The Marine Silk Road
The winds of fate have greatly shaped the course of emerging markets throughout history. This literally was the case for the Marine Silk Road, which stretched from the Arabian Peninsula, across the Indian Ocean, through the Straights of Malacca, around Vietnam, and up to China. Due to favorable and predictable monsoonal winds, ships have plied these waters for centuries, trading goods, opening markets, and expanding political influence in the names of countries, kings, merchants, pirates and privateers. Initially dominated by Arabs, Indians and Chinese, and then European powers and the US, the Marine Silk Road has become a major – perhaps the major – artery of global commerce. All trading countries have stakes and/or a presence in these waters. This reality is largely explained by the economic ascendancies of countries in East, Southeast and South Asia, and the energy producers in the Gulf States.
The opportunities, challenges and threats along the Marine Silk Road — and its narrow straits and canals through which so many ships must travel to deliver so many goods to so many ports and consumers around the globe – resonate with governments, security agencies, businesspersons, legal experts, policy wonks, and academics. And so it was that several of them/us were summoned to Williamsburg, Virginia, last weekend, to participate in the Critchfield Conference, an exploration of current and future salient issues along this ancient and resurgent maritime highway.
From piracy off the coast of Somalia to the breathtaking growth in ports, numerous topics were discussed. For example, readers may be interested to know that during the conference it was reported that the average ransom paid for a full container ship hijacked off the coast of Somalia fetches a cool $18 million; that the capacities of ports in Singapore and Shanghai are larger than the combined capacities of all the ports in North America. We’re talking high stakes, high risks and big players. It is no surprise that the Obama administration is wisely shifting attention to this part of the world. As always, megatrends portend game-changing events and inevitable uncertainties – both good and bad. So batten down the hatches and hang on, we’re all in for an interesting cruise as the global economy sails along, or is increasingly dependent upon, the Marine Silk Road.