Since the Asian Infrastructure Investment Bank (AIIB) was founded in 2014, there have been many discussions around this multilateral development bank concerning its purposes and functions. Despite the skepticism, AIIB, once launched, will accelerate Asia’s infrastructure development and international trade. This blog will briefly explain the impacts of the high-speed Silk Road, one of such projects that AIIB has announced recently.

The Silk Road aims to eliminate the connectivity bottleneck in Asia and it will connect 17 countries in central and southeast Asia with a high-speed rail network. A flow of efficient trade across the world’s largest continent is truly needed in the global economy. First, the high-speed rail network will deliver fast and efficient transportation so goods can be exchanged frequently. Thus, the Silk Road will expand the global import and export market because countries that sit along the train route will have the channel to communicate with their neighbor countries. Moreover, the Silk Road will spur the revitalization of cities by encouraging high density and mixed-use real estate development around the rail station. The high-speed rail will drive the population to flow in the cities along the route and accelerate real-estate construction. The road will also broaden the labor market and offer workers a wider network of employer to choose from.

China is said to be the biggest beneficiary of the Silk Road project. The road offers the country new opportunities from Indonesia to Kazakhstan to consume excess capacity in the steel and iron industries. Nepal is another country that would be benefit from the Silk Road Fund. For example, after suffering from the recent earthquake, Nepal urgently needs to collect money to rebuild the country. The Silk Road will speed up reconstruction, as it will provide the country with more labor and fast traffic.

The Silk Road has the potential to boost a region that will contribute 80 percent of global economic growth and vault 3 billion more people into the middle class by 2050, according to advisory firm McKinsey & Co. Through the Silk Road, AIIB is able to link the Asian countries together into an integrated region that then function as a single stronger economy. It helps to expand the world’s trade market and offer new perspectives for countries whose economic growth have slowed down.

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