The Eurasian Land-Bridge:
The mort important strategic question of today.

By Helga Zepp LaRouche Jr.
speech transcript, Feb. 5, 1997

The presentation of Helga Zepp LaRouche, founder of the Schiller Institute, to the Feb. 5 forum on the Eurasian Land Bridge, follows.

Subheads have been added.

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Helga Zepp LaRouche:

The European/Eurasian Land-Bridge is, no matter what the media say or not, the most important strategic question of today. And, the success of the economic integration of the Eurasian continent, on a very high-level technological basis, will determine the fate of mankind. And, this is not a question ahead in the very far future, but I think that, considering the different strategic parameters, the question of whether the Clinton administration takes a positive attitude to make it a foreign policy strategic interest of the United States, to support the success of this Eurasian Land-Bridge, or if they remain indifferent, passive, or worse, will indeed determine whether mankind plunges into an incredible catastrophe, of which the developments in Africa give us a small foretaste, or whether we are in front of the biggest economic miracle in world history.

This alternative is directly in front of us, and I think the reason this question is the most important, is fairly obvious. If you look at the population density in the world today, you can see very clearly that the largest concentration of the world population is in China and Southeast Asia and South Asia, with very thinly sprinkled concentrations elsewhere. And, this part of the world, South Asia, West Asia, Southeast Asia, is also going to be the area of the largest population growth in the next century.

China presently represents 1.2 billion people. It is presently the most populous in the world, and it has, without any question, had the most intensive positive economic development of any country on this planet in the last 12 to 17 years, averaging 10%, even 12%, annual growth.

The fascinating thing right now is that at the Davos World Economic Forum, despite rather hysterical misreportingby the international press, the European/Eurasian Land-Bridge, and the economic development of China, but, in a new way, also, of India, is the most debated topic in Davos in the last couple of days.

It is very funny that, for a long time, Mr. LaRouche was like a sole caller in the desert, warning about the imminent collapse of the financial system, advocating the Eurasian Land-Bridge, with the international media basically denying both realities, as a matter of fact, not reporting about the true condition of the world financial system, but equally absolutely not reporting about the emerging alternative reality, in the form of the Eurasian Land-Bridge. Now, all of a sudden, at the Davos summit, both realities are popping out, and are on the table.

Because the two issues which were debated there by some of the leading world financial and economic political leaders, were, on the one side, the imminent financial crash of the speculative bubble, possibly triggered by the crisis in Japan, or other factors, the systemic crisis of the system as a whole, but, also, the Eurasian Land-Bridge. And, some people were completely annoyed about the self-assuredness with which the Chinese representative and the Prime Minister of India presented the development perspectives of their respective countries, at Davos.

The Coming Crash

But, let me first give you a taste of what the debate is, especially in Europe, about the imminence of the financial crash, because I don't think that those of you who looked at President Clinton's State of the Union address last night, got the full flavor of what the debate right now is.

The director of the Institute for International Economics in Washington, C. Fred Bergsten, did make a speech at the Davos conference, warning of the new dangers to the financial system coming from Japan, triggered by the yen crisis plus the overall economic situation in Japan, which would pose new threats to the international system. He says there is the danger of a vicious circle, a weakness o the financial system in Japan, combined with a restrictive Japanese monetarist policy, which could lead to a continuous fall of the yen. Panic selling on the stock market could hit Japan, and then banks would have no other choice than to liquidate their foreign assets. This would then have devastating consequences on foreign markets. And then, in addition, you could have new Mexico-style crises in the emerging markets at any moment, most likely in Brazil and Argentina, and that could then trigger a chain reaction all over the world.

But, this was not the only voice. In the meantime, you have European conservative financial dailies, like the Neue Zuericher Zeitung, which is the paper of Swiss banking and conservative circles, on Jan. 24, reporting in a big banner headline: ``Are the Stock Markets Heading for a New Crash? Comparison of the Present Development with that of 1929 and 1987.''

So, Prof. Gerhard Aschinger, from the University of Freiburg, describes his scenario of the coming crash, which is divided into six phases, leading up to a market crash. And, he says that we are presently in the fifth phase, passing into the sixth. The fifth phase is characterized by euphoria and irrational behavior by those people speculating in the market, in terms of a mass psychology. Then, in the sixth phase, a panic erupts, and the bubble bursts.

He says that the transition from the fifth to the sixth phase can be triggered by events and news which are not so important in themselves; but, because they lead to an upset, in the expectation to make just a little bit more profit in speculation, the mass psychology will then turn into a panic. He says that the fact that the Dow-Jones has risen by 70% since the beginning of 1995 through the end of 1996, can only be compared to the speculative bubble of the 1927-29 period. He also completely agrees on that point with Mr. LaRouche, that the longer the bubble continues to grow, the larger the crash implosion will be.

But, these are not individual voices. I wll give you some more, to show you that right now there is an entire chorus of people warning about the impending crash, something which, up till recently, only Mr. LaRouche and our organization has said.

On Jan. 15, in Frankfurt, the president of the German savings and loan association, Horst Koehler, warned that overnight, waves of chaotic currency speculation could erupt. On Jan. 19, at a seminar of the Protestant Academy of Tutzing, the former chief economist of the Bavarian Hypo Bank, Volker Hoelterhoff, said that the world financial markets are incredibly endangered.

The arch-monetarist of Deutsche, Norbert Walter, said that the world financial markets are decoupled completely from the real economy. Especially dangerous: the derivatives, and the breathtaking volume of these derivatives is absolutely frightening.

Jan. 20, the Frankfurter Allgemeine Zeitung predicts that the stock market hype in New York and in Europe, is just the buying spree based on the assumption that the party will be over soon.

Jan. 21, Le Monde: Is the financial world going up in flames? They have a three-page supplement on the danger of a financial blowout, basically saying that ``Alone during the first nine months of 1996, $1,195 billion of stocks and bonds have been issued.'' That is $1.1 trillion worth of stocks and bonds have been issued, in which context they quote the U.S. stock broker Charles Schwab saying, ``How can anyone not tremble when imagining the consequences of an eventual brutal displacement of such masses of capital?''

Now, this gives you the setting of why there is no way this world will survive, unless we do, very soon, the kind of reorganization Mr. LaRouche has proposed, why we need a new Bretton Woods system, and why, after the reorganizaton of the world financial system, the Eurasian Land-Bridge must be the cornerstone of a global reconstruction of the world economy.

But, let me give you, very briefly, the history of the emergence of this concept.

From IDB to Productive Triangle

In 1975, Mr. LaRouche gave, in Milan and in Bonn, a press conference, in which he predicted that the present or then-existing international monetary system of the IMF would inevitably go bankrupt, and should be replaced by a different credit creation institution, namely, the International Development Bank (IDB), to facilitate long-term cheap interest credit for capital investment and capital goods transfer from the industrialized sector to the so-called developing sector, to overcome the underdevelopment of Africa, Latin America, and large parts of Asia.

This proposal, by the way, was then taken up by the Non-Aligned Movement in 1976, in their Colombo resolution, demanding a just new world economic order.

Then, because obviously powerful forces prevented this from being implemented, Mr. LaRouche proposed, in 1978, that the then-existing European Monetary System should be the cornerstone of such a reorganization of the world economy. In 1982, in the famous ``Operation Juarez'' proposal, he proposed the urgent debt reorganization of the Third World, a cancellation of most of the debt, and reorganizing the world banking system, centering on the economic integration of the Latin American continent, which was begun to be implemented by Lopez Portillo, President of Mexico at that point.

Then, in 1984, Mr. LaRouche wrote, with his associates, a study for the 50-year development of the Pacific Basin, which proposed large infrastructure programs for India, for the Mekong Delta, for South China, the Kra Canal, for large parts of South China and other places. And, if you compare the present policies of the Chinese government, and reflect on the shift which China has made away from the policies of the Cultural Revolution, you find at least very interesting parallels between these two approaches.

In 1988, Mr. LaRouche made the famous proposal for a soon-to-become-real unification of Germany, which he just referenced. He was, to my knowledge, the only Western economist and statesman predicting the collapse of the Soviet Union more than a year before it happened. He was the only one who predicted the unification of Germany, at a point at which all German politicians called the unification of Germany the ``lie of the Century,'' people should forget about it, and so forth. And, Mr. LaRouche said, ``Let's take a unified Germany, and use Western technologies to develop Poland, and make that the model for how you can transform the economies of the Warsaw Pact with Western means into a modern economy.''

Then, in 1989, at a point when (you all remember the pictures on TV), the Berlin Wall came down at the beginning of November, people were happy. There was an incredible historical moment. And, again, I must say, given the fact that I and my friends, Michael and Anno, were on the scene, busily trying to shape history, there was not anyone, not Kohl, for sure not from the U.S. administration, or anywhere else, who had any idea of what to do, of how to capture the historical moment of the fact that the Wall dividing the Eurasian continent would come down for, really, the first time since the Versailles Treaty--except Mr. LaRouche, who proposed the famous program of the Productive Triangle.

The Productive Triangle was the idea of taking the territory in the triangle between Paris, Berlin, and Vienna, which is about the size of Japan, and which, still to the present day, includes the highest concentration of industrial capacity and skilled labor power, and goes through Saxonia, Bohemia, parts of the former Czechoslovakia, combining, for the first time, the industrial centers of France, the Ruhr, Saxonia, Bohemia, into one coherent piece.

He proposed that this should basically be upgraded, through the most modern infrastructure network, including the maglev train, the Trans-Rapid, other investments in avant-garde technologies, to make this, then, the most powerful locomotive for the recovery of the world economy.

We put this proposal on the table in November 1989, to the Kohl government, to all the Europan governments, East and West. We proposed that Eastern Europe should be integrated through the development corridors; namely, through the building up of transport lines, one corridor going from Warsaw to Moscow, St. Petersburg, another to Kiev, another to the Balkans, to the Black Sea, another to Sicily, bridging into Africa, another to the Iberian Peninsula, reaching into Africa.

The Productive Triangle Report

This report was published in all European languages in 1990. We presented it at many conferences and seminars in Warsaw, Minsk, Moscow, in Kiev, in Poland, in Prague, Bratislava, Vienna, Zagreb, Sarajevo, many other places. What would have been necessary, would have been an approach whereby the economies of the Warsaw Pact (admittedly not up to world standard) would not have been dismantled, as happened under the IMF, but would have been used to build up the infrastructure of Eastern Europe, to provide the absolutely necessary precondition for industrial development and agricultural development.

Because one of the inherent flaws of the communist economy was a complete neglect of infrastructure. The Soviet Union, for example, used to lose 40% of their agricultural harvest, just because of a lack of infrastructure. If you remember the famous Autobahn in East Germany, it was like a bumping road; there was the horrible condition of the trains; you remember that lack of infrastructure was one of the key problems.

The idea, then, was to generate wealth by using up these obsolete technologies of Eastern Europe, to reach the condition where, with Western help, one could have a kind of Marshall Plan for the East, using these corridors (about the functioning of which I will say more) to drive the economic development of Western Europe into Eastern Europe; to raise the level of the republics of the former Soviet Union, and fulfill their aspirations to join the First World, which is what the people in Ukraine, in Poland, in Lithuania, in Russia, wanted. They wanted to be part of the advanced est; you all remember this.

Well, we know that history took a different turn. Mr. LaRouche has mentioned it: The key banker in Germany who was thinking a little bit in the direction that we do, Alfred Herrhausen of Deutsche Bank, was assassinated. Just recently, Deutschlandfunk, the official German radio, has pointed to certain Anglo-American financial interests as being behind the murder, not the Baader-Meinhof group. And, it is also being debated that they don't even exist: There is no ``third-generation Baader-Meinhof group.'' But, for geopolitical reasons, Herrhausen was assassinated, and I'm afraid that everybody of rank in Germany knows the details and reasons for this.

And, Germany, rather than going in the direction we proposed, and using Europe's historic chance, capitulated to the British campaign of Margaret Thatcher, George Bush, and Mitterrand, but especially the British; namely, that if Germany did that, it would become the ``Fourth Reich.'' So Kohl, rather than using the historic chance, capitulated, and today we are seeing a complete collapse of Western Europe, and the end of the Kohl era in the very immediate period.

We, however, continued to organize for the realization of this program.

In 1992, we presented a proposal for the Eurasian infrastructure alliance because, at that point, the Soviet Union had collapsed, and we proposed to combine the Productive Triangle, situated in Western Europe, through infrastructure lines, all the way to China, with Line A being the northern route, the Vladivostok Trans-Siberian Railroad, Line B going through Ukraine, Kazakhstan, China, and Line C from Turkey, Iran, Kazakhstan, China.

So, we proposed to integrate the Eurasian continent into one piece. And, again, we had many conferences about this in Moscow, in other places. And, especially because China at that point was still involved in a very dangerous mixture, on the one side a state-planned economy, but, on the other side, also being absorbed in the speculative bubble, we, fortunately, put out many wanings against financial AIDS--that is, speculation in the economy--warnings which were published widely in China.

So, by 1993, the Chinese government consciously turned away from the bubble economy, put more emphasis on a dirigist policy, and there was a clear revival of the famous policy of the founder of modern China, Dr. Sun Yat-sen, who, in the 1920s, had put out a beautiful document called the ``International Development of China.'' This is a map he used, which includes a very elaborated system of integrated railways, water projects, and other infrastructure programs.

Dr. Sun at that point proposed a rail system to be 100,000 km long, one million kilometers of new roads, large canal projects, and projects for the control of the Yangtze River and the Yellow River, the construction of many new cities, which is all in this map.

The Delors Plan Is Shelved

Then in 1993, Jacques Delors from the European Union, put out the famous Delors White Book, which included practically all the original Productive Triangle transport lines, minus the railway from Munich to Zagreb, because they assumed that the Balkans war would continue for a long time.

Delors's White Book was completely skipped, and is now hidden somewhere in Brussels, or I don't know where.

Now, in 1993-94, there were further important changes in the economic policy of the Chinese government to reduce the bubble, both in the real estate market and in other markets. They implemented more dirigistic measures, put more stress on the Eurasian Land-Bridge, and announced that they intended to develop the northeast regions of China, to improve relations between China and Europe, as well as the rest of Asia.

In May 1994, the Vice Minister of the State Commission on Science and Technology, Hui Yongzhen, gave an exclusive interview to Executive Intelligence Review, in which he said that the Eurasian Land-Bridge would be the central feature of China's international and economic foreign policy.

In August of 1994, representatives of the ER participated in Lanzhou, in a conference on the cooperation for the development of the Eurasian Land-Bridge. And, in May 1996, I myself, together with a delegation of the Schiller Institute, participated as a speaker at the Beijing conference, titled ``The Development of the Economic Regions Along the Eurasian Land-Bridge.''

This conference was a watershed, because the Chinese government announced there their strategic long-term perspective for China up through the year 2010, which is already written into government legislation. And they have no less a goal than to bring the entirety of China up to the level of the rest of the world, as quickly as possible.

Different spokesmen, whose speeches you all can read in the report we published, announced that a new era of mankind has started, namely, the Land-Bridge era, where, for the first time in human history, there will be no more regions of the world which will be disadvantaged because of their geographical positions, but, because of the Land-Bridge conception, you can bring development into all areas around the globe. And especially the landlocked areas will participate in the same kind of advantages which, previously, only maritime cultures or cultures, civilizations based on rivers, had.

Cultural Optimism

But, I think the most important thing was that this conference, in which I think 34 nations participated, expressed an incredible cultural optimism, an optimism which you do not find in the United States, in Europe, for sure not in Russia. And, people were just completely filled with the idea that the underdevelopment of mankind is coming to an end.

Now, since that May conference--again, the international press has not reported this. Except for one or two tiny articles, there was an absolutely deafening silence about the fact that the majority of the world had come together to decide to overcome underdevelopment--

In the meantime, an incredibly breathtaking development has taken place, namely, a very wide array of agreements and deals, mainly blacked out by the press. Beginning in January of this year, eight developing countries met in Istanbul, Turkey, forming the so-called D-8, the Development Eight, as a counterweight to the G-7. This was under the leadership of Prime Minister Erbakan of Turkey, and with the participation of the Foreign Ministers of Iran, Indonesia, Malaysia, Nigeria, Bangladesh, Pakistan, and Egypt, representing, again, about 700 million people. The D-8 announced that they would be open for additional members.

The aim of the D-8, which they announced, was to help its members in their development goals, to function as a partner in cooperation with other organizations, and to be an equal partner with the G-7. This all goes back to a vision of Erbakan's and Indonesia's Habibie, when both of them studied as young students at the University of Aachen in Germany, where they planned that. I think this will give you optimism: Sometimes you have a good plan, and it takes 30, 40 years, until you are in a position to realize it.

So, Erbakan, the moment he was Prime Minister, took his foreign trip to Iran, Pakistan, and Malaysia. And, in Teheran, he signed an agreement: large pipeline agreements between Iran and Turkey which, for 23 years, is supposed to delivery natural gas from Turkmenistan and Iran, to Turkey and beyond. They also agreed on completing the missing railway link between Tabriz and Bonn, and they have planned the founding of this organization, the D-8, for June of this year.

Now, let me give you a couple of the elements of what is going on, and why China right now is the fastest-developing country, and you will get a sense that while, on the one side, we are looking at the collapse of the financial system, rising unemployment in Europe, collapse of economies, there is a completely different process, where economic development is taking place, actually representing hope for mankind as a whole.

China is presently involved in absolutely gigantic infrastructure projects. Among them, are these: They want to have a railroad network, by the year 2000, increased by 11,000 km, and by 2000, to be 90,000 km altogether, which is twice the amount they have today. They want to have completed the first 300 km of a high-speed train between Beijing and Shanghai, also by 2000. They want to increase the road network--roads--by 12,000 km. They want to build 14 large subway systems in the next five to 10 years. One hundred airports, 100 ports. In the next 20 to 30 years, 200 cities with 1 million habitants or more each, because they expect a population increase of 200 million people, and they want to supply adequate housing.

Gigantic hydroelectric plants, large-scale canal and irrigation projects to divert the water from the water-rich south to the dry north; four nuclear power units come on line in the next years, and many more are planned, and the first HTR, High Temperature Reactor, is under construction.

Projects of the Century

There are two so-called ``Projects of the Century.'' One is the famous Three Gorges Dam project. Here you see an artist's painting of what it could look like when it's finished. This project mainly has as its aim the taming of the Yangtze River, using also the water gained then in the reservoir for energy and irrigation.

And, the second Project of the Century, is the new Eurasian rail development, linking the Chinese coastal area, through the enormous interior regions, to Europe.

There is a whole array of ambitious projects along the Yangtze River, combining this Yangtze River development project. They also have projects for the Pearl River delta in the southeast. The region along the Bohai Bay in the northeast, including the Beijing and Tientsin region, and then, fourth, the development corridor along the Eurasian rail line, and the modern Silk Road.

But, of all of these projects, the most spectacular is the Three Gorges Dam on the Yangtze River. The construction of this began in 1994, going back to the idea of Dr. Sun Yat-sen. This is a typical example of the hypocrisy of the environmentalistsand the World Bank, for that matter, in the West, who have denounced this project tremendously, claiming that it will hurt the environment, and so forth. But, let's not forget that in the last flood disaster in this area alone, 33 million hectares of farmland were flooded, 1,000 people died, 800,000 houses were destroyed, 2.8 million homes were damaged. And, that is after the Chinese government hd already taken some measures to limit the damage, because, in previous centuries, you had many flood catastrophes, in which tens or even hundreds of thousands of people would die.

Now, this dam is supposed to be completed in the year 2010, and then the danger of these floods will be eliminated. It will also produce hydroelectric power of 85 terrawatt hours per year; but, most importantly, it will eliminate the threat to 15 million people living in this area. It will cost $30 billion, but, in the long term, it will be incredibly profitable. The hydroelectric power plant, with a maximum capacity of 17,680 MW, will produce 13 times the amount a normal nuclear power plant produces. It will be the most powerful hydroelectric plant in the world, and it will be a key element in China's energy grid, at least until nuclear energy is developed.

Part of it will be a five-level system of locks, which can lift 10,000 GRTs (gross registered tons), which will enable ships to travel upstream as far as the city of Chongqing, which will make 700 km of the Yangtze navigable. Then you will have, in China, a river like the Rhine in Europe, and all of you who have ever been in Germany or Holland, have seen what a beautiful thing the Rhine is, which is completely regulated. You have one ship, one after the other, you have freighters going. Every time Mr. LaRouche sees that, he says, ``This is infrastructure! That's what it should look like!'' So, China is going to have their own Rhine very soon.

Through the dam, the volume of freight will be increased from, presently 10 to 15 million tons, and the cost will be reduced by one-third. Naturaly, it will also be a gigantic reservoir. Through a canal which is yet to be built, the water will be transported to the north, for irrigation. This will open up a territory larger than Germany, for infrastructure development and agriculture in the north.

Agreement with the TVA

In September of 1996, there was an agreement between the U.S. TVA, the Tennessee Valley Authority, and the Chinese government, in the collaboration to build these dams and power plants and canal systems, taming the Han River, which flows into the Yangtze, through this canal system, into the north, and, also, the Li River, to also contain flooding there.

The project to divert water from the Yangtze to the Yellow River, through this modernization of an existing canal, makes use of the fact that the mouths of the rivers are not very far from each other. So you can put the water of the Yangtze through a canal system, feeding the irrigation system of the north of China. And, what this will mean, is that the Gobi Desert will be a blooming garden fairly soon.

Till the year 2000, it is also planned to increase, and modernize, and continue the development project at the mouth of the Yangtze, near Shanghai. This will be a $100-billion investment program, planning a new port, modern communication from Shanghai to Chongqing, a new airport, auto refineries, two auto plants, a nuclear plant, increasing the steel production to about 48 million tons--which, by then, will be half of the Chinese steel production--improving the road and railway from Shanghai to the cities at the upper Yangtze, building four new railroads alone and eight new highway bridges over the Yangtze, as well as the 1,300-km high-speed railway between Beijing and Shanghai.

The region of the Xi Jiang river delta and the Guangdong canton, is also one of these development zones. Everything right now is prepared for the economic integration of Hongkong.

Probably the largest development project in the world right now, is the famous Bohai project. This is the region at the moth of the Yellow River, in the northeast of China, and it includes four regions: Shangdong, Shaanxi, Hebei, and Liaoning. It includes Beijing and the port of Tianjin, parts of inner Mongolia, and, as I said, it will probably be the richest development region of the world in a fairly short period of time.

Already now, that is the center piece of Chinese industrial concentration. It represents only 12% of the territory, but 20% of the Chinese population lives there, and they produce one-quarter of all production.

It is an economic zone which also puts together China, Japan, North Korea, South Korea, and the Far East of Russia. Already now, the Bohai region is the center of Chinese heavy industry, and machine tool industry. It represents the second-largest oil and gas revenues of China, the third-largest chemical production, and a gigantic economic potential which sits, basically, in Beijing's back yard.

In the next years, seven large new ports are planned, or supposed to be enlarged. Also, to connect this region better to the highlands, many roads and rails are planned. Key to the new development, is a bridge over the Bohai Bay which connects the two peninsulas of Shangdong and Liaoning. This will be the largest sea-bridge in the world, 57 km long, which will shorten the distance along the coastlines by 2,000 km. It will be an ideal connection between the northern Eurasian Land-Bridge, the Line A on the previous picture, and Line C, combining these two different routes.

It will also include several bridges and one tunnel. It will be completed by the year 2010. Until then, a modern railroad ferry is being used between Dalian, the main port of Liaoning, and Yantai in Shandong.

In this entire region, the Bohai region, in the next 15 years, 3,600 infrastructure projects will be built, including road and railroad, heavy and light industry, nuclear plants, new cities, and so forth. The idea behind that, is nothing less than the idea of connecting the developed coastal regions with the undeveloped interior regions and Europe, and using the development of the coastal area as a development driver to overcome the underdevelopment of the interior regions.

 

It Already Exists

As I said, the Eurasian Land-Bridge already exists. In 1990, the 4,131-km-long railroad was completed at Alataw Pass between China and Kazakhstan, which was opened in 1992 for container transport. The last part of the 11,000-km-long line, going from China through Turkmenistan to Europe, was opened in May 1996: the famous piece between Iran and Turkmenistan.

The construction, turning these infrastructure lines into industrial corridors--and I will explain what that means in a second--is already Chinese policy. It's part of the present five-year plan, and the strategic long-term planning. It includes the port of Lianyungang, which is located between Shanghai and Qingdao, and which represents right now what one could call the natural end of the Eurasian Land-Bridge. Other ports will be built there--for example, Rizhao; Qingdao will be modernized, as well as Tianjin and Shanghai, Shenzhen, and Guangzhou (Canton).

Now, the idea is to integrate this existing rail line, with an electricity grid, oil and gas pipelines, the installation of an optical-fiber net, which will already start to operate in April of this year, two months from now. This will be 27,000 km long, and it will be the longest in the world, connecting Frankfurt in Germany to Shanghai, supplying 20 countries along the way.

The idea is, also, to have industrial projects along this line, to process the rich natural resources along the Eurasian Land-Bridge. For example, petrochemical complexes, and so forth. For the next 20 to 30 years, the Chinese government has planned, as I said, along this line mainly, the construction of 200 new cities, which is a gigantic project.

Now, a very interesting strategic development project is also located in Tumen, the Tumen Economic Zone. This is a region representing an area of 10,000 km at the mouth of the Tumen River, including the bordr region between Russia, China, North Korea, and Vladivostok, which is the end of the Trans-Siberian Railroad, and is a triangle between Vladivostok, Yanji in China, and Chongjin in North Korea.

The key is a rail connection from Nanjing in North Korea, to Posiet in Russia, over Chinese territory, to the city of Chita, which will shorten the distance to Europe by 1,700 km. A connection is also planned to South Korea, and this is supposed to be a $30-billion investment program for the next 20 years, and a power zone of a system of ports and industrial production, comparable to Rotterdam in Holland. So it will be a gigantic port, trade, and industrial complex, obviously for the purpose of peaceful collaboration of the countries involved, which will be absolutely crucial.

Now, I want to look at some of the other pieces of the Eurasian Land-Bridge, namely, the southern corridors. The revival of the old Silk Road as a concept was mainly pushed on the impulse of China and Iran. But now, it involves the very active participation of Turkey, the Central Asian republics, Russia, Pakistan, and India. And obviously, the whole concept of what this region is all about, changing from an area of continuous instability, geopolitical manipulation, and so forth, is now moving into a region of economic cooperation to the mutual benefit of all those involved.

On May 13, 1996 in Teheran, there was the opening of the 300-km rail line from Mashhad to Sarakhs and Tedzhen, with the participation of 12 heads of state, 50 nations, and 1,500 delegates. This concluded the missing link of the transcontinental rail between China, Turkey, and therefore Europe on the southern route, and President Rafsanjani of Iran at that point praised the revival of the historic Silk Route as a ``symbol of East-West relations,'' the bridge for the region and the world.

Li Peng, meeting in Beijing with the Iranian Deputy Foreign Minister, spoke of the creation of the ``Silk Road for the 21st Century,'' and represented there the extremely close collaboration etween China and Iran.

In the meantime, a flood of bilateral and multilateral agreements for the region has been concluded. In August of last year, Erbakan went with 102 Turkish businessmen, inaugurating a new era in Turkish-Iranian relations: a $20 billion natural gas deal, a new pipeline, new rail lines, the integration of the energy grid, and fostering many of these projects in the region.

Now, one of the reasons why Turkey, despite all economic problems, has had relatively interesting economic development in the recent period, was the Southeastern Anatolia Project, which is an area of 75,000 km, which includes 22 dams, 19 hydroelectric plants for electricity, and irrigation of an area of 1.7 million hectares. This is supposed to increase the national income of Turkey by 12%, and it should be noted that all of this was done without international financing, and without international help, all by Turkish engineers.

China, in the meantime, in the summer of 1996, gave a credit worth $270 million to Iran, to help to build the Teheran subway, with Chinese participation, and put many more projects on the table, to which the Foreign Minister of Iran, Velayati, gave the policy direction of the government, by saying: ``We cannot have a peaceful country in a region plagued by instability, and we cannot have a rich country in a region of poverty.''

 

U.S. Must Reconsider Iran Policy

So I think that it is extremely important for the United States to reconsider its policy towards Iran. First of all, there has been a very important shift in Iran, which I can only compare to the change which has occurred in China. China has very consciously turned away from the Cultural Revolution and decided to go in the opposite direction, of maximum technological progress, maximum development of the interior of the regions. And, in a similar way, Iran has had its own experience with the revolution, with the war with Iraq, and they, like China, are thinking about how can they accommodate their people, their growing population,which will be 100 million people by the year 2000, with appropriate living conditions.

There are massive, giant projects for the common exploitation of the enormous oil and gas resources at the Caspian Sea. And obviously, there are many projects in which Iran is participating. For example, in Azerbaijan, in the Shakh-Denic consortium. The idea is to have Iranian natural gas to Nakhichevan in Armenia and to Georgia and Ukraine. There is also an oil swap with Kazakhstan: To save transport costs, Kazakhstan will export oil to northern Iran, and then Iran will sell oil to be exported to the benefit of Kazakhstan. There will be a pipeline between Iran and Pakistan, part of the Eurasian pipeline net, and it will then be possible to directly ship oil from the Caspian Sea and the Gulf to Europe, Russia, and Ukraine, but also Pakistan, India, China, and Southeast Asia. So we are also looking at a Eurasian energy bridge.

Now, the Caspian Sea oil and gas resources are obviously the center of a lot of international attention these days. But, it should be noted that Iran wants to change the dependency on these resources, to favor its own industrial development in-depth based on science and technology, to increase the productivity of its labor force.

So, there is an important change going on, in which Iran consciously wants to define its role as being the gate between East and West and North and South. There are massive state investments going on: eight major dams built between 1989 and 1994, 25 new dams under construction, and 70 in the planning stages. The first plans for the use of water power, for Iran, by the way, were thought out in the United States, in the '50s, by the U.S. Tennessee Valley Authority, and represented part of the Franklin D. Roosevelt plan to develop the postwar world. So people should remember that there was a time when the United States had quite a different policy towards Iran, not least in the Shah period.

Iran is also doing major investments in its own fertilizer industry. It wants to double is internal electricity production, and has massive investments in the metal industry, machine tool, shipbuilding, aerospace and steel, refineries and petrochemical industries, which they want to double in the next five years, to surpass Saudi Arabia.

For the Central Asian republics, the Silk Route is the only hope for the future. This concerns Kazakhstan, Turkmenistan, Uzbekistan, Tajikistan, and Kyrgyzstan, which are in the very interesting geographical position between China, Russia, India, and Europe. And, this is an area twice the size of Europe.

Most people don't know this, but this is a region with a very rich cultural tradition. It's too long now to go into that, but one of the greatest thinkers of mankind, Ibn-sina, was born in Bukhara, which today is in Uzbekistan, just to mention one.

This region has an enormous wealth of raw materials, but they are relatively poor. The reason for that, is that during the time of the Soviet Union, there was relatively one-sided development: a cotton monoculture in Uzbekistan, Turkmenistan, and Tajikistan. The Soviet Union got 90% of their cotton from there, and obviously, for this, they used an enormous amount of water for irrigation, out of the rivers which flood into the Aral Sea. As a consequence of that, the water level of the Aral Sea has sunk dramatically. The sea has shrunk by half, and there is now a big danger of an ecological disaster: sandstorms and enormous amounts of salt flying around. There is also the danger that the sea may disappear completely.

Already, during the time of the Soviet Union, there was a plan to direct water from West Siberia to the Aral Sea through a canal, which would then be used basically for irrigation in this entire region. This would require big pumping stations, where the water would be pumped over the division between West Siberia and the Aral Sea basin, and from there, the water would flow by gravity, all the way to the southern end of the canal, and feed a large reservoir. This canal can be built in 15 years. It would cost$18 billion. Gorbachov, by the way, was the one who abandoned that project.

Gripped by Economic Crisis

And, right now, this region is gripped by a rather severe economic crisis. All kinds of multinationals are stepping on each other's toes in a raw materials grab. There is a danger that there will be a repetition of the old British ``Great Game'' in the region, and it is very clear that only a crash program of infrastructure development of the European/Eurasian Land-Bridge will make it possible to solve the problems of this region.

Now, the main rail line of the Eurasian Land-Bridge goes from China to Kazakhstan, over the Alataw Pass between Aktogay and the Kazakh border town of Druzhba, then along the main corridor through Almaty, the former Alma-Ata, Dzhambul to Tashkent, at which point it divides. One route goes to the northwest, to Arabakh and Orenburg, Kubichev, Moscow, and Europe, and the second route divides there in Tashkent, to Samarkand, Bukhara, Tedzhen, Mashhad (in Iran), Turkey, and Europe.

And, it is this second route, this southern route, which is actually the old Silk Route.

Now, these lines are planned and, in part, completed, but obviously they must be fully built up, to become infrastructure development corridors. The richness of the raw materials in this region is an advantage, but they must be used to overcome the dependency on these raw materials. And, therefore, these corridors must be fully developed, not just as transport lines, but as functioning agricultural and industrial production complexes, which is not impossible, because, for example, in Kazakhstan, you have the advantage of a very qualified labor force from the old military-industrial complex of the Soviet Union.

On Feb. 4, Le Figaro had the following article on ``Caucasian Participation in the Eurasian Land-Bridge: Countries of the Caucasus Decided To Reopen Old Silk Road.'' The article quotes people from the region, saying that after the collapse of the Soviet Union, they intend to exploit their geogrphical position. As one representative put it, ``God has given us a strategic position, at the crossroads of two great routes. One north-south axis, from the Scandinavian countries and Russia to Iran or Turkey. An east-west axis, from Central Asia into Europe.''

Iran is building the connection between Kerman and Zahedan. From Zahedan, the Iranian railroad is already connected to the Pakistani rail network via the border town of Mirjaveh. The last step is the rail connection from India to Bangladesh to China, to Southeast Asia.

Now, China recently built an important railway bridge from Ruilui, a town in China, to Maoshweli in Myanmar. And, from there, it's supposed to build a 250-km railway to the northwest, to connect to the Rangoon-Mishna line. So, this will also then be the connection to Nanking in South China. It will include the Greater Mekong sub-region. It will connect China, Myanmar (Burma), Thailand, Laos, Cambodia, and Vietnam.

In further development, a high-speed railway is planned from Kuala Lumpur to Singapore, the upper circle, and eventually, a rail all the way down to Jakarta, at which point you will have one railway from Rotterdam to Jakarta, and you will be able to travel by train from Holland to Indonesia, in the very near future. I find this absolutely exciting, because I do not like airplanes.

So, let me give you, very briefly, a couple of the theoretical aspects which are absolutely critical to make this project function, because the new Silk Road has, without any question, to lead to not only a recovery of the world economy, but to the greatest economic miracle in history throughout the entire Eurasian continent, and also reaching all parts of the world.

What is absolutely key, therefore, is the concept of the development corridors, which is supposed to bring the development into those less-developed areas. And the location of these corridors depends, first, on geographic considerations, but also on principles of physical economy, of which Mr. LaRouche is the most advanced spokesman an theoretician today. But, let me first go to the geographical aspects.

 

Linked Ancient Civilizations

The famous old Silk Road which linked the ancient civilizations of India, China, the Middle and Near East, Europe, and Africa, was trade routes, connected through cities. And, these trade routes spread knowledge and culture. It is very interesting that the present distribution of the population along these old Silk Route lines, which is big rivers, coastlines, channels, roads, and railroads, that even if thousands, to be precise, about 2,200 years have passed, still, 25% of the population of Eurasia, and 70% of its urban population, is living along only three transport corridors. You have a very heavy population density along these corridors.

Now, the development of the railroads is key for the development of Eurasia, because it is possible for the first time to open up the vast hinterlands of Eurasia. Mr. LaRouche already referenced that, in 1869, in the United States, there was the first transcontinental railroad in the world. And, at that point, people had the idea of an intercontinental railway net, including Africa, Europe, and Asia. But, we all know that the British Empire was completely determined to prevent this from happening, and regarded it as casus belli. This was one of the key reasons for World War I and World War II, and decades of the Cold War.

As a result of this interruption in completing what seems to be so naturally in mankind's interest, after 100 years, namely, 100 years after the first transcontinental rail line in the United States, there is only one continuous rail line in Eurasia. There was only one continuous railway in Eurasia, until last year, which was the Paris-Vladivostok-Trans-Siberian rail line, and then this other line being completed in May of last year.

But at many different parts of the other routes, there are parts under construction, a railroad here, a canal there, but up to the present day many gaps still exist. One can clearly sy that the May conclusion of the Mashhad-Sarakhs line, represented a turning point in this development. And now, there are three major rail connections: the northern, the middle, and the southern routes, which connect the 500 million people of Europe, and 4 billion people in East Asia and Southeast Asia.

And, it is very clear that one has to look at these transport lines as transporting many more goods in the near future (because of the population growth) than what is happening now. So we are only looking at the beginning of a gigantic development. Several nations participating in this, are, right now, modernizing the existing lines, or building new lines, and are engaged in the modernization of the track transfer at several of the borders, because the tracks are different sizes.

Now, there are massive plans in India right now, to improve the northern routes, via the island of Sakhalin to Japan. There is a plan to build a tunnel under the Bering Strait to the United States.

So, if you look at the map of the population concentration in the world, one can see that the only areas which have population density comparable to that of the Productive Triangle in Europe, are, first, in China, in the river valleys along the Yellow River, and the Yangtze. Then, parts of Korea, parts of Japan, Java in Indonesia, parts of India and Bangladesh, and the Northeast Coast of the United States, and the area of the Great Lakes in the U.S. Midwest.

The reason that this is important, from the standpoint of physical economy, is because low population, contrary to the idiots of the environmentalist movement and criminals like Lester Brown, low population density is actually a negative economic factor. What you have to look at, is the cost per capita for the specific living standard and level of production. And a large factor in that, is the basic infrastructure cost.

 

Basic Infrastructure Costs

Now, basic infrastructure cost involves: roads, railroads, public transport, production and distribution of energy, a supply of sable water, canalization, communication, health care, and education. If you think about that, it is clear that the average cost, for example, for 1 million people in a well-planned city, is much less than for 1 million people who are spread over a rural area. Therefore, cities represent a much higher efficiency. Because, first of all, you have a much shorter distance to conquer for persons, goods, and services to be supplied. You have a higher intensity of use of all the systems, for example, transport, education, and so forth, and, third, you have a better use of the technologies in urban centers. You have a higher energy-flux density, and a higher power density of machines. Therefore, you can do more useful work, with a relatively smaller expenditure of labor, materials, and land-area per unit output.

This parameter, by the way, the energy flux density, coheres directly with the increase of population density. In other words, the more people you have, the higher the density of the production process must be. Therefore, advances in technology always lead to, and can lead to, an increase in the potential population density. Conversely, an increased concentration in population density stimulates the progress of technology. This is not only true for cities, but also for populations along rivers, trade routes, and so forth.

If you compare the relative energy efficiency of the United States, France, Japan, in the time before the crisis erupted, let's say, 1980, they had a roughly comparable standard of living, health services, and industrial activity. Japan required the least expenditure of energy per capita. But they had the highest density of energy use per square kilometer. So, there is very clearly an advantage of greater density.

The typical infrastructure corridor along these transport lines, should be imagined in the following way. You have a corridor approximately 100 km wide, which includes a rail line, a high-capacity electric power line, oil and gas pipelines, water supply lines, fiberopticscommunications lines, and so forth.

The most essential preconditions for any industrial and agricultural and urban construction, are these infrastructural arteries, which, once built, can then branch out, and eventually cover the entire territory; but, starting the development from these arteries, and then branching out into the lesser developed areas.

Along these arteries, you also want to have new cities (which, in parentheses, must be built beautifully, not like Houston). There are very many beautiful architectural models in the ancient cultures of Eurasia, and people should use the fact that nowadays, it's so much cheaper to build, to not neglect beauty. I mean, just think about the beautiful cities of China, of Korea, of Thailand and other places, and there are many ideas for how these places can be built beautifully.

Now, the infrastructure corridor model is important, because if you only build a rail line to connect, let's say, A to B over a long distance, then that railway is only a cost factor. But, if you have this kind of an approach, then, through the dense agricultural and industrial activity, the line from A to B becomes an economic multiplier, and the larger the density of the economic activity along the route, the more efficient the investment into the initial railway becomes. So, what you want to create is both large markets and large suppliers of goods, so that the connection from A to B has the role of a gigantic production line.

Now, this approach is obviously the unique way to overcome the disadvantages of unfavorable natural conditions, let's say of Arctic Siberia, deserts of Central Asia, and landlocked areas in principle. And, it is also clear that therefore, the continuous development of a corridor, is more advantageous than, let's say, islands of economic activities which have no immediate connection.

Now, let me go very briefly into some of the absolutely necessary technologies needed to make the Eurasian Land-Bridge succeed. The need exists to use avant-garde echnologies in these corridors. Once you use them in the corridors, they will be distributed to the participating nations of the Land-Bridge. In this way, the corridors become the transmission belts for scientific and technological progress in all of Eurasia.

If the Eurasian Land-Bridge is supposed to become the locomotive for the world economy, it is important to apply the principle of physical economy in selecting the most important technologies for transport, energy, water, and communication.

Now, since the average parameters of performance of infrastructure in the Eurasian corridor must supersede those in Japan before the crisis, in all categories--for electricity, heating, fuel per capita and per square kilometer, supply of households, industrial production, agricultural production, water, and so forth--the performance of transport systems in ton kilometers and value ton km per hour per capita and per square kilometer, communication systems, and health and education systems--therefore, the selection of technologies must be based on the relatively highest density of performance, in terms of the infrastructure performance per unit of land area, per employed worker, and per other resources consumed, by the given infrastructural system.

The higher performance correlates broadly with the energy flux density or power density of that technology, as measured in watts per centimeter of power flow through the crucial work surface of the process involved.

The technological quality of the energy system, therefore, must increase. For example, there must be a growing role of electricity versus thermal power, of high-temperature heat versus low-temperature heat, increasing the speed in passenger transport, and so forth.

The infrastructure projects also must be designed in advance, to anticipate the introduction of more advanced technologies when the corridor is developed. The integration of all means of transport--water transport, railroads, planes, and trucks--must also be included, including the containerization offreight transfer from one mode to the other. Since there is a dramatic increase in global demand for multi-mode transport projected, it is crucial to anticipate now how to overcome the bottlenecks.

There already exist engineer designs for fully automated freight transfer stations, so-called Combi-terminals. In France, the first generation of rapid transfer systems is already in operation, the so-called commuter facility near Paris.

The present conventional, state-of-the-art system involves the use of porto-cranes, which run 700 meters along tracks parallel to the train tracks. Then, to unload a typical container train of 600 meters in length, carrying 40 containers, such a crane normally requires at least 70 minutes. With the first generation of automated rapid transfer systems, this can be reduced to 15 minutes or less. For example, in Germany, Krupp is presently developing such a system, called the Fast Freight Transfer Facility.

All Modes of Transport

The Eurasian Land-Bridge must combine all major modes of transport, but the reason that railroad transport must play a central role, is because it requires much less energy, and less labor. It is also less affected by climate and weather, than road or ship.

Existing systems are obviously the French TGV, with 300 km per hour, and 150 km or more for new high-speed freight lines. Also, the present Eurasian Land-Bridge is based on conventional railroad technology. It is absolutely crucial that the magnetically elevated ground transport play a decisive role in the future. One existing model is the German Transrapid, which can go 450 to 500 km per hour, and, hopefully, will be built by the year 2005 between Hamburg and Berlin, if present resistance can be overcome, and then eventually extend to a Europe-wide network.

With this Transrapid, you could go from Paris to Beijing in six or seven hours, so that you could easily go in the morning, and in a leisurely way do your work on your terminal, have telephone work, and by the afternoon, you would be in Bejing, well-rested, securely, without weather storms in the air, and so forth. Japan is only slightly behind Germany, building a different system, and, also, China is working on one. There is a very interesting model presently being worked on by some Ukrainian scientists.

This kind of travel is revolutionary. It eliminates vibration and friction, because it's not connected to the ground, and the speed is really nice to get ahead. This technology will be very efficient in all of Eurasia. It will replace short- and middle-distance flights, because it's completely ridiculous: If you go from New York to Washington, you spend two hours getting to the airport, one hour in the air, two hours getting from the airport. With this, you will have one hour travel and be where you want to be.

The total investment for the maglev system, of the type of the Transrapid, of a total length of 100,000 km, will be approximately one trillion dollars. That sounds like a lot; but, it's only $220 per capita of the Eurasian population, in a span of 10 to 15 years. And, for about 10 years, it requires an investment of only 1% of the GNP of the respective countries. But, think about the change this will mean.

Now, obviously, for transport by sea, which is still the most efficient for bulk goods and goods which are not dependent on time delivery, namely, raw materials, semi-finished products, fuels, grains, heavy machinery, and so forth, this will also expand many times. Therefore, we will need massive expansion of harbor facilities, and major improvements of inland waterways, new inland shipping canals. Many breakthroughs have been made in the recent period, for example, in the high-speed gas turbine-powered catamarans, which are used right now between Sweden and Denmark, which have about twice the speed of normal ferries. This can be used all over the world; especially Indonesia is a place where the natural water roads offer themselves for this technology.

Contrary, again, to what the environmentalist movement says, the world economy wil be much more energy-intensive in the future. There will be an enormous energy requirement for the economic exploitation, for example, of mineral resources, where technologies such as plasma processing will be used. And we need a lot of water for the large-scale desert regions in the Near and Middle East, in North Africa, Central Asia, and in China, for pumping, reprocessing, and desalination of water.

We have to provide large amounts of cheap energy, of which electricity today is the highest quality of energy, because you can easily distribute it on a large scale. And, we also require large amounts of industrial processes for buildings, industry, fuels for internal combustion engines, and so forth.

Despite the enormous quantity of fossil fuels in Eurasia, the technology which has the highest energy flux density is, in the future, nuclear fission, and, hopefully very soon, nuclear fusion. There are right now extensive nuclear power programs in Japan, South Korea and North Korea, China, Vietnam, Indonesia, Iran, Turkey, and India. Presently, the light water reactor of approximately 1000 MW, is in use in many countries. France, for example, gets 80% of its electricity nationally from this reactor type.

But, what we propose, is actually a much more attractive model: the high-temperature reactor developed by Prof. Schulten from the Juelich Laboratory in Germany. This is the only existing HTR in construction right now, near Beijing, which we visited in May of last year. A similar reactor is being developed in the United States and Japan. But, in any case, the HTR is much more efficient than the light water reactor, because it also, among other things, produces processes for industrial and other uses.

The HTR is inherently safe, because the possibility of a meltdown, other releases of radioactivity, is ruled out by physical mechanisms. So, without complex safety systems or human intervention, this reactor is safe, mainly because of the encapsulization of the nuclear fuel within multiple layers of a special high-tmperature ceramic, the so-called ``Siamant,'' which prevents the release of radioactivity, even under extreme conditions.

The HTR is, therefore, a robust and easy-to-operate reactor, safe especially in densely populated areas, and as a component of the nuplex cities which have to be built. One big advantage, is that it is based on the thorium cycle, of which India has large resources. As I said, presently, China is the only country which is building an HTR based on the Juelich type. And, it is useful for many, many projects which I have mentioned.

I could say many more things. I just wanted to give you a glimpse of, on the one side, the gigantic construction activity, the physical principles this effort has to have. We have produced this study, so I invite you to study this in-depth.

Let me just go into two last aspects, to give you an idea.

Now, you probably realize that I did not mention Russia, and obviously, Russia is a crucial centerpiece within the Eurasian Land-Bridge. And, I can assure you that, without doing what Leibniz said 300 years ago, that is, taking Europe and China, and taking Russia as a mediation between these two cultures, and bringing the development from both sides, there is no way that we will avoid a terrible catastrophe in Russia.

Right now, as a result of the reform policy, the industrial production of Russia has collapsed to 20%, average, in the last five years, of what it was in 1991. General Lebed and others have warned that we are looking at a danger this coming spring, because of a serious supply crisis.

Fortunately, there is right now,--this is not represented by Yeltsin, Chernomyrdin, as such--there is right now a growing group of scientists and other people in Russia, who are absolutely fascinated, who want to integrate Russia into this Eurasian Land-Bridge. Mr. LaRouche gave a seminar in April last year, organized by a famous economists like Leonid Abalkin, with the participation of former Prime Minister Pavlov, and with 40 famous Russian economists, about this erspective. The proceedings in Russian were just published, and are circulating widely in government and other circles, as well as a document which Mr. LaRouche wrote for the Russian Duma.

 

Back to the Mittelstand

When Gen. Lebed was in Germany just two weeks ago, he--very surprisingly and very positively--announced the need for Russia to go back to the policies of Count Witte, which was exactly the same approach, and to use the German model of machine tool Mittelstand, middle-level industry, to transform Russia.

Now, this obviously is very urgent, and no time is to be lost.

Let me just, as a last point, mention the German situation. Those of you who know Germany and love it like I do, are probably crying right now over what is happening to this beautiful country. Rather than using the historic chance of 1989 and transforming the East through technological means, Germany, being really hoodwinked by the Anglo-Americans, by Thatcher, by Bush, by Mitterrand, is now collapsing. It is right now falling apart at a speed which people cannot imagine.

There are right now, officially, 4.5 million employed. But, if you take the hidden unemployment, Germany right now has well above 8 million unemployed. That is higher than 1932 or '33, when Hitler came to power, and the situation is, even though there is no Hitler inside, the country is in a very, very dangerous situation.

Germany has lost, in the last five years, 25% of its industrial employment. This, for Germany, is a catastrophe, because the German economy, despite the present collapse, is unique. For example, in '95, Germany's exports were still DM 728 billion; 87% of that was industrial goods, mainly capital goods; 112 billion in export in machine tool, 11 billion of those machine tool design; 126 billion in vehicles, 96 billion chemical products, 96 billion electrical equipment, 13 billion precision and mechanical and optical goods, 15 billion aviation and space vehicles.

Now, the only other country which has a similar situation isJapan. But, they're more focussed on the Far East, while Germany has a broader, worldwide distribution. And, there is no country in the world which is as dependent on the prosperity and stability of other regions in the world, as Germany.

Now, in Germany, we have seen, since the unification, a dramatic collapse of export-oriented jobs: 700,000 jobs alone were lost in this area. So, the situation is absolutely dramatic, and, if Germany is to be saved, it is so obvious: Germany has everything which these corridors need. It is a crime to destroy these industries.

The government right now, which is absolutely mad to fulfill Maastricht, a conception which was designed by Thatcher and Mitterrand to contain Germany, to weaken Germany, and to destroy it for geopolitical reasons, is, right now, in the process of turning Germany into a rubblefield.

We are determined to put the Eurasian Land-Bridge on the table as an alternative.

The reason Germany has to play a crucial role, is that Germany not only has this export-dependency, but the reason for that, was that Germany has a very large component of machine tool and Mittelstand. Now, this is extremely important for all the other economies as well, because, contrary to what the economists of the monetarist school of Adam Smith and others are saying, the source of wealth of a country is not its resources. It's not oil, gas, strategic minerals, and all these other things. It's not speculation, it's not stocks, it's not a bubble economy.

The only source of wealth in an economy, is the creative reason of the individual. And, if that creative reason is applied, and leads to scientific and technological progress, which, then, is basically turned into machine tools, then you apply scientific and technological progress, and make it usable for production. This occurs through the work of the engineer, the scientist. He turns it into a machine tool, and many of the machine tool Mittelstand industries in Germany, were, up to the present time, run and headed by engineers, who had a family firm, with several dozen or several hundred employees. And, they were the engine of technological progress.

Now, Germany also, obviously, has a way of reversing its present course, because we do have a tradition of making people creative, because Germany used to have the best educational system in the world: the famous Humboldt education system, which was the reason why, in the 19th century, Germany was the leading country in the world, in producing new technologies and defining new categories of knowledge. And, all we have to do, is to go back to that educational system, where the centerpiece is not specific skills, but the development of the character, the development of the character and beauty of the person to become a state citizen.

 

Make Germany a Centerpiece

So, what we propose is to return to this, and make Germany a centerpiece, and not let Germany collapse, but make it one of the leading motors in the driving of this Eurasian Land-Bridge. We have what people need; why should we collapse? We can help.

Now, there are two strategic areas, where everybody can see that the regions will blow up, if this is not done. One, is the Balkans, and Bosnia in particular, where the Eurasian Land-Bridge must be effected to calm down and develop the region. You all have heard that Bulgaria right now is falling apart, there is a terrible hunger catastrophe. The country is just collapsing: You have hyperinflation, a complete standstill of the economy. Serbia is exploding, among other things, because of the economic condition. Albania--Kosova--there will be another war for sure, if Bosnia and the Balkans are not part of this, very fast.

And, I think that if you look at the continent of Africa, it is also clear that, with what is going on in Zaire, Rwanda, Burundi, Sudan, the only way to stop the bloodshed, to stop the collapse, is to build the Eurasian Land-Bridge into Africa as quickly as possible.

This is the map of the railways which existed in 1990. And, what is proposed, and what we propose, is to connect the Eurasian Land-Bridge fully to the African railway system as a totality. If this is done with the help of China, other countries of Eurasia, Germany, Japan, and with the full backing of the United States, there is no reason why Africa cannot be saved. It is eminently possible.

So, what is required, therefore, and this is the purpose of this seminar, is for the United States to go back, consciously, to the policies of FDR, overcoming the Depression through a dirigistic program, not only for the United States, but for the world as a whole.

If we do that, then each of us can look into the eyes of these children, and many other children to come; if we don't do it, then these children will not live.