seek the common interests which we can find in a joint system of relations. Ladies and Gentlemen, There is a reason why in the new era one can see relations between China and Central Europe as a success story. The Honourable Governor was kind enough to mention that our trade volume is close to 70 billion dollars, and its rate of growth is staggering, standing at an average of 10 per cent; and – if I’ve understood the data correctly – trade between China and Hungary grew by 18 per cent in the first three quarters. Ladies and Gentlemen, I would also like to draw your attention to the fact that, in this new world order, a prominent role will be played by knowledge, talent and creativity. Everyone has two possibilities: the first is to produce knowledge; the other is to buy knowledge. Among regions there is increasingly fierce competition for outstanding specialists. This “brain drain” will create winners and losers. The Central European countries have never been famous for seeking to attract highly qualified workers from elsewhere. Throughout its entire history, every Central European country has believed that its independence and national sovereignty have cultural and intellectual foundations, and a country which is unable to produce the knowledge needed to be competitive in the modern world does not deserve to exist as a nation. In my view, this conviction is shared by the countries of Central Europe; and so we want to produce knowledge rather than buy it. And everything is in place for us to produce this knowledge: Central Europe has highly qualified, intelligent young people. And – without wishing to offend any of my contemporaries – if I compare my generation with the young generations coming after us who have now entered adulthood, they are clearly better qualified and more competitive than we were, and they will become more competitive than we are. We have no shortage of intelligent and highly qualified young people, we have creative enterprises, and we also have political systems which support research and development. In Hungary, for instance, the goal is for spending on R+D to reach 1.8 per cent of GDP by 2020: approximately 1,000 billion forints. By Hungarian standards this is an enormous sum. Ladies and Gentlemen, I would also like to draw your attention to a possibility. We do not know whether it will happen, but it seems increasingly likely that we will need to prepare ourselves

for the dollar losing its monopoly in world trade. Today it is no longer alone on the scene. It seems that the world will be more diverse than it is today not only in a political dimension, but also in a financial one. In the future the importance and strength of the new trade centres will not necessarily be expressed in dollars. The yuan is an investment and trade vehicle which we Hungarians, too, must take account of. It is no accident that Hungary has already issued yuan-denominated government bonds, and will do so in the future – although we primarily want to finance our public debt from domestic Hungarian savings. But when we do issue bonds abroad, we will do so in the direction of the East, and we shall work on creating the possibility for the yuan to be the currency in which bilateral trade is settled. This is dramatic, and we are witnessing enormous changes. It is well worth looking at this as not only a threat, but also an opportunity – indeed more as an opportunity than a threat. I would also like to say a few words, Ladies and Gentlemen, about how I think that the role of central banks will change in the new world order. Of course it is extremely dangerous for prime ministers to talk about this, because in the West today the doctrine is that prime ministers are not allowed to say anything about central banks. On the other hand, one can generally say that if central banks say something about governments, the latter must immediately take notice. It is extremely dangerous for a prime minister to give an opinion on central banks. Yet at a conference like this we can perhaps grant ourselves this luxury. All the more so because I would like to agree with the Governor of the Hungarian National Bank, who stressed that, in the present era, cooperation between national banks and governments is of the utmost importance. The task of central banks is to provide financial stability, while the task of politics is to provide political stability. We must not pursue separate paths: if the financial system and the political system are both stable, we can defend ourselves against the crises which repeatedly emerge in the world economy. And if there is cooperation, and we both achieve stability in our respective fields, we shall not experience a crash of the kind seen in 2008. Ladies and Gentlemen, I also believe that national banks could play a more active role in the development of trade and the economy. They have the means and authority to do so, but perhaps I will say a few words about this later. And lastly, I would like to call your attention to the fact that another crisis cannot be ruled out. Naturally, no one is able to speak with certainty on this – and regrettably neither can I. What I can say is that the analyses I see – part-

ly Hungarian and partly international – mention a 70 per cent probability of another approaching crisis. They claim that we should expect an economic decline of unspecified nature: smaller than 2008, so not on that scale, but almost certain to take place. No one knows whether this will be the case, but I repeat: international analyses mention a 70 per cent probability. This is underlined by what the Honourable Governor said, and this is also true of Hungary: we must have two plans, a Plan A and a Plan B. We must not find ourselves in situation in which the Hungarian government does not have to hand a plan which has been prepared for this economic eventuality.

Ladies and Gentlemen, Due to lack of time, I would like to say just three sentences about migration. It will transform our lives. First of all it will transform the lives of Westerners: this is beyond doubt, and this process is already under way. Western Europe will never again be what it was. The process seems to be unstoppable. It seems that in Western Europe the emergence of parallel societies is inevitable – especially in large Western European cities. We do not yet know whether Western European governments will be able to cope with the problems caused by this process, and to turn the inherent opportunities to their advantage. But we know for certain that they will have different problems from those faced by us in Central Europe, who have

Ladies and Gentlemen, Among the causes of the crisis, everyone mentions the debt burden. Indeed, a significant proportion of EU Member States are deeper in debt today than they were at the time of the 2008 crisis. It is sad that the era of cheap money is over. We are also embroiled in trade wars. The Hungarian language is more direct than the Chinese language, and in our language “trade disputes” translate into “trade wars” – but that is the nature of the Hungarian language, Honourable Governor. And there is also the issue of migration, which I believe will affect our lives more than we think. With regard to the issue of trade war, for a long time we Hungarians have taken the view that the United States is seeking to preserve its dominant role in the world economy, and is therefore attempting to transform relations in world trade. We understand this. This, for instance, is why the US is imposing customs duties on European Union products and on our most marketable sectors, thereby seeking to significantly change the trade that is the engine of the world economy. Export-oriented regions – and our Central European and Balkans region is an export-oriented region – must find the right policy in this situation. This is not easy. All I dare to say here is that this war is not our war. This is perhaps the starting point, with the aid of which we can determine how we should act in such a period of trade conflict. This war is not our war, but it has an impact on us. So we must guide our economic policy in a way which enables us to simultaneously maintain good relations with the various parties with their opposed interests, and we must be able to build good trade and economic relations with each of them separately. I believe that we – not only Hungary, but the entire region – are able to develop an economic policy which ensures that China, Germany and the United States all have an interest in making Hungary and the Central European region successful. This is not an easy operation, but it is feasible.

so far successfully defended ourselves against migration. When economic conditions balance out – because trends seem to indicate this – and if Schengen and free movement survives, then we too shall have to respond to the problems with which they are struggling today. Fortunately, this is not a challenge that is expected to emerge during this term of government: there is time before subsequent governments have to deal with it, but it is wise to prepare ourselves intellectually for this situation. Ladies and Gentlemen, The fact that the first migration wave has passed does not mean that we should not look at the Asian and African demographic indicators which forecast – with absolute certainty – ever more waves of migration. Ladies and Gentlemen, We must work on ensuring that the region remains as it is today: a safe, strong and fast-growing region which has influence – indeed substantial influence – over what the future of Europe will look like. Ladies and Gentlemen, In conclusion, I would like to say a few words about the possibility of cooperation between central banks and governments. If we are serious about building Eurasia, we must implement major developments, primarily infrastructure developments, because we must link China, Central Europe and the Balkans to a single network: a network on a global scale. This requires capital. In my view, central banks should take on a more active role in making recommendations to governments regarding raising the types of capital required, and they could even play a part in that process. The second thing that I think governments should consider – and in which it would be good for them to receive assistance from central banks – is launching programmes

which would enable central banks to take part in the development of businesses. Central banks – including in Hungary, though here we can see successful examples from credit programmes – should perhaps play a more active role than earlier, particularly in the development of the sectors that will shape the future and innovative enterprises. And, Ladies and Gentlemen, if what I’ve said about knowledge is true, it is also true that it will be hard to win the future without modern education. I think that when it decided to play a part in the training of economists and engineers for the future, the central bank, the Hungarian National Bank, moved in the right direction – though it could be even bolder. So I believe that, in addition to governments, central banks could play a greater role in education than has been customary over the past thirty to forty years. I would specifically encourage central banks to consider this possibility. And finally, Ladies and Gentlemen, what is it that national governments can offer in return? I don’t think that central bank governors will be unable to agree on this. The greatest gift that governments can offer central banks is political stability. It is necessary to create a political atmosphere free of major shocks, so that the economy can function in a predictable manner. We need the political system to be just as predictable and stable as the economic system that we expect from central banks and our financial institutions. In this respect Central Europe has no cause for complaint: Central Europe is a stable

place, free from major shocks. In order to avoid diplomatic complications, I will not mention by name those Western European countries which find themselves compelled to struggle with continuous problems in forming governments, where coalitions are formed and then fall apart. And I will also not name countries where the prospect of early elections looms large. With due modesty, all I would like to say is that there is Hungary, for instance: the first free elections were held in 1990 – twenty-eight years ago – and since then not once has there been the need for early elections. This shows that in Central Europe we understand that political stability is important, and that it is also a precondition for economic success. So what we are able to promise central bankers, bank governors and managers in finance and business is that we are doing everything we can to build political systems which are at least as stable as the economic systems that we expect from financial leaders. Ladies and Gentlemen, Once again I would like to greet the 16+1 central bank governors’ meeting. We are grateful to the Governor of the People’s Bank of China for attending this meeting in person. I again welcome our friends from the Balkans and Central Europe. I hope that you can produce ideas and cooperation schemes which will enable us to build a truly unitary Eurasia, which in the period ahead will also operate successfully in economic terms. I wish you every success in your conference.

HUNGARY ON THE PATH TO ECONOMIC CONVERGENCE

12 turnarounds in economic history since 2010 Author: GyĂśrgy Matolcsy â&#x20AC;&#x201C; Governor of the Central Bank of Hungary

Hungary has implemented twelve great turnarounds recently, and has launched the thirteenth one, which means a turnaround in competitiveness. Hungary has made good use of earlier, traditional and non-traditional instruments of economic policy. Changes of an economic historic scale have taken place, which have also required structural reforms.

MAJOR TURNAROUNDS From June, 2010 the crisis was being managed successfully in Hungary, and then the country managed to return to its growth trajectory. At the beginning of the first cycle, between 2010 and 2014 structural reforms were launched, with the most important ones taking place in the first two years. The Hungarian reforms stabilised the economy and facilitated the growth turnaround simultaneously. This is the outcome of a logical sequence; first, a budgetary turnaround was completed, then a monetary one, and now a turnaround in competitiveness is taking place.

complete the turnaround in its economic history without austerity measures. The Hungarian actions did not build the policy on austerity measures; this is one reason why the employment turnaround could have been completed so successfully. PROMOTING WORK AND SAVINGS The next great turnaround was completed in the taxation system by introducing single-rate taxing and incorporating family policy allowances.

The turnaround in the labour market is one of the most important ones of the twelve great turnarounds, since the country has achieved impressive results in this field. Our unemployment rate is one of the best ones in Europe and employment has increased considerably. Hungary has managed to

Without the turnaround in the taxation system, no other turnarounds would have taken place, either. In the taxation system, burden-sharing has shifted from taxes on work towards taxes on consumption. Regarding the budgetary turnaround, the primary budget balance has been positive since 2012. There has also been a significant decrease in government debt, and the excessive deficit procedure for

Hungary was closed. The monetary turnaround could have been built on all of these turnarounds. The base rate of the Central Bank plunged to a historical low, resulting in a significant decrease in the interest rates of government securities. For this single reason, the budget had savings of HUF600 bn in 2017.

The conversion of foreign currency-based loans into HUF was a significant structural reform, reducing household debts by HUF1,000 bn. The Central Bank of Hungary completed a turnaround of narrowing the balance sheet of the Central Bank with a lending turnaround simultaneously taking place and the base rate being reduced. This was not typical in the world.

LENDING STARTED

There has been a growth turnaround in the Hungarian economy, therefore expansion has been above two per cent since 2013. Hopefully, growth will be above 3.5 per cent this year. Hungary entered the crisis by giving up our convergence trajectory, but we could not be sure of returning to it after the crisis had been managed. After the growth turnaround, a convergence turnaround has also happened. Our country is still at the very beginning of the turnaround in competitiveness, but after twelve plus one turnarounds we can say that all adjustments made after 2010 have contributed to all the changes.

The lending turnaround has also taken place, although it was the most difficult task, as the lending market practically froze in 2013. By introducing the Growth Loan Programme, the credit expansion of SMEs was fuelled, and then this impetus has been successfully maintained. In the coming years, credit expansion might remain in the 5 to 10 per cent zone, which is a sustainable track.

12 turnarounds in economic history since 2010

HUNGARY IS IN THE GLOBAL FOREFRONT Regarding the objective variables of the World Economic Forum, the Hungarian competitiveness index has not deteriorated, but in the case of the subjective ones it has. If we apply objective indices, such as measuring the changes in the labour market, Hungary’s progress is obvious. We are leaders in research and development within the Visegrad Group. The Economic Complexity Index suggests that Hungary is in a very favourable position. This Index has been developed by Harvard and MIT. According to this Index, Hungary ranks number eight in the world, while we were only number fifteen in 2007. From the region, the Czech Republic and Austria are also included in the top 10. Parallelly, the economic complexity of the EU has deteriorated, while that of the Central European region has improved. If Hungary is able to implement competitiveness reforms in the coming years, the country will face a very promising future.

“Hungary has implemented twelve great turnarounds recently, and has launched the thirteenth one, which means a turnaround in competitiveness. Hungary has made good use of earlier, traditional and non-traditional instruments of economic policy.”

Presentation by GyĂśrgy Matolcsy, Governor of the Central Bank of Hungary A NEW GOLDEN AGE â&#x20AC;&#x201C; A KNOWLEDGEAND CAPITAL-BASED ECONOMIC MODEL IS TO BE FOLLOWED The Scandinavian economic model could be a model for Hungary to follow because they are progressing towards a knowledge-based economy after a labour- and a capital-based one. From 2010, the country has been taking again such a road at the end of which the age of prosperity, a new golden age can come in Hungary, partly because we have implemented the most effective crisis management in the European Union, facilitating a growth turnaround. The Southern European economic model is not an example for us anymore, as high levels of indebtedness and unemployment cannot be examples; for the Central European countries of the Union, the Scandinavian model is an example to be followed: they shifted towards a capital-intensive phase after the employment rate was raised and the economy is knowledge-intensive; these models are successful and serve as examples for Hungary as well. Economic science today agrees that ideas are important in addition to realities as thoughts create reality. In Hungary, the mindset must be changed, because capital is a nice thing to have, profit is also a nice thing to have, the Hungarian state appreciates

money, capital, and profit; it must be put in its proper place in our mindset â&#x20AC;&#x201C; money generated from activities benefiting the community is a nice thing to have. In Hungary, competitiveness has improved since 2010, as global rankings do not take any more factors into account; 90 per cent of the researches made by the Central Bank of Hungary are based on facts, while half of the major international rankings examine partly subjective factors. We need to do everything we can to take stateowned companies public, as presence in the stock markets enables us to measure the efficiency of companies. The presence of blue chips is also very important, but the listing of other large companies is also required. For us, it is worth considering the Polish example, where all the large banks are listed in stock exchanges, basically in a compulsory manner; on the one hand, this model would present a dynamic source of capital for the stock market, but would also be important for banks as their performances would become measurable through the stock market. Medium-sized enterprises constitute the backbone of the Hungarian economy, therefore we need as many strong medium-sized enterprises as possible, as it is demonstrated by South German, Austrian and North Italian examples. Today, there are 25,000 small enterprises on the verge of becoming

12 turnarounds in economic history since 2010

medium-sized ones, and the participation of almost 40,000 SMEs in the Growth Loan Programme is also a very important achievement. Baden-Württemberg is a very good example: its 14,000 medium-sized enterprises are innovative and creative, constituting the backbone of the economy. In Hungary, however, currently there are only 4,600 strong medium-sized enterprises; if their number is multiplied by 2.5-3 times, Hungarian GDP is likely to grow significantly. Importantly, Hungary is implementing an opening to the East and to the South, as well as participating in building the Silk Road, since an increasing share of the Hungarian economic output will be generated in the future through relationships with regions outside the European Union. After the financial and growth turnaround completed after 2010, Hungary is in the phase of sustainable catching-up, while the budget deficit is around two per cent. This financial balance is attributable to – among other things – the tax reform, the Hungarian crisis management measures, and the turnaround in monetary policy. The main point of the latter one is that, as opposed to several major central banks, the Central Bank of Hungary, has introduced a so-called balance sheet narrowing, so that money should not be left

“parking” at the Central Bank – in two-week bonds of the Central Bank of Hungary, for example – but it should be circulated in the economy, and be provided as loans to corporate and private customers by the banks. The global economy has entered the age of abundance, as, among others, emerging Asian economies are gaining strength and money is cheap owing to base rates of around zero per cent. This is a kind of “golden age” – it already came in Hungary under kings Charles I and Louis, the Great in the sense that most of Europe’s gold was produced in Hungary, and we were also leaders of silver production. For the Hungarian economy – instead of failed South European crisis management –, the economic model of Scandinavian countries might set an example, because these countries are progressing towards a knowledge-intensive economy after a labour- and then a capital-intensive one. For the Hungarian economy, such an opportunity has opened up in the global economy that was not provided between 1920 and 1990; because now the geopolitical space has opened up for our catching-up. It is not a coincidence that the economic growth of the East-Central European region is considerably faster than the European average,

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HUNGARY, AS A PIONEER

OF THE “BELT AND ROAD” INITIATIVE 101

HUNGARY, AS A PIONEER OF THE BRI Author: Alexandra Zoltai

According to an analysis published by the HKTDC (Hong Kong Trade Development Council), our country counts as one of the major pioneers of the New Silk Road cooperation. Hungary is dubbed as the champion of Chinese investment in Central and Eastern Europe (CEE), which has long been an important partner for China in the latter’s “Going out” Strategy. Hungary is home to the first renminbi (RMB) clearing centre in CEE – which has played a prominent role in RMB internationalization –, it has also been the first European country to sign a memorandum of understanding (MoU) on the Belt and Road co-operation with China, and it is also active in promoting inter-cultural and people-to-people exchanges with China in fields such as tourism and the arts.

PARTNERSHIP AND ECONOMIC RELATIONS WITH CHINA

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Our country is by far the largest recipient of Chinese outbound direct investment among CEE countries. The “Opening to the East Strategy” was launched in 2010 by Hungarian Prime Minister Viktor Orbán as a way of opening new markets in Asia. China’s economic and cultural cooperation with Hungary has been considerably enhanced ever since the official launch of the “16+1” framework in 2012 and the announcement of the BRI in 2013. Within the “16+1” co-operation framework, nearly 30 per cent of China’s total stock of Chinese investment was directed to Hungary in 2015.

In 2013, Hungary was the first CEE country to sign a currency swap agreement with the People’s Bank of China (PBoC), and in 2015 the Central Bank of Hungary launched the Budapest Renminbi Initiative in conjunction with its Renminbi Programme to foster Chinese-Hungarian economic partnerships related to the RMB-HUF (Hungarian forint) market. Hungary is home to the regional headquarters of the Bank of China (BOC), and in October 2015, Hungary was selected by BOC to launch its first RMB clearing centre in CEE, and in January 2017 the bank launched its first Chinese RMB and Hungarian forint debit card in Europe. In April 2016, Hungary became the first CEE country to issue an RMB-denominated sovereign bond.

Hungary has long been one of China’s key trading partners. Among CEE countries, Hungary accounted for the largest share of China’s imports (US$3.5bn, some 23 per cent of the region’s total Chinese import) in 2016, and it was behind only Poland and the Czech Republic as a CEE destination for Chinese exports (US$5.4bn, which accounts for 12.3 per cent of the total for the region).

This good relationship set the stage for Hungary to become the first European country to sign a memorandum of understanding (MoU) on the Belt and Road initiative in 2015. This agreement is on the construction of a 350-km high-speed railway between Budapest and the Serbian capital Belgrade, which would reduce the travel time between the two cities from the current eight hours to about

China’s ODI Stock in 16 CEECs (US$ Million)

2011

2012

2013

2014

2015

Hungary

475.35

507.41

532.35

556.35

571.11

Romania

125.83

161.09

145.13

191.37

364.80

Poland

201.26

208.11

257.04

329.35

352.11

Bulgaria

72.56

126.74

149.85

170.27

235.97

Czech Republic

66.83

202.45

204.68

242.69

224.31

Slovakia

25.78

86.01

82.77

127.79

Serbia

5.05

6.47

18.54

29.71

49.79

Lithuania

3.93

6.97

12.48

Croatia

8.18

8.63

8.31

11.87

11.82

Bosnia and Herzegovina

6.01

6.07

6.13

7.75

Albania

4.43

7.03

6.95

Slovenia

5.00

Estonia

7.50

3.50

Macedonia

0.20

0.26

2.09

2.11

Latvia

0.54

0.94

Montenegro

0.32

Source: 2015 Statistical Bulletin of China’s Outward Foreign Direct Investment

China’s Trade with 16 CEECs in 2016 Country

Total Exports

Total Imports

Total Trade

US$ Mn

% Share

US$ Mn

% Share

US$ Mn

% Share

Total

44.016

100.0

14.890

100.0

58.907

100.0

Poland

15.247

34.6

2.531

17.0

17.778

30.2

Czech Republic

8.055

18.3

2.947

19.8

11.002

18.7

Hungary

5.425

12.3

3.463

23.3

8.887

15.1

Slovakia

2.868

6.5

2.407

16.2

5.275

9.0

Romania

3.474

7.9

1.441

9.7

4.916

8.3

Slovenia

2.293

5.2

436

2.9

2.729

4.6

Bulgaria

1.065

2.4

584

3.9

1.649

2.8

Lithuania

1.300

3.0

163

1.1

1.463

2.5

Latvia

1.079

2.5

132

0.9

1.211

2.1

Croatia

1.028

2.3

161

1.1

1.190

2.0

Estonia

967

2.2

211

1.4

1.179

2.0

Albania

518

1.2

130

0.9

647

1.1

Serbia

434

1.0

162

1.1

596

1.0

Montenegro

109

0.2

142

0.2

Macedonia

0.2

0.3

135

0.2

Bosnia and Herzegovina

0.1

0.3

108

0.2

Source: China Customs

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three, significantly upgrading infrastructural connectivity. Hungary’s active participation in the BRI has been welcomed by investors such as China’s leading electric automaker BYD, which opened its first bus plant in Europe in Komárom in April 2017. On the Hungarian side, Hong Kong selected building information modelling software developer Graphisoft as a partner to cooperate within the Belt and Road framework. AN IMPORTANT NODE ON THE NEW SILK ROAD Hungary’s location has been playing a major part in its economic development. On the one hand, it is on the eastern border of the Schengen Area, on the other hand, it provides excellent connections with other CEE countries, and it has close economic relationships with many of its direct and indirect neighbours. Although Hungary is landlocked,

104

it has overcome this disadvantage by developing major inland ports along the Danube River, creating an advanced infrastructure and access to the Black Sea. Furthermore, two corridors of the Trans-European Transport Network (TEN-T) traverse the country. The increasing number of direct air cargo connections with Belt and Road economies such as Hong Kong, Qatar and Turkey, makes Hungary’s a trans-shipment hub in CEE, from where goods can flow toward other CEE countries. As a result, the amount of cargo being handled by Budapest Ferenc Liszt International Airport has been increasing for years; in 2016, for example, this share grew by 23 per cent from the year before to a total of more than 112,000 tonnes. In order to meet increased demand, the BUD:2020 programme has been launched, the amount of which reaches HUF50 bn (€160 mn). Within the framework of this development project, a new logistics centre will be set up at Terminal 1, dedicated specifically to cargo traffic and companies engaged in

transport, but it also includes extensions related to passenger traffic. The Hungarian rail network is also undergoing considerable expansion and re-organisation, the main focus of which is on the modernisation of the Budapest-Belgrade railway line. It is designed to improve Hungary’s connections with seaports in the Adriatic and Mediterranean Seas, including the Greek Port of Piraeus co-operated by China’s COSCO Shipping. Additionally, Záhony must be mentioned, which is a major railway junction on the Trieste-Budapest-Kiev-Moscow-Khorgas transport corridor. PIONEERING ON THE CULTURAL FRONT Hungary is also active in promoting inter-cultural and people-to-people exchanges with China in fields such as tourism and the arts. In terms of tourism, the China-CEEC (CEE Countries) Tourism

Coordination Centre, opened in Budapest in 2014 and the China National Tourism Administration (CNTA)’s first CEE-based tourism office, opened in Budapest in 2016, should be highlighted. Both are good examples of the success of the Sino-Hungarian touristic co-operation. From the first Chinese Film Festival in Hungary in 1953 to the official premiere of Kung Fu Yoga, at the city’s Urania National Film Theatre in April 2017 (also attended by Hong Kong action star Jackie Chan), films and arts have proven to be an important way for China to connect with the Hungarian people. The first Sino-Hungarian co-production film, China, Hungary and the Soccer, made a successful debut at the opening ceremony of the Beijing Hungarian Cultural Institute in Budapest in 2013. The funding of the film was provided by the Hungarian National Film Fund, which has given an impetus to the co-operation between the two countries also in the film industry.

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THE IMPORTANCE OF THE NEW SILK ROAD TO THE V4 IN THE GLOBAL ECONOMIC SPACE 107

THE IMPORTANCE OF THE NEW SILK ROAD TO THE V4 IN THE GLOBAL ECONOMIC SPACE

Author: Marcell Horváth

China’s President Xi Jinping launched his mega-project, the ‘One Belt, One Road’ initiative (Belt and Road Initiative, BRI) as an international economic recovery programme in 2013. The major aim of the New Silk Road is to develop ever closer economic, political and cultural ties between BRI countries through the development of maritime and overland infrastructure relationships, and to implement Eurasian interconnectivity under China’s leadership. Hungary and all V4 countries have been building increasingly intensive relationships with China since the 2000s, which has been further fostered by the fact that the V4 lie on the New Silk Road between Europe and Asia. The V4 states are one of the destinations of the central overland route and a part of the southern railway line, to which also the Maritime Silk Road is connected. For the region covered by the V4 and more broadly, the 16+1 cooperation, BRI represents several opportunities and challenges in economic growth and the diversification of geopolitical relationships. In the future, the V4, as major participants in the 16+1 cooperation, can position themselves as a bridge linking the EU with China with an adequate common strategy.

IMPORTANCE OF THE NEW SILK ROAD China’s President Xi Jinping first proposed on an international level the implementation of the ‘Silk Road Economic Belt’ (SREB), a new method of cooperation, during his visit to Kazakhstan in September, 2013. Then, in his speech delivered in the Parliament of Indonesia on 3rd October, he went one step further and proposed the establishment of the ‘21st Century Maritime Silk Road’ (MSR). The word ‘belt’ refers to the relationship between China and Europe, Central Asia, Southeast Asia, that is Eurasia, while the word ‘road’ means that Chi-

108

na reaches Europe and Africa from its cities both on land and sea routes. BRI connects more than 73 countries, that is, more than a half of the world’s population through a new Eurasian landbridge. The economies of member countries together account for almost 30 per cent of the world’s GDP (Huang, Y. 2016). China’s fundamental aim with this mega-project is to strengthen its influence both in the world economy and world politics, and deepen regional cooperation in Eurasia. The strategy highlights China’s need for taking on a greater global role and also offers an opportunity to export Chinese overcapacities. Since its launch, China has invested $87 billion into various infrastructure investments. For China, howev-

er, the New Silk Road is not merely a strategy aiming at regional development, but also a global one. So far, more than 100 countries and international organisations have joined the BRI, within the framework of which six economic corridors have been implemented and forty Memoranda of Understanding have been signed. The scheme includes the development of railways, motorways, oil and gas pipelines, electric and internet networks, as well as maritime and other infrastructural links, which promote the creation of Eurasiaâ&#x20AC;&#x2122;s complex connectivity. The Chinese concept seeks to coordinate the BRI with the national development strategies of the different countries for a common objective. The countries taking part in the BRI project cooperate in five key areas: 1. coordinating various policies; 2. improving infrastructure connectivity; 3. ensuring unimpeded trade; 4. financial integration; 5. promoting people-to-people relationships. The financial cooperation can be primarily realised in the form of loans, thus the programme means longterm investments for China. The financial infrastructure serving the BRI is continuously being moulded. In order to promote the development and infrastructur-

al upgrading of the countries lying along the New Silk Road encompassing Eurasia, China has initiated the establishment of several investment funds to finance projects directed into the region. Moreover, financing is also facilitated by the Asian Infrastructure Investment Bank (AIIB), announced by President Xi in his speech to the Indonesian parliament, and the New Development Bank (NDB), the new development bank of the BRICS established in 2015. Chinese companies and state-owned banks play an important role in the financial implementation of the BRI; in addition to the Export-Import Bank of China, the China Development Bank and the largest commercial banks provide funding to new projects. The economic and financial integration of the New Silk Road is also facilitated by the internationalisation of the Chinese currency, the use of RMB in international transactions, through various funding options and investments. Overall, with its mega-project, the BRI, Chinaâ&#x20AC;&#x2122;s aim is to create such complex connectivity in Eurasia which creates win-win situations in terms of trade, finance, economy and geopolitics. The effects of the New Silk Road on participating countries can be summarised as follows: 1. It incentivises the market; 2. It boosts efficiency; 3. It encourages knowledge; 4. It enhances cooperation. (Csizmadia, N. 2016)

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THE IMPORTANCE OF THE V4 REGION TO CHINA The VisegrĂĄd Cooperation was established on 15th February, recalling the historical memory of the summit of the Hungarian, Czech and Polish kings in 1335 and reviving the historical cooperation. Since its establishment, the V4 group has become a recognised brand and the most influential alliance of the region. Its initial aim of enabling its member countries to join the Euro-Atlantic integrations as soon as possible changed in the meantime, and as their weight in terms of economy and foreign policy grew, their foreign policy goals also levelled up. Thus, the V4 has set the common goal of becoming the leading and decisive economic and political cluster of the CEE region. To this end, they have developed economic and political cooperation in the region with Western Balkan states and the countries participating in the EUâ&#x20AC;&#x2122;s eastern partnership, and then they have continued building relationships on a global level. In the future, the aim of the V4 might be to go further with their geopolitical objectives and fulfil the role of a bridge mediating between the west and the east. Therefore, they might have an important role in relations with China, and may appear as an interme-

110

diary between China and the EU, and may become the main European destination of the New Silk Road, Chinaâ&#x20AC;&#x2122;s mega-project. The relationship between China and the V4 countries was taken to a new level by the 16+1 Cooperation in 2012. China initiated this new platform at a meeting held in Budapest in 2011, and the 16+1 cooperation mechanism, established during the China-CEE summit, first organized in Warsaw in 2012, has become a comprehensive inter-regional forum. The cornerstones of the cooperation include infrastructural developments, financial cooperation, science, education, culture and people-to-people relationships. Within the framework of the cooperation taking place with the participation of 16 Central and Eastern European countries (Albania, Bosnia and Herzegovina, Bulgaria, the Czech Republic, Estonia, Croatia, Poland, Latvia, Lithuania, Macedonia, Hungary, Montenegro, Serbia, Romania, Slovakia and Slovenia), comprehensive and sector-specific platforms and communications forums have been set up. In this new cooperation framework between China and the region, the role of the V4 countries may be considered to be the most important. Nevertheless,

THE IMPORTANCE OF THE NEW SILK ROAD TO THE V4 IN THE GLOBAL ECONOMIC SPACE

China’s leadership pursues a flexible and pragmatic policy also with the V4 countries. They not only envisage the rapid development of the region; they also hope that the V4 countries will fulfil an increasingly significant role in the CEE region. Notwithstanding that all 16 CEE countries are members of the BRI, the V4 is of crucial importance to the cooperation. Poland is the only founding member of the Asian Infrastructure Investment Bank (AIIB) from the region, and Hungary was the first European country that signed a Memorandum of Understanding on the BRI scheme. In recent years, the Czech Republic and Slovakia have been taking an increasingly active part in the cooperation. The Chinese government also ap-

ships with Asian countries and China in particular. Since then, the frequency of high-profile visits has increased, and today Hungary is China’s number two trading partner in the CEE region after Poland.

preciates the V4’s influence in the CEE region in the following fields: •T he V4 countries play a significant role in promoting the 16+1 Cooperation; •T he V4 have an important role in the CEE region both economically and politically; •T he four countries are perceived by China as a kind of entrance to the single European market due to their locations.

Lama again. We cannot talk about any substantial Czech-Chinese relations of the time; China did not send Chechia invitations to any major regional summits. The election of Miloš Zeman as Czech president in 2013 constituted an important turning point, which accelerated the relations between the two countries. Below, the complex present-day system of relationships between particular V4 countries and China is outlined, with a primary focus on investments. Three of the V4 countries, Hungary, Poland and the Czech Republic, pursuing a similar strategy, compete and try to seem to be a bridge between China and the EU.

RELATIONSHIPS AND COMPETITIVE ADVANTAGES OF THE V4 AND CHINA The initial relationships between the V4 countries and China can be well characterized through Hungary’s example. A couple of days after the proclamation of the People’s Republic of China on 1st October, 1949, Hungary was among the first countries to officially recognise China, and the two countries established diplomatic relations, and several agreements were signed. The cooperation continued in economic, political, cultural, educational and scientific terms. As the climax of the relation then, Prime Minister Zhou Enlai paid a visit to Budapest in 1957, and in the same year, János Kádár also paid an official visit to Beijing. However, the good initial relationship was followed by a split between the Communist Party of the Soviet Union and that of China in 1962, and the Sino-Soviet conflict also adversely affected the Sino-Hungarian relations and relations with other Communist countries. The relations between the two countries, just like in other V4 countries, started to become more intensive in the 2000s. Then, after the ‘Eastern Opening’ policy, announced by the Orbán government in 2011, relations received even greater impetus. The objective of the new policy was to strengthen relation-

Chechia is a bit off-pattern: after a hopeful start in the 1990s, the country’s diplomatic relations with China were at a low point up to 2012; the Dalai Lama provides the context for this period. In the early 1990s, Czech President Václav Havel received the Dalai Lama officially, in 1995 he welcomed Taiwan’s Prime Minister, Lien Chan for an official visit, and advocated Taiwan’s accession to the UN; then, in 2009, Prime Minister Jan Fischer received the Dalai

HUNGARY Hungary was the first European country that joined the New Silk Road. Most FDI flows into Hungary within the CEE region. According to 2015 data, of the countries participating in the 16+1 cooperation, Hungary received 30 per cent of all Chinese investments. Furthermore, Hungary is the location of the Budapest-Belgrade railway line, China’s fist railway construction project implemented within the territory of the EU, which increases the country’s importance to China. Hungary is an attractive target country for FDI, primarily due to its qualified and relatively cheap workforce. The country is characterized by high economic growth, modern infrastructure, and a good telecommunications network. The GDP growth rate is 15.6 per cent (in 2013), inflation is 3.1 per cent. Furthermore, significant financial cooperation started between China and Hungary in 2013. The Bank of China opened its first regional RMB clearing centre in Central and Eastern Europe in Budapest in October, 2015, and on 9th September, the Central Bank

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Figure 1: Investments projects of Chinese enterprises in the CEE region (2003-July, 2018) Country Poland Hungary Romania Czechia Bulgaria Serbia Slovakia Lithuania Croatia Bosnia and Herzegovina Slovenia Estonia Macedonia Latvia Total

Number of investments projects announced 68 49 43 34 21 18 15 10 4 2 2 2 1 1 270

of Hungary was the first bank on the continent and, after the Bank of England, the second bank in Europe that signed an agreement to set up a foreign currency swap line with a nominal value of 10 billion yuans in order to promote trade and investment relations between the two countries. In April, 2016, Hungary issued three-year maturity, RMB-denominated bonds of a value of 1 billion RMB (136.8 million EUR). On 12th December, 2016, direct RMB/HUF trading started on the Chinese onshore (domestic) foreign exchange market in the CFETS system (China Foreign Exchange Trade System). All these measures promote the development of bilateral financial and economic relationships. Of the V4 countries, our country has the greatest Chinese FDI stock in spite of the fact that we do not take a prominent place in competitiveness lists. Huawei Technologies was the first significant Chinese transnational company that moved to Hungary, and opened its subsidiary in Budapest in 2005. Since then, several large companies have moved to our country, primarily from the chemical industry (BorsodChem), telecommunications (Huawei, Lenovo), automotive industry (BYD), pharmaceutical industry and the banking sector, but logistics and electronics industry are also popular sectors for Chinese investors of FDI. The BRI’s first Hungarian project, the Budapest–Belgrade railway line is aimed at infrastructural development. The 350-km-long line, stretching to the Kelebia border section in Hungary, might cost 550 billion HUF, 85 per cent of which is financed through

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Investment volume (USD million) 2,526 1,661 2,249 897 2,630 1,044 492 130 339 667 77 42 400 5 13,159

a loan from the Chinese policy bank (for a term of 20 years, with an annual interest rate of 2.5 per cent). It is again the Export-Import Bank of China which finances the he modernization of the Serbian section; the Serbian government took out a loan of 266 million EUR in May, 2017, with which work has already started on the Serbian side. In 2017, the Chinese Academy of Social Sciences (CASS) set up its China–Central and Eastern Europe Institute, with its seat in Budapest, the objective of which is to promote and facilitate scientific cooperation between the 16+1 countries through seminars, joint research projects and conferences.

POLAND Poland is the only country in the EU where economic growth has been continuous since 1991. The country’s GDP grew by eight times in the period from 1991 (80 billion USD) to 2016 (468 billion USD). In addition to its outstanding economic output, Poland

THE IMPORTANCE OF THE NEW SILK ROAD TO THE V4 IN THE GLOBAL ECONOMIC SPACE

excels the other CEE countries also in its size. More than 30 per cent of the population of the entire CEE region lives in Poland, and this 38-million market offers excellent opportunities to Chinese investors. Poland is currently characterised by a strong domestic market and low levels of private debt. The GDP growth rate is 21.3 per cent (2013-2017), inflation is 2.5 per cent. On the Asian continent, China is Poland’s largest trading partner, thus the further expansion of bilateral relationships brings mutual benefits to both parties. Since 15th June, 2016 Poland ¬– as the only country from the CEE region – has been a founding member of the Asian Infrastructure Investment Bank, which perfectly fits in this economic strategy. Poland’s AIIB membership, in addition to attracting capital into the country, could also increase its political and business role in the Asian region. Financial integration between Poland and China is also significant. In August, 2016, Panda bonds of a value of 3 billion yuans (452 million USD) were issued on China’s interbank market, yielding 3.4 per cent on average. In June, 2012, the Bank of China and in November, the Industrial and Commercial Bank of China (ICBC) established their branch offices in Warsaw. HSBC Bank opened a China Desk in Poland in January, 2018, to encourage trade and investments within the BRI framework. The Biała Podlaska Special Economic Zone (SEZ) is being integrated into the New Silk Road initiative. With its total surface area of 94.06 hectares, it is situated in Eastern Poland, near the Belarussian border, along the New Silk Road, and near the Małaszewicze-Brest border crossing, which lies on one of the most popular railway lines between Europe and China. The Łódź Special Economic Zone, which is an area of 1,339 hectares, is similarly important. The region offers favourable opportunities to investors, the level of state aid may reach even 55 per cent, and foreign investors are also incentivized by tax allowances. The area has a developed transport network, thus investments are also facilitated by motorways and railway connections (especially the railway between Łódź and Chengdu). Thanks to the Łódź-Chengdu railway line, opened in 2013, now the region can boast of the most dynamically developing network of relationships with China.

Poland has played a particularly active role in the 16+1 initiative since the platform was established. In 2014, at the summit held in Belgrade, the decision was made to set up the China-CEEC Business Council and the China-CEEC Investment Promotion Agencies Contact Mechanism, an information-sharing centre, in Warsaw. Furthermore, several institutions have been established and measures have been made that aim at strengthening its relationships with China. These include, for example, the ‘Go China’ programme and the Center for Polish-Chinese Economic Cooperation. The economic agenda of the government is also in line with the OBOR initiative. Regarding bilateral relationships between the two countries, it should be mentioned that the Polish Investment & Trade Agency opened a trade office in Shanghai, the main tasks of which include arranging B2B meetings, information sharing, selecting business partners and providing investment advice. China views Poland as the informal leader of the 16+1 initiative, as this country has the highest GDP of the participating countries, and its domestic political system is stable. And Poland is seeking to reinforce this. In February, 2017, when the ‘Riga Guidelines’ were adopted, the China-CEEC Secretariat for Maritime Issues was set up in Warsaw. Poland also seeks to create a positive image about itself in China through culture and education. They attended the 2010 Shanghai Expo, where they presented eleven programmes related to Polish culture in Shanghai, Beijing, Tianjin and Hangzhou. In the middle of 2014, a Polish Institute was opened at Poland’s Embassy to China, with the aim of promoting Polish culture, and various Polish events are held on a monthly basis. Confucius Institutes are an excellent way of promoting Chinese culture; there are four such institutes in Poland: in Krakow, Wrocław, Opole and Poznań. CZECHIA Czechia is one of the richest, stablest and most developed countries in the CEE region. Unlike Poland, it has very developed infrastructure. Just like Poland’s and Hungary’s, Czechia’s economic growth is strongly affected by FDI and export. The growth rate of GDP is 21.1 per cent (2013-2017), inflation is two per cent.

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ceiving orders for some 317,000 vehicles. Since 2017 a total of 2 million cars were delivered to Chinese customers. Home Credit, an insurance company owned by the Czech financial group PPF (První Privatizační Fond – First Privatisation Fund), entered the Chinese market in 2007. Despite initial difficulties, currently PPF is one of the most important actors when it comes to fostering relationships with China.

Czechia has one of the most extensive railway network in entire Europe. Four of Europe’s nine most important transport corridors run across the country. In addition to favourable railway links, Czechia boasts of one of the largest airports in the CEE region, with direct flights to several Chinese cities, and a cargo route was also opened between Hong Kong and Prague in May, 2017. According to the data of the Czech Statistical Office, Czechia’s export to China increased by one-fifth in 2017, and export to Germany increased by 7.3 per cent. Czech export to China increased twice as fast in 2017 as import did, the Chinese export to Czechia amounted to 472 billion CZK while the value of the Czech export to the Asian country was 56 billion CZK, therefore Czechia’s trade deficit with China is significant, it amounted to almost 8.4 billion EUR in 2017, according to Eurostat’s data. Despite positive changes in trade, Chinese investments in Czechia have not been significant, either. Chinese FDI started to grow after 2013, reached 259 million EUR in 2015, but Chinese FDI represented only 0.23 per cent of FDIs in the Czech market in 2015. The largest Chinese investor in Poland is the investment group CEFC (China Energy Company Limited). The Shanghai-based company chose Poland for its European seat, and set up an office in Prague. The presence of Czech companies in China has started to increase, with the automotive industry being the most illustrative example. Škoda, owned by German Volkswagen, entered the Chinese market in 2006, and set a new record in 2016 by re-

In order to boost trade relations, CzechTrade agency, established by the Ministry of Trade and Industry, has opened several offices in China, in Guangzhou, Beijing, Chengdu and Shanghai. The task of the offices is to facilitate trade between the parties in healthcare, food, services, equipment for civil aviation and environmental technologies. In the development of Sino-Czech people-to-people relationships, Jan Kohout, former Minister of Foreign Affairs and an advisor to president Zeman, had an important role. Kohout founded an institute named New Silk Road Institute Prague in September, 2015, in response to the ongoing and accelerating geopolitical and economic changes in the world, and with the aim of strengthening Sino-European relations. NSRIP is an independent think tank, which holds symposiums and prepares publications for both experts and the public. Its objective is to contribute to mutually beneficial cooperation between Asian and European countries, and facilitate it by searching for new methods of communications and economic cooperation within the New Silk Road concept. The Czech and the Chinese Ministries of Education signed an agreement for cooperation in the period between 2016 and 2019 to enhance educational relationships, by increasing the number of university scholarships, promoting cooperation between universities, and joint research and innovation projects. SLOVAKIA Compared to Slovakia, the other V4 countries are much more active in maintaining and developing relationships with China. The Slovak party started to

Figure 2: Export between V4 and China in 2017 Poland Czechia Hungary Slovakia

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Trade relationships between V4 countries and China in 2017 16,322 2,062 10,537 2,138 5,612 1,579 3,078 1,213

in million EUR -14,260 -8,400 -4,033 -1,865

THE IMPORTANCE OF THE NEW SILK ROAD TO THE V4 IN THE GLOBAL ECONOMIC SPACE

build relationships actively in 2017, when the Strategy for the Development of Economic Relations with China 2017-2020 programme was announced. Among the V4 countries, Slovakia has its own competitive advantage. First and foremost, it is the only V4 country where the euro is used. Furthermore, Slovakia has been one of the regional frontrunners when it comes to economic reforms, attracting high amounts of FDI and generally experiencing rapid economic growth. In terms of its trade with China, Slovakia has the lowest trade deficit in the region, mainly thanks to its automotive industry exports. Slovakia’s GDP has been increasing continuously since 2014, growth reached 4.6 per cent and inflation stood at 2.4 per cent in 2017. When it comes to scientific and educational relationships, Comenius University, Bratislava should be mentioned, which is one of the official partner institutions of the 16+1 Think Tanks Network. The Department of East Asian Studies forms a part of the Faculty of Arts, which is the only department with oriental studies programmes in Slovakia. The Slovak Academy of Sciences is also a member of the 16+1 Think Tank network; its Institute of Oriental Studies focusses on Asia and as such, China. To sum it up, the V4 countries have a prominent role in the 16+1 cooperation platform. This is contributable to, on the one hand, their EU membership and their geostrategic locations, which is partly central in terms of the region, and partly frontier in terms of the EU. The prominent role within the 16+1 is contributable to, on the other hand, their bilateral economic relationships with China. Trade with the V4 countries accounts for 70 per cent of the total trade volume between China and the 16 CEE countries. Approximately 70 per cent of total Chinese FDI is directed to the V4 countries, thus the V4 group is the most important area of the 16+1 cooperation in trade and investments. With regard to the fact that in addition to trade and investments, geographical location, or more precisely, the resulting access to the EU market, plays a key role in international relations with China; the V4 countries’ role in China’s system of foreign relations with the CEE countries has the greatest weight. However, as long as V4 countries are competing with each other while seeking to establish as favourable cooperation with China as possible for

themselves individually, the V4-led CEE region cannot be globally competitive for China. Out of pragmatic considerations, China seeks cooperation with larger regions. That is why the 16+1 cooperation of diverse CEE countries, which is easier to grasp on a Chinese scale, has been established; the disadvantage of this loose cluster derives exactly from this wide-reaching diversity. Therefore, an interest of all parties may lie in establishing cooperation within the region at least on V4 level, ensuring economic and infrastructural links, which may become an integral part of the BRI. A “win-win-win” situation could be created, which can be beneficial for the V4 countries individually, the V4 group, and China. SUMMARY In the 21st century, centres of economic power, rivalling for global economic power, seek to build as complex and global connectivity as possible and extend it over the world. One of the “players” of this competition for interconnectivity is the BRI, designed by China. The New Silk Road aims at achieving infrastructural, commercial, financial and people-to-people integration between its member states, and thereby creating a Eurasian region. In this BRI project, great value can be attached to the role of the V4 countries, due to their geostrategic location. The role of the V4 could be a linking activity, which may include providing transport routes and railway lines as well logistics, and on the other hand, an intermediary activity between the west and the east, with financial and business services. In order for the V4 countries to become a geopolitically decisive bridge region, integration between them must be enhanced, which would also enable them to lead the future of the CEE region into a competitive direction.

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A HUNGARIAN COMPASS BETWEEN EAST AND WEST Author: Sándor Kopátsy

We, Hungarians have got between the East and the West several times throughout our history. We can even say that we have had to manoeuvre in this situation continuously for 1,200 years. In our times, we can witness the EU seeking direction and the East, led by China, accomplishing unprecedented economic success, while greater social and economic changes have occurred in the past 50 years than in the previous five-thousand years. We must find reference points in this transforming world, and be successful by relying upon Hungarian virtues and using a good compass. We have been caught between the East and the West several times throughout our history, when western and eastern major powers declared our region a buffer a zone between them. First, we got into the grip of the East and the West when we conquered the Carpathian Basin. We were the first pastoral people heading for the West who met a settled population using a three-year crop rotation in Transdanubia and along the peripheries of the Great Plain; and the foundation of our state coincided with the European semi-barbarian people’s conversion to Christianity. It was in the 16th century that we became a buffer zone for the second time, because in its war fought against the Hispano-Austrian Empire, it came in handy for the West, conquering the oceans and becoming also religiously independent, that the Turks could threaten Vienna through us. Typically, the Turkish has not yet understood why we talk about a Turkish occupation whereas all they wanted was to put the Habsburgs, the oppressors of Western-European Protestants, under pressure. We played a part in one of the greatest struggles of European history, and protected Christianity against pagan Turks. We were caught between the East and the West in Yalta for the third time. Essentially, the same thing happened in 1944 and in 812: western and eastern major powers declared our region no man’s land. There is an uncanny resemblance, with the difference that it was not the Ottoman Empire but the Soviet Union that could dictate in this no man’s land. Thus, there have been several instances in the last 1,200 years when

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we have become participants in a great European play. Let us examine now the current state of Europe and the East, and what their future economic, social and geopolitical prospects are. Let us have a look at what we can expect from the East and the West.

“In the past fifty years only those countries were economically successful where the behaviour of the population was characterised by puritanism in the West, and a Confucian lifestyle in the East.” EAST AND WEST RUNNING ON DIFFERENT TRACKS In the past fifty years, only those countries have been economically successful where the behaviour of the population has been characterised by puritanism in the West, and a Confucian lifestyle in the East. Thus, the last half-century clearly demonstrates that success lies in these two kinds of conduct only; only a

puritan West and the societies of the Confucian Far East have advanced compared to the global average, while all other cultures and behaviours are lagging behind. However, the West and the East are progressing on completely different tracks, as international data and analyses demonstrate. Today, also politicians and economists are beginning to realise that the performance of developed Western societies is just a fracture of what have been achieved in the Far East. We have to come to terms with the fact that even puritan Western societies cannot keep the pace dictated in the Far East. Economics has not even started to looking into the reasons for Far Eastern successes. These reasons, however, are obvious on both sides. • The employment rate of the working-age population is high in the Far East and low in the West. This difference is especially sharp in the bottom quality quartile of the workforce. Western politicians start to perceive now that they are unable to provide employment for low-quality workers, who are not motivated enough to find work. • In the far East, savings are very high, while they are very low in the West. No matter how evident it has been for decades, no great importance has been attributed to it. • In the Far East there is a strong desire to learn, while it is very weak in a considerable proportion of Western population. The advantage of the Far East in the effectiveness of education is even greater, yet it is not addressed. The puritan West wants an ever-improving life, but, at the same time, wants to work increasingly less and enjoy more years after retirement. The poorer the people are in the Far East, the more they work, learn and sacrifice for learning. People work considerably more in four former British colonies, and especially in the United States, than in EU Member States. It is sufficiently evidenced by highlighting some figures. Regarding the number of hours worked annually, Hong-Kong, Singapore and South Korea stand out. In 2010, the number of annual working hours per worker was in the 2,200-2,400 range. It must be added that this figure was as high as almost 2,800 in South-Korea in 1980. Among the leading economies of Europe, this figure has dropped below 1,500 both in Germany and France in the past 15 years. The number of hours worked annually has been declining most rapidly in the Netherlands and France between 1980 and 2010, by an annual average of 0.8 and 0.6 per cent respectively. In 2014, the number of hours

spent at work weekly was 28.9 in the Netherlands, and 36.1 in France, according to OECD data. These figures alone would be sufficient to demonstrate that while Europe wants to succeed with less and less work, the greater the trouble the Far East is in, the more it works.

ABOUT THE AUTHOR The over-half-century long career of one of the most renowned economists of Hungary encompasses the economic reform agendas and the control of the privatisation process during the change of regime to the creation of today’s novel economic approach. He has been involved in all economic reform agendas since 1953. He was President of the National Planning Office and the Revolutionary Committee of Ministries during the revolution of 1956. Due to his role taken in the revolution, he became an ignored black sheep of the Kádár regime. He has published some thirty books, in which he deploys convincing and modern arguments to support the truth that István Széchenyi proclaimed 170 years ago, ‘The quantity of scientific people is the real power of the nation’. According to his creed, in today’s developed societies, it is no longer capital investment or infrastructure that dooms an economy to succeed or fail but the quantity of highly-skilled, talented workforce. And a society having adopted this new approach requires such new economics that takes intellectual capital as well as physical capital into account – even bringing talent, quality training and expertise more and more to the fore. His essay submitted to Polgári Szemle (Hungarian journal of social sciences) and his upcoming book is centred around this subject. If we contrasted the number of years spent in retirement with the number of hours worked rather than with the number of years spent in work, we would have an even more tragic picture. That is because in EU countries the working time has dropped by 10 per cent on average over the past 30 years. It is coupled with a nearly 10 per cent increase in the number of years spent in retirement despite the fact that retirement age has been raised. More typical than anything else is that while in the EU Member States, primarily in the Mediterranean countries, the rate of people retiring before reaching full retirement age steadily grows, in Japan people are happy to work past the

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Hours worked per employed person by countries 1980-2010

Source: The Federal Reserve Bank of St. Louis, U.S. Bureau of Labor Statistics

retirement age. Let us now look at the difference between the official retirement age and the actual age of retirement by region, based on OECD figures. We can see that in Japan and South Korea people work longer than they are required to; in the USA they work roughly as much as they must; while in Europe they work less. Differences in the field of intellectual property, knowledge and education are even greater than in the activity of those participating in producing the national income. Based on educational achievements, all Far Eastern countries are ranked in the top class: only Finland is competitive with South Korea, Taiwan, Japan, Singapore and Hong Kong. Except for Japan, the countries listed are even farther ahead in terms of the percentage of university students studying at world-famous western universities and their academic achievements there. Moreover, the superiority of Far Eastern countries is even greater in terms of the degree to which families support after-school learning. In these countries, it is quite common that families spare no effort or money to help their children achieve as good academic results as possible. Admittedly, there is no better predictor of future achievements than the quality of education. The outcome of school-based education is primarily

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dependent on parentsâ&#x20AC;&#x2122; attitude to the effectiveness of learning. The advantage of the Far Eastern culture is the greatest in this respect. EUROPEAN DILEMMAS Today cooperation is more useful than exploitation but the crisis of the Eurozone has made it clear that the European Union is walking the wrong path. Instead of being strong, the European Union wanted to become big at any cost and now fails to realise that it is exactly this intention that makes it increasingly weak. Competent officials of the European Union have not yet realised that where there are tensions in the financial world there society is ill and it is not possible to cure this disease by financial means. I would not entrust my money to those who have introduced a common bank and a shared currency for the Germans, the Greeks and the South-Italians. Essentially, there are three significantly different cultures and, consequently, three different kinds of Christianity in Europe. Of these three, only one, the North-Western one, belongs to the top segment of the world, and this is the way that the French, South-Germans and Austrians live and behave. In Europe, it is only these peoples that belong to the

A HUNGARIAN COMPASS BETWEEN EAST AND WEST

advanced West. European Mediterranean peoples have received and are still receiving a huge amount of help from Northern peoples through tourism and aid, and would not have achieved on their own even the level where they are now. Concurrently, Orthodox Christians are increasingly dropping behind. Currently, the European Union is uncompetitive against the two other giants, the United States and China. The leaders of the European Union have failed to reckon that an economic community cannot be healthy unless the behavioural culture of its population is more or less identical. If the European Union had only expanded up to a point where it can still preserve its relative homogeneity, it would be considerably smaller but significantly stronger today. There was no point in pushing the boundaries of European integration any further. Ever since I was a student I have had the opinion that the level of social development of every country in Europe can be measured in a coordinate system where the y-axis stretches between Malmö and Athens and the x-axis stretches between Moscow and Seville. To put it more simply: “Tell me how strong the effect of the Gulf Stream is and I will tell you at what stage that country is.” That is the logic on which my book entitled Towards the West has been based. This book introduces how and why the social and economic development that started in Egypt then moved towards

the North-Western region and, at the beginning of the third millennium, culminated in Norway. The crisis of the European Union has been made apparent by the exit of Great Britain. From that moment on, the European Union could not remain what it has been since its creation. Or it will revert to what it initially was: the free movement of goods, services and people, which means a free market of goods and services. It can only be realised if the Member States’ sovereignty is preserved. Economists have not clarified to date the prerequisite to the free movement of goods. The free movement of goods and services essentially can operate effectively between states of all kinds of cultures and levels of development if, and only if, the sovereignty of states to change the value of their currencies is preserved. Only those states which are culturally related and have an almost identical level of economic development can have a shared currency. The European Union should be a customs union of free and sovereign states. The EU was a lame duck with Great Britain but it is even more so without it. This is also true of its role in the world economy but goes even more for its military strength. Europe is not a player in world politics in terms of its military power. NATO essentially means the United States, the other members devote limited resources to this purpose, but even this has no real military significance. Military spending of the

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United States has been significantly curbed, from 5.3 per cent to 3.7 per cent in the past 8 years. The EU Member States’ expenditure, except for Great Britain, which exited, remains below 2 per cent and its share is decreasing, except for Poland where it has slightly increased. The lack of Europe’s military power is well illustrated by the fact that the European Union is not a military player without the United States. It must also be added that it is not competitive economically, either, and is increasingly lagging behind. THE RISE OF THE EAST If we want to see the future, we have to focus on China. This is true from several aspects. China is currently the engine of global economic growth to the extent where its development has a crucial impact on global demand for raw materials. As a result of China’s amazing development, the world economy’s demand for raw materials has grown at an unprecedented pace and, as a consequence, the amount and percentage of mining royalties have also grown. Such growth in demand for raw materials is unmatched in the history of the world economy. China’s size and speed of growth is unprecedented. The first 200 years of the industrial revolution of the West affected one-tenth of humanity and result in a growth in per capita GDP of hardly 1 per cent. By contrast, China represents one-fifth of the global population and has increased per capita performance by approximately 10 per cent on average in the past 25 years. It is enough to think about the fact that the industrial revolution was predominantly based on coal and iron ore, and Europe, poor in these two products, was able to meet demand for them until the mid-20th century. Today, China produces 10 times as much steel as did Europe at the end of the 19th century. China, however, has walked the classic path of industrialisation in hardly a quarter-century, therefore the level of its demand for raw materials is declining, so in the future the greatest growth in consumption demand will no longer come from mining but from agriculture. Social scientists have been hardly dealing with this shift in demand but biologists have. Thanks to them, the revolution of producing aquatic animals has begun. We are still at the early days of this revolution but its speed is several orders of magnitude faster than that of the revolution of terrestrial livestock because their potential reproduction, and consequently, their selection, is significantly greater. The engagement of water, especially salt sea water,

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in production is likely to have a much higher potential than terrestrial areas. The fact that in the foreseeable future the greatest consumer demand will be for food production has, to the best of my knowledge, been so far realised only by the Chinese. This is no surprise because China, an overpopulated country compared to its arable land area, will be the largest consumer of foods. Characterised by slow population growth but rapidly growing wealth, China will increase meat consumption but will be unable to produce the forage which is required. Today, it is reflected by China’s being the largest soybean importer of the world. Its leaders have already formulated the idea whereby feeding the population can primarily be organised in Brazil. China has indicated it with actions, which is shown by the fact that they are looking for opportunities to pursue closer political and economic ties with Brazil. As an example, it has been announced recently that China has undertaken to build the railway connection between the two oceans in Brazil. In other words, they have already realised that effective access to the Pacific coast with goods can only be possible through a modern and high-performing railway. Seeing such developments, I am saddened to see how mundane and narrow-minded the EU leadership is about Europe’s future, compared to China’s leaders. Seeing the pace of China’s development, the West should be both more modest and more patient before it expresses criticism. For example, in relation to the natural environment and water management it can be said that China is the best water manager in world history. It has 7 per cent of water resources in the world and supports 20 per cent of the world’s population with that. Despite its limited opportunities, China has increased per capita income and wealth 5 times of the EU average and 10 times faster last year alone. THE ROLE OF A COMPASS World economy and the power centres therein are undergoing transformation and such transformation always implies conflicts but it also offers opportunities and possibilities. History has proven that ordeals to which a society is subject always lead to greater results if they are endured. What is it that we, Hungarians, can rely on in this changing global economic and geopolitical environment? Hungarian people are exemplary in their diligence. Economic success in our present age depends, and

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will depend even more in the foreseeable future, on which people can make best use of its time. In the 1980, we were the best of all peoples at using the opportunity to earn supplementary income by work done in our leisure time. In other words, there has never been a people that has relied on enterprises to such an unprecedented degree. Our entrepreneurial spirit is a great virtue. Hungarians are individualistic and good organisers. We should not just stress the fact that we arrived here as a pastoral people and were able to establish a lasting state in that capacity but we must also see that we are still bearing its consequences. Pastoral people are inherently characterised by total economic atomisation and, as a counter-balancing factor, an organisational capability based on arms. Therefore, in their economic interdependence, shepherds also lived in constant fear of others and it was this duality that determined their character. Shepherds were individualists, made excellent soldiers and their leaders were excellent organisers. That is what both our individualism and our desire for unity derive from. Creativity and the Hungarian genius. As my career led me into the field of economic policy I instinctively turned to the works of SzĂŠchenyi, whom I consider a political genius. By my old age I think that his greatest merit was that, ahead of his age by 200 years, he realised that it was not more arable land but more educated people that was primarily needed. Today

we can see that his prophesy has been fulfilled to an increasing degree and the greatest asset is an educated mind. IstvĂĄn SzĂŠchenyi did not only give crop production areas to the country but also the Academy of Sciences, the Chain Bridge connecting Buda and Pest and, most importantly, a vision of the future. Just as a small horseshoe multiplies the power of horses, so does a compass weighing only a few ounces multiplies the safety of ships at sea in foggy or overcast weather, enabling navigation far from dangerous coastlines. In my life as well, my compass has been a prerequisite to all my unexpected successes. I have never got lost; I have always realised where political boundaries, invisible to many but life-threatening, lied and could remain within my possibilities. I did not want to live long; I am already 35 years older than I was hoping to be. I contribute it to my good luck, as during the war I was brought on the verge of physical and mental demise many times. However, I have never got lost amidst the conditions of the country and the world, and survived everything because I have had a good compass. I feel myself lucky because I have lived long enough in an age where we have enjoyed much more progress during a hundred years than for many thousand years beforehand. Events are accelerating and it is especially important to have the ability to orientate ourselves under rapidly changing circumstances.

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THE EUROPE OF THE FUTURE IS EMERGING IN OUR REGION Author: Márton Békés

We are living in an era of change. Ideas about the economy underwent fundamental changes after the Great Depression was triggered in 1929 – the first global production crisis; in the same way, the financial and real estate crunch of 2008 brought far-reaching consequences in its wake.

After the Great Depression, Keynesian economics replaced laissez-faire capitalism as the dominant approach; meanwhile in the later crisis, the neoliberal financial system based on stock exchange speculation and debt-circulation received a slap in the face from reality itself. The world of asset bubbles and financial derivatives lost every last drop of credibility. However, 2008 provided a much more profound lesson than did 1929. On the one hand, faith in the omnipotence of the market was shaken, and values such as hard work, thrift, predictability and security were upgraded. On the other hand, the economy’s internal structure also underwent notable changes, as the role of credit was replaced by that of work; the autonomy of the economy was replaced by the role of the state in protecting the interests of society. This was a reaction to the experience of previous decades: instead of creating prosperity on the basis of work, ruthless privatisation and chain-trading of fictive products had been the order of the day. As the lesson was learned, tangible things, well-defined interests and limits guaranteeing security were back on the global stage. In short, public interest became the priority. As always, the change started in our minds. There started to be open discussion of mistakes made by centres of financial planning and half-hearted crisis management by the international organisations controlling the world economy, as well as imbalances within the economy – such as disparities in the share respectively obtained by capital and labour of the value generated by

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each, and the ratio of foreign versus domestic capital. Open discussion dismantled the barriers blocking free opinion which had been raised by political elites who had declared the “end of history”, and who since the 1990s had allied themselves with neoliberalism. The ban on questioning their received wisdom, which had been in force for twenty years, had shaped a neo-Orwellian Newspeak which declared certain expressions to be “politically incorrect”, and by so doing linguistically shackled any attempt to address problems. Therefore, when those problems manifested themselves more strikingly than ever before, people were unable to find the right words needed in the search for a solution. The revolt against the status quo started with a reconquest of our notions: by courageously referring to problems by their names. Characteristically enough, the two great surprises of 2016 were the election of Donald Trump and the Brexit vote. Pollsters, the mainstream opinion-dictating media machinery and “independent” pressure groups had declared in unison that the former would never happen; as for the latter, the day after the vote a leading British liberal newspaper was published with a front-page headline declaring victory for “Remain”. As opinion leaders moved within the old conceptual framework, they were unable even to imagine the possibility of a world that was different from theirs. But cracks appeared in their old world’s cultural hegemony, and on both of these occasions voters failed to follow the cues that were fed to them from above. This sig-

nalled a return of the majoritarian model of democracy, in which an elite jealously guarding its own privileges is rejected in favour of the nation deciding its own destiny. The people have once again become sovereign.

“A new consensus is emerging in Europe. The new Europe is emerging in the central and eastern parts of the continent.” A new consensus is emerging in Europe. For some years now, unaccountable and unelected leaders and remote bureaucratictechnocratic centres have seen an erosion of their power. In reaction they have ceaselessly but unsuccessfully attempted to stigmatise the new political forces as “populist”. In fact this term means that the latter are able to win the trust of the majority of the electorate and enact policies which are “people-friendly”: in other words, they use their legislative mandate within national borders and for the good of the people. Meanwhile, another process is also underway: at the expense of the supranational structures which strengthened alongside the popularisation of individual identity subsets, we are witnessing a renaissance of national communities – whether in the form of strengthening nation states or, in the other direction, in demands for ethnic autonomies. The electoral results in twenty-two European countries have proved that electoral support for so-called “right-wing populist” parties is higher than at any time over the past thirty years. In practice, all of this simply means that in certain areas the will of Warsaw, Prague, Bratislava and Budapest will prevail, rather than non-transparent and unaccountable decision-making in Brussels or Strasbourg. For reasons relating to history and the peculiarities of political culture, the new Europe is emerging in the central and eastern parts of the continent. The changes underway across the whole of Europe are appearing here sooner and are more sharply delineated than elsewhere. In a lecture at Harvard In 1978, four years after emigrating to the West, Alexandr Solzhenitsyn said the following: “A fact which cannot be disputed is the weakening of human beings in the West while in the East they are becoming firmer and stronger – sixty years for our people

and thirty years for the people of Eastern Europe. During that time, we have been through a spiritual training far in advance of Western experience. Life’s complexity and mortal weight have produced stronger, deeper, and more interesting characters than those generally [produced] by standardised Western well-being.” What the Russian Gulag survivor had in mind was that under the pressure of communism the lives and the independence of the peoples of Central and Eastern Europe were in constant danger; thus their desire for freedom and their respect for national traditions were perpetually aroused. Meanwhile the mortal danger of communism forged these people not only to be full of vitality but also to be united. Despite being in a decades-long hibernation during that political Ice Age, the central and eastern part of Europe – from the Baltic Sea to the Balkans, and from the line of the Oder, the Neisse and the Danube to the Dniester – was instilled with two striking qualities: a state of permanent defence; and a heightened immunity to ideologies and utopian temptations – including those of the present. Then, during the decades since the fall of communism, that historical experience has been turned to advantage, enabling the cooperation of the V4 countries to become Europe’s driving force. The fall of communism in 1989–90, when Hungary and its fellow countries in the region regained their freedom and independence, was followed by long years in which our country was trapped by communism’s burdensome legacy. Single party dictatorship was replaced by parliamentary democracy, planning directives by a market economy, and instead of forcible Soviet integration structures Hungarians could opt for NATO and the European Union; but the one-party state survived in our cultural codes, among those who pulled the strings in the public sphere and in the basements of public institutions. Hungary struggled for another twenty years before it started dismantling the post-communist

“Hungary struggled for another twenty years before it started dismantling the postcommunist structures, from 2010 onwards.” 125

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structures, from 2010 onwards. It is since then that this country has been able to follow its own path, leading to the possibility of many innovative ideas and – more importantly – autonomous actions. Many people have found all this rather strange, others have thought it unusual, and quite a few wanted it to fail. But the Hungarian model has proved to be viable. When asked what we are like, we Hungarians tend to boast about our inventiveness, resourcefulness and shrewdness in problem-solving. This must be due to the great trials and the desperate times that the nation has been confronted with over the past centuries, and which have made deceiving hostile powers a necessity. Using our brains has been imperative for survival. This is the spirit in which Hungary stood on its own feet in 2010 and in which it is following a path indicated by the electorate. Over the past eight years the local solutions we have found for global challenges have gradually eliminated Hungary’s economic dependency, increased its diplomatic room for manoeuvre and given us ample reason for feelings of national pride. One of our first tasks was to create a modern constitutional framework for 21st-century Hungary. This goal was served by the new constitution (the Fundamental Law), which replaced the one originally imposed on the country in 1949 and amended several times since. The Government also guaranteed the country’s independence by reducing the negative impact of the mismanaged economic crisis and eliminating dependency and financial subordination. Getting rid of the public debt accumulated by previous governments and the settlement of forex debts contributing to society’s financial vulnerability were both motivated by the same consideration: a country accumulating debt cannot be truly independent. The same purpose was served when the Government took strategic infrastructure under public – or national – control. This was also true for the introduction of special taxes on multinational enterprises, financial transactions,

“The great discovery of the 2010s was the realisation that only a nation focused on work and families can be strong.”

the telecommunications sector, advertising and public utility companies. Between 2010 and 2017 these special taxes amounted to 1.5 to 2 per cent of GDP. The great discovery of the 2010s was the realisation that only a nation focused on work and families can be strong. For this reason a series of measures was enacted to protect working people and families, and to promote their prosperity. Earlier neoliberal policies meant that wages had been lagging far behind productivity. Wages as a proportion of GDP had declined continuously, and thus Hungarian employees had become the main losers in the period between 1970 and 2010. The income restructuring transfers introduced by the Hungarian government resulted in a sharp correction of this process, and by 2017 Hungary had the highest wage-output ratio among the Visegrád countries. In an effort to create a work-based society, VAT has increased to enable reductions in taxes on wages, while minimum wages, pensions and salaries in selected sectors have been substantially increased. The statistics are revealing: by 2017 4.5 million Hungarians were in work, while net real salaries had increased by almost 40 per cent from 2010 to 2017. Subsidies to families also became a priority, and a series of measures serving the goal of strengthening the most elementary unit of society comprised: efficient family support systems; encouragement for new housing and the commitment to have children; tax allowances for families with several children; and reductions in household utility charges. Overall, one million families have seen their positions alleviated as a result of family tax allowances, while from 2011 to 2018 the system of joint tax returns for married couples left 1,900 billion forints with families. The Government’s reductions in household utility charges enabled families across Hungary to save one trillion forints. Birth rates have been moving upwards from a historic low in 2010. Putting the country’s financial house in order naturally serves an aim which is far more important than the increases in income themselves: forming the culture of a robust nation. In addition, Hungary’s experience shows a work-based and a family-friendly society to be more competitive. Hungary is a fully-fledged European country, and within Europe it is a member of the family of the peoples of Central and Eastern Europe, who depend so much on each other. We have been living in the heart of Europe for one thousand years. We are proud of our past and the friends we have made. We continue on our path together.

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THE SIGNIFICANCE OF GEOGRAPHY IN THE MULTIPOLAR WORLD ORDER OF THE 21ST CENTURY

Geofusion – Mapping of the 21st century Author: Norbert Csizmadia

What are our maps like in the 21 st century? How has our world changed in this new, 21st-century world order? What is the role of Central Europe on the world’s geopolitical map? Why is it important to understand the current economic and political changes of the 21st century through geography? We are at the dawn of a new world order. While the period 1980-2010 was defined by globalisation, new cooperations, new players, new ways of thinking, new value systems have started to evolve resulting from the economic crisis of 2008; since 2010, globalisation has entered a new era, the era of technology and knowledge. NEW MULTIPOLAR WORLD ORDER – REDISCOVERING GEOGRAPHY In this new era, we are talking about the rise of geography and economic geography; geopolitical processes are being replaced by geoeconomic ones, and there is a competition for markets in lieu of territorial expansion. This is the age of networks and fusions; a complex approach is becoming the most important thing in an interconnected world. The pole of world economy is shifting towards east again. While the 19th century was the century of the British Empire, and the 20th century was the century of the United States, the 21st century is obviously the century of Asia. We can witness the rise of the Eurasian continent, with China playing a leading role, and Central and Eastern Europe, dubbed as a buffer zone until now, may become a bridgehead region. As the eastern gate of the New Silk Road, as the eastern gateway to the most developed region of the European Union, technolo-

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gy-led Baden-Württemberg, Bavaria and Lombardy, and as the mid-section of the former ancient Roman Amber Road (where the most important projects of the automotive industry in Central and Eastern Europe can be found now), Central and Eastern Europe is a meeting and a connection point between the West and the East. Connection points are extremely important in the 21st century. By connecting geography, geoeconomics, geopolitics and the global economy we can approach our world in a complex way. With the help of maps and geography, in this fusional era we are seeking the answer to the question as to who the winning nations, communities, leaders of this era will be. How can we understand the global political geographical, economic and economic geographical processes going on around us? How can we redefine and redraw our maps? How are former peripheries becoming centres again?

The financial crisis of 2008 has created a new world order, a new value system, with new players, new cooperations, new places; former centres have got to the periphery and former peripheries could become centres. Former recipes and dogmas have failed; we need a new way of thinking and new methods. The 21st century is the era of knowledge, talent, technology and innovation, and genuine ideas and innovation are its currency. After the age of globalisation, the age of technology has come, and one of the main questions is what role places will have in this technology-led age. If we coin technology, knowledge and geography into one term, we get tech-knowled(ge)ography, that is, knowledge in the geographical world of the age of technology. This is the geography of knowledge and fusions, “Geofusions”, which become the meeting point of complex knowledge and geography in the age of networks. GEOGRAPHY IS A TOOL OF EXPLORING THE WORLD Geography is a tool of exploring the world, as geography is not just memorizing places on our maps, but a complex exploration of the world is inherent in familiarity with and the knowledge of geography. There are

some, however, who think differently: at the beginning of the 1990s, Richard O’Brian wrote his book Global Financial Integration: The End of Geography, which is about the role that geographical space has in our globalized world. He argues that, thanks to modern information technology, one can transfer millions of dollars from one corner of the Earth to the other within seconds. The future when ‘geographical location no longer matters in economic development’ is not far. Well, we can definitely claim now that O’Brian has not proven to be right. A decade later, Stratford’s geopolitical guru, Robert D. Kaplan focussed on recognizing the decisive role of territoriality in global processes in his book, The Revenge of Geography, which can be read as a response to O’Brian. In his book, Kaplan writes, we might forget about the power of geographical factors, but they still do not cease to exist. Even technological advancement is unable to do so, and although many believed, technological advancement has not cancelled geography but increased its significance. The author of the great book The World is Flat, Thomas L. Friedman is in a similar opinion, adopting a slightly different approach, who said in 2013 that in today’s world the big divide is no longer between developed and developing countries but rather between high-imagination-enabling coun-

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tries and low-imagination-enabling countries. It is high-imagination-enabling countries that will count in the future. WHY ARE MAPS IMPORTANT? To understand the processes of this new era, we need maps. Maps are important! Maps are continuously changing, developing, but there meaning and significance remain unchanged. Maps were important in the past, are important in the present and will be important also in the future. In the 8th century A.D., the Polynesians drew a map with the help of which they got to more than 1,000 islands within the triangle anchored by New Zealand, Hawaii, and Easter Island. They knew the stars, the ocean currents, the sea routes. They made their maps by hand and they placed seashells on the junctions, representing islands, and this is how they navigated for centuries. But portolan charts made by European sailors were just as important maps; they described major places and ports in as many details as possible, and these maps meant the cartographical basics of the European explorations one and two hundred years later. Or the mosaic map found in the city of Madaba, Jordan, made of two million mosaics in the 5th or 6th century A.D., containing the complete geographical description of the globalized world of the time, and the map itself was discovered in 1884. But what are our maps like today? What can we see and read on maps: countries, marked with different colours, national boundaries, dividing countries of different colours so that they can be more visible, continents and oceans. This is the political map of todayâ&#x20AC;&#x2122;s world like: almost 200 countries on five continents and three big oceans. And what can strike us on maps is that there is always Europe in the middle, and there is Asia to its east, and the American (the North American and the South American) continent to its west is divided by the Atlantic Ocean. Yes, we, Europeans live in a Eurocentric world, and we see the world through a Eurocentric world map. This new way of thinking is supported by maps because if we look at the world from a different angle, we can adopt a new kind of viewpoint: what does our world map look like viewed from the perspective of Asia or the Pacific? But let us just imagine what our maps would look like if we did not draw countries on our maps but the routes of the worldâ&#x20AC;&#x2122;s 182 airlines, or the results of international research cooperations and scientific collabora-

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THE SIGNIFICANCE OF GEOGRAPHY IN THE MULTIPOLAR WORLD ORDER OF THE 21ST CENTURY

tions; or the map of connections of Facebook used by 2 billion people. They are all network maps, with lines and connection points at their nodes which outline the power lines of the 21st century and its centres, the cities. And what does our world map look like if it depicts cities instead of countries, without national borders, or the network map of the world’s almost 400 most significant cities connecting to each other, or the world’s 50 most important airports? The population number of cities, the size of our cities would be illustrated on the map by spots: the more populous the city was, the bigger the spot would be. Exactly the same way as on Benjamin Hennig’s world map, who, on his internet site Views of the World, has completely recreated the world map. His starting point was that the more significant a city or country is in a given category, the more it bulges from the map, thus the world maps he created show the spatial processes taking place on our Earth in a completely different light, for example on the population map of the word. More than 7.4 billion of us lived on the Earth in 2017; interestingly, nearly 50 per cent of the Earth’s landmasses is populated by 0.5 per cent of the population, while more than 90 per cent of the world lives on an area of 5 per cent (China, India). Can you imagine what it looks like on a world map drawn by using this fresh approach? The same is outlined on the map of the global economy: the spatial distribution of some US$80 trillion shows that there are three bulging, or rather rounding, regions – the United States, Europe and China. It is even more interesting to see these maps both in space and time. However difficult it is for us to imagine in the new, technological world order, our maps do start moving. With the help of GIF animations, we can see how the world’s population changed between 2000 and 2010, as well as the spatial distribution of annual GDP growth, where East Asia is growing bigger and bigger. We are living in a dynamic world in the age of dynamic maps. The 21st century is the century of knowledge and creativity, in which genuine ideas and innovations are the most important currencies, and the countries who do not have sufficient knowledge yet can do nothing but purchase it, and knowledge will be more and more expensive. We are witnessing the rise of geography, and geoeconomics, the combination of economy and geography, is becoming ever more important. Sir Paul Tucker, the former Governor of the Bank of England was asked within

the framework of the Tacitus Lectures held in London in March 2016 who the winning countries, nations and leaders of the 21st century will be. He answered that those countries will be winners who coordinate their finances, that is, their monetary policy, their economic policy and their geopolitics. THE AGE OF GEOECONOMICS It is a major geo-political element of the 21st century that a new, multi-polar world order is emerging from the former, mono-polar one. It has three main protagonists: the United States, China and Russia; and two supporting characters: Germany and Turkey. Geo-economics, as a fusional meeting point of economics, social sciences and geography, determines the processes of world economy. Today, we are witnessing the rise of geo-economics; a competition taking place in the language of commerce but according to the logic of wars. Geopolitical competition transforms the global economy, the global balance of power and governance. Before the financial-economic crisis, geopolitics had a local role; in these days, however, conflicts between major powers have flared up again. The conflicts between the West and Russia, China and its neighbours, as well as the crisis in the Middle East, becoming increasingly manifold and multi-faceted, are the most prominent ones. There is an invisible zone on the map of this multipolar world order between the 30th to 36th parallel north– and there are five turning points along this line: between Mexico and the USA, at Gibraltar, between Europe and Africa, at the Levantine ports, at Kashmir and the South China Sea, where conflicts arise. Although several wars are being fought in the world, from Damascus to Ukraine, nowadays economy is considered to be the most important battlefield. Military strikes are replaced by economic sanctions, military alliances by competing commercial systems. Currency wars are much more probable now than territorial conquest, and manipulating the price of certain raw materials (such as oil) proves to be more effective than a conventional arms race. These reveal that we are witnessing the rise of geo-economics; a competition taking place in the language of commerce but according to the logic of wars. Geo-economics means at once the antithesis of globalization and its greatest victory. Countries are so inter-dependent and interconnected that the opportunity of exclusion amounts to the gravity of an armed conflict. Geo-economic challenges highlight the powerful trends that are reshaping

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the world and change the circumstances of the competition between countries. All these outline a world in which the possession of power will be as important as the pursuit of profit, accompanied by an intensifying participation of the state; economic warfare will undermine economic integration; multilateral systems, instead of becoming global, will regress onto a regional level; the price of oil will be low and volatile, therefore competition will take place for markets and not for resources. CONNECTIVITY – THE IMPORTANCE OF CONNECTING LINES There is one more cartographic element on the map exploring the 21st century which is even more important than borders, and this is the lines extending beyond and linking locations and continents. These are infrastructural lines. In a TED talk, Parag Khanna claimed we have less than 500,000 kilometres of borders, one million kilometres of Internet cables, two million kilometres of pipelines, four million kilometres of railways and 64 million kilometres of roads. These networks will be the most important lines on our maps. It is not a co-incidence that China’s long-term geo-strategy is to shift the axis of the world economy from oceans to the mainland again. China launched the New Silk Road or the “One Belt, One Road” initiative in 2013. The main point of China’s long-term scheme is to regain Eurasia’s former histori-

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cal, cultural, economic and commercial significance by rebuilding the New Silk Road. The New Silk Road comprises railway lines, the development of sea and inland ports, the construction of motorways, the establishment and the development of logistics hubs; networks which are realised through economic corridors. Since the announcement of the programme in 2013, considerable financial investments and plans have been made on behalf of China to ensure that the economic belt extending over the new Eurasia will become operational. The China Development Bank has set aside some US$900 million for hundreds of projects. The main nodes of infrastructure networks being built within the framework of the New Silk Road are reshaping the significance of specific regions, and new hubs appear. The dry port in Khorgos, Kazakhstan – which is also dubbed as the world’s largest dry port and which is the main gateway and a major logistics hub of China’s most important land route – also affects the development of Central and Eastern Europe. The same is true for the China-Pakistan Economic Corridor, which links China with the Arabian Sea via Gwadar port through the highest paved international road of the world, the Karakoram Highway. Gwadar’s significance lies in, among others, that Chinese goods can reach the European continent faster through it than traditional transport routes passing through the Strait of Malacca. One of the main distribution centres of goods is the Port of Piraeus, Greece, from where goods are expected to

THE SIGNIFICANCE OF GEOGRAPHY IN THE MULTIPOLAR WORLD ORDER OF THE 21ST CENTURY

reach Hungary on the Belgrade-Budapest railway line, and there they are dispatched to the ports of Rotterdam and Hamburg. It is not a co-incidence that up to date 64 countries have joined the One Belt, One Road initiative, and it is not a coincidence, either, that China provides Hungary with a considerable role: three Silk Road networks meet at Hungary. Therefore, our country is a key country of the New Silk Road, and the Central and Eastern European region may become a new bridgehead region. The former Silk Road was always important throughout history; it connected four empires, and transported the most important products, technological innovations and knowledge of the given eras, and quality products were exchanged. The Silk Road does not comprise only infrastructure networks but also knowledge sharing, people-to-people relationships, cultural and financial cooperation. In May, 2018 26 European ambassadors wrote a joint petition (the Hungarian ambassador was the only one who did not sign it), in which the ambassadors denounced the concepts of the New Silk Road for lacking transparency and being of ad hoc nature. It is no wonder, as even the most accurate map from a European perspective (MERICS) indicates only economic belts and one or two investments on maps, which then European decision-makers receive. That is why it is necessary to prepare as accurate and detailed maps as possi-

ble; it is unknown what goods, in what volumes and with what frequency are exchanged and where transport cooperations are in place. As a total of 3,673 trains have been running between 38 Chinese cities and 36 European ones since 2013, which has created more than 180,000 new jobs. The Port of Piraeus may cut the time of maritime transport by twenty days, and the Xi’an-Duisburg railway line covers the route in 24 days instead of the previous travel time of 42 days. The hubs of railway transport may include Duisburg, Germany; Brest, located at the Belarus-Polish border; Łódź, Poland; Port of Piraeus, Greece; and Budapest. As a result, a new development axis is emerging, which is, on the one hand, has an eastwest direction in the north, and has a northwest-southeast direction on the south branch, connecting Piraeus with Rotterdam or the port of Hamburg. A north-south belt evolves from the Baltic Sea to the Adriatic and the Black sea. The 16+1 member countries represent an important link with China. It is not a coincidence that the emergence of two centres is envisaged in this region: one of them is a northern centre, with Warsaw as its centre, where mainly transport, logistics, energy industry investments are located, while in the southern belt Budapest is the location of financial services, cultural and scientific cooperation (the European centre of the Bank of China can be found in Budapest, and the Chinese Academy of Sciences opened its Centre for Social Sciences here in the autumn of 2016).

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WE LIVE IN THE AGE OF FUSIONS AND NETWORKS We live in the age of knowledge, in the age of geo-economics, in a world of fusions. We can find fusions in gastronomy, music, science, architecture; fusions are important because something completely new can be born from encounters in the most unexpected places. In terms of gastro-fusions, we can talk about a fusion if the East meets the West. And in this fusional age, in this geo-fusional age big data will be the raw material of the 21st century; knowledge, creativity, experience will be the services; with new participants and from new co-operations the small ones become giants, as start-up companies, start-up cities and start-up nations have demonstrated. In a new Cambrian moment, we are witnessing a new technological-entrepreneurial revolution. If we had to highlight one map from the 21st century, we would say that this would be the map of the internet – with its networks and hubs. In addition to the interconnectivity of networks, the most important component is measuring complexity. The atlas of economic complexity was first published by the researchers at MIT in 2012. Ricardo Hausmann, who delivered his keynote address at the annual conference of the Regional Studies Association (RSA) in Dublin in June, 2017, presented the latest results of his research. The most important factors of measuring economic complexity include what product a given

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country exports, and how this exported product is interconnected in the global product space. The indices and how the ranks of various countries in a given period of time change have been monitored since 1974. Two things count, Hausmann claims: one of them is knowledge and highly skilled workforce, and the other is the exported product, that is, the share of industries with high added values should be as high as possible in the export structure of the given country. In this new kind of complex competitiveness, Japan tops the list, followed by Germany, and the TOP 10 includes countries from three regions: Southeast Asia (Korea, Singapore), Scandinavia (Finland, Sweden, Norway) and central and Eastern Europe (Hungary, Austria, the Czech Republic, Poland and Slovakia). That is another reason why the share of innovation should be as high as possible in the new era of technological knowledge, and the region should be a growing and prospering region in the 21st century through interconnectivity. GEO-MANIFESTO – THE IMPORTANCE AND RISE OF GEOGRAPHY IN THE 21ST CENTURY “If it is geopolitics that makes you hit the bottom, it is geopolitics that gets you out.” The famous saying by George Friedman has become a motto to be followed by each leader in this century. Decision-makers of the 21st century are the ones who will be able to view the world from a geopolitical perspective, and dare to re-draw the maps. Philip Zimbardo, the

THE SIGNIFICANCE OF GEOGRAPHY IN THE MULTIPOLAR WORLD ORDER OF THE 21ST CENTURY

father of the Stanford Prison Experiment said, ‘if one person withstands the world, he is mad; if three or four people do the same, it is a standpoint’. If one of our maps is incorrect, it is useless, might probably mislead us, but it is not a typical construction error, though; but if three or four of them are, it is the first sign of a paradigm shift. Leaders of the most dynamically growing multinational companies, professors of most successful universities and politicians with extensive international networks of relationships have already discarded their incorrect maps, and they are drawing their own system of targets and interpretations onto a blank sheet.

the Faculty of Social Sciences of the National University of Singapore, Asia’s best university, economics is complemented by geography, communications theory, psychology and political science. Similar processes have commenced at Hungary’s Corvinus University. The world’s leading economic, political and knowledge centres intend to redraw the maps of the world, adding their own interpretation kit and legend to them. These metropolitan areas and regions (Boston, San Francisco, Bangalore, Singapore…) intend to become such hubs that are inalienable from the data, knowledge and innovation networks influencing the decisions of the world.

Leading companies of the world are building an ever closer network with Eastern Europe, India and Southeast Asia to refresh their portfolios with the creativity of small start-ups. In the meantime, China is building the modern Silk Road crossing the Asian continent from the east. The directors of technological giants pay more and more attention to global social issues, putting pressure on such international political decisions such as space race, global warming or migration. Science has also turned towards geopolitics: urbanism, territoriality, sustainability and social geography are also included in the economic and leadership studies of the University College London. In 2015, Stanford launched its global executive programme of US$700 million USD, seeking answers to economic-social questions, globalization and technological challenges. At

Ultimately, it is always people and the decisions of people that are behind geopolitical turning points. And those will be the decision-makers, economic, political, scientific and technological leaders of the 21st century who are able to comprehend global connections and create hubs of creativity and information flow around them. Those who are brave, curious and creative enough to draw strength from crises and to reconsider the role of spatiality in global decision-making. Those who are seeking fusions and new border areas, may they be physical, natural or scientific. Those who build personal networks with other creative hubs and draw strength from the exchange of experiences with other cultures. They will be real explorers, global leaders, pilgrims of dynamic maps who, adopting a geopolitical viewpoint, will reshape the world.

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THE GEOECONOMIC SIGNIFICANCE OF THE “NEW AMBER ROAD”

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THE GEOECONOMIC SIGNIFICANCE OF THE “NEW AMBER ROAD” Author: Ádám Sashalmi

The objective of this study paper is to explore the possible geoeconomic consequences of the establishment of the new rail freight corridor called the “New Amber Road”, and its effect on the economic and trade relations of participating countries. During the short period of time that has elapsed since the launch of the initiative, specialized literature has produced relatively few relevant publications on the topic. The article by co-authors, András Inotai and Ottó Juhász (Inotai, A. – Juhász, O. 2017), however, must be highlighted. Publications examining the competitiveness of the port of Koper and other ports, first of all, the calculations of Wiktor Żuchowski (Żuchowski, W. 2014), and the article written jointly by Cedomir Dundovic and Svjetlana Hess (Dundovic, C. – Hess, S. 2005), have also helped in writing this research paper. The data of the European Commission, the World Bank and specific port authorities have served as a basis for statistical analyses. Communications, information disclosed officially by specific national governments, the Visegrad Cooperation and the institutions of the European Union have served as sources. In addition, works by historians and geographers have also been used.

In addition to relevant reference literature examination, the paper considers official sources of law, strategies, communications and news items published in the media. In addition to lexical research, the paper greatly relies on the analysis of statistical data on rail freight transport, port traffic and inter-state trade. The results of data analyses are visualised by diagrams and cartograms. THE ANCIENT AMBER ROAD The new rail freight corridor has been named after one of the most important ancient European trade routes, the Amber Road, therefore it is worth dwelling on it briefly. The Amber Road is assumed to have existed even earlier, but it was flourishing in Roman times. The route linked the Adriatic Sea with the “Eastern Sea”, which is called the Baltic Sea nowadays, and according to certain theories, there was also another branch towards the Black Sea. It was named after amber, the most important product it

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transported. This product counted as a very important, versatile commodity, which was used not only as jewelry, but medicine as well. Amber was worked in Aqulieia and finished articles were exported from here. Apart from amber, however, many other commodities were carried on the route; the trade of furs and leather goods also counted as significant. The route of the Amber Road within the Roman Empire is relatively well-known. It passed through Italia, Pannonia and Noricum provinces within the empire, then crossing the limes in the territory of the so-called “Barbaricum”, it went on across the zone outside the administration of the Roman Empire. It is assumed to have continued through the Little Carpathians and along major rivers, such as the Danube, the Morava and the Oder, beyond the borders of the empire. From time to time, the latter ones were used for river transport, but it greatly depended on weather conditions. Several posts are known in the territory of present-day Hungary, such

Zalaszentiván, and then branches off toward Sopron and Csorna. From Csorna, it continues to Rajka, and another branch to Budapest via Komárom, from where it goes as far as Kelebia, the Hungarian-Serbian border. From Rajka and Komárom, it runs towards the north, crossing the Hungarian-Slovakian border. It traverses Bratislava, Leopoldov and Žilina. Then it continues in Poland, where it passes through Katowice and Krakow, and proceeds into two directions, one of them ending in Warsaw, and the other ending as far as Terespol, the Polish-Belarusian border, via Luków. Apparently, it will connect important industrial, economic and transportation hubs.

as former Savaria near Szombathely, or Scarbantia, once situated in the location of present-day Sopron. THE NEW AMBER ROAD The new initiative relates to the ancient Amber road to the extent that it follows approximately the same route. The New Amber Road, however, is a rail freight corridor, and it will be built and operated in accordance with the conditions of the present. The establishment of the freight corridor has been initiated jointly by four countries, Poland, Slovakia, Hungary and Slovenia. The four EU Member States put forward the initiative to the European Commission in March, 2016. The Commission approved the establishment of the corridor in its Implementing Decision No. 2017/177 on 31st January, 2017, which was published in the Official Journal of the European Union on 2nd February, 2017. Pursuant to the Decision, the new freight corridor must be established until the end of 2018. The New Amber Road will start from the port of Koper, run across Slovenia, including its capital, Ljubljana. Then it reaches Hungary, where traverses

A parallel plan of the Polish government, the “Via Carpathia” should also be mentioned here. This initiative is about the establishment of a road transport corridor also in a north-south direction, starting from Klapiea, Lithuania, running across the eastern parts of Poland, Slovakia and Hungary, and finally reaching Romania. In Romania, it splits into two, one branch goes to the Black Sea, to Konstanta, the other enters Bulgaria and Greece, as far as the port of Thessaloniki at the Aegean Sea. The transport corridor is scheduled for completion in 2025 (Sejm.gov.pl: Highway from Rzeszów to Budapest – Via Carpathia under construction, 2017). With the establishment of the Via Carpathia, such a trade-transport infrastructure could be established geographically that would be similar to the Black Sea branch of the ancient Amber Road. HOW THE INITIATIVES FIT IN THE CONCEPTS OF THE EU AND THE V4 The initiative is supported by the fact that it fits in the concepts of the European Union and the Visegrád Cooperation, and even strengthens them. The establishment of a north-south trade and transport corridor in the region matches the objectives of both the EU and the V4. Within the European Union, the first international, market-oriented rail freight corridors were designated by Regulation (Eu) No 913/2010 of the European Parliament and of the Council (Regulation (Eu) No 913/2010 of the European Parliament and of the Council 2010). The regulation specifies nine freight corridors, several of them run through the four countries. The “Rheine-Danube” runs through Slovakia, the “Eastern” through Slovakia and Hunga-

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ry, the “North Sea-Baltic” through Poland, and the “Mediterranean” corridor through Slovenia and Hungary. In addition, a north-south corridor, the “Adriatic-Baltic” corridor, already exists; it runs through Slovenia, Slovakia and Poland, but not Hungary. The New Amber Road would be connected at several points with the Adriatic-Baltic corridor. Annex 2 to Regulation (Eu) No 1316/2013 of the European Parliament and of the Council modified and expanded the corridors, also providing an opportunity to establish new corridors. Furthermore, the EMPIRIC (Enhancing Multimodal Platforms, Inland Waterways and Railways Services Integration in Central Europe) programme in the 2007-2013 programming period should be noted, which was devised to link the ports of the Northern Adriatic region with Central European markets, primarily using rail freight transport (Żuchowski, W. 2014).

of the 16+1 regional cooperation with China, which strengthens synergies between the parties.

One of the objectives set by the Visegrád Declaration, which established the Visegrád Cooperation, was the establishment of a north-south transport corridor (Visegrád Declaration 1991). The programme of the Polish presidency between 20162017 included the New Új Amber Road as a concept to be realised (Programme of the Polish Presidency, 2016-2017). The Eastern Partnership is also important to the European Union, and due to its geographical location, the Visegrád Cooperation. The New Amber Road may contribute to encouraging economic cooperation within the partnership. From this perspective, it is particularly important that the Polish-Belarusian border is the northern terminus of the planned freight corridor, as Belarus participates in the Eastern Partnership.

From the perspective of the new rail freight corridor to be planned, underlying power interests are not the only things that count, but also the specific features of the initiating countries do. From the European Commission Rail Market Monitoring 2016 database, I relied on two statistical data to justify the benefits of the project for Poland, Slovakia, Hungary and Slovenia: railway density and EU rail funding in the Member States in the period 2014-2020. On the basis of the length of lines per 10,000 km2, the figures of all

THE CONNECTION BETWEEN THE NEW AMBER ROAD AND THE NEW SILK ROAD The name New Amber Road is symbolic not only because the ancient trade route used to stretch along roughly the same line, but the Silk Road, running across Eurasia in a west-east direction linking the Roman Empire with China, was in operation simultaneously with the ancient Amber Road, which is another connection point. With this, the four countries initiating the project wish to indicate that the new rail freight corridor is a response to the New Silk Road concept, and is intended to be connected with it. The branch of the New Amber Road reaching

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towards the Hungarian-Serbian border plays an important role here, since it would join a branch of the New Silk Road, running from Piraeus to Budapest via Belgrade, which would make the transportation of Chinese goods to the north possible. (Inotai, A. – Juhász, O. 2017). The idea of the New Amber Road was received positively in China, too; China’s President Xi Jingping expressed it when he met Poland’s Prime Minister Beata Szydło at the Belt and Road Forum in May, 2017 (Premier.gov.pl: Prime Minister Beata Szydło at the international Belt and Road Forum 2017). China’s intentions are not worsening the EU’s positions, as China is interested in a strong EU. Poland, Slovakia, Hungary and Slovenia are also members

SPECIFIC FEATURES OF THE INITIATING COUNTRIES

four countries are above the EU beverage (Figure 1). Hungary takes first place in the four countries, and fifth place in the EU, with its railway line of 848 km per 10,000 km2. Then comes Slovakia with 740 km, Poland with 605 km, and Slovenia with 596 km. On the basis of the density of the rail network, the situation of the fur countries can be considered favourable. Again, by the total allocated EU rail funding, the figures of the four countries are above the EU average. Poland’s figure is the highest within the entire EU, it is 521,000 EUR/km. Slovakia’s figure is 364,000, Slovenia’s is 262,000, and Hungary’s is 259,000 EUR/km (Figure 2). It is visible that railway developments are supported by considerable EU finding in these four countries in this programming period. This, again, can be considered a favourable situation. However, the condition of the rail infrastructure and the level that can be reached with the available funds are also important factors from the perspective of the Amber Road.

THE GEOECONOMIC SIGNIFICANCE OF THE “NEW AMBER ROAD”

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Figure 1.: Density of railway network, 2014 (km / 10,000 km2) 1400

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Figure 2: Total allocated EU rail funding in Member States in relation to their network length (2014-2020, thousand EUR per line-km)

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THE GEOECONOMIC SIGNIFICANCE OF THE “NEW AMBER ROAD”

Figure 3: Changes in cargo traffic of major ports in the Northern Adriatic region (1,000 tons) 60 000

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Koper Trieste

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Venice Ravenna Rijeka

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0 2009

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SIGNIFICANCE OF THE PORT OF KOPER The port of Koper is important to the initiating countries because it enables them to reach and trade on the high seas. This is particularly significant for the two landlocked countries, Hungary and Slovakia. Geographically, the Adriatic Sea is within the shortest reach both form Slovakia and Hungary. Consequently, Hungary itself develops the port of Koper. The Slovenian port, however, is important not only for the three smaller countries but also for Poland, which has its own ports. Wiktor Żuchowski’s article points out that it is more beneficial to embark goods arriving from Asia in Koper, and transport them further by rail to Poland’s central and southern parts, including Warsaw, skipping German or Polish ports. We can find out more about the competitiveness of the port of Koper if we compare the data of cargo traffic records kept by the port authorities of major ports in the Northern Adriatic region (Trieste, Ravenna, Venice, Koper, Rijeka). Based on the changes in cargo traffic, Koper is only number four of the five ports, its traffic exceeded 20 million tons only in 2015. Trieste’s figure is outstanding, the traffic of Venice and Ravenna is roughly similar, and the vol-

2013

2014

2015

2016

ume of goods disembarked in Rijeka annually does not reach 10 million tons (Figure 3). This suggests that – apart from Rijeka – the other ports are more competitive than Koper. However, if we take the changes of cargo traffic into account, we can say that Koper’s traffic increased to the largest extent, by 67 per cent between 2009 and 2016. Ravenna’s cargo traffic increased by 39 per cent, Trieste’s by 33 per cent, and Venice’s by less than 1 per cent compared to 2009. Rijeka’s traffic increased approximately by 9 per cent between 2009 and 2015. Based on changes on the previous year, only Trieste and Koper could increase their cargo traffic every year (Figure 4). Additionally, we can mention that Ravenna and Venice play a less significant role in Eastern European freight transport, thus Koper must primarily compete with Trieste and Rijeka. The difference between Trieste, and Koper and Rijeka is that while the two latter ones mainly focus on transit cargo traffic, it forms a much smaller part in the case of Trieste; we can say, it is a port with a different profile. In this regard, Rijeka is the real rival of Koper, which is more successful based on several indices. Thus, we can conclude that Koper counts as a competitive port.

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Figure 4: Changes in traffic of ports on previous year

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Trieste

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POSSIBLE CHANGES A positive consequence of the realisation of the New Amber Road may be an increase in trade between the four initiating countries. According to the data of the World Bank (World Bank Trade Statistics 2015), the extent of trade between each other is currently low; by contrast, the value of trade with Germany measured in USD is much higher. According to current data, Hungary’s export to Slovakia accounts for 5 per cent of total exports, while its export to Germany accounts for 27 per cent of total exports. Hungary’s import from Poland accounts for 5.5 per cent of total imports, and its import from Germany accounts for 26 per cent of total imports. Proportions are similar in the case of the other three countries, too. The rate of export to import between each other is a one-digit number, while with Germany the share of export and import in total trade is between 15 and 30 per cent. The establishment of the new freight transport corridor may enhance the value of certain transporta-

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20%

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tion hubs through which the New Amber Road runs. It is particularly important for those that other corridors traverse, such as Koper, Ljubljana, Budapest, Bratislava, Žilina, Katowice, Warsaw or Terespol (Figure 5). ITALY’S INVOLVEMENT? The initiative does not exclude the subsequent extension of the New Amber Road (GYSEV: The ancient Amber Road can be resurrected by rail, 2016). Obviously, the idea that the corridor should also reach the Apennine Peninsula as the ancient Amber Road did, occurs. With the involvement of Italian ports, trade passing through Eastern Europe may further increase. Italy itself has significant economic weight within Europe, and has been an important trading partner for participating countries. Thus, Italy’s involvement would further promote the diversification of the trade relations of Central European countries. On the other side, Italy may also be interested in being reached by the New Amber Road.

Figure 5: Hubs on the New Amber Road

CONCLUSION If established, the Amber Road may bring about changes that will improve the competitiveness of the Central European region. It may represent development and breakout opportunities for the initiating countries. However, there are several questions unanswered about the New Amber Road. It is unknown whether it will be able to mitigate the economic dependency of participating countries. Can increasing trade with China, Italy or each other counterbalance Germany, and will Germany have a response to it? Can it enhance the Central European political cooperation, can the political weight of the region increase? Can it contribute to the growth of the regionâ&#x20AC;&#x2122;s economic output? Can there be any negative consequences? Can a new dependency, this time from China, develop? Will Chinese goods force domestic products out of the market? We will have answers to these questions after the initiative is realised.

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ESTABLISHING THE BUDAPESTWARSAW AXIS

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ESTABLISHING THE BUDAPEST-WARSAW AXIS

by developing the infrastructure in the Southern Slovakian region Author: Ádám Bohár

The presidency of the V4 is held by a different member state year by year; in 2017, Hungary took it on from Poland. These two countries are not adjacent; Slovakia is a wedge between them. In order to develop the economic relationship between Poland and Hungary, the country between them must be addressed. The basic assumption of my essay is that the Southern Slovakian region may seriously benefit from establishing a new Polish-Hungarian infrastructural axis. I will analyse the current economic situation in Slovakia, the differences that exist there and afflict the country and affect the future economic development of the region. I will specifically cover the situation of the southern regions. The road network of the region is the second important element that affects the development of the region’s economy, and is absolutely relevant to infrastructure links. I will highlight a possibility that could found the economic development of the region. Finally, I will examine a recently launched project, the main aim of which is to make contacts, but it is also capable of shedding light on the problems outlined above.

NEW PRESIDENCY, NEW PROGRAMME Hungary took on the V4 rotating presidency from Poland on 19th June, 2018; one of the main goals that Hungary set then is building economic cooperation and improving diplomatic relations. The plan of establishing a new Budapest-Warsaw axis already arose then. But the implementation of the plan requires a plethora of steps and projects. Beata Szydlo, Poland’s Prime Minister of the time emphasised that one of her main objectives was the fast and safe development of the V4 group. Furthermore, she also added that the V4 was such a group of countries that ‘above all, address the issues important for its citizens.’ Hungary has taken on the presidency of the group comprising countries from Poland, and will fulfil this role within the V4 group (Hungary, Poland, the Czech Republic and Slovakia) from July, 2017 until June, 2018.

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ANALYSIS OF THE CURRENT ECONOMIC SITUATION ON COUNTRY LEVEL I will analyse Slovakia’s regions based on the surveys conducted by INEKO to provide an understanding of the current situation. Regions prone to poverty include the Banská Bystrica region, but the Košice region should not be neglected, either. The poverty index has been well above the Slovakian average in each region for more than ten years. It is well demonstrated by the fact that Slovakia takes 21st place among OECD’s 32 member countries in terms of unemployment and employment. There is a difference on regional level in the aspects of transport, employment, remuneration, and parallelly, poverty; however, compared to surrounding countries, income is higher but it performs worse in terms of employment and unemployment Figure 1 well illustrates that southern and eastern districts are lagging behind the other districts the most.

Figure 1: Registered unemployment rate broken down by districts in March, 2017. The darker colour marks a higher rate.

Figure 2: Changes in the number of registered unemployed people in the regions between 2011 and 2016.

Figure 3: Changes in the unemployment rate of the eight least developed districts in Slovakia in the last four years.

Unemployment is the highest (above 20 per cent) in the Rimavská Sobota, the Revúca and the Rožňava districts, and slightly under 20 per cent in the Kežmarok district. Interestingly, the lowest unemployment rate is below 3 per cent (Piešťany, Trnava and Hlohovec), and it does not reach 4 per cent in the remaining ten districts, either. Figure 2 shows that unemployment increased dramatically at the outbreak of the crisis, then it started to decrease, but the difference in unemployment between regions has not decreased. The Trnava region has caught up with the Bratislava region, regarded as the most developed, unemployment has dropped below 5 per cent in the Trnava region. It has also decreased in the Nitra region and is current-

Figure 4: Distribution of vacant jobs broken down by regions in 2015.

Figure 5: Number of job seekers broken down by regions in 2015.

ly between 5 and 10 per cent. In the Banská Bystrica and the Košice regions, the number of the unemployed is below 15 per cent. Figure 3 well illustrates that from 2016 by March 2017, unemployment had decreased in the Rimavská Sobota district; for the present, the level of unemployment is still stagnating in the Rožňava district. It is important to note, as these districts can be found in Southern Slovakia. After unemployment, let us examine the situation of the regions in relation to new jobs. The Bratislava region is the first with 51 per cent, second is the Banská Bystrica and the Trnava region with 8 per cent. Comparing Figure 2, 4 and 5, the problem is clear: jobs exist and are created in regions with low unemployment rates, but few jobs are created in regions struggling with a high rate of unemployment. Consequently, employees have to travel to be able to work, thus road and railway networks are extremely important to them. Figure 5 details the distribution of job seekers broken down by regions. This figure well illustrates that most jobseekers are in the Prešov, Košice and Banská Bystrica regions. The number of such people is around 6-8

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Figure 6: Change sin the average wage in euros broken down by regions in the period between 2000-2016.

Figure 7: Extent of emigration broken down by regions in the period between 2005-2015.

situation seems to be similar in the period between 2010-2015. Of the recommendations of the INEKO Institute, which has carried out the surveys mentioned above, I want to highlight the ones that focus on the development of the transport system and the creation of more favourable conditions for entrepreneurs. Summing up the findings of this chapter we can conclude that there are enormous regional differences in the labour market between eastern and western regions, in terms of remuneration, the size of workforce and vacant jobs. ANALYSIS OF THE ECONOMIC SITUATION

Figure 8: Using EU funds on Slovakia with a view to the Hungarian minority (2007-2013)

per cent in the Bratislava, Trnava and Trenčín regions. In terms of remuneration, the Bratislava region takes first place. Wages are the lowest in the Nitra, Prešov and Banská Bystrica regions. Regarding wages, there has been some development in the Trnava and Žilina regions since 2000. The analysis of Figure 6 reveals that the difference between the Bratislava district and the other regions further increase the difference between regions in terms of average wages, as in the past 16 years, the average wage has increased to 1,200 EUR in the Bratislava region but in other regions this amount is only 700-800 EUR or less. Figure 7 shows the tendencies of emigration in particular regions in the last 10 years. It can be concluded that the number of emigrants is high in each region, but the Košice and Banská Bystrica regions stand out, and the

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IN SOUTHERN DISTRICTS I will present the situation of southern districts below. Ákos Csonka wrote that the Ipoly Valley and the Börzsöny region are areas placed on the sidetracks in terms of their infrastructure. Infrastructure, gas and water networks are scant in this region. Officially, there is only one bridge over the river, which divides the two regions along 50 kilometres, thus the two regions, similar physical geographically and coherent socially, are separated. The author mentions only one honey factory in Ipeľský Sokolec, but, as the description shows, the “struggling” agriculture cannot keep young generations in the region, and investors avoid it because of the deficiencies of the infrastructure. The author calls the steps taken to improve tourism in the Börzsöny and their effect on boosting the region exemplary. In the 1990s, the southern districts were considered developed, but in 25 years their situation has changed. As it can be seen, developed regions can be found starting off from Bratislava towards Northwest, to the High Tatras, and the areas situated east of Žitný ostrov have become more underdeveloped economically. This can be contributable to the fact that the state does not manage the development of these regions, they are in a disadvantageous position when economic policies are developed. Within the European Union, it is typical of Slovakia that development aids tend to be concentrated in small areas, and specific regions, such as the Southern Slovakian ones, where the number of ethnic Hungarians is high, are forced to take a back seat. The above statements are justified by a survey conducted by the Entrepreneurs Association of Slovakia according to which southern regions are the most underdeveloped on country level, especially from east of Komárno to Medzibodrožie. It is important to note, how-

Establishing The budapest–warsaw axis

ever, that parallelly, the eastern region in Hungary is a lagging region. It is important to add to the above conclusions that the number of state investments is low in this region. It is important to highlight that the development of the infrastructure, and in this case, that of the road network would be extremely important for the development of the region, as main junctions fall outside the region, therefore transport is more difficult, major investors also avoid the region, and those who want to invest locally cannot forward their products onto larger markets.

Figure 9: Road conditions in the period between 2000 and 2016. Orange expresses the share of unfit roads and red expresses the share of dangerous ones. (The country average is 7.4 per cent.)

CURRENT SITUATION OF THE ROAD NETWORK IN SLOVAKIA The development of infrastructure, and in our case, of the road network may be a breakout opportunity, but concepts are rather one-sided, and it is important to note that they do not take place within the framework of the V4 cooperation. The road network of all four countries used to run east to west in the last 20-25 years, as generally western countries wanted to forward their goods onto the eastern market and transport their semi-finished products from east to west as soon as possible, and all investments were implemented taking these viewpoints into account. Thus, this west-east axis has been established, while northsouth connections have not or hardly developed. Crossing borders is an illustrative example: there are border crossing points at every 5 kilometres between France and Germany, but in the case of Slovenia and Hungary the distance between border crossing points is between 20 and 60 kilometres, and even between Poland and the Czech Republic, or the Czech Republic and Slovakia the average is 25 km. On road, the average speed between Budapest and Vienna is 93 km/h, between Warsaw and Berlin it is 103 km/h, but on the Warsaw-Budapest axis it is 64 km/h and between Prague and Vienna it is 52 km/h, thus the V4 countries cannot benefit from the competitiveness deriving from the speed of delivery. Furthermore, trade between the V4 countries is not optimally developed, either. That is why it was necessary to select 61 possible new border crossing points, as it is underpinned by economic interests. The Trans-European Transport Network (TEN-T) includes a core network, that is, the major routes, and additional networks. The north-south routes belong to the category of additional networks. The development of the core network receives 80-85 per cent EU funding, but the development of the additional network

Figure 10: Motorways and express roads in Slovakia today.

Figure 11: Expected system of motorways and express roads in 2020.

receives only 30 per cent. The TEN-T network must be re-designed, specific routes must be connected. After 2020, the Cohesion Fund is expected to cease to exist, therefore planning must be done in such a way that V4 countries should be connected, even by establishing a V4 Fund and co-funding. In relation to the development of transport, INEKO’s survey also highlights that level of road network development in the Southern Slovakian region, examined previously, and the region lying east of Žitný ostrov in particular, does not reach that

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of other regions. It is also a fact that there is a very high rate of Hungarian-speaking population in this region, and this trend is not likely to change in the next three years. INEKO’s analysis reveals that 40 per cent of roads in the region are in an unusable and/or dangerous condition. The construction of motorways and express roads is not taking place on the promised schedule, nor the development of railways reaches the required extent, that is, state funds are not used as efficiently as possible. Analysts claim that the maintenance of primary roads is a priority as most traffic flows on them. In southern regions, the section connecting Bratislava with Dunajská Streda, and the section connecting with Michalovce will be developed only; no road developments are planned in other regions. The fact that there is no or little funding for motorway and express road developments planned earlier should be highlighted from the analyses. In the following tables, the green colour marks investments that have state funding, and red marks the ones lacking state funding. This table reveals that apart from certain sections of D1 and D3, there is appropriate funding for D4R7 around Bratislava.

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Neither the R2 express road, the Zvolen-Košice section of which would mitigate infrastructural disadvantages in the Southern Slovakian region, nor the R3’s section between Zvolen and Šahy had funding when the table was prepared. It is important to highlight that there are no resources for R7’s Nové Zámky-Lučenec section, either. In the South Slovakian region, developments are planned – in addition to the previously mentioned ones – only around Rožňava and Košice. Road constructions alone are not enough, since Slovakia is struggling with major regional differences. They started at the time of the regime change, and have continuously become profound. Unemployment is low only in and around Bratislava, along the Váh River and in Liptov; this rate is considerably higher in all other regions. There are several analyses concluding that the construction of motorways can reduce unemployment but they are insufficient alone, and the expected positive impact is not necessarily achieved. According to analyses, if an express road and/or motorway is accessible within 30 minutes, unemployment is reduced by 0.9-1.6 per cent. Fundamentally, it is contributable to the fact that investors invest in areas with

Establishing The budapest–warsaw axis

adequately developed infrastructures, as in this case transport and storage costs significantly decrease. However, this is true for a specific distance only, as it is illustrated by the Jaguar Land Rover case; Bratislava’s leadership could not convince investors to move their investments more eastward, because the transport of parts, which originate from Germany and the United Kingdom, incurs significant costs.

would be connected into main road no. 131, Komárom’s southern bypass on the Hungarian side. It is important to note, that there is a weight limit of 22 tons on the Elisabeth Bridge, linking the two cities, Komárom and Komárno, and the nearest possibility to cross the Danube is at Vámosszabadi upriver, or over the Megyeri Bridge downriver, thus this development would extremely ease transport.

The qualifications of the workforce in a given region, and population density are further factors. The construction of a motorway section could affect areas with low population density positively, because it may set off urbanization, population density increases,

CONCLUSIONS AND RECOMMENDATIONS

which is an attractive fact for investors. Furthermore, it is qualifications that can attract investors into a region, and it takes more than building primary roads. There is a correlation between the existence of motorways and the decrease in the unemployment rate, but this is mainly true for districts with high unemployment rates. The construction of the bridge in Komárno, expected to be inaugurated in the autumn of 2019, may help to link the two countries and the two geographically similar regions. 2x1 car lane, a cycling road and a pedestrian sidewalk are planned for this 600-m-long bridge. It

As a summary of our essay, we can conclude that there are huge differences between the western and eastern regions in Slovakia, in terms of remuneration, workforce and labour shortages. The eastern regions are likely to further decline in the future. It is important to highlight that Hungary’s northern areas adjacent to the South Slovakian areas are also lagging regions. It would be also very important to develop the road network to a maximum extent. The bridge being built now over the Danube at Komárom/Komárno would make transport between the two countries considerably easier in the future, and is expected to contribute to the development of the Southern Slovakian region, and the Budapest-Warsaw transport/economic axis. But the development of local, regional enterprises is also a priority for the development of the Southern Slovakian region.

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RAIL FREIGHT TRANSPORT BETWEEN CHINA AND THE EUROPEAN UNION ON THE NEW SILK ROAD

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RAIL FREIGHT TRANSPORT BETWEEN CHINA AND THE EUROPEAN UNION ON THE NEW SILK ROAD

Author: PĂŠter Bucsky

Both China and the United States announced a new strategy to revive the economy of the region of the medieval Silk Road, part of which is the development of Eurasian transport connections. According to plans, the decrease in travel times and the expansion of relationships will make direct rail freight transport between China and the European Union become more significant. It is worth examining what has been achieved already, taking the commercial data into consideration, and in which areas of the two economies rail freight transport may play a major role.

The quality of transport connections between countries has a substantial impact on the development of the quality and quantity of trade. Travel times and costs determine which goods are competitive to be traded between the regions. Thus, all countries are interested in developing better and cheaper transport systems, improving connections between regions, and contributing to the growth of international trade. For long decades, there has been no significant innovation in rail freight transport, the speed of wagons and engines has not increased: it is generally 100-120 km/h. The tracks are appropriate for this in Europe but heavy traffic causes a growing challenge, especially congestions in the areas of cities. In China, the railway system was for a long time rather underdeveloped but a significant railway development programme was launched in

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the 1990s. The primary goal of it was to improve the quality and speed of passenger transport and to establish new railway connections. Rail freight transport also benefited from this, because highspeed trains used the new high-speed tracks and significant capacity became available for freight trains. The two important economic centres have appropriate infrastructure for rail freight transport, but the 10 thousand kilometres between them have to be travelled through countries that were members of the former Soviet Union. In this region railways have a prominent role with a share of 80 per cent in goods transport, as opposed to 10-30 per cent in developed countries. The reason for this, however, is not the rail freight transportâ&#x20AC;&#x2122;s high level of development, but the underdeveloped road infrastructure, low population density, and very

Logistics performance of countries along the Silk Road, based on the World Bank’s LPI (Logistics Performance Index) rank 2007 country Germany

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4.1

4,23

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3.13

3,67

17%

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3.32

3,66

10%

Poland

3.04

3,43

13%

Kazakhstan

2.12

133

2,75

30%

Ukraine

2.55

2,74

Russia

2.37

2,57

Mongolia

2.08

136

2,51

108

20%

Uzbekistan

2.16

129

2,4

118

11%

Belarus

2.53

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120

-5%

Turkmenistan

N/A

2,21

140

N/A

Kyrgyzstan

2.35

103

2,16

146

-8%

Tajikistan

1.93

146

2,06

153

Countries included

150

160

Source: https://lpi.worldbank.org/international/global

long distances. It is easy to see that, while China’s logistics performance reaches the level of Central Europe – where it is measured additionally to infrastructure along the performance of attached industries and services – countries in Central Asia are considered the poorest performers as far as logistics is concerned. The exception is Kazakhstan, where quality has improved a lot recently. Regarding Belarus and Russia, which are important transit countries, there are still numerous problems.

in modern logistics systems. Railways performed worse than their competitors in Europe exactly in these fields, and these services are even less developed in the former Soviet region and China – as underpinned each year by the LPI reports.

Rail freight transport can be competitive only in long distances, that is roughly over 700 km according to a rule of thumb in the European rail industry. However, it is more difficult to determine over what distance it is still worth transporting by rail rather than the slower but much cheaper ship. Another important question is how to specify those other boundary conditions that are necessary for the competitiveness of rail goods transport, because the existence of tracks is although a necessary, but not sufficient condition for that. What is more, supplementary services, such as intermodal freight transport terminals, door-to-door delivery solutions, accurate delivery time information, warehouse and distribution centres and flexible quantity and pricing solutions, gain growing importance

The railway connection between Europe and Asia was established by the Trans-Siberian Railway in 1917, which has been used in freight transport since 1936. Thus, direct railway connection between China and Europe has been available for 80 years. In the past period the biggest progress was the establishment of a new railway corridor via Kazakhstan. This route may offer a 2 thousand kilometres shorter journey between the Central and Southern Chinese regions, and between Central Asia, European Russia and Europe. As available data reveal, the trade in goods of the Trans-Siberian route was 420 thousand TEU (twenty-foot equivalent unit) in 2012, and 240 thousand on the Kazakh route. It is important to note here that the majority of this cargo did not go to Europe, but to CIS states.

THE EURASIAN LAND BRIDGE FROM AN ECONOMIC AND POLITICAL PERSPECTIVE The Kazakh connection

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Source: https://america.cgtn.com/2017/05/13/5000-china-europe-cargo-trains-expected-by-2020#

The railway connection between China and Kazakhstan was established in 1991. The railway connection between Urumqi and Alashankou was possible to establish thanks to the ease of political tension between China and the Soviet Union in the second half of the 80s. It seems there is no real possibility of establishing a shorter and faster railway connection in the short or medium term.

â&#x20AC;&#x153;The transport development plans of the New Silk Road concept support not only the Chinese export, but their goal is to export the Chinese development model as well.â&#x20AC;? Creating alternative transport connections can have not only economic but also political and security reasons. Having the shortest possible connection with the economies of the Eurasian region may serve the security of supply in China. The line

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through Kyrgyzstan and Uzbekistan enables bypassing Kazakhstan, but only by crossing the politically isolated Turkmenistan and Iran. Through these countries a new connection between China and Turkey could also be set up. An alternative route for this could be the ferries from Kazakh ports to Azerbaijan, from where trains could reach Turkey circumventing Armenia. There are several other, locally significant Asian railway development projects in progress, but their importance cannot match the importance of the Kazakh line. TRANSFORMATION OF THE CHINESE ECONOMY For reasons of the growing interest towards rail freight transport it might be worth examining the changes in the structure of the Chinese economy. Since the turn of the millennium, China has financed numerous infrastructure developments and these appeared in the New Silk Road concept in 2013. The transport development plans of the New Silk Road concept support not only the Chinese export, but their goal is to export the Chinese development model as well. Railways in this concept have a much larger significance in the direction of the Central Asian countries than to Europe, because developments in Central Asia support

RAIL FREIGHT TRANSPORT BETWEEN CHINA AND THE EUROPEAN UNION ON THE NEW SILK ROAD

Source: http://www.unescap.org/resources/trans-asian-railway-network-map

Chinese capital investments and the establishment of production units. In respect of European destinations, maritime transport will continue to be the main means, but a slight shift is expectable from the Western ports (Rotterdam, Hamburg) to the South European ports (Piraeus, Trieste, etc.) â&#x20AC;&#x201C; mainly because part of these is in Chinese hands.

Inner China can be as far as 2,000 km from the sea ports, so itâ&#x20AC;&#x2122;s much more likely to be worth transporting goods to Europe from there, or from Europe to those cities through the continent. Since 70-80 per cent of Chinese export is based on import, transport in both directions plays a significant role.

Beside Chinese international interests and roles, the transformations inside China also play an important part in the situation of the Eurasian land bridges. The goal of Chinese politics is to develop the inland territories, which has been also forced by the economic necessity, because the workforce is increasingly more expensive in the coastal cities and problems in labour supply are occurring ever-more frequently. As a result of the one-child policy, workforce growth has practically stopped by now.

Because of the increasing Chinese wages and the decreasing labour force, part of the factories must find new investment locations. An ideal area for that may be Vietnam or Bangladesh, which can be reached by ship. The second ideal location would be Central Asia, but for that the area needs infrastructural development. However, the mere 70 million population strongly limits the development possibilities in the area. At the same time, since environment protection regulations are becoming stricter in China, moving polluting and energy intensive industries to the area can be observed. For instance, a cement plant is constructed in Tajikistan. Such plants of heavy industry typically need rail freight transport. Relocation of agricultural production to neighbouring countries can also gain an important role. This typically means production of goods in large quantities that can be transported cheap via railway, which underpins the rationale behind the Chinese infrastructure investments.

Meanwhile, wages increase continuously in the Chinese coastal cities, simple mass production is moving to the inland territories. Cities in

GEOPOLITICAL GOALS AND ECONOMIC REALITY

Source: https://www.rba.gov.au/publications/bulletin/2016/jun/pdf/bu-0616-5.pdf

The majority of transport connections drawn on the map, plans and goals usually are not realised, especially if they are motivated not so much by

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Modal split of freight transport performance of EU Member States (billion tonne-kilometres)

Rail

Road

Waterways

Air

Pipelines

Share of rail %

Maritime

Source: author’s own calculation based on data of the European Commission Transport Pocketbook

Modal split of China’s freight transport performance (billion tonne-kilometres)

Road

Maritime

Rail

Pipelines

Air

Share of rail %

Inland water

Source: author’s own calculation based on data of NBS

market demand but rather political intention. Links established without economic rationality but based on political interest cannot automatically generate more trade. It is much more important to maintain the already existing tracks, shorten travel times and make traffic denser and, even more importantly, to provide service industries in appropriate quality and availability, which cannot be shown on maps. BUREAUCRATIC CHALLENGES In case of Central Asia, the questions of corruption and bureaucracy, the quality or lack of maintenance, difficult international communication are particularly important. Trains between Europe and Asia may be held up at borders waiting 4-5 days for customs and other controls during their 15-20-day journeys. This is a huge development potential with no investment necessary,

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but the area is traditionally doing very badly in the “Ease of doing business” survey of the World Bank as far as bureaucracy is concerned – except for Kazakhstan. The OECD carried out its last survey on customs controls’ average duration in 2010, and the area achieved very weak results, the average waiting time at the Uzbek-Kazakh border was 100 hours, which means 4 days. There are legal risks as well, because the European and Asian railways use different legal and insurance systems, and also different waybills. In Europe, the COTIF waybills (Convention concerning International Carriage by Rail - COTIF) are used, while in the former Soviet Union and China the SMPS/SMGS waybills. This causes problems not just because of differences in form but also because there are different legislation systems behind them that are difficult to relate. The common CIM/SMGS waybill is available since 2006,

RAIL FREIGHT TRANSPORT BETWEEN CHINA AND THE EUROPEAN UNION ON THE NEW SILK ROAD

which is a huge progress, but there are still a lot of possibilities to harmonise the bureaucratic and accounting systems of European and Asian railways.

hides the differences between the individual types of goods, for example in China the series of coal power plant closures are behind the decline of rail transport performance.

ROLE OF RAIL FREIGHT TRANSPORT

It’s worth noting that – according to the Chinese State Statistical Office – the average transport distance was 722 km in 2014, while it was 718 in 1991. Thus, the investments in railway developments of the past fifteen years and the industrialisation in the inland areas could not change these data, which shows that railway was not able to play a significant role in these changes. The above is supported by the fact that the average distance of maritime transport grew from 1554 km to 1866 km in the same period.

General trends and distribution of modes of transport The gradual loss of importance of rail freight transport can be regarded as a general trend in China and the European Union. The tonne-kilometre share of railways in freight transport in China declined from 27 per cent to 12 per cent between 1996 and 2015. In the EU, it dropped from 14 per cent to 12 per cent in the same period, so currently the share is the same. Since the growth in total transport performance was low in the EU, the decrease in the share of railways meant decrease in absolute terms as well. In China, the rail transport performance peaked in 2011, since then it has been slightly declining. Therefore, it is difficult to consider rail transport as competitive in the future. It is true though that the average

Container traffic has a key role in transport between Europe and China. Among the member states of the EU Ireland has the highest ratio with 51 per cent of the total transport, but Central European countries have only 10-13 per cent. This can be problematic from a Eurasian transport perspective, because this transport mode is not really widespread in the Central European region.

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Modal split of the European Union’s foreign trade (export+import) with countries along the Silk Road (based on value, in euros)

Source: author’s own calculation based on commercial database of the European Commission

CHINESE CONTAINER DEFICIENCIES According to the World Bank report, significant production restructuring took place from the Chinese coastal regions to the inland territories of the country. This had considerable importance in the enormous growth in the transport sector between 1998 and 2007. During these 15 years, the GDP rose by 9.7 per cent, while the tonne-kilometre transport performance grew by 10.4 per cent, which the railway could not exploit. China would be an ideal country for transport for several hundreds or thousands of kilometres, similarly to the United States. But due to lack of appropriate services and professional knowledge, transport is road-based. According to 2013 calculations, only 1.3 per cent of goods arrives by rail to Chinese ports, which reveals serious underdevelopment of rail container transport capacities. There were merely 20 significant land terminals in China, according to a 2013 study. The cause of the problem is that the Chinese government focuses mainly on passenger transport and does not deal with the development of freight transport services. There is considerable shortage of land intermodal terminals where road and rail cargo could effectively be transloaded. According to the 2016 study of the Asian Development Bank, rail container goods transport was only 2.4 per cent of total trade in tons, which is significantly less than the 20 per cent ratio in the EU and 37 per cent in the United

162

Modal split of the European Union’s foreign trade (export+import) with countries along the Silk Road (based on volume, in tonnes)

Source: author’s own calculation based on commercial database of the European Commission

States. China Railway (CR) has already founded its subsidiary specialising in intermodal transport, CR Intermodal. The company runs 18 land container terminals jointly with private investors. Boosting container traffic between Europe and China is unimaginable without the substantial expansion of this capacity. Data of the National Bureau of Statistics of China first contained container transport within rail freight transport in 2016, and they show that it represented 3 per cent of total transport in tons and 8 per cent in tonne-kilometres. Aside from construction materials, this was the only sector the performance of which decreased compared to the previous year.

The European Union’s foreign trade (export+import) with the countries along the Silk Road split by specific value (euro/tonne)

Source: author’s own calculation based on commercial database of the European Commission

RAIL FREIGHT TRANSPORT BETWEEN CHINA AND THE EUROPEAN UNION ON THE NEW SILK ROAD

Based on the industry benchmark, intermodal rail transport can be profitable over 500-700 km. Chinese data are exceptional in this respect, the average distance was 1,800 km. The Chinese railway market, although slowly, but has set out in the direction of container and combined transport, which will still require substantial development. ANALYSIS OF RAIL FREIGHT TRAFFIC BETWEEN EUROPE AND ASIA The commercial database of the European Union enables the analysis of the EU’s export and import along modes of transport in terms of both value (Euro) and quantity (ton). The proportion of railway in the trade with the countries along the Silk Road does not exceed 1-2 per cent. The Kyrgyz Republic, Mongolia and Uzbekistan are exceptions, but the reason beside low-level trade in goods might be that neither of them has coasts. Only Ukraine on the Eastern border of the EU could show high value, where road infrastructure is rather underdeveloped, while railway is of relatively good quality. This is a good illustration that even in case of such a close country, only 12 per cent of trade value is transported by rail. And this also reveals how limited the opportunities of rail freight traffic with China are. Goods transported by rail represent bigger significance in value than in weight. This supports the assumption that more valuable goods are worth transporting by rail. Transport modes are selected to goods of similar unit value when trading with the countries along the Silk Road. Thus, it is not only transport conditions that determine what means of transport is used in trade with a certain country, but it is also the type and value of those goods. It is also clear that – because of the large distances – it is viable to transport only those goods by rail to China that are more expensive than in other countries, which further narrows the opportunities for this means of transport. Therefore, when infrastructural developments are planned, it is worth considering the structure of the current trade in goods and the available potentials to understand whether the given means of transport can play a role at all.

“…it is not only transport conditions that determine what means of transport is used in trade with a certain country, but it’s also the type and value of goods.” OUTLOOK The physical conditions of rail freight transport between Europe and Asia have been available for a century. However, rail freight transport played a negligible role compared to maritime and road transport. American and Chinese geopolitical strategies foresee the appreciation of the Silk Road region, and they consider railways as an important tool to improve economic and political relations. In the past few years a growing number of analyses have been published about the revival of rail freight transport along the Silk Road. However, currently the proportion of rail transport in the trade between the European Union and China is around 1-2 per cent in both quantity and value terms. Its base value is very low and continuously loses market position in the European Union and China alike. The National Development and Reform Commission of China plans to have 5,000 container trains operating annually between Europe and China by 2020, instead of the current annual 1,500-2,000. This could be reinforced basically by economic structure changes, although Chinese estimations seem a bit optimistic. The biggest customers of Eurasian container transport are automotive and machine industries, and manufacturers of electronic devices. In the latter case, it is a significant advantage that the corrosive effect of salt water vapour, damaging sensitive devices, can be disregarded. Although saved time is important, air transport would not be profitable in case of high-value but heavy products of the machine and automotive industry. According to forecasts, these are exactly the industries that will become increasingly important in the trade between Europe and Asia.

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COMPANIES MANAGING RAIL FREIGHT SERVICES BETWEEN CHINA AND EUROPE Author: Katalin Miklós

The expansion of rail links is one of the priority infrastructure plans to improve trade relationships between China and Europe. There is a growing number of freight trains running between the eastern and western end of the Eurasian continent; below, we are introducing the companies managing them.

THE TRANSPORT COORDINATING COMMITTEE OF CHINA-EUROPE FREIGHT TRAINS The “One Belt, One Road“ initiative, announced by China’s leadership, seeks to create closer links in several different fields in the Eurasian region. One element is the development of infrastructure links, which includes, among others, the development and expansion of existing rail and road networks, and the establishment of logistics hubs, industrial parks, and other transport facilities. The initiative is a grandiose concept, which, however, lacks one single central management organisation; developments conceived in different fields fall within the competence of different and often not easily identifiable bodies. The expansion of rail links is one of the priority infrastructure plans to improve trade relations between China and Europe. The number of trains called China-Europe freight trains in Chinese and CR Express in the English translation used by the Chinese (CR stands for China Railways) has been rapidly growing in recent years, and an increasing volume of goods arrive in Europe in this way, but it is hard to see which companies organise and operate these services. In

164

May, 2017 a committee dedicated to carrying out coordination tasks, the Transport Coordinating Committee of China-Europe Freight Trains, was set up in Beijing. The establishment of the Committee was initiated by China Railway Corp., responsible for the railway strategy of the BRI, and, in addition to the China Railway Container Transport Corp., Ltd., consists of companies of seven large logistics centres: • Yuxinou (Chongqing) Logistics Co., Ltd. • Chengdu International Railway Service Co., Ltd. • Zhengzhou International Hub Development and Construction Co., Ltd. • Wuhan Hanou Logistics Co., Ltd. • Suzhou Zongbao Tongyun International Freight Forwarding Co., Ltd. • Yiwu Tianmeng (Timex) Trading Co., Ltd. • Xian International Inland Port Multimodal Transportation Co., Ltd. The goals set for 2018 suggest that the number of freight trains travelling between China and Europe is intended to be increased up to 4,000. Currently, there are considerably more trains running from China to Europe than in the other direction; the goal is that

2011 2012 2013 2014 2015 2016 2017

China-Europe Europe-China China-Europe Europe-China China-Europe Europe-China China-Europe Europe-China China-Europe Europe-China China-Europe Europe-China China-Europe Europe-China

Trains 17 0 42 0 80 0 280 28 550 265 1,130 572 2,399 1,274

TEU 1,404 0 3,674 0 6,960 0 23,804 2,266 47,132 21,770 97,400 48,394i 212,000 105,930

the number of freight trains travelling from Europe to China should reach 60 per cent of those travelling in the other direction. To this end, the coordination of services must be improved, costs must be cut and transit at border crossing points must be accelerated. They wish to develop the southern branch of the railway line to Europe, and the lines toward Lithuania, Latvia and Ukraine. The committee’s tasks include the assessment of foreign rail and transport companies, and providing Chinese companies that want to cooperate with a foreign partner with information. The safety of transport, electronic anti-theft systems along the full line and traceability are important issues. By setting up a standard container platform, a refrigerated transport chain would be provided; the containers of both China Railway and the members will be used.

lines run from China to Europe and 19 run into the other directions. Unfortunately, there is no standard information on these lines, the links between Chinese and European cities; incomplete data on the different services can be collected from the homepages of railway companies and news items on the “One Belt, One Road” initiative.

Priority tasks include the development of digitalisation, setting up an information platform, and the development of information exchange between the railway companies, customs authorities and transport companies of participating countries.

Yuxinou (Chongqing) Logistics Co., Ltd. is a pioneer of rail freight transport between China and Europe. The name of the company has been coined by combining the former name of Chongqing (Yu), the first syllable of the name of the Uyghur Autonomous Region (Xin) and the first syllable of Europe’s Chinese name (Ou). We can encounter such Chinese names of various lines in other services, too; they are used as brand names and appear on containers and packaging.

The statistics published on the homepage of the China Railway Container Transport Corp. reveal that the number of freight trains travelling between China and Europe, and Europe and China changed in the period 2011-2017 as shown by the data of the table. The information of the China Railway Container Transport Corp. reveals that currently 43 Chinese cities are linked with 42 cities in 14 European countries by the freight trains running between China and Europe. Since 2nd April, 2018, freight trains have been travelling on 65 designated routes, 46 of these

YUXINOU (CHONGQING) LOGISTICS CO., LTD. Situated in Sichuan province in southwest China, Chongqing has been the one of the first Chinese cities to establish rail freight connections with Europe: the service was mainly used by automobile factories and electronics manufacturers to manage logistics between business premises located on two different continents.

Yuxinou (Chongqing) Logistics Co., Ltd was established on 11th April, 2012 by five related companies. Its members include DB Schenker China Ltd., China Railway International Multimodal Transport Co., Ltd., the Transport Holding of Chongqing, Kaztransservice (the container fleet operator of the Kazakhstan Railways) and RZD Logistics (the logistics operator of Russian Railways). The management of the company

165

2013 2014 2015 2016 2017

China-Europe Europe-China China-Europe Europe-China China-Europe Europe-China China-Europe Europe-China China-Europe Europe-China

includes a European member, too; its President is Thomas Lindy Sørensen, CEO of DB Schenker North/ Central China. DB Schenker offered tailor-made rail logistics services to manage freight transport between China and Europe already in 2013. It operated regular block trains from Chongqing to Duisburg for a leading electronics manufacturer, its regular train service from Leipzig to Shenyang was used by a prestigious car manufacturer, another one from Qingdao to Moscow was used by a European component manufacturer, and it also transported cosmetics from China to Kazakhstan. As a pioneer of China-Europe rail trade, Yuxinou launched a pilot service to Moscow in 2011, and transported components from Europe for the Changan Ford automobile factory in 2013. By the end of 2017, 1,500 runs had been made. In 2016, 420 runs were made, 278 of them travelled from China to the west, and 142 were inbound. The cargo mix transported to the west mainly included IT articles, machinery and equipment, automobiles and parts, and coffee beans, whereas mainly automobiles and parts, machinery and equipment, cosmetics, beer and milk powder were imported from Europe. The main route is the Chongqing – Duisburg line, which enters the territory of European Union via the Brest-Małaszewicze border crossing point. The average running time is 13 to 15 days; this line provides connection with several further countries, such as the Czech Republic, Ukraine, Lithuania, Latvia, the Netherlands, Belgium, France, Italy, Switzerland, Hungary, etc. Another route links China with five Central Asian countries and Russia via Dostyk and Almaty.

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Trains 31 0 45 0 72 31 291 169 541 324

Total 31 45 103 460 865

CHENGDU INTERNATIONAL RAILWAY SERVICE CO., LTD. The Chengdu International Railway Service Co., Ltd. was founded on 28th March, 2018. Its members include the Chengdu Rongou Investment and Development Co., Ltd. and the Chengdu Sinorailway South-West International Logistics Co., Ltd. The Chengdu Rongou Investment and Development Co. is a spearhead of the “One Belt, One Road” initiative; it is a subsidiary of the Chengdu Industrial Investment Company, which has a subscribed capital of 600 million yuan. The number of services launched from Chengdu in the period of 2013-2017 can be seen in the table. Additionally, they also have an extensive logistics network domestically, trains are operated together with 11 cities, including Shenzhen and Ningbo.

Trains leaving from Chengdu are called Rongou trains – a combination of Chengdu’s former name and the first syllable of Europe’s Chinese name. Main routes are as follows: Chengdu – Łódź, Chengdu – Tilburg, Chengdu – Nurnberg, Chengdu – Moscow, Chengdu – Vienna, Bratsk – Chengdu, Lesosibirsk – Chengdu, Chengdu – Alashankou, Chengdu – Khorgos. Routes are divided into three groups: the middle line is the Chengdu – Łódź service, which stretches farther toward Kutno, Nurnberg, Tilburg, Prague, and other European cities. The southern line runs from Chengdu

COMPANIES MANAGING RAIL FREIGHT SERVICES BETWEEN CHINA AND EUROPE

to Istanbul, covering areas in Central and Western Asia as well as Southern Europe. The northern line goes to Moscow, and introduces CIS countries and Eastern Europe into the rail bloodstream. In addition, the first Milan – Chengdu service was launched on 28th November, 2017, carrying machinery, quality furniture and tiles to China. The company has a customs terminal suitable for receiving meat imported from Europe, with a reefer terminal and a cold storage depot of a capacity of 3,000 tons. It transports colour television parts for TCL from Chengdu to the assembly plant in Poland. ZHENGZHOU INTERNATIONAL HUB DEVELOPMENT AND CONSTRUCTION CO., LTD. Zhengzhou is one of the centres of the New Silk Road. Since it is situated at the intersection point of the north-south and east-west railway lines, it is an ideal logistics and warehousing hub. Zhengzhou International Hub Development and Construction Co., Ltd. was established on 26th June, 2013. The collective name of services from Zhengzhou, like in other cities, is Zhengou freight trains. The main railway link to Europe is the Zhengzhou – Hamburg service, which reaches its destination via Alashankou or Erenhot, taking 10,214 and 10,484 kilometres respectively. Another important line links Zhengzhou with Munich, again, via Alashankou or Erenhot; the distance here is 10,650 and 10,920 kilometres. The average running time is 15 days, which is 22-27 days shorter than ocean shipping time, and cost is 20-80 per cent cheaper than air freight, depending on weight. Since 18th July, 2013, when the first service was launched, a total of 1,187 freight trains have carried goods between China and Europe (683 outbound and 504 inbound ones), with a total value of US$ 6,277 billion and a total weight 605,000 tons. The warehousing hub in Zhengzhou receive shipments from the Yellow River and the Pearl River Delta, the Bohai Bay and the north-eastern industrial region – that is, three quarters of Chinese provinces. Korea, Japan and Taiwan are easily accessible by sea. It is connected to 121 cities of 24 countries abroad and cooperates with 780 foreign companies. Zhengzhou International Hub Development and Construction Co., Ltd. maintains relationships with some 50 European, Russian, Central and East Asian logistics companies, and Polish, Kazakh, and Belarus railway companies. Negotiations have begun with railways in Turkey, Luxemburg, Bulgaria and Lithuania

on establishing a shared centre of collection, the development of the southern European line, the construction of logistics hubs, etc. The company has developed a customs clearance platform for online trading companies, and operates its own online trading site named Banliego. In addition to online trading, they are present also “offline” in many supermarkets with their own display stores, and imported goods can be looked at in a central display room in the Zhengzhou development area. WUHAN HANOU LOGISTICS CO., LTD. Wuhan Hanou Logistics Co., Ltd. was founded on 25th March, 2014. Europe-bound trains leave China either at Alashankou (Hanxinou trains) or Manzhouli (Hanmanou trains), reaching Europe within 14-17 days on average. Trains leaving from here reach 60 cities in 28 countries. Transported goods tend to be aircraft, automobile and bicycle parts, machinery components, electronics, textiles and chemicals, food, etc.

A rail freight service between Wuhan and Europe was launched in 2014, with only 23 trains. This figure increased to 92 in 2015 and 122 in 2016; in addition to this westward direction, trains are operated returning from Europe, importing timber from Russia, dairy products from Belarus, wine from France, automobile parts, and meat products from Germany to China. Railway lines running across Wuhan link the Southeast Asian region with Russia and Central Asian countries. SUZHOU ZONGBAO TONGYUN INTERNATIONAL FREIGHT FORWARDING CO., LTD. Suzhou Zongbao Tongyun International Freight Forwarding Co., Ltd. was established on 2nd April, 2011; it is a subsidiary of Suzhou Gaoxin Free Zone and Logistics Co., Ltd. Trains running from Suzhou to Europe cross the Chinese border at Manzhouli (Sumanou trains),

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and several train services are operated in cooperation with Russian Railways. The main route that leaves from here is the Suzhou – Warsaw line; the journey of 11,800 kilometres takes 14 days on average. In five years, 346 trains ran between Suzhou and Europe, carrying goods of a total value of US$2.98 billion. In the first ten months of 2017, 104 trains were running along the line, carrying goods worth US$925 million. 45 of the trains ran from Europe to China, the value of such imported goods amounted to US$162 million. Through Suzhou’s Taicang port, Japan and Southeast Asia can be linked to the Eurasian railway network, and the multimodal logistics hub smoothly forwards shipments arriving by sea. YIWU TIANMENG (TIMEX) TRADING CO., LTD. Yiwu Tianmeng (Timex) Trading Co., Ltd., founded on 28th February, 2012, is the operator of Yixinou trains leaving from Yiwu. The company has several agencies abroad, in Madrid, Duisburg, London and Paris. The main route is the Yiwu – Madrid line, which was launched in 2014, and reaches the Spanish capital via Małaszewicze and Duisburg. Apart from Madrid, freight trains leave from Yiwu for London, Tehran, Chelyabinsk, Minsk, Riga, Prague and Mazar-i-Sharif. In addition to eastward traffic, trains run on their way back, too: the western and eastern ends of the Eurasian continent have been linked by the Madrid – Yiwu service since 2015 and the Prague – Yiwu and London – Yiwu services since 2017. XI’AN INTERNATIONAL INLAND PORT MULTIMODAL TRANSPORTATION CO., LTD. Established on 11th October, 2016, Xi’an International Inland Port Multimodal Transportation Co., Ltd. is the operator of international freight trains leaving from Xi’an (Changanhao trains).

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The main Europe-bound routes run from Xi’an to Hamburg, Budapest and Kouvola. The Xian – Hamburg line is 9,547 kilometres long, the journey takes 16-18 days, and the train reaches the German port city via Alashankou, Iletsk in Kazakhstan, Brest and Małaszewicze. The Xian – Budapest line is 8,767 kilometres long and reaches Hungary via Iletsk, Kazakhstan, Suzemka, Russia and Chop, Ukraine in 13-15 days. The Xian – Kouvola line is 9,110 kilometres long, the journey takes 13-15 days and arrives in the Finnish capital via Kazakhstan and Buslowskaya, Russia. At the end of 2017, a return train service left from the Finnish city, carrying timber, machinery, work clothing and ship components to China. The service was organised by Kazakhstan’s KTZ Express along with Xi’an International Trade & Logistics Park and Kouvola Innovation Ltd. OTHER COMPANIES COORDINATING RAIL FREIGHT SERVICES One of the major difficulties of mapping the rail infrastructure development unfolding within the framework of the “One Belt, One Road” initiative is the lack of comprehensive information on projects. In addition to the companies and routes detailed above, there are several other links; from a Hungarian perspective, the Changsha-Budapest-Changsha service is significant. It is operated by Xiangou Express Logistics Co., Ltd., and apart from Budapest, there are services to Duisburg, Hamburg, Moscow and Minsk as well. Freight trains running from Changsha to Budapest and vice versa are coordinated by a Chinese-Hungarian trading company and a related Hungarian logistics company. Transport capacity is booked in China, the trains reach Hungary via Kazakhstan, Russia, Ukraine and Dobra, Slovakia. On the Kazakh-Chinese border, where gauges are switched, the most critical factor is not the speed of transshipment, but the availability

COMPANIES MANAGING RAIL FREIGHT SERVICES BETWEEN CHINA AND EUROPE

of wagons. They are ordered from Russian TransContainer. In addition to the Hungarian example, there are several news items about further Chinese and foreign logistics companies transporting goods from China to Europe on the new railway Silk Road. Automobiles and automobile parts account for a significant part, some 15 per cent, of the cargo â&#x20AC;&#x201C; Volvo, for example, moves S90 vehicles made at its plant in Daqing, China, to Zeebrugge, Belgium. The service is managed by Beijing Changjiu Logistics and HAO International Logistics. But automobiles and parts are transported between China and Europe also by APL Logistics and Russian Railways-owned Gefco; and these are just some examples. The number of routes is increasing rapidly, too. The Eurasian rail bridge links China as well as surrounding countries to Europe. Japanese Nippon Express logistics company has launched a new service recently: it provides transport through maritime or air transport from nine Japanese cities to Chinese railway hubs, where cargo hits the rails to Europe. The products of the Japanese company arrive by sea in Dalian and

by air in Chongqing, and in both cases the European destination is Duisburg. CONCLUSION On the basis of the information above, it can be concluded that rail freight services between China and Europe form a complex, intricate, extremely dynamically expanding, multi-stakeholder network. China Railway, the Chinese companies comprising the Transport Coordinating Committee of China-Europe Freight Trains, the Russian and the Kazakh railways all take part in operating the trains, and transport is coordinated through countless logistics companies. However, there are opportunities for not only Chinese but also foreign companies to enhance their trade relations, as these trains run in both directions. The quality of service is continuously improving, temperature-controlled transport chains, tailor-made solutions, door-to-door transport and end-to-end monitoring are available for customers. As in previous years, rail links are expected to be further expanded; they will be worth exploring and analysing at a later stage.

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THE NEW SILK ROAD AND THE ANCIENT EURASIAN CIVILISATION Author: Dr. Atilla Grandpierre

After the ancient-medieval Silk Road, more and more details Road have been revealed about the existence of the prehistoric, 40,000-year old Silk Road, which was the main artery of a surprisingly consistent and surprisingly high-level culture. The prehistoric Silk Road was created by the ancient Eurasian high culture, which had preceded the Mesopotamian civilisation, and the exploration of which can provide considerable help to build an ecological civilisation. Our article brings the most important element of the ancient Eurasian culture, its scientific world view closer to the readers, to facilitate the building of the New Silk Road, the One Belt, One Road and to highlight its uplifting, historic significance.

40,000-YEAR LONG HISTORY OF THE PREHISTORIC SILK ROAD In the region of the later Silk Road connecting the Atlantic Ocean with the Pacific Ocean, the whole and the sites of occurrence of the depictions (e.g. cave paintings, Venus figurines) remained from the Upper Palaeolithic display remarkable uniformity. Scientists have drawn the conclusion that religion and cosmology in this vast Eurasian region has been basically unchanged, consistent and continuous for over the past 20,000 years. Most researchers now refuse the long assumed â&#x20AC;&#x153;primitiveâ&#x20AC;? thinking of prehistoric man, and instead acknowledge that in the Upper Palaeolithic man followed patterns of thinking similar to the ones today. In the Upper Palaeolithic, the religious experience of mankind formed a whole with the knowledge acquired about the Cosmos, there was no difference between science and religion, both were determined by a harmonious, cosmic world view. In the Cosmos-based Eurasian culture cosmology, philosophy, religion and mythology were basically coherent until the 1st millennium BC, the emergence

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of Western civilisation. From the Carpathian Basin to Central Asia and the Pacific Ocean, folk tale researchers talk about a coherent Eurasian folk tale continent. The still exiting shamanistic-cosmological roots of the Hungarian and Chinese folk music stem from the view that music is a part of Nature, and is closely integrated to cosmology. With state-of-the-art mathematical methods, ethnomusicologists have established that the ancient layer of pentatonic folk music must have had the same level of development at least 12,000 years ago. As historian of religion J. Bruce Long said, the ancient Eurasian high culture was the one that developed the notion of cosmic law, which meant the principle designating the arrangement of the things of the Universe, their most general nature. In human behaviour, this notion was used to denote reality, truth, law or human right and justice â&#x20AC;&#x201C; and in an extended form, the whole range of social and ethical norms on which society is built. The principle of popular sovereignty, known in the ancient Hungarian legal system, as well as the idea of the Mandate of Heaven in ancient China both stem from this idea of the ethical world order. Clothing also dates back at

least 30,000 years in this whole region. We seem to have all the reasons to talk about an ancient Eurasian high culture in this region which is today still unknown to the public awareness. In his book Silk Road Encyclopaedia, Jeong Su-Il, a prominent South-Korean expert of the Silk Road, has established that a prehistoric Silk Road connecting Europe with East Asia along the temperate zone, stretching from the Atlantic Ocean to the Pacific Ocean, along which, for example, the famous Venus figurines can be found, existed as early as the Upper Palaeolithic. The oldest Venus figurine from around 40,000 BC was found in Central Europe, around the headwaters of the Danube, near Hohle Fels. In the vast zone ranging from Western Europe to Anatolia and the Pacific Ocean, more than 250 highly elaborate, in many respects similar Venus figurines have been found, the similarity of which indicates the existence of a high-level, coherent culture. Many of the Venus figurines are of religious nature, others exhibit the clothing and hairstyle of the age, researchers have found. It remains a mystery, but these Venus figurines displayed extraordinary uniformity and consistency for tens of thousands of years. The prehistoric Silk Road was not only a trade route, but the global circuit of a coherent ancient civilisation and culture, notes the Silk Road Encyclopaedia in the Steppe Road entry. The age of the prehistoric Silk Road dates to 40,000 BC, on the basis of the age assessment of the Venus figurines. As the beginnings of the historical Silk Road are marked by the rise of the Han Dynasty around 207 BC, the prehistoric Silk Road embraces an unusually long time span of 40,000 years. This means that a highly developed civilisation had existed before the first civilisations known today â&#x20AC;&#x201C; the Mesopotamian, the Chinese, the Indian and the Egyptian. Exploring this ancient civilisation is of historic significance. Here, we primarily aim at highlighting the world view of this ancient culture, because it has the greatest significance to building an ecological civilisation. We thoroughly examined the Eurasian ancient culture in the Silk Road region based on four natural sciences: physical geography, anthropology, genetics, archaeology, and six humanities: folktale research, ethnomusicology, linguistics, history of religion, ethnology and the study of national

identity in a separate book. Hereby we present the most important facts on the basis of which the ancient Eurasian civilisation can unfold in its own context and all its glory. The world view of the prehistoric Silk Road, as set out below, was more profound and more complete than the modern one. It indicates the fact that exploring the world view of the ancient Eurasian culture is vital for the progress of civilisation. THE PREHISTORIC SILK ROAD AND THE IDEA OF POPULAR SOVEREIGNTY As it is written by historian of religion, Mircea Eliade, life in ancient Eurasia had a sacred nature. The most formative experience of man living in harmony with life and Nature was the sacred experience of cosmic order. The faith that the entire Universe was built and governed on the basis of natural and ethical order enabled human beings to resolve their intellectual, moral and spiritual life crises individually and collectively. A substantial feature of the sacred ethical world order is the idea of popular sovereignty that lies outside the perceptual boundaries of profane modern civilisation. The idea of popular sovereignty means that the people, as an integral whole, is destined to govern its own life, on a basis which is in line with the ethical order posed by the

sacred, that is eternal, cosmic world order. All the indications are that the idea of the sacred kingdom was present in ancient Eurasia in the Upper Palaeolithic, since an adult man of the collection of finds discovered in Sungir and dating to 26,000 BC was wearing a headpiece strung from 2,936 mammoth pearls, resembling to a crown with cross straps. Next to it, a 2.4 meter-long, straightened mammoth

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tusk weighing 20 kg and decorated with a sun-disk at head-level can be found, which was identified as a royal sceptre by researchers. Archaeologists have established that burials in Sungir took place within sacral ceremonies. The idea of the sacred kingdom is known in the ancient Hungarian legal system, Mesopotamia, China and India. In the Xia Dynasty of the 3rd millennium BC, the king was empowered by the Mandate of Heaven (“t’ien-ming”).

“We can call the religion of the prehistoric Silk Road the religion of the magi, a religion or philosophy of wisdom deriving from the knowledge of the cosmic world order or wisdom-worship in lieu of the 19th-century term of »shamanism«”. THE PREHISTORIC SILK ROAD AND THE EURASIAN TALE CONTINENT Other characteristics of the coherent Eurasian high culture also indicate its existence. Folk tale research earlier found that there had been three distinctly different tale continents in the distribution of Eurasian folk tales. The Eurasian tale continent is the tale region lying along the prehistoric Silk Road, from the Carpathian Basin to Central Asia and more eastward, including Hungarian, Turkish, Chinese, Saka, and Central-Asian folk tales. In the Hungarian tale corpora, István Vámos explores a complete theme, which depicts the cosmic, magical world of existence, and this is almost the same in the historic corpora of Eurasian peoples. The primary region, where the most important element of Hungarian folk tales, the tree that reaches the sky, the World Tree occurs most frequently and has the richest system of symbols, is the region stretching from the Carpathian Basin to India and East Asia. What makes the World Tree a World Tree is that it reaches the sky, that is, the planets, the

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stars. The Sun and the Moon, however, can be found among the branches of the World Tree only in the tale thesaurus of the Hungarian, the Uralic, the Altaic, and ancient Asian peoples. In the world of Hungarian folk tales, it is the cosmo-magical life-force that, as a natural force, “makes the waters of springs flow and the plants of the Earth grow, blows winds into the clouds and assigns the orbits of the Sun, the Moon and the stars”. The Sun, the Moon and the stars are also empowered and given splendour by this magical life-force. This cosmic, magical life-force fills the whole space. The World Tree itself is the embodiment of this cosmic life-force, as it literally a cosmic being, a World Tree, as it is inherent in its very name. The major elements of Hungarian folk tales – the World Tree, the griffin, the dragon and the stag – are major symbols of Scythian art. Griffins appear in five hierarchical roles in the mythology of the peoples of the Steppe. These include the role of God, the ancestor of the nation, the sacred king, the magus, and the sacred king as the magus. The dragon of the Hungarian folk tale type “Son of the White Mare” (Fehérlófia), as its behaviour demonstrates, is different in its every feature from Western European dragons. While in the Western European tale thesaurus the dragon is an evil, beastly monster, in Hungarian tales it has many human characteristics: it lives in a castle together with an earthly woman whom it took, its weapons include a mace and a sword, the hero has a fight with it and defeats it while wrestling, and it is not unusual that it also has some positive characteristics. The World Tree is often guarded by a dragon. It is a dehumanised monster because it has several (6, 9, 12) heads, a huge form and dreadful strength. The Scythian dragon has only one head, just like in Chinese folk tales, in which the dragon is benign. In China, the name of the dragon means: a creature with an excellent wit, which is also the inventor of writing and sciences. With regard to the fact that the old folk tale motives of the tale continent of the Steppe were elements from the ancient religion, there must have been a coherent ancient religion behind the coherent tale continent of the Steppe. THE CULTURE OF THE PREHISTORIC SILK ROAD AND THE EURASIAN ANCIENT RELIGION The religion of the region of the prehistoric Silk Road is named by the terms “animism” or “shamanism”. Both words are newly coined. It would be more

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correct to use the name of the time instead. In ancient Central-Asia, from where the people of Arpad moved back to the Carpathian Basin in the 8th century, one of the names of the ancient religion was mazdaism (Mazda = wisdom, mazdaism = wisdom-worship), and another name was the religion of the magi. The word ‘magus’ in ancient times primarily meant ‘wise’. What is knowledge in the modern perspective, was wisdom in the perspective of the ancient Eurasian culture. Wisdom is substantially more than knowledge, because, in addition to knowledge, it also included using knowledge in a right way, in line with the ethical world order. The further meanings of the word ‘magus’ in ancient times include proficient in the secrets of Nature, an astronomer, a statesman, a teacher, a healer, a seer having divine knowledge, a priest, a sorcerer, a philosopher. Magi are philosophers as well, since philo = a friend/love of, sophia = wisdom, philo-sophia = a friend/love of wisdom; and wise people obviously love wisdom, and even cultivate it, apply it, adapt it to life. Thus, philosophy did not start with the Greeks; the ancient Eurasian high culture had sacredly worshipped wisdom. The entry ‘Magus’ in Oxford English Dictionary says, “Magi were a pre-Semitic and pre-Arian [i.e. more ancient than Semitic or Arian peoples – AG] priestly caste in West Asia”. As the origins of the Semitic and Arian languages date back to more than 5,000 years, Magi have an even more ancient history. Eurasian Magi were “indubitably Mankind's most ancient teaching nation. The Magi worked without partiality and prejudice". We can call the religion of the prehistoric Silk Road the religion of the Magi, a religion or philosophy of wisdom deriving from the knowledge of the cosmic world order or wisdom-worship in lieu of the 19th-century term of “shamanism”.” The characteristic features of the Magi, different from the ones of shamans, are well characterised by notes from the Antiquity, according to which Dicinius, the Transylvanian for example, “almost educated the Goths in the entire philosophy and taught them physics, astronomy and logic”, as historian Iordanes noted in 6th century AD. The Magi also had a prominent role among Scythians ruling the Eurasian region in the millennia BC. Around 7th century BC, Scythian seers, magic healers, religious teachers swarmed out from the North to Antique Greeks. The teachers of Plato, Democritus, Pythagoras,

“availing themselves of the principles of music, exhibit a most perfect symphony as existing in the universe by the common union and sympathy of the parts for another” Empedocles and Protagoras were all Magi. Magi prepared Persian princes in Antique Central Asia for kingship, justice, bravery and independency. The Persians can thank the Magi for their political and civil institutions too, historian of religion Gherardo Gnoli noted. “Magi lay down the basic laws of jurisprudence. They state that they are the discoverers of geometry, astronomy and arithmetic”, wrote Diogenes Laertius (200 AD). Magi represented the ethical world order in the legal order of society. Dio Chrysostomus (cca. 40-112 AD) said, “Magi are people worthiest of truth.” On the basis of archaeological and linguistic evidence, Victor H. Mair also proved that the old-Chinese word meaning “myag, magus, scholar of science, philosopher” is not of Chinese but Ventral Asian origin. In China, the teachings of the Magi were important primarily in the religious life of the ancient royal court. Chinese Universalism, Confucianism, Taoism were built upon the teachings of the Magi, preserving the cultural continuity dating back to the ancient past. We must add that in the Antiquity, philosophy also encompassed natural sciences. According to Clement of Alexandria, philosophy was regarded to be the most useful activity in the world by the peoples before the ancient Greeks. Actually, the entire ancient culture was based on one single uniform, comprehensive world view, which included religion, the ideas of governing society and even craftsmanship. In his notes, Alexandria Philo writes about Mesopotamian Magi, “The Chaldeans appear beyond all other men to have devoted themselves to the study of astronomy and of genealogies; (…) availing themselves of the principles of music, exhibit a most perfect symphony as existing in the universe by the common union and

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sympathy of the parts for another, which through separated as to place, are not disunited in regard of kindred. These men, then, imagined this world which we behold was the only world of the existing universe, and was either God himself, or else that it contained within itself God, that is, the soul of the universe.” The Hungarian ancient religion is negligently identified with shamanism. However, it is a fact that the priests of the Hungarian ancient religion were called magi and not shamans. The Byzantine and Western missionaries visiting the Hungarians of the Arpad era, cherishing the Hungarian ancient religion, called the priests of the Hungarian religion “Magi”, excellent ethnographer Tekla Dömötör writes in the entry” Hungarian religion” of Encyclopaedia Britannica. The Vienna Chronicle (nowadays more widely-known as the Illustrated Chronicle,), originating from the 14th century, mentions the Magi by the name “Magos”. Magi played a central role in the ancient history of Hungarians and Central Asian peo-

“Most remarkably, three cosmic basic principles constitute the ultimate essence of the Universe in the ancient Eurasian culture.” ples, but also in ancient China and India. In his study published in 1990, Victor H. Mair, Professor of the Chinese language and literature at the University of Pennsylvania, demonstrated the difference between shamans and magi on the basis of archaeological finds. According to Mihály Hoppál’s summary, a shaman is the spiritual leader of a clan, a sacrificer, a spirit guide, a seer, a healer (or wise-man), poet and bard (minstrel), and also the protagonist of the drama of shamanisation in one person; perhaps its most characteristic feature is the passage in a modified state of consciousness, in which the shaman takes part in initiation rites and healing. By contrast, in China the ancient magus called ’myag’ (pronounced as mag, the sound 'm' is to be pronounced more softly) belongs to the court of monarchs, holds a state office of high rank, is a counsellor to the king,

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a seer having divine knowledge, and, as a responsible officer, is competent in astronomy, prayers and healing. In other words: the magus is an officer playing a key role in state organisation, a member of the royal council, astronomer, priest, physician, seer, that is, in one word, wise. Mair proved that the Magi had a history of at least 7,000 years. And this is fully in line with the findings of de Groot, “In very ancient times, or even before the dawn of the Chinese religion, the organized religion of the Magi may have had a priesthood in the region of later China.” THE SCIENTIFIC KNOWLEDGE OF THE EURASIAN ANCIENT CULTURE ON 0 THE UNIVERSE AND THE COSMIC ONE-TRINITY One of the main characteristics of the scientific knowledge of the ancient Eurasian culture is their familiarity with the first principles of the Universe. It is known that the first ancient Greek scholar, Thales was investigating the basic principles (‘archḗ’ in Greek), that is, he was aware of the existence of cosmic basic principles. He did not seem to know, however, what the basic principles of the Universe were. By contrast, it was known in the ancient Eurasian culture from the Carpathian Basin to China that the most profound basic principle of the Universe is the life principle. Considering life as a cosmic basic principle has been preserved by the idea of the Chinese “qi” and Indian “prana”. “All Chinese traditions converge on one essential point: they all hold that the Universe represents an all-comprehensive Urge of Life, an all-pervading Vital Impetus, that never for a single instant ceases to create and procreate and never in a single place ceases to overflow and interpenetrate”, Chinese philosopher, Thomé H. Fang

“Body, soul and mind form one unit both in man and the cosmic world, the Universe.” wrote. In Chinese philosophy, “qi” is the ethereal substance of which everything is composed. According to a tradition preserved in China, the cosmic law is the basis for wisdom. The oldest part of the Shujing (I, 4) reads, “There is the most intimate relationship between the Heavens up and the men down, and who

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recognises this in its entirety is really sage.” Although qi is the most fundamental principle of the Universe, it is not the only one. Most remarkably, three cosmic basic principles constitute the ultimate essence of the Universe in the ancient Eurasian culture. In China, the three treasures, jing, qi and shen, that is, matter, life force and spirit, form one unit. In India, three gunas consist of sattva, rajas, and tamas, that is, matter, life and spirit. Body, soul and mind form one unit both in man and the cosmic world, the Universe. In order to understand the essence of the Eurasian culture, we must have a better knowledge of these cosmic basic principles. The cosmic basic principle is an extremely deeply-rooted notion. In its ancient meaning, it is a principle, archḗ in ancient Greek, from which the visible Universe originates, and governs the entire Universe. In ancient Mesopotamia, it is the coherence of the cosmic first principle of One-three, writes Francois Lenormant in his book Chaldean Magic. Basic principle is a more profound notion than the notion of laws of nature, as laws of nature derive from these basic principles – or in other words, first principles. While the number of the laws of nature is rather high, and not exactly known, the number of more profound basic principles, the first principles is known to be three in the ancient world. Three cosmic basic principles, that of matter, life and mind govern the entire Universe, and these three cosmic basic principles form a single unit: the One-trinity. The knowledge of these cosmic basic principles represents the most effective means of science. The basic principles are extremely profound spiritually, probing the human mind, because they are such condensations of reality that encompass the whole world, all the basic laws of nature, and the countlessly endless detectable phenomena in a nutshell. We emphasise that the knowledge of the life principle as a cosmic principle is extremely profound, and means the understanding of the entire modern civilisation beyond the spiritual horizon. “In traditional, ancient societies, it is the life principle that governs the dynamics of individual life”, historian of religion Claude Riviere wrote. The cosmic life principle connects human life with the Cosmos and the ethical world order denoting the respect for life the highest cosmic value. This ancient knowledge about cosmic principles has been justified owing to the four hundred

The Szekler-Hungarian flag of the One with the double cross in the Pentecost pilgrimage from Șumuleu Ciuc year-development of modern science in the field of the material world. The greatest achievement of modern physics is the recognition that all basic principles can be deducted from one single principle – in addition, in the most elegant manner – from the principle of least effect. From this basic principle of the inanimate world, all basic equations of classical physics, relativity theory and quantum physics can be deducted with the help of exact mathematics. It has been proven that the entire material world is in fact governed by this one single cosmic basic principle. The basic principle of physics, however, governs only the inanimate, material world. However important the knowledge of the material basic principle is, physics is the science of lifeless matter, important only for technical-technological development. For our life and our future, a detailed and reliable knowledge of the life principle is even more important, because, if it proves to be correct, we can build our life and our future on the basis of the life principle to be in line with the real essence of our life. We believe that an at least as exact knowledge of the life principle as that of the principle of matter in physics is even more important for mankind and science. Western civilisation is fundamentally focussing on the material development of engineering and technology and on material power. We think that this materialistic view is the most fundamental cause of the ecological crisis threatening the world today. For harmonising civilisation with life and common sense interpenetrating the whole Nature, the scientific development of the life principle expressed in an exact, mathematical form may have

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ever more profound and comprehensive laws. When scientific knowledge gets to cosmic basic principles and recognises that those three cosmic principles constitute one single unit, the One, there is nowhere to go to, because this One is the Universe itself, the integrated whole of all beings, thus there are no other beings outside of it. The idea of the ONE also implies the essence of the ancient sacred world order, the One-trinity.

The double cross is in a remarkable substantial relationship with the World Tree in ancient Scythian symbols crucial importance. In this light, we must mention that it is available owing to the works of Ervin Bauer. The life principle formulated in Ervin Bauer’s exact theoretical biology is identifiable with the life principle known in the ancient Eurasian civilisation due to all its substantial features, its cosmic nature and due to the capability of life, being uplifting and sensible, to create harmony in the entire Universe. This fact indicates that the ancient Eurasian civilisation spiritually surpassed the horizons and the depth of the cognitive skills of modern Western civilisation. THE ONE-TRINITY OF COSMIC BASIC PRINCIPLES IN ANCIENT TIMES Scientific knowledge proceeds from the phenomena perceived by external sensory organs towards

The double cross in the bottom left corner in the 7,000-year-old Tărtăria tablet

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due to its relationship with the One-trinity, we cannot disregard the fact that the symbol of the sound GY in the Hungarian word EGY (ONE) consists of three lines, and not just one in the ancient Hungarian Runic script. This symbol is not only a symbol of the Hungarian Runic script, but also one of the most important symbols of the Hungarian ancient religion, forming a double cross: ╪. This double cross has been one of the most important national symbols from prehistoric times (picture: flag of the ONE). Beyond doubt, there must have been a good reason why we form the symbol of ONE, from which the Hungarian word egyház (‘church’) stems from, with three lines and not one. It seems almost inevitable that the symbol of ONE should constitute of one symbol only. Still, the universal, cosmic ONE is represented by not one but three symbols in the Hungarian Runic script. According to historian of religion Arnold Ipolyi, the One was the forebear, the ancestor of the concept of God in ancient Hungarian mythology. There must have been a good, or even sacred reason why such religious notion of central importance was depicted by three lines and not by one. When “three” means “ONE”, it is about the unity of trinity, the One-trinity. The philosophical system of ancient Hungarian mythology was centred around this cosmic One-trinity. The idea of the World Tree, the Tree of Life and the Tree of Knowledge were all closely related to this idea of One-trinity. It may be related to the fact that the cosmic One-trinity is the unity of the visible world, cosmic life and comic sense. The World Tree is a central motive of the structure of the Scythian cosmos. The fact that the symbols of the World Tree, the Tree of life and the Tree of knowledge closely intertwined in the region of the Eurasian high culture in the millennia BC indicates the idea of the unity of life, the Universe and common sense. Archaeological finds suggest that there

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was evidence for the symbol of the World Tree in the Carpathian Basin as early as the 7th millennium BC. Researchers claim that the magical-religious symbol of the double cross depicted on tablets found near TurdaČ&#x2122;, Transylvania, originating from 7th millennium BC is connected to the characters of the Mesopotamian civilisation two millennia later. The vertical pole of the double cross is the life principle itself, the trunk of the cosmic Tree, on which the lower horizontal bars is the principle of matter and the upper is the principle of common sense. The life principle is the most fundamental of the three cosmic basic principles, which embraces, holds the world together, and ensures harmony between

being valuable if we can see it having its own life and sense. In order to overcome the ecological crisis, mankind needs exactly this kind of concept of Nature.

these three. It seems to be a philosophical system of unsurpassable complexity and unsurpassable

hended in its own context, in its own system of interpretations. According to the mindset of the ancient Eurasian civilisation, some of the false, anachronistic ideas influencing our view include: covering the cosmic, life-centred ancient culture with the word shamanism, and confusing them; disregarding the vast era and high-level of development of the Eurasian ancient culture; disregarding the demographic conditions of ancient times; and the delusion that philosophy and science started with ancient Greeks, leading to a misjudgement of the pre-history of mankind.

CONCEPTUAL HURDLES IN UNDERSTANDING THE EURASIAN ANCIENT CULTURE The essence of the Eurasian ancient culture lies in the cosmic, life-centred view. We see the essence of modern Western civilisation in a material view. Therefore, on the basis of the view blueprinted during long centuries, millennia in the Western world, the ancient Eurasian culture cannot be compre-

â&#x20AC;&#x153;Western civilisation is fundamentally focussing on the material development of engineering and technology and on material power. We think that this materialistic view is the most fundamental cause of the ecological crisis threatening the world today.â&#x20AC;?

Shamanism is a term coined in the 19th century to name the religion of Siberian people. It is a fact that by the 19 th century the religious life and folk traditions of Siberian people had decayed after the Mongolian conquest in the 12 th and 13th century and three centuries of Russian conquest from the 16th century, and undergone an enormous loss of traditions. We should refrain from projecting a folk tradition that has lost its original nature to such a substantial extent back to the age of the ancient Silk Road, i.e. an age 2,000 or even more years ago, under the name shamanism.

elegance. We think that the knowledge of the three cosmic basic principles in the Eurasian ancient culture has extraordinary significance because the cosmic One-trinity indicates the existence of a philosophical system exploring the ultimate essence of the Universe. We are talking about such profound knowledge that surpasses the conceptual frameworks of Western civilisation limiting science to the material world even to this day. It is particularly important for us because we can regard Nature as

Western civilisation has demonstrated enormous development in the past millennia, primarily since it revived and further developed the knowledge preserved by the ancient Greeks in the age of the Renaissance. We think that the knowledge of which 19th century-shamanism preserved only certain elements, was the knowledge of the Magi of the ancient Eurasian culture. From this knowledge, Western civilisation has adapted only the branch leading towards material development. A new and even more significant Renaissance can unfold if the

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other two branches of the ancient Eurasian high culture, the branch leading towards the scientific development of life and sense, which have left an indelible imprint on this region, are adopted by the new Eurasian civilisation. A DERAILED WORLD AND THE FUNDAMENTAL QUESTION OF CIVILIZATION For a long time, we had the impression that practically everything being valuable for the modern world had started with the Greeks. But the Greeks themselves, Strabo and Homer admit that troubles started with them. In his masterwork, Strabo (cca. 23 AD), referring to Homer (before 800 BC), writes, “our way of life has encouraged a change for the worse for nearly all people, introducing truphḗ and pleasures and fraudulent dealings and much greed besides. (…) extravagance...retail trade... injustice... corruption of morals... embroidery…” Its almost 3,000-year-old, consistent direction is an indication of the fact that Western civilisation is an ontological stance of the primacy of the material world over life, man, common sense, and the mindset respecting nature, life and sense. According to the book The Sacred and the Profane by Mircea Eliade, Western civilisation is a relatively new way of experiencing the world, in which life and Cosmos are perceived as completely desacralized. Supposedly, time derailed almost 3,000 years ago on this extremely deeply-rooted level, the level of ontology. No matter how many advantages mankind has had from elevating material culture to a very high level, which is mostly contributable to modern natural science, in the long term it is inevitable for mankind to get back on the track of an ecological civilisation, which is harmonious with Nature, communities and common sense and is sustainable in the long term.

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THE SIGNIFICANCE OF THE EURASIAN ANCIENT CULTURE FOR BUILDING THE NEW SILK ROAD AND THE ECOLOGICAL CIVILISATION The millennia of the prehistoric Silk Road have tied the peoples of the region together with countless threads economically and culturally. These deeply-rooted traditions may play an important role in the future of the New Silk Road provided today’s viewpoints and circumstances are considered. In the age of One Belt, One Road, OBOR, Hungary can connect the centre of Europe with the emerging East. The New Silk Road provides the peoples of concerned countries with an enormous opportunity for progress. The greatest hurdle in the rapid development of the New Silk Road is represented by the cultural isolation of the peoples in the Eurasian region and their alienation from their common roots. The long-term guarantee of Europe’s rise lies in the “soft elements” of OBOR, in the postmodern culture, legal order and education, all complying with the ecological criteria. It is crucial for OBOR to have foundations that culturally form an integral part of the ancient traditions of these people. It is a fact that the historical memory, traditions, ancient culture of the peoples in this region still preserve common elements connecting the peoples with each other and the more complete dimensions of Nature. Our researches indicate that such-high-level knowledge, or rather wisdom is inherent in the ancient culture of the Silk Road that escaped attention in the centuries ruled by the Western mindset and can come back to the fore with the birth of postmodern science, which is more developed, more comprehensive and more profound than modern science. This more complete postmodern science exploring

the laws of nature of life and sense in addition to the science of the matter, physics, is the key to laying the fundamentals of, re-discovering and re-assessing the ancient culture, the traditional culture of the Silk Road. It is even more timely because the view rooted in the ancient culture fundamentally matches the ecological view â&#x20AC;&#x201C; the essence of which is fostering the harmony of communities, man, society and Nature â&#x20AC;&#x201C; that would ensure the permanent prosperity of the region. The primacy of ecological viewpoints in the most fundamental mindset of civilisation is not so much a matter of choice any more, but an inescapably necessary step to take, the command of times in more and more parts of the world. An ecological, postmodern civilisation can become more effective than modern civilisation if it creates its own scientific grounds, postmodern science, which is more effective than modern science. The time has come to replace the unilateralism of the scientific worldview by a balanced, ecological scientific worldview, fostering the harmony of man, nations, mankind and Nature. A comprehensive, balanced scientific worldview, as the most modern approach of the 21 st century, can become the main engine of long-term economic, financial, legal and social development. The quality renewal of civilisation requires a comprehensive change of mindset, a healthy concept of nature and society, a healthy vision of man, because these can ensure a balanced, healthy and effective future vision for us in the governance of society as well as in the relationships maintained between nations and within the family. Thus, for example, in the vision of man of postmodern science, man is interpenetrated and connected to Nature and, ultimately, the Universe by cosmic, sacred laws of nature, the laws of nature of matter, life and sense, that is cosmic creative forces. Process philosophy

and constructive postmodernism, associated with the names of Alfred North Whitehead, John B. Cobb ĂŠs David Ray Griffin, play an important role among the founders and forebears of building the ecological civilisation. The pillars of the Chinese ecological civilisation include ancient Chinese philosophy, constructive postmodernism and organic thinking. The correspondence between the ancient Eurasian high culture and the comprehensive, life-centred postmodern science allows to lay the fundamentals of and further develop both process philosophy and constructive postmodernism, the organic view and ancient Chinese philosophy. The most fundamental, human resources of society lie waste. Surveys demonstrate that half of the people finishing school start their lives as nihilists, adopting a profane view. The most fundamental natural direction of our life is the deployment of our spiritual and intellectual capabilities in order to uplift life, and harmonise our individual and community life with the cosmic creative forces interpenetrating both the inner world of man and Nature as a whole, the cosmic laws of matter, life and common sense. The deployment of human resources provided by Nature is key to the success of building an ecological civilisation in order for man to find its right place in Nature, to recognise its natural place in society and the world, to live their life for the benefit of mankind, and, with their sense, to make decisions serving the long-term progress of mankind. A healthy vision of the world, man and society gives guidance for the advancement of mankind and civilisation on a scientific basis, in harmony with common sense and common good. A comprehensive, holistic worldview based on postmodern science is in fundamental harmony with the high culture preserved to this day by the peoples of the New Silk Road region.

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THE SCIENTIFIC BASIS OF THE ECOLOGICAL CIVILISATION

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THE SCIENTIFIC BASIS OF THE ECOLOGICAL CIVILISATION

Author: Dr. Attila Grandpierre

It is a basic pursuit of mankind to live the best and fullest possible life. In our article we call attention to the two basic types of civilisations: the life-centric and the material-centric civilisations. It was not only in ancient times when man lived in a life-centric civilisation. After our birth, we all have perceived and understood the world around us with a life-centric approach. Later, newer civilisational layers, received from our family, then school and society, have built on our original, natural being, alienating us from it in the material-centric civilisation. Due to alienation our human creativity is reduced to a fraction. The science of life can provide substantial help to cope with alienation. With the help of the new, exact biology we arrive at the first comprehensive, substantially complete science. The basic principle of exact biology is encouraging us, as the most fundamental natural law of the Universe, in achieving the fullness of life and complete health. The first principles of the comprehensive science provide the ground the comprehensive scientific worldview, which can be called healthy, because it is comprehensive, balanced, and corresponds to the essence of reality. In the comprehensive science, the most comprehensive and fundamental characteristic of the Universe is that it is alive. Due to life’s fundamentally cosmic nature, our life has fundamental communal, social and cosmic dimensions. And if it is so, then understanding life is the key to understanding the whole world and to the success of the ecological civilisation. In our essay, we will show how.

TWO BASIC TYPES OF CIVILISATIONS: NATURAL AND MODERN Fundamentally, two kinds of civilisations can be distinguished in the history of mankind: the ancient, Nature-compatible, life-centric, communal civilisation and the modern, materialistic, material-centric, individualistic one. The division of civilisations into these two basic types – among others – is supported by the surviving ancient traditions of mankind and its historical memories of earliest times; the history of religion; the history of mythology; the study of folk tales; and history.

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A natural civilisation is characterized by the harmony of man and living Nature. Man is born of the creative powers of Nature (see below in the section The First Principles of the Universe), he is their human embodiment. Man is fundamentally just as much of a natural being as any other living being on Earth. Human nature – homonymy is not a coincidence here – and Nature are consubstantial. For millions of years, man lived in Nature’s lap, in unity with Nature. In the nature religion of the ancient civilisation, man conceived Nature as filled up with the most awe-inspiring force, the cosmic life force. The man of a natural civilisation feels gratitude towards Nature, greatly appreciating its gifts. He

is extremely sensitive to the mystery of the energy lying dormant in all beings of Nature. He regards frankness, honesty and purity as moral virtues resulting from the natural order, and shows the highest respect for the fascinating and awe-inspiring law of natural order, the perfection of the life processes of Nature. The natural civilisation is sacral; for it, the order of Nature is sacred, life is sacred, reason is sacred, and they are all held in the highest respect. The man of a natural civilisation aims at cooperation with Nature. In modernity, none of them is sacred. Modern man uses its environment, and does not seek cooperation. The natural civilisation regarded life as the most fundamental existence, therefore life was held in the high-

verse. The man of an ancient, sacral civilisation bravely takes responsibility, for example, for taking part in the creation of the world, creating his own world, ensuring the life of plants and animals, etc. This kind of responsibility is, however, different from the one we, modern people regard as real and valid: it is responsibility in a cosmic dimension. The man of the pre-Western, natural civilisation takes part in such a cosmic sacrality that manifests both in the animal world and the vegetable world. For ancient man, the Cosmos is a living and arranged unit.

est esteem; that is why it was life-affirming and harmonious, that is why it could persist for an extremely long time. The basic experience of mankind, the experience of the sacredness of life saturating Nature has been overshadowed by the increasing dominance of materialism. The experience of the sacredness of life and Nature has been replaced by the experience of a nihilistic, profane civilisation.

parts of Europe and in most parts of Asia until 1200s AD, and still lives on in Confucianism, Taoism, Shintoism and the archaic traditions of the peoples along the Silk Road. With the birth and the conquests of Western civilisation, this Eurasian, life-affirming civilisation has been replaced by an increasingly materialistic civilisation lacking respect for values inherent in life and Nature. Albert Schweitzer argues that in the Middle Ages, the archaic European worldview was replaced by an approach denying life and the world, focussing on the supernatural. Life-affirmation, relying on the creative powers of initially “barbaric”, that is, “pagan” peoples, arriving from the East in Europe in the Middle Ages, with a worldview akin to Zoroastrianism and Chinese philosophy, was reborn again from the 1300s, but has been gradually overshadowed again since the 1800s. It is the tragedy of modern European thought that the bonds that originally existed between lifeand-world-affirmation and a moral worldview were slowly loosening and finally broke, and there was a tragic rupture in European history.

The decay of civilisation seems to have begun with the ancient Greeks, the founders of Western civilisation, in the centuries around 800 BC. Referring to Homer, Strabo, the most significant ancient Greek historian, writes, ‘our way of life has encouraged a change for the worse for nearly all people, introducing truph and pleasures and fraudulent dealings and much greed besides. (…) Although these things ought to incite them to civilisation, instead they corrupt the morals and introduce an embroidery instead of the frankness(…).’ These signs of moral corruption are all characteristics of a materialistic approach. Civilisation is closely related to material-technological achievements, which have often led to shifts in our way of life, and repeatedly entailed the belittling of traditions, profanation, and the gradual strengthening of materialism. Groups of people pursuing a traditional way of life and preserving a pure source of a legacy of million-year-old knowledge both in their lifestyle and their worldview, that is, in a more complete way, may play an important role in building an ecological civilisation. As Mircea Eliade, a prominent historian of religion pointed out so convincingly, the profane, Western civilisation, ‘the completely profane world, the wholly desacralized cosmos is a recent discovery in the history of the human spirit’, and in all other eras and regions man has always attempted to remain in a sacred uni-

This archaic, life-affirming, sacral world order persisted in nature religions in the central and eastern

BREAKING THE LIFE-CENTRIC VALUE SYSTEM AND THE CREATIVE POWER IN INFANCY In the first years of our individual life – just like in the archaic, natural civilisation – our value system is based on the appreciation of life. This is the natural value system, the value system of life. In our infancy, as years go by, a second value system, learned in the family (nursery, kindergarten) is being built upon us with increasing weight. When this second, family value system clashes with the first, life-centric value system, our personality becomes ambivalent. American psychologist Gordon W. Allport pointed out that in the West, family and social effects overcome the original, natural self of children at the age of 3-5

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years; by that time, â&#x20AC;&#x2DC;the I of Western people sticks out [from their inner world] like a stubbed thumb.â&#x20AC;&#x2122; Remarkably, the independent, original perspective and creativity of children is simultaneously fading. In ages from three-to-five years old, the creativity of 98 per cent of children reaches the creative genius level. By the age of 25-30 years this rate drops below 2 per cent. Why does it happen? it is a fact that from the age of 6, a third value system is built on the second one: the value system of school education and the curriculum. Modern, compulsory school education has a materialistic worldview, its curriculum forcing children to memorise boring data supresses free will and interest, it is distant from life, substantially alien

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from the original interest and natural motives of children, enhances nihilism and takes the creative genius out of children. Human creativity is the main driving force of civilisation. A civilisation that retains our original, innate human creativity, interest, curiosity and motivation, in harmony with manâ&#x20AC;&#x2122;s nature, the natural forces and skills inherent in us, would not only provide mankind with a much higher joy of life but, at the same time, would also gain a vast surplus of the civilisational diving force compared to the volume conventional in a materialistic civilisation. In the materialistic worldview characterizing modern civilisation, the integrated unit of life, reason and the

material world, i.e. Nature does not seem to be more than matter: and life and reason do not seem to be more than side-phenomena of the material world, lacking independent causal power. Consequently, in the modern world life and reason are subordinated to the material world, and, alienated from its very nature, it is forced to follow materialism. As Leo Strauss outlined in his impressive criticism, the essence of modernity is the pursuit to “liberate” human will from all factors regarded as “external”, such as God, Nature or history. The successfulness of modernity, however, undermines modernity itself, because modern western man, left without any compass, does not know what to want, and has lost his faith in the rea-

son that would have confirmed his higher purposes. Losing his original, natural orientation, western man is easy prey for materialism. History has left its natural banks, the time is out of joint, as Shakespeare put it in 1602. Under natural circumstances, human will to live and the faith in reason are the primary driving forces of human creativity. The crisis of modernity entailed that modern civilisation has downgraded its greatest resource, the internal motivation that drives human creativity, and put it on hold. Our conclusion is underpinned by Niall Ferguson, Professor of History at Harvard University, who claims that in recent decades westerners have lost their faith in their own civilisation.

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THE CORRELATION BETWEEN HEALTH AND THE ECOLOGICAL APPROACH The fact that man is fundamentally a natural being means that our self-identity is basically consistent with Nature. It is only possible if Nature is a living organism. By Nature, we mean the Universe here, that is, the integrated whole of all living beings. If the Universe is alive, its life is unimpeded as there is no living being external to it. If we, as natural beings, are consubstantial with the Universe, our life is in a personal relationship with this unimpeded, extraordinary, cosmic life. Due to our natural being, we are one with the Universe living a cosmic life, organized on a higher level – the Whole. Therefore, our being is extremely profound and it is integral only if it is not alienated from this Whole. And if our self-identity is fundamentally consubstantial with this infinite Universe, living in celestial freedom, it belongs to the integrity and health of the human spirit. Ecology is the science of living organisms and their relations, interactions and relationships. If Nature is alive, then ecology encompasses the Universe, and thereby becomes the most comprehensive science. Within the frameworks of materialism, the human being is limited to its individual body. According to the definition of the World Health Organization (WHO), health is ‘a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity’. By mental well-being, we mean a high level of emotional and cognitive well-being. In order to comprehend the full significance of health, a notion crucial for the health of our civilisation, the WHO’s definition of health must be clarified and extended over the most fundamental level of life, our natural self, and the relationship between man and Nature. Considering the fact that mankind can appreciate Nature if it is comprehended as something having its own, internal value, the basic task of ecology is to be able to regard the Universe as a living organism. The scientific basis of ecology, appreciating Nature, requires exact biology, extending life over the whole Cosmos. Distinguished from the materialistic concept of health, limited to physical health, the notion of health obtained this way is called complete health when it is required for understanding. Thus, our definition of health is as follows: health is a state of complete physical, mental, spiritual, social

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and natural well-being of our individual, social and natural self, including the well-being of the relationship between man and Nature. Complete health is not merely the absence of disease but the absence of any kind of effects damaging our physical, mental and spiritual health, and it is being charged with all kinds of physical, mental and spiritual power, complete power of life, enthusiasm and discernment. It includes a complete harmony of our natural self with the living Universe. This complete health is accompanied by the full and high-level unfolding of spirit and mind, happiness and discernment. If we want to highlight these characteristics, we can also call complete health life-fullness, the prime of life. To preserve our mental and spiritual integrity, we need a healthy, life-affirming, reason-affirming and world-affirming civilisation. In the definition by Nobel laureate physician and philosopher, Albert Schweitzer, world- and life-affirmation is an inner conviction of man that life is a real being, the world and life have great, internal value, life is infinitely valuable to everyone, the human spirit can encompass the whole world and man should never give up its fight. This life-affirming and world-affirming civilisation is typical of two regions of the world; these are Europe and China. ‘It was nowhere but in Chinese philosophy the problem of world-and-life-affirmation has been felt in so elemental and comprehensive a fashion.’ Our previous study paper indicated that the Silk Road had created a cultural unity of these two regions in pre-historic and ancient times, persisting as long as until 1200 AD. Western civilisation, with the increasing dominance of materialism, has left this path. China, however, preserved its life-and-world-affirming worldview until Mao’s term. In recent decades, the ancient ecological worldview is being reborn in Central and Eastern Europe as well as in China. Health is a fundamentally ecological notion because life in the Universe has a communal and fundamentally interdependent nature. In ancient Hungarian mythology – just like in comprehensive ecology – the Universe is the highest level of the organisation of cosmic life, the Highest Being. Similarly, the Universe is perceived by Chinese philosophy as a living organism. In our times, astrobiology and anthropic cosmology unexpectedly created a fundamental link between the Universe and life sciences. This relationship is confirmed by the universal law of nature, discovered by Ervin Bauer, a biologist of Hungarian origins, the

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Gaia theory, developed by James Lovelock, which is the theory of the Earth as a living organism, the Helios theory, which is the theory of the Sun as a living organism, and the theory of the Living Universe. These mutually reinforcing trends constitute the modern scientific substantiation of the ancient Hun-Hungarian and Chinese life-centric philosophies. THE THEORETICAL BASIS OF CIVILISATION One of the major branches of metaphysics is ontology, the study of being and its basic types. Materialism regards matter as the only being, and does not attach ontological importance to life and reason. A life-centric worldview contributes ontological importance to matter, life and reason as well, and of these three, it regards life fundamental. In a life-centric worldview, matter, life and reason make up an integrated whole, and for this reason – at least under natural circumstances – these three kinds of reality are in harmony. A natural civilisation is metaphysical, sacral and harmonious; a materialistic civilisation is anti-metaphysical, profane and alienated. Although the emergence of a mechanic ethos based on new, materialistic metaphysics played an initiating and decisive role in the development of modern science, modernity tried to downgrade metaphysics. And this is detrimental to its

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own survival, as the fall of the first version of western civilisation, the Greek-Roman civilisation in the early Middle Ages was caused by the fall of its own worldview based on “pagan” metaphysics. The materialistic worldview of Western civilisation is based on the extremely doubtful metaphysical assumption that physics, the science of matter can describe all aspects of the entire Universe, that is, the behaviour of both living and lifeless beings. This assumption is made on an ontological level, meaning that all changes can be contributable to only physical causes, that is, all changes are brought about by physical forces. But physics, which is extremely successful at anticipating the behaviour of lifeless objects, fails miserably in anticipating the behaviour of living organisms. It flatly contradicts everyday experience as well, as human behaviour is fundamentally governed by instincts, feelings and thoughts and not by physical forces. In addition, as we will show below, today the materialistic worldview of Western civilisation is being disproved by its major tool, science. Since the relative significance of matter, life and reason is an ontological question, civilisation is regarded as a fundamentally ontological position. This ontological position is so profound that it counts as an almost completely unexplored world for our thinking, which is burdened by everyday problems, accustomed to less-

THE SCIENTIFIC BASIS OF THE ECOLOGICAL CIVILISATION

er questions, and overwhelmed by these. And exactly this extremely profound nature enables civilisation to guide our way of thinking imperceptibly into the direction of its own ontological position, for example, to steer it into a materialistic framework. Furthermore, the ontological position of civilisation enters our inner world without criticism in our early years. After we have got used to it, it guides us unnoticed. Therefore, it is extremely effective at creating our everyday conduct of life, and can exert an effect on a significant part of mankind. That is exactly the reason why the dominant ontological position is regarded as the essence of civilisation. If the impact system of the dominant ontological position affects a multitude of peo-

these questions. What we call thinking is usually not more than applying our already existing worldview to a particular situation. Worldview is fundamental in science, too, usually without our knowledge. Fundamentally, it depends on our worldview what we think about science. The worldview has greater practical significance than science. The unconscious development and application of the worldview is one of the major reasons why we are unaware of the immense significance of the worldview. The worldview is immensely significant because its three layers – the innate one, the one received from the family and the one received from society – develop in every person at a young age, and usually determines the whole conduct of life. In

ples and a historically significant period, we can talk about civilisation.

addition, very few people recognise the role their worldview has in their lives even in adulthood, exactly because the immense significance of the worldview dissipates. Still, if there is awareness, we can become capable of rendering our worldview healthy and guiding our life into a rising direction.

THE ESSENCE OF CIVILISATION AND ITS MOST EFFECTIVE TOOL: WORLDVIEW The Universe is an integrated whole of all living beings, that is, an integrated reality. An ontological position forms an opinion on the essence of the whole world, therefore it is necessarily philosophical. A worldview is a form of an ontological position applicable in everyday life, a coherent system providing fundamental explanations to every phenomenon in the world. A worldview is a coherent system, the essential foundation of interpreting, evaluating and perceiving the world; it is the way we comprehend and evaluate the world. The worldview is the most effective tool of civilisation, because it is incorporated in children through their families and the system of social effects in their early childhood, and determines their understanding of the world, before the development of critical thinking available for adults. If we do not become aware of it later, it remains unnoticed. It also remains unnoticed that the worldview has crucial significance in determining the fundamental direction of our conduct of life. Therefore, being aware of the significance of the worldview is essential. In other words: the worldview is a coherent system of our thinking and value system, upon which our decisions are based, and thus it is the most fundamental drive of our actions. The way we perceive the world is of key importance because we can use all our experiences to improve the quality of our life, our emotions and thoughts – or to increase material wealth, to gain more money or power. It is the worldview that determines which questions are important to us, and what answers can be given to

The significance of the worldview lies in the fact that it sums up the Universe in a nutshell, and knowledge summed up in a nutshell is incorporated into the thinking of each member of the civilisation. The next level of our thinking is the effect of science and education. We have already indicated above that the natural, primary level of our thinking is seeing the world in a natural, life-centric way. In the Western world, the value system, which determines the second level of our thinking and is learned in the family, and is usually more or less consistent with the value system of the society and the civilisation due to the dominant role of parents and their inclusion into society, is built upon the primary level. In the materialistic civilisation, parents usually acquire a materialistic worldview, and therefore the second level of our thinking becomes a materialistic worldview in Western civilisation. The first two levels affect us unconsciously, imperceptibly. The third level is conscious thinking. In today’s world, a significant part of conscious thinking is characterized by the effects of science. Both parents and school children consider scientific truths relevant when deciding what is true and what is not. If science is of a materialistic nature, which is the case for modern science, which acknowledges the exclusivity of physics, the third, conscious level of our thinking is – usually without being noticed – guided into the framework of materialism. And if this third level is fundamentally in line with the second, family-led worldview, they enhance each other’s effect, and overshadow even more

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effectively our innate, life-centric worldview and our spiritual and mental and health. Alienation becomes even greater.

All three levels of our thinking are extremely significant for building an ecological civilisation. In order to be able to preserve the natural health of our childrenâ&#x20AC;&#x2122;s mind, these three worldviews must be in harmony. Since the life-centric worldview is innate, our mental health cannot be complete unless we receive a life-centric worldview from our family and the civili-

of school education is life-centric and adequate attention is paid to physical, mental and spiritual well-being by harmonizing them. As long as one single exact science exists, the science of matter, i.e. physics, and the authority of this exact science is attributed to materialistic metaphysics, which can be at best considered as a hypothesis, the worldview of school education remains fundamentally materialistic. Consequently, adopting the Western educational system in Central and Eastern Europe and Asia fundamentally transforms the thinking and the worldview of children leaving school. Children graduating from the Western educational system go out into society with a Western type of thinking, irrespectively of lo-

sation. It is a fundamental task for a society seeking a healthy approach to prepare parents for life-centric child-rearing, based on a healthy worldview. Getting familiar with the parenting habits of peoples still preserving the child-rearing traditions of the ancient Eurasian civilisation may provide important help. The worldview of our children can remain healthy on the second level of thinking if parents consciously strive to acquire an adequate level of the healthy worldview. The worldview of our children can remain healthy on the third level of thinking if the approach

cal traditions and cultures. The emergence of exact biology, which is not deductible from physics and has its own, independent laws, can change this situation. Since the basic principle of the new, exact biology, upholding and developing the best traditions of modern physics, provides guidance for our conduct of life at both individual and community level, it enhances schoolchildrenâ&#x20AC;&#x2122;s natural interest and love of life both individually and at community level. A life-centric life science also brings physics much closer to students, because it allows for deeper understanding more eas-

THE THREE LEVELS OF OUR THINKING AND THE HEALTHY CIVILISATION

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THE SCIENTIFIC BASIS OF THE ECOLOGICAL CIVILISATION

ily, quickly and effectively owing to its first principles. Therefore, it can raise their interest, turn the school curriculum attractive, inspiring and motivating instead of being the conventional boring, unrelatable, encyclopaedic knowledge, place emphasis on understanding relationships and the evolution of independent thinking, and develop childrenâ&#x20AC;&#x2122;s soul and mind in a healthy direction. The goal of healthy child-rearing is to preserve and develop the integrity of our self to the level of succeeding in todayâ&#x20AC;&#x2122;s civilisation, being able and ready to act independently for the health of our individual, community, social and natural self. The goal of healthy education is to answer and summarise the fundamental questions of human existence in a coherent system of basic knowledge encompassing the whole word, in basic literacy. A coherent vision of the world allows for the most effective development of general cognitive skills. Since it is a life-centric curriculum, the education of the science of living organisms and their interaction, i.e. ecology also becomes simple at a stroke. The life-centric, substantially complete and therefore healthy ecological worldview, completing our system of interpreting and evaluating the world, enables the generations finishing school to build a balanced, healthy civilisation. If the ecological worldview does not provide for a scientific basis the significance of which is at least akin to that of the sci-

entific basis of the materialistic worldview, it may be placed at competitive disadvantage. In our opinion, the most important tools required for building a viable ecological civilisation are a science encompassing the entire Universe in its full extent and depth, which includes the science of life and reason in addition to the science of matter, and the healthy worldview based on this comprehensive science. This task requires the development of such biology that promotes life-affirmation, the increase of the vital force and the quality of life, and which has such exact foundation as physics does, but is not subordinated to physics. An important task of building the ecological civilisation is to establish a scientific basis for life-affirming biology and reason-affirming psychology. THE FIRST PRINCIPLE OF PHYSICS A developed industry based on physics and the materialistic worldview based on physics are the most effective props of modern Western civilisation. To solve our task, the first step is to recognise that the most effective tool of physics is the principle of least action. The principle of least action can be regarded as the first principle of physics, because all basic equations of physics can be deducted from it. It is a fact that the most elegant, most concise and most

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explicit wording of the basic equations of classical physics can be deducted from the principle of least action, as in the case of the theory of gravity or quantum physics. The principle of least action, which comprises all the basic equations of physics, can be regarded as the definition of physics. Physics is the science of lifeless matter; it is lifeless matter the behaviour of which is determined by the principle of least action. The content of the principle of least action is illustrated by the fact that the inertia is manifested in the changes of physical objects.

definition of the essence of life. It expresses that the essence of life is action, work done to elevate life to the highest possible level. Since it is an eternal law of nature, life in the Cosmos is necessarily destined for victory. A law of nature cannot be defeated. There is no such earthly power that could impede the victory of life at least in the long term. Thus, the essence of life does not lie in survival, as it could be seen through the lenses of physics, but in elevating the quality of life, perfecting life, making it increasingly valuable, happy and meaningful.

THE FIRST PRINCIPLE OF BIOLOGY

BIOLOGY IS MORE FUNDAMENTAL THAN PHYSICS

Living organisms, however, are not inert, thus their behaviour is described by a fundamentally different law of nature, the law of maintaining the ability to act. Living organisms have to restore their own ability to act, their own viability in their actions because biological actions require energy and time as well. If living organisms did not take care of maintaining their viability, their energy, their mobility would soon vanish. The universal law of living organisms was discovered by Ervin Bauer, and it is named the Bauer principle after him. The Bauer principle provides that ‘living and only living systems are never in equilibrium, and, on the debit of their free energy, they continuously invest work against the realization of the equilibrium which should occur within the given outer conditions on the basis of the physical and chemical laws. A living system always converts its entire free energy content into work done against the realization of the expected equilibrium.’ The A Bauer principle can be regarded as the first principle of life because Bauer deducted all basic equations of life, including metabolism, reproduction, growth, and all the basic phenomena of life from it. Therefore, the Bauer principle can be regarded as the first principle of Nature. It provides an energy-related

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The significance of the Bauer principle requires a comparison with the most important component of theoretical physics, the principle of least action. As the principle of least action is the law on the changes of inert objects, and living organisms have a substantial surplus, the ability to act, I was looking for a way to biologically generalize the principle of least action. The principle of least action prescribes the trajectory requiring the least energy and time consumption between the current, given starting point and the future endpoint of an action or event. The principle of least action is ideal for the role of the “postman” because it links the starting point with the endpoint with a straight line. If we generalize the principle of least action, and we omit the “least” constraint, and we consider the fact that the endpoint, the purpose of the action is determined by the living organism itself because – in accordance with the Bauer principle – it spends all available energy on elevating its ability to act onto the highest level, we get to the basic principle of biology. A falling stone falls to the ground in a straight line and not in a zig-zag pattern, because that would take more energy and time. “Effect” is the combined measure of the energy input and the time commitment. Physical objects complete their trajec-

tories with the least energy expenditure and within the shortest period of time; this is what the principle of least action expresses. However, the opposite is true for living organisms. We aim at living with as much energy and for as long as possible. We select the endpoint of our actions to benefit from it, to elevate our life onto the highest possible level and this should last as long as possible. That is how I have got to the principle of most action (PMA). The mathematical form of PMA includes the Bauer principle as the principle of greatest vitality, and also the principle of the most efficient use of time, that is, the principle of greatest wisdom. I have defined “wisdom” in a biological sense: a decision that is made in favour of life is a wise one. Reason belongs to life. Its purpose is to make the decision that is the most favourable to life as quickly as possible under the given circumstances. Reason was created by life to make wise decisions, so that life could move forward to fulfil its highest potential. The principle of most action includes, as a close case, the principle of least action, should the most action be extremely small, as it is in the micro world. This is the principle of the smallest degree of action, the principle of inertia, which is typical of elementary particles and the material world. Since the PMA is the generalization of the principle of least action, it is as valid in the entire Universe as the principle of least action is. Since PMA includes the principle of greatest vitality for the whole of the universe, the Universe – as a whole – is a living organism. Since PMA includes the first principle of physics, the laws of physics derive from the law of life. Life is more fundamental than matter. The Universe lives on a deeper level of reality than its material surface. The causality between biology and physics is remarkable. The biological cause exerts an effect first, sets the goal, and deploys the biological energies required for the achievement of the goal. Thereby a whole series of specific physical causes, necessary for the physical achievement of the goal, are generated. As soon as the goal is set biolog-

ically, the required physical processes are created as economically as possible because the principle of inertia is also the principle of economy, the principle of the least energy and time expenditure. Nature gives biological reasons priority over physical causes and the ability to dispose of them. The civilisation based on the science of life has a more efficient scientific basis than the materialistic civilisation does because the principle of most action is a further developed, extended, more far-reaching version of the principle of inertia, promoting the elevation of life. While the civilisation focussing on the consumption of material wealth aims at creating more and more convenience, a life-centric civilisation, retaining the aspect of material well-being, fundamentally aims at improving the quality of life. THE LIFE PRINCIPLE ENCOURAGES US TO HAVE COMPLETE HEALTH As the principle of most action comprises only quantities existing also in physics, time and energy consumption, I have further generalised it to biology’s own drives. Every living organism is a sentient being, and every living organism must decide how to act in a given situation. In physics, changes are caused by a physical force. Biological changes are caused by motivation. There are two basic types of motivation: emotional and intellectual motivation. That is how I have arrived at the most general, most fundamental principle of biology, which I have named the life principle. The life principle states that every living organism deploys all their energy, enthusiasm and wisdom to elevate their vitality, emotions and thoughts to the highest possible level at every moment. Familiarity with the life principle may facilitate a conscious conduct of life because it states that, as living organisms, our life task is to deploy all our spiritual and intellectual energies at every moment to discover

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and perform actions done in favour of a complete life. According to the principle, we live our lives as much as we do for everything to elevate life. If do not do that, we are vegetating in a state of suspended animation; our life passes by without using the real opportunities life offers us, the opportunity of elevation. Thus, if we want to live a substantially full, that is, healthy life, we must do everything to make life prosper.

ticles are generated in living organisms by biological causes with the help of biological energies. The scientific significance of the comprehensive natural science is reflected by the fact that, on the one hand, it can define a systematic aspect of the behaviour of living organisms, but, on the other, remedy both defects of modern physics without any further assumptions. LIFE IS A REALITY EXISTING ON ITS OWN POWER

It does matter to living organisms what they feel, whether they feel good about themselves. It does matter to intelligent creatures whether they have a correct understanding of the world. The life principle encourages us to have the best emotions and thoughts, complete health and to achieve the prime of life. It is worth considering as it is about our life. The life principle is the natural law of health and life-fullness. Raising our awareness of the life principle enhances vitality, wisdom and the development of our best abilities, and encourages us to regain our creativity revived as an inner, pristine force of nature. If we live consciously according to the life principle, we are filled with elemental power, eternal vital force and obtain an enormous surplus of vital energy. Therefore, understanding the life principle is essential for a healthy civilisation. THE THREE FIRST PRINCIPLES OF NATURE The three first principles of Nature are the principle of matter, life and reason. The ontological One-trinity of matter, life and reason corresponds to the trinity of physics, biology and psychology in science, the trinity of body, mind and soul on the level of the individual, and the trinity of atom, emotion and though on the level of ultimate components. In the theory of the living beingsâ&#x20AC;&#x2122; ability to act I have shown that biologically controllable energies belonging to motivations can create pairs of virtual particles in the quantum vacuum that are suitable for the physical realization of their inherent goal. According to quantum-electrodynamics, all physical forces are carried by virtual particles. Thus, biological motivations can generate and implement physical processes corresponding to biological causes in living organisms. Modern physics suffers from two fundamental defects, and these are the infringements of the universal law of conservation of energy and that of causality. In the quantum vacuum, pairs of virtual particles generated spontaneously, without physical causes, happen to violate both at once. According to exact biology, pairs of virtual par-

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Life, consistently with its fundamental nature, focusses on creating life. Life recreates itself over and over again. Life is more than mere existence, because it acts and creates. Life is a reality establishing, creating and realizing itself. Cosmic life is an extraordinary, completely unique example of causality because it represents such a cyclic teleology through which a living being setting the goal can cause their own further becoming. Cosmic life is an omnipotent reality creating itself in its full connections, in its full existence and its complex of being, which is independent from anything else in its existence. The material being cannot be the first being because its being must be created, which needs an ability to create. As an ability to create must be created, it can exist if it creates itself, if it is the ability to create. There is only one such thing, and this is cosmic life. Thus, cosmic life is an absolute being, being through and by itself. Cosmic life is a reality being and acting by itself. Life is more than being, because it is also acting; it is self-creating through its acts, and therefore it is the basis for any existence. Life is a reality creating itself through its acts. If a reality can be ultimate without a cause external to itself, that is, creating itself, then cosmic life is the ultimate reality. Thus, the ultimate reality is the Living Universe creating itself and its changes by itself. There is nothing greater than cosmic life. Life is filling and embracing, and even continuously creating, moving and developing the Universe. Life is the only, ultimate reality coming into being by itself, by its own power, continuously creating and perfecting itself. Life lives on seven levels In exact biology, the individual is a â&#x20AC;&#x153;psychogenicâ&#x20AC;? notion, it is not involved in the life principle. The notion of individual derives from self-reflection. An individual cannot live without their cells, cannot live without ascendants, cannot life without a species, a species cannot live without the biosphere, and if life is the ultimate reality, all life originates from life, and therefore the biosphere on Earth originates from cos-

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mic life. Life cannot be put in a box. The life principle is universal, is ubiquitous and its fruits are various life forms on different levels. The essence of life lies not in its substance, but in leading its changes, its behaviour, and its life-elevating nature. This behaviour manifests simultaneously on an the level of the individual and the community as well as on the level of our cells. The same universal life principle governs the lives of individual people and the lives of cells, of the human species, the biosphere, the Universe. The life principle links the life of an individual with the life of cells, the life of the species, the life of the biosphere and the Cosmos. Ecology, as the study of living organisms and their relations, links the world of cells with the life of

also complies with Albert Schweitzer’s ethics based on respect for life. ‘Ethics grow out of the same root as world- and life-affirmation, for ethics, too, are nothing but reverence for life. That is what gives me the fundamental principle of morality, namely, that good consists in maintaining, promoting, and enhancing life, and that destroying, injuring, and limiting life are evil.’ Since being alive is the fundamental essence of the Universe, the fact that it is good belongs to its fundamental essence. Since the life principle comprises the principle of matter, spirit and reason, it can be regarded as a coherent theory encompassing all three fundamental realities. Hence, it comprises the essence of the whole Universe. All three first principles of Nature

individuals, species, the earthly world and the cosmic world. We have arrived at the ecology embracing the whole Universe. In this comprehensive, cosmic ecology, we differentiate between seven fundamental levels of life, for which we are responsible, for which we must act, on which our life happens. These seven levels are cells, the individual, family, nation, mankind, biosphere and the cosmic community. Our life is the union of these seven lives. Our true self is present simultaneously on all seven cosmic levels of life. The fact that the man of the archaic, sacral civilisation voluntarily takes the heavy responsibility for ensuring a life for plants and animals and in a cosmic dimension indicated that our moral commitment to the earthly and cosmic levels of life was known in the ancient Eurasian civilisation. The comprehensive science enhances this ancient knowledge. Our life is more profound than the material world, thus, necessarily, our self, our intelligence, as well as our life principle, are of cosmic nature. A life-and world-affirming ecology is unfolding before us. We have come to the Earth to act as a local centre of action of the Living Universe throughout our life. These seven levels of life are the basis for the universal moral world order. The universal moral world order is the law of acting for the benefit of all lives on all seven levels of life. In addition to our individual life, the seven levels of life also comprise our community and natural self. The moral world order based on the exact science of life provides the basis for harmonizing the life of families, nations and mankind with the natural, earthly and cosmic living world. An exact, independent biology adds value to science. Of all values, life is the most fundamental and the greatest value, since all values are values for the lives of living beings. Acting for the benefit of life is good for life, therefore a scientific basis can be provided to the moral notion of “good”. Our conclusion

are more profound than the laws of physics, and they also cover the world of life and reason, thus the worldview of the comprehensive science is both wider and more profound than the modern physical worldview. Compared to the worldview of the comprehensive science, the physical worldview is one-sided and shallow. Since the function of a worldview is to give a picture of the whole world, and physics gives a picture of only one side of the world, the material one, the physical worldview is one-sided, mutilated, misleading because in reality it is not a worldview, only a material-view, it is only the view of the material world and not the whole world. Since the worldview of the comprehensive science comprises all three circles of life of reality, i.e. the material reality, the world of life and the world of reason, it can be called substantially complete. Since it is substantially complete, it gives a realistic picture of the whole world, and therefore it can be called a healthy worldview. The comprehensive science covers the whole world; therefore it can be regarded as the essence of the scientific worldview. As it comprises both the essence of the whole world and the natural law of life-fullness, it may ensure that our individual conduct of life is in harmony with Nature and reality. Since it encompasses all mankind, it provides the fundamental law and the main goal of civilisation. As the dominant worldview of a civilisation is its source, drive and most effective tool, familiarity with the healthy worldview is of historical importance because it lays the foundations for building a healthy civilisation. THE SIGNIFICANCE OF THE SEVEN LEVELS OF LIFE TO OUR LIFE 1 The significance of the world of cells We are responsible for the health of our cells. Our life entails the natural moral commitment to do

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everything we can for the health of our organisation and the world of our cells within. It is worth acknowledging that our sells are living, and as such, sentient beings. The emotions of our cells are closely related to our environment. The human organisation consists of 60,000 billion cells, which is a greater number than the number of stars in the Milky Way. How can we form a non-mechanic picture of the life of our cells? Every cell implements hundreds of thousands elementary biochemical processes per second; for example, thermal motion to and from, the appropriate molecules must be transmitted to the appropriate receptors. Both the structure of the cell and the whole of the cell take part in controlling the molecules of our cells. The whole of the cell can intervene in processes on molecule-level with biological motivations. Our cells contribute to ensuring their appropriate life functions with their emotional energies. In a metaphor: our cells help the molecules reach their goals with emotional energies, their passionate love of life. My calculations suggest that the cells use their full thermodynamic potential, all their energy for biological purposes. Cells work extremely effectively; they almost always transmit their molecules perfectly appropriately. In this respect, they far exceed human performance. The almost perfect cooperation of cells is even more remarkable. They cooperate so harmoni-

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ously that they ensure almost perfectly the activities required for our human life, from our brain functions to moving our limbs, happening in cosmic heights compared to their lives. Such cooperation of our cells enables us to move our body extremely easily through our will, for a hundred years or even longer. They seem to function in accordance with the principle of “one for all, all for one”, although it is not easy for us to comprehend how powerful, cosmic being is the “one” they act for. The basis of their agreement is the respect for the life principle keeping all lives alive, including human life taking place in a cosmic distance from them. Such perfect cooperation can be a model for the cooperation between nations and mankind. The fact that there are cells that use their independence for abuse, asserting their interests to the detriment of community values illustrates that this cooperation is not mechanic at all. These are called “cheating” cells by biologists. This individualist, anti-social behaviour, however, is so rare that it does not impede the life of our organisation taking place with fascinating ease and in almost perfect harmony. Much can be learnt from considering that our organisation consists of cells pursuing extremely effective life activities. It is time to grow to live a similarly perfect life. If the key to this is a passionate love for life, and an active commitment to it, we cannot be strangers to that, as we

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are living organisms, too, and the more fully we live our lives, the happier we live. More precisely, the unusual efficiency of the lives of cells and their communal cooperation is contributable to the fact that their decisions – with an unusual commitment and frequency – are in line with the life principle. Let us illustrate the life of cells with a metaphor! Let us regard the life principle as a shaman horse, the cells as the princes of fairy tales, and our organisation as an army of princes, each member of which does their best for the cause with all their life and spirit every day. Lying on the backs of their shaman horses, they are dashing on their most attractive, most pleasing course of life, becoming one with their horses, in perfect unity, for a common goal of promoting their own life and the life of a higher living organism. The prince is rushing with the speed of a whirlwind because he agrees with the shaman horse; the main point of their decisions is ‘Forward’! If he told his shaman horse, ‘stop, I want to get off, because I need freedom, because I want to achieve everything from my own powers, completely independently from reality’, he could only walk, much more slowly, and it is very doubtful whether he is going forward or backwards. Compared to our cells, in cosmic heights we live our human life as celestial beings. Our organisation is a kind of macrocosmic world beyond the micro cosmoses of our cells. We can bridge this distance with our actions, emotions and thoughts, since our emotions and thoughts are biological drives. In this sense, our physical, emotional and intellectual activities count as “divine” events to our cells. To our cells, we are actually acting “gods”, higher beings. We can act as benevolent, compassionate gods, if we eat healthily, if we do exercise on a daily basis and we generate happiness hormones through exercise, if we act for the beauty and elevation of life. And we will also benefit from it! 2 The significance of our individual path of life to our conduct of life In our actions, we should always keep the full path of our earthly life in mind so that the end-result, that is, the whole of our life, should be as great as possible. If we look back at the other end of the path of our earthly life, as if on our death bed, and rack our brain on what we can do for our life while we are here on Earth and able to act can have a very mobilising effect. Fundamentally, we have received our life and our mind from Nature. The cosmic mind, saturating Nature, is the one that knows why we are here. Our task is to find out what this goal set by Nature is. That

is why it is significant if we try to look at our life goal and our life through the eyes of Nature, a cosmic living being. All efforts of this kind bring us closer to discovering and realising the goal of our life, to living the life we were born for. Every single day we can take further the cause of our life, because, if we live a healthy life, no one and nothing can stop us from dedicating our emotions and thoughts to striving for this goal. No one can stop us from living an increasingly healthy life, either. There is an old aphorism: seize the day. In the film entitled Dead Poets’ Society, the teacher says to his students, ‘Seize the day, boys. Make your lives extraordinary.’ We should add: seize the week, the month, the year, the decade and first of all, seize your whole life. Make your life extraordinary. Your life should be extraordinary because the Living Universe itself found your earthly life great enough to take you to the Earth. Seize the goal of your life, the meaning of your life, and your quality of life will multiply. Every single day we can start our day by deciding at the moment of waking up, by completely mobilizing our abilities, and by proclaiming as a resolution in our organisation, ‘I will elevate my life’. Before falling asleep, at the end of the day, we can ask ourselves, ‘What have I done today for elevating my life? What great, elevating experiences have I gone through? What great, elevating thoughts and decisions have I come to? What have I done today for becoming a better man, for my development? What great, elevating deed have I done?’ In the world, we are the person who is the most responsible for shaping our life. We are responsible for our worldview, we are able to take actions for it, we are able to acquire a healthy worldview because the life principle, and the principle of greatest vitality and greatest wisdom therein, helps us do so. The life principle states that the goal of life is to live and enforce the most wonderful, valuable and meaningful life possible on Earth. We all are working on solving this same task. We are life-colleagues. Martin Seligman, a researcher of the psychology of health, says that happiness has three levels. The first one is short-term pleasures and delights, such as eating. This level also has an important role in our life. The second, more profound level of happiness is the joy surplus released during passionate activities during which we feel that greater forces join us in realizing our goal, for example, when one gets an elemental feeling, our goal is almost realised by itself, and we act almost perfectly. We can experience the third, most profound level of happiness when we feel that our whole life

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has a meaning, and is related to a life greater than our individual life. This happiness is permanent, is related to our whole life and is even more-far-reaching, as it is related to an intelligence higher than our earthly life. It has been proven that until the first two levels of happiness do not imply an improvement in the quality of life, the third, most profound level of happiness, feeling the meaning of our life improves our health permanently, and to a remarkable extent: it increases our quality of life by five hundred per cent, that is, fivefold. It is worth dedicating time and energy continuously to the achievement of the most profound happiness, because our investment will bring a multiple return. The life principle encourages us to do so. 3 The significance of improving family life to our quality of life The most personal, most fundamental level of our life is family life. From our early childhood until we become parents, and then again, now as parents, our private life takes place in a family, intertwined by many intimate ties. Our self is not limited to our individual self. Our emotions naturally connect us with the natural emotions of our family members. That is why the best, the healthiest possible family atmosphere has immense significance to all of us. The level of happiness of family life is an important component of our quality of life. If we actively seek to improve our family

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life, we can significantly increase our individual quality of life. Exactly because of our close co-habitation, our family life requires the development of our personality the most. In the United Kingdom, a survey of some 160,000 people conducted by the National Statistics Office concluded that above a certain level of income, a happy marital relationship is twenty times more important to our quality of life than a high salary. Good family relationships are of key importance also in the case of low incomes. Dedicating some hours every day to the well-being of our family life improves our quality of life much more than spending the same amount of time on earning money. Improving our family relationships is a life-long pursuit. The life principle spurs us to do everything we can for the happiness of our family. It is up to us how much part we take in this soul-refining task. 4 The significance of culture, nation and society to our quality of life From an ecological perspective, all nations are cohabitation communities of individuals, and the life of every nation takes place on the same level of life, in cohabitation communities of nations. History is determined by the activities of nations and their relations to each other. The life principle represents the fundamental law of comprehensive ecology. According to that, it is the natural goal of all nations to provide

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the nation with the highest possible level of material, emotional and intellectual well-being. On the basis of the life principle it is the natural life goal of all nations to cooperate with each other for the highest possible level of health of mankind and all life on Earth. On the basis of the universal ecological worldview, it is easy to notice that the fundamental interests and values of nations are common. The seven levels of cosmic life form a single coherent order, a moral world order. Fundamentally, the life of nations is interpreted and evaluated in this world order. As all of the seven cosmic levels of life follow the same universal value system, the value system of cosmic life, by Nature, nations are not enemies and

operation of nations becomes predominant on Earth, the life of mankind will start to flourish dramatically and beyond all expectations. Cosmic creative powers lend mankind’s world of emotions and thoughts wings. Mankind’s world of emotions and thoughts will become much more effective and will produce much greater results if it becomes harmonious with Nature, that is, reality. The unhindered manifestation of cosmic creative powers gives mankind a world of cosmic emotions and thoughts. Positive psychology has shown that the greatest and most magnificent experience, a peak-experience of human life is the experience of cosmic unity. In the past millennia, this peak-experience has appeared only rarely and in short

opponents but cooperating colleagues of each other and mankind. The primary interests of any nation are the elevating values of universal life. The material, spiritual and intellectual well-being of a nation is the stage where our life unfolds and an essential component of our individual quality of life. Loving our nation belongs to our mental health. The existence of a moral world order and an ecological worldview are essential to the elevating prospects of nations.

periods of certain people’s lives. As soon as mankind regains their complete health, the experience of cosmic unity will become commonplace and conventional. In a healthy civilisation living in harmony with Nature, cosmic sympathy, known from ancient times, becomes an important part of the culture of mankind. Understanding the essence of the Universe, unfolding the inner creative powers of life, preserving and further developing a high level of human creativity in adulthood raise the intelligence of mankind to a qualitatively higher degree. The process of becoming human achieves its goal, the full unfolding of man’s abilities to elevate life.

5 The significance of a moral world order to mankind The life of mankind takes place in cohabitation communities on Earth. From Nature’s perspective, the life task of mankind is to ensure the complete health of the cohabitation community on Earth and to improve their quality of life. It is a fundamental interest of mankind to enrich the integrity ad beauty of our home on Earth and the cohabitation community of earthlings. What makes humans human is human compassion, generosity and goodwill for all forms of life. Since all forms of life are invigorated and driven forward by three cosmic creative principles, they are the manifestations of cosmic life and intellect. These creative principles become active parts of our lives as the three basic instincts of living organisms. These three instincts focus on sustaining individual, community and cosmic life physically, mentally and spiritually at the highest possible level. With their activity, mankind can contribute to an even richer prosperity of the living world. In the archaic history of mankind, there are several examples that justify mankind’s practical activity to enrich Nature. These include, for example, the ancient Hungarian floodplain water management, which provided fish with such living conditions that in the Middle Ages there were more fish than water in our waters. A comprehensive ecological worldview forecasts that as soon as an ecological, constructive co-

6 The significance of a moral world order to the living Earth, Gaia On the basis of a moral world order, the natural life task of Gaia is to contribute to the evolution and perfection of the life of the Living Universe on Earth and exercising a life activity that is valuable and meaningful to the Universe. 7 The significance of a moral world order to the Living Universe As soon as mankind becomes a healthy member of the cosmic world order unusual processes are expected to take place on a cosmic level. It is a fact that mankind has a unique role on Earth, which is related to their high level of consciousness. The unique role of mankind on this cosmic planet may be a sign of mankind’s essential role and responsibility in the Universe, as it is taught by ancient Chinese philosophy. Now, let us regard mankind as an important centre of the brain of the Universe. Under current circumstances, this centre of the brain is ill, as its components, the nations, instead of cooperating for a higher cause, often turn against each other. If the cells in our brain turned

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against each other, our brain functions would break down. Seeing it from the level of cosmic life, this cosmic brain centre is like a confused anthill that suffers from an internal decay. Since one of the centres of its brain is ill, the Universe is not completely healthy, either. But when mankind regains their complete health, the Living Universe will become healthy again. Having achieved this healthy state, the life forces of the Universe will completely saturate man again. Cosmic creative powers inherent in mankind will be stimulated by human intelligence and spirit, harmonious with them. Since the Universe regains its healthy centre of the brain, the cosmic mind will get into a higher, healthier, more complete and happier state of mind. The two arms of cosmic life, matter and intelligence will achieve a qualitatively higher level of harmony, get closer to each other and life, and their fundamental nature will become qualitatively more refined. In this state of fulfilment, matter responds to the effects of mind and emotions more easily. Mind and soul will become capable of governing matter on a qualitatively higher level. The Universe may enter its life stage of fulfilment, unfolding its complete abilities. ON THE SEVEN LEVELS OF LIFE In terms of an ecological worldview, we think that harmony and balance between the three spheres of existence and the seven levels of our lives is the basis of a healthy conduct of life by mankind. It is worth mentioning that Chinese philosophy has preserved similar views. “The context of life is created by a whole person, nation or all mankind or the fullness of the Universe, all elements and participants of which enter into the most intimate and harmonious relationship with each other” (Fang 1957, The Chinese View of Life, 249). For the ecological civilisation the extraordinary advantage of the comprehensive ecological view is that it renders us personally interested in the complete health of all seven levels of life. The most basic resource of civilisation is human creativity. No civilisation can survive without it. If unimpeded, the main path of life is health on all seven levels. Creating a healthy, ecological civilisation is the key issue of our quality of life. Our results show fundamental matches and similarities with the remaining traces of the civilisation along the Ancient Silk Road. The most written records of the ancient Eurasian high culture have been preserved by the Chinese civilisation. in Chinese philosophy, ‘qi’ is the life force, from which everything is created, the ‘ultimate fundamental of the existence

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of the Universe’, … ‘the ontological source of the Universe’. The exact verification of the existence of the life principle will provide a scientific explanation for the existence of ’qi’. THE SIGNIFICANCE OF COMPREHENSIVE ECOLOGY TO THE ECOLOGICAL CIVILISATION What dimensions are outlined by comprehensive ecology, emerging from exact biology? A comprehensive science and a healthy worldview may play a key role in one of the most important factors of building and maintaining an ecological civilisation, i.e. school education. A comprehensive ecology enables the development of a life- and-world-affirming curriculum, and makes it attainable that the school system should not put out generations with an ecological worldview and not a materialistic one for building an ecological civilisation. A comprehensive science is the science of matter, life and consciousness. While paradigm shifts have so far meant advancements within physics, with the emergence of a comprehensive science our whole worldview will progress and arrive at a substantially complete, healthy worldview, thus it may mean an advancement more significant than any paradigm shift so far. The previous worldview shift took place at the dawn of the Early Modern Times, and represented an advancement to material growth. ‘Initiators and representatives (…) called this chaos new philosophy, which we call scientific revolution today.… Their cosmic speculations and researches (…) demolished the medieval concepts of a closed universe and an unchangeable social order, the fixed system of moral values, and they transformed European societies, culture, habits and the entire structure of civilisation to such extent as if a new species had appeared on the planet.’ (Koestler 1959, Sleepwalkers, 13). As a result of the successes of exact physics, the medieval vision of the world was replaced by a materialistic approach. This turnaround was called “scientific revolution”. Its consequence is the achievement of material well-being. The emergence of the next exact science may bring the exploration of the nature of life and its social application. Its consequence is the achievement of mental and spiritual well-being. Thanks to exact biology, the scientific substantiation of a life-centric worldview has become possible. In the scope of civilisation, a life-centric worldview can be adopted by everyone, as the materialistic worldview was in the past centuries. The diffusion and a growing consciousness of a healthy worldview can represent advance-

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ment to all mankind. Let us not be afraid of considering the expected consequences of the comprehensive ecology. The motto of the Hungarian, Nobel laureate biologist, Albert Szent-Györgyi is as follows, ‘one can compromise everything but one’s goals’. And if the most fundamental characteristic of the Universe is that it is alive, as it is supported by a growing number of scientific arguments, life is the ultimate reality, and the scientific resolution of the question of life may be the key question that opens the gate to the understanding of the whole world. If the most comprehensive and profound essence of the world is that it is alive, and if we understand this cosmic life, it may provide a key to understanding the whole world. The exact formulation of the first principles of Nature allows for cultivating philosophy on a scientific basis, the revolution of philosophy. Discovering the moral significance of the life principle may contribute to the revolution of social sciences. As Ernst F. Schumacher highlighted, ‘the conclusions and prescriptions of economics change as the underlying picture of man and his purpose on earth changes’. According to a comprehensive ecology, man’s task on Earth is to promote a richer flourishing, beauty and cosmic value of the living world. A healthy civilisation focusses on completing this task. Discovering a moral world order may contribute to a healthier national identity, the constructive coop-

eration of nation, world peace, the rebirth of mankind’s unity, a recovery of the relationship between man and Nature, the revolution of world history. ‘ War is a judgment that overtakes societies when they have been living upon ideas that conflict too violently with the laws governing the universe’ (Dorothy L. Sayers, ‘Why Work?’, Chapter 6 in: A Christian Basis for the Post-War World (S.C.M. Press), 46-63). A substantially complete, healthy worldview can contribute to the revolution of a healthy conduct of life, the revolution of reason, or to be more accurate, of wisdom, the revolution of mental integrity, the revolution of creativity, the revolution of the quality of life, the building of an ecological civilisation. It can harmonise natural and social sciences, which have been moving away from each other for centuries. Through its scientific substantiation, a sacral moral world order can remedy the misunderstanding between science and religion. By introducing the science of life into the school curriculum, science and life can be drawn closer. The comprehensive ecological worldview can draw our worldview closer to reality. The fact that a life-centric, comprehensive ecology, encompasses the whole Universe and is coherent attributes fundamental significance to the science of ecology. A focus on ecology can eliminate man’s alienation from his self, society, mankind and Nature, and harmonise civilisation with Nature once again.

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LIST OF PICTURES AND FIGURES The geopolitical situation of Central Europe 1. figure: a szerző saját szerkesztése 2. figure: https://pangea.blog.hu/2014/06/29/a_foldrajz_a_tortenelem_kulcsa, 2019. január 5. 3. figure: Zack Cooper: The Clash of Asian Civilizations?, https://www. cato-unbound.org/2017/02/16/zack-cooper/clash-asian-civilizations, 2019. január 6. 4. figure: Zbigniew Brzezinski: A Nagy Sakktábla, Európa Könyvkiadó, Budapest, 1999. 88.o. 5. figure: Jakub G. Grygiel – A. Weiss Mitchell: Nyugtalan határvidék, Antall József Tudásközpont, Budapest, 2017. 20.o An Introduction of the “16 + 1 Cooperation” 1. figure: wikimedia Budapest Guidelines 1.table: The Budapest Guidelines, 2017 Hungary, as a pioneer of the “Belt And Road” Figure 1. 2015 Statistical Bulletin of China’s Outward Foreign Direct Investment Figure 2. China Customs The importance of the New Silk Road tot he V4 in the global economic space 1. figure: fDi Intelligence, from the Financial Times Ltd 2018. 2. figure: Eurostat The New Europe is born here, in our region 1.figure: Bernek Ágnes összeállítása, Cartographia Kft. készítette 2. figure: Az új világrend új térképi ábrázolása, www.chinaebridge.com. cn 3.figure: A kulcsövezet, valamint a belső és külső peremív, Halford J. Mackinder: „The Geographical Pivot of History”. Geographical Journal, Vol. 23. 5. figure: Kína „Egy övezet – Egy út” fejlesztési programjának fő útvonalai a 2017. évi márciusi helyzet szerint, Merics – Mercator Institute for Chineas Studies, https://www.merics.org/index.php/en/ china-mapping/silk-road-initiative 6.figure: Kína „Egy övezet – Egy út” fejlesztési programjának hat fő fejlesztési övezete, Hong Kong Trade Development Council, HKTDC Research, http://china-trade-research.hktdc.com/business-news/ article/The-Belt-and-Road-Initiative/The-Belt-and-Road-Initiative/obor/en/1/1X000000/1X0A36B7.htm, 2017 augusztus 14. 7.figure: Az Egy Övezet Egy Út – az Új Selyemút útvonalai, Theo Deutinger and Kit Chow 8.figure: Geopolitikai hatalmi mátrix a közép- és kelet-európai térség vonatkozásában, Bernek Ágnes saját figure 9.figure: A közép- és a kelet-európai országok – 2017, Bernek Ágnes saját összeállítású táblázata a World Bank World Development Indicators adatai alapján 10.figure: Az EU NUTS2-es régióinak GDP/fő értékei (PPP – vásárlóerőparitásos értékek) 2015-ben az EU 28-ak regionális gazdasági fejlettségi átlagának százalékában, Eurostat 11.figure: A 16+1 együttműködés európai csatlakozó országai, ecfr.eu 12.figure: Az Európai Unió TEN-T törzshálózati folyosói, Európai Unió, Európai Bizottság honlapja, http://ec.europa.eu/transport/ infrastructure/tentec/tentec-portal/site/maps_upload/SchematicA0_EUcorridor_map.pdf 13.figure: A közép- és kelet-európai térséget érintő öt TEN-T törzshálózati folyosó, Bernek Ágnes és a Cartographia Kft. által készített saját térkép az Európai Unió Európai Bizottságának TENtec Interactive Map Viewer honlapja alapján. 14.figure: Az Európai Unió makrorégiói, Az Európai Unió makroregionális stratégiáit bemutató, 2017-ben megjelent kiadványának térképe: http://ec.europa.eu/ regional_policy/hu/information/publications/ 15.figure: A Rajna-Duna törzshálózati (TEN-T) folyosó, Európai Unió, Európai Bizottság: TENtec Interactive Map Viewer: http://ec.europa. eu/transport/infrastructure/tentec/tentec-portal/map/maps.html 16.figure: Az Európai Unió Duna-régió makroregionális stratégiájának területe, Európai Unió, Európai Bizottság, az Alpok-régióra vonatkozó uniós stratégia: www.alpineregion.eu/ 17. figure Magyarország áruexportjának fő irányai 2016-ban és a Magyar Nemzeti Kereskedőház irodái 2017-ben, Bernek Ágnes és a Cartographia Kft. által készített saját térkép az IMF Direction of Trade Statistics adatai és a Magyar Nemzeti Kereskedőház információi alapján

18.figure: A Hyperloop 2020-as évekre tervezett útvonala Bécs, Pozsony, Budapest és Kassa között, http://www.dailymail.co.uk/ sciencetech/article-3493007/Hyperloop-coming-Europe-Superfast-tube-people-continent-just-25-minutes-2020.html 19.figure: A Mediterrán törzshálózati (TEN-T) folyosó, Európai Unió, Európai Bizottság: TENtec Interactive Map Viewer: http://ec.europa. eu/transport/infrastructure/tentec/tentec-portal/map/maps.html 20.figure: Az Európai Unió Alpok-régió makroregionális stratégiájának területe, Európai Unió, Európai Bizottság, az Alpok-régióra vonatkozó uniós stratégia: www.alpineregion.eu/ 21.figure: Az Északi-tengeri – Balti törzshálózati (TEN-T) folyosó, Európai Unió, Európai Bizottság: TENtec Interactive Map Viewer: http:// ec.europa.eu/transport/infrastructure/tentec/tentec-portal/map/ maps.html 22.figure: A Hyperloop tervezett útvonala Lengyelországban a Varsó-Lódz-Wroclaw útvonalon és a lengyel Hyperloop vasút tervezett formaképe, A Hyper Poland honlapja: www.hyperpoland.com 23.figure: Az Európai Unió Balti-régió makroregionális stratégiájának területe, Európai Unió, Európai Bizottság, a balti-tengeri régióra vonatkozó uniós stratégia: www.balticsea-region.eu/108 24.figure: A Gazprom Északi-áramlatának I. és II. vezetéke, Gazprom hivatalos honlapja: www.gazprom.com 25.figure: A Balti-Adriai törzshálózati (TEN-T) folyosó, Európai Unió, Európai Bizottság: TENtec Interactive Map Viewer: http://ec.europa. eu/transport/infrastructure/tentec/tentec-portal/map/maps.html 26.figure: A Három Tenger Kezdeményezés országai és három alapelve, Slawomir Debski előadásanyaga: https://twitter.com/slawomirdebski/status/879437089162629121 27.figure: A tervezett észak-déli irányú energetikai gázfolyosó, BIZNESALERT http://biznesalert.com/polish-briefing-eu-grant-agreement-poland-slovakia-gas-interconnection/ 28.figure: A Kelet/Kelet-Mediterrán törzshálózati (TEN-T) folyosó, Európai Unió, Európai Bizottság: TENtec Interactive Map Viewer: http://ec.europa.eu/transport/infrastructure/tentec/tentec-portal/map/maps.html The geoeconomics significance of the „New Amber Road” Az „Új Borostyánút” Geoökonómiai Jelentősége 1. figure: Rail Market Monitoring adatai alapján a szerző saját szerkesztésű ábrája 2. figure: Rail Market Monitoring adatai alapján a szerző saját szerkesztésű ábrája 3. figure: Kikötői hatóságok adatai alapján a szerző saját szerkesztésű ábrája 4. figure: Kikötői hatóságok adatai alapján a szerző saját szerkesztésű ábrája 5. figure: a szerző saját szerkesztésű ábrája Establishing the Budapest-Warsaw axis 1. figure: Munkaügyi Hivatal 2.figure: INEKO 3. figure: INEKO 4. figure: INEKO 5. figure: INEKO 6. figure: INEKO 7. figure: INEKO 8. figure Őry Péter, Pro Civis PT 9. figure: INEKO 10. figure: INEKO 11. figure: INEKO Rail Freight Transport between China and the European Union on the New Silk Road 1. figure: LPI (Logistics Performance Index) listája alapján Forrás: https://lpi.worldbank.org/international/global 2. figure: Forrás: https://america.cgtn.com/2017/05/13/5000-china-europe-cargo-trains-expected-by-2020# 3. figure: Forrás: http://www.unescap.org/resources/trans-asian-railway-network-map 4. figure: Forrás: https://www.rba.gov.au/publications/bulletin/2016/jun/pdf/bu-0616-5.pdf 5. figure: European Commission Transport Pocketbook 6. figure NBS 7. figure: European Commission 8. figure: European Commission 9. figure: European Commission

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credits EDITOR-IN-CHIEF Norbert Csizmadia EDITORAL BOARD Ágnes Bernek Viktor Eszterhai László Körtvélyesi Géza Salamin Péter Szatmári György Szapáry István Szilágyi COPY EDITOR Szilvia Kalla ART EDITOR Gyula Nagy

AUTHORS Ágnes Bernek Márton Békés Ádám Bohár Péter Bucsky Gréta Czene Norbert Csizmadia Viktor Eszterhai Attila Grandpierre Marcell Horváth Sándor Kopátsy György Matolcsy Katalin Miklós Viktor Orbán Ádám Sashalmi Alexandra Zoltai

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