Turkey: Eurasia in the Global Economy

Eurasia, the landmass bridging the traditional continents of Europe and Asia, has become a bulwark of the global economy.

The ancient network of trade routes that for thousands of years brought goods from the Far East to Western Europe is now a rapidly modernising network of pipelines, rails, super highways, and Information Technology links. The Eurasia of the Third Millennium is home to some of the world's largest oil producers, wealthiest investors, and fastest growing economies along with more than half the world's population.

China and Eurasia

China is the foremost economic power in the Eurasian theater, where it is investing more heavily than the EU or the United States. China's Eurasian portfolio includes road construction projects in Tajikistan and Kyrgyzstan, gas pipelines in Turkmenistan and Kazakhstan, and hydropower plants in Tajikistan and Kyrgyzstan. With $2.0 trillion in reserves representing nearly 30% of foreign exchange reserves worldwide, China enjoys huge financial resources to support its Eurasian ventures.

Energy and energy security are the drivers of China's Eurasian strategy. China is now the world's second largest oil consumer due to the country's rapid industrialisation and urbanisation. China's massive economic stimulus package, strategic stockpiling of oil reserves, and launch of new refineries are heightening the country's demand for energy. According to the International Energy Agency, China's oil demand will rise to 11.3 million barrels a day by 2015.

The hydrocarbon supplies coming from the Eurasian region remain modest compared to those originating in the Persian Gulf. Kazakhstan (the second largest oil producer in the Former Soviet Union following the Russia Federation) produces 1.4 million barrels per day (bpd) compared with Saudi Arabia's 10.9 million bpd, the United Arab Emirates' 3.0 million bpd, and Kuwait's 2.7 million bpd. Iraq, whose long-dormant oil industry is poised for major production increases, is projected to reach 4 million bpd by 2015.

China's energy investments in the Eurasian area serve to lower the country's reliance on imports from remote Middle Eastern suppliers, most of which have lengthy and potentially perilous journeys through the choke points of the Hormuz and Malacca Straits.

Noteworthy among these Eurasian projects is the 2,228 kilometer Kazakhstan-China pipeline (jointly owned by KazMunayGas and the China National Petroleum Corporation), which will transport 20 million tonnes of oil per year from the Aktobe, Kumkol, and the increasingly important Kashagan fields on Kazakhstan's Caspian shore to Alashankou in the western Chinese province of Xinjiang.

The $7.3 billion Turkmenistan-China pipeline was inaugurated in December 2009, permitting the eastward transportation of Caspian gas. By 2011, 30 billion cubic meters of natural gas will be delivered to China from Turkmenistan (along with 10 billion cubic meters from Kazakhstan), helping China stabilise its energy supplies and reducing carbon dioxide emissions.

Parallel with these energy initiatives in Central Asia, China is expanding its commercial footprint on the South Asian Subcontinent (illustrating the gradual warming of bilateral relations with longtime antagonist India) and the Middle East (including manufacturingrelated trade and investment in the Middle East and North Africa).

China is also a potential participant in the IPI (Iran-Pakistan-India) project, which as originally conceived would deliver natural gas from Iran to Pakistan and India. But India is hedging on the project due to sanctions on Iran by the United States, whose ties with the New Delhi government have also deepened in recent years. The Obama Administration is reportedly pressuring the Pakistani government also to abandon the natural gas venture with Iran.

China is prepared to fill the void left by India and Pakistan's withdrawal, constructing a deepwater port in Gwadar near the Hormuz Straits in preparation of and to promote an energy partnership with Iran.

Eurasia and Energy Politics

Russian-based energy companies (GazProm, Lukoil, et al) and mining/metallurgical companies (e.g., MMC Norilsk Nickel Group) are heavily invested in the "Near Abroad" of the Former Soviet Union, and are therefore important commercial players in Eurasia.

But geopolitical factors (notably the reassertion of Russian domination in Central Asia and persistent ethno-national and territorial disputes in the North Caucasus) powerfully influence Russian activities in the Eurasian area. Moscow's heavy-handed use of the energy weapon against Belarus and Ukraine and its armed intervention in Georgia demonstrate the close interconnections between politics and economics in Russia's approach to Eurasia.

To counter the Moscow government's growing assertiveness in the Eurasian region, the EU (strongly supported by the United States) constructed the 1,768 kilometer Baku-Tbilisi- Ceyhan (BTC) pipeline transporting oil from the Azeri-Chirag-Guneshli field to Turkey's South Mediterranean port. Since the first tanker with Azeri oil left a Turkish port bound for an Italian refinery in 2006, BTC has become the most important energy corridor linking the Caspian Sea and Europe.

The EU and U.S. also sponsored the parallel Baku-Tbilisi-Erzurum (BTE) pipeline, which transports natural gas from Azerbaijan's offshore Shah Deniz field to Turkey. From there, Caspian natural gas will be distributed to Western Europe via a Turkish-Austrian pipeline (Nabucco) and other links. A proposed Trans-Caspian pipeline will convey natural gas underwater from Turkmenistan to Azerbaijan, connecting to BTE for delivery to Western Europe. Meanwhile, the European Commission has signaled its interest in ITGI (Interconnector Turkey-Greece-Italy, which would convey natural gas from the Caspian to Italy) and the White Stream project (which would transport Caspian gas to Romania and Ukraine).

Notwithstanding Western efforts to create alternatives to Russian hydrocarbons, the Russian Federation remains the dominant energy power in the Eurasian area. Current energy projects underscore the readiness of European players to accommodate Russian prerogatives:

  • Italy's Eni and Russia's Gazprom have formed a joint venture called the South Stream pipeline, which will transport Russian gas under the Black Sea to Southeastern Europe.
  • Turkey's TPAO (Türkiye Petrolleri Anonim Ortakligi) has joined a Gazprom-led consortium to develop the Badra oil field in eastern Iraq.
  • Germany's BASF and E. ON and Holland's N.V. Nederlandse Gasunie have signed as minority partners with majority owner Gazprom in the Nord Stream project, an offshore Baltic gas pipeline that has incurred the ire of bypassed Poland.

Transportation Projects

A range of international transportation projects are underway to create a modern infrastructure for the Eurasian region.

The building of a railroad linking Kars, Turkey and Akhalkalaki, Georgia and the rehabilitation of the Akhalkalaki-Tbilisi rail line will connect Istanbul to the Caspian Sea. The Kars- Akhalkalaki-Tbilisi-Baku railway is expected to be completed in 2010 with onward connections from Azerbaijan to Kazakhstan. Together with rail lines linking Kazakhstan and China, these projects will create a rail connection from Istanbul to Urumqi in China's interior.

China is constructing 12 highways to configure Central Asia as a land bridge linking Beijing with the Black Sea. These highways will connect the Xinjiang Autonomous Region with neighboring countries, including Russia, Kazakhstan, Kyrgyzstan, and Pakistan. Customs procedures for en route goods will also be streamlined. China's Eurasian highway ventures are part of the 141,000 kilometer Asian Highway project sponsored by the United Nations.

The China Railway Construction Corporation (CRCC), which is the world's 6th largest contracting company and whose declared mission is ''to cut paths through mountains and builds bridges across rivers'', has launched a number of Eurasian projects. The China–Kazakhstan railway will connect China and Kazakhstan via the Alataw Pass, providing passenger service from Urumqi to Almaty and Astana. CRCC is also constructing a rail link between China, Kyrgyzstan, and Uzbekistan.

The importance of this East-West transport corridor was recognised by the EU's TRACECA (Transport Corridor Europe-Caucasus- Asia) programme in the mid-1990s. The transportation network will make it possible to ship goods quickly and inexpensively across the Eurasian landmass reducing the transit time for cargo between the Chinese Pacific coast and the European market to about one week.

Information Technology in Eurasia

Along with investments in transportation, the Eurasian region is undergoing a modernisation of Information Technology.

The Black Sea Interconnection (BSI) project implemented under 7th Framework Programme of European Commission and the Istanbulbased Black Sea Economic Council (BSEC) has developed a high-speed backbone linking the national research and education networks of the South Caucasus countries, allowing connectivity to the pan-European research and education GEANT2/3 network. The Scientific and Technological Research Council of Turkey (TUBITAK) acts as coordinator and links 45 universities and over 150 000 scholars from Azerbaijan, Georgia and Armenia with partner institutions in Europe. The BSEC is also leading the Trans-Eurasian Information Super Highway (TASIM) venture to bridge the region's "digital divide" by enlarging international connectivity and expanding broadband access.


The resurgence of international interest in the Eurasian commercial area has important implications for the countries of the region:

  • Deepening commercial ties between China and the EU, whose trade turnover already surpasses the volume of Sino- American and Sino-Japanese trade
  • Rising standing of the Republic of Turkey as a cultural/economic/political/ technological bridge between Asia, Europe, and the Middle East
  • Expanding links between the EU and the Soviet successor states and the Caucasus, many of which endured stagnation, instability and isolation during the 1990s and 2000s but are now showing strong economic potential (eg Azerbaijan).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions