Peter Frankopan: the mismatch of expectation on the new Silk Roads

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Merryn: Hi, I'm Merryn Somerset Webb, editor-in-chief of Money Week magazine. I have with today Peter Frankopan, who's an Oxford academic and also the author of this brilliant new book The Silk Roads: a New History of the World. Now the first and very obvious question Peter is, why do we need a new history of the world? What's wrong with the old histories of the world?

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Peter: Well, I think there's an intersection between what history means and mythologies. I think we, in the West, in Western Europe and in Britain have very clear ideas of what our past looks like and what it means. And when I was at school (and my children go through the same curve), we're taught that ancient Greece leads on to ancient Rome, then, there's sort of a gap.

The Norman conquest we get taught that; the wives of Henry VIII, multiple times, and then the Enlightenment. Then there's the idea that there's a direct line that explains our rise, and explains why it is that the West is the bastion of tolerances, of democracy, the global financial centres that they are, and so on. And I don't think you need to shift your perspective that much to realise that, well, first of all, there's an entire different way of looking at the past. But second there are regions in the world that we are perhaps more aware of today than we were when I was growing up. And perhaps even more than 100 or 200 years ago.

You know, most of the world doesn't live in Western Europe, aren't familiar with the European languages, and so I wrote a book really on the basis that if you're a child growing up today in So Paulo, or Shanghai, or New York, or sub-Saharan Africa, or in London, what sort of things would you need to know? What is actually important in this global story we have; where these words of globalisation, the idea that we're all more interconnected then we really are, what actually matters? And I would have thought in the global sweep of history, things like the Battle of Hastings don't really matter, or the fact that Henry VIII was a bad husband...

Merryn: Over and over.

Peter: But a good king; repeatedly a bad husband. So I think there is a way in which one can shift through to look at parts of the world that we know literally nothing about in this country. Places like Russia obviously, and the Ukraine, the Caucuses, Mesopotamia, Iran, Central Asia, through to China.

And from my perspective as an academic, those regions are not just interesting because they have a history that needs to be told. It looks to me that that's where you want to stand to get a view point of all of global history, because that meeting point, that, sort of heart of the world', with the Silk Roads fanning out in all different directions, are where all of our great commercial exchanges have happened in history. It's where our first laws were ever made; it's where our first cities were built.

Civilisation itself comes from Mesopotamia. The Garden of Eden was there and this region in the sort of heart of the world' is where all of our languages collided. Indo-European meets the Semitic languages. The Altaic languages of the steps and Turkic meet Sino-Tibetan. It's where everything is boiled up in a cauldron and we learn from each other. And so it's where religions have bounced off each other.

And even today, we do have some sort of muscle memory. We are aware, even without being linguistics experts, we will say that we speak Indo-European languages, and we don't really know, normally, what that means.

Or when I fly to New York and I have to tick a box. I tick that I'm of Caucasian decent this mountain range between the Black Sea and the Caucuses. There is a kind of muscle memory that this area, perhaps, is more important than just a region that looks dislocated to us.

And from my perspective, having spent 30 years as a researcher and an academic, it looks like you get very interesting views of how the past looks of this region and of the world that explains the rise of the West in a different way, and perhaps explains this transition period that we're going through today.

So, I think that the Silk Roads are interesting both as a way of looking at the past and of history in general. I think, they have regional importance of explaining the history of places like Iran and Russia to those who have to make diplomatic, political and investment decisions either with investors from these parts of the world, or try to get access to resources, minerals and so on.

But then above all, trying to put the reins on our own view of the past and to distance that, those myths that I talked about, that comfortable story where we are more tolerant, more heroic, braver and more enlightened than other parts of the world it doesn't look like that from 90% of the world's perspective.

Merryn: Yes, in Western Europe, we've mostly forgotten about the Silk Roads, we've forgotten about all this area. When did it end? When did this happen, this shift from that being the centre of the world to this being the centre of the world?

Peter: Well, part of the problem is the name; so the word Silk Road', evokes the exotic in all of our minds. We all think, "wouldn't it be great to go to Samarkand? There must be some beautiful buildings there. And I'm not quite sure where else, maybe, Tashkent is probably on the Silk Road." And it's something very unspecific, very vague and yet it tells us about the transition of goods from east to west. That's what we think about when we talk about the Silk Road.

And of course, you don't need to be a particularly sophisticated economist to realise that when there are goods travelling in one direction, you need to be asking about what's going in the other direction too. And of course, although we think of the Silk Road connecting China with Europe, most of the trade along the Silk Roads, which is a plural, (it's originally coined to determine the plural), are localised. You know, towns that are next to each other trade; local communities trade with each other and negotiate and swop ideas and so on. But some goods, some high-value goods in particularly are making the move in both directions. So, the first thing I think, is to think of the Silk Roads, as plural, as not just east/west, but west/east, and also north/south.

Merryn: Yes, because there are lots of different routes. People think of the Silk Road, they think of one road, but there isn't one road, there are endless different routes in many different directions.

Peter: That's right, there's a mesh; it's a mesh of connections. It's a sort of web of connections. And it's a little bit in the eye of the beholder, what you include where, but it's really those ways in which that bridge works that connects the West or Europe, north Africa and the Gulf, through with the East. And that's quite inclusive and so on. But I think that this idea of the Silk Road as an exotic past is wrong. I mean, globalisation is something that worried writers in China and writers in Persia in 500 BC; you know, the idea that the role of a good king, good ruler of a good state, is to find the best ideas regardless of geographical boundaries.

And so those Silk Roads have been tying the world together, not just in this moment where Tamerlane's tomb was built and you have great mausoleums and observatories that still stand. But it's been a constant for the last two and half thousand years. And in fact, one finds these still equally useful networks today.

I mean, we think I'm obsessed with them about the mirroring of railway tracks, pipelines, air routes, along exactly these webs. The same sort of profile the same sort of...

Merryn: It's interesting, you must have seen a photograph that I've seen; the satellite photograph of Europe running down to Greece where you can see the major economic activity today following the lines of old Roman roads. You know, infrastructure never leaves us and...

Peter: That's right.

Merryn: that you can see, I think, the same thing happening all over the region you're talking about. The new infrastructure following the lines of the old and the economic activity following exactly the same lines...

Peter: Absolutely.

Merryn: ...and routes of thousands of years ago.

Peter: And the same question, then, is what's being exchanged? If mineral resources are going in one direction, let's say, gas from Turkmenistan along the Tapi line to China, what comes back in the other direction? How does that affect, not just the local region, how does... what impact does that have, concertinaing outwards. And who do you choose to trade with? We all, I think, take for granted in the West that the highest price wins. But it doesn't always work like that, particularly when there are state players involved, and I'm talking today on the first day of Xi Jinping's visit to Great Britain.

Where we have a very different structure here, where we have the state and it's mirror in some ways, with corporations which have shareholders that may have very different interests and not be aligned with national interests, whether it's about security, or about resource, or about pricing, or investment. China has a very different profile on these kinds of mega-structure considerations.

But going back to the Silk Roads, these networks have always existed. And in fact, they've modified, so the goods that used to be traded silk, spices and textiles, ceramics had to have had various manifestations since then that, I think, we don't think about in the same way, just because we're so obsessed with this idea of silk, this exotic.

But oil, the discovery in Persia in the beginning of the 20th century, the same process happened of this part of the world fanning out, sending out black gold at that time, in different directions, and who can control the sources of the commodities.

Since then again, we got rare earths, all the things we need for our mobile phones, 90% of which is found in China, Kazakhstan and Mongolia, classic Silk Road territory. And I think that we need to detach, or it's helpful to detach, from this idea of an exotic peripheral nice holiday mechanic to looking at the world, I suppose, like a doctor. I'm not a medical person at all, but if someone hadn't explained to me that I had lungs and kidneys and whatever, I would assume that my body just functions because it functions.

And sometimes a historian, and with a book like this you have the opportunity to do an autopsy, and to cut things open and you can see these veins. I would have no idea that I can use my fingers; that my brain is connecting my movements and that things are... that the exchange of oxygen and carbon dioxide through the bloodstream is what's keeping me alive and breathing.

But with the world, it's a classic thing that the ancient Greek philosophers, ancient Egyptians, were obsessed about comparing the world and the body. So in a way, it's quite an old-fashioned idea. But there are these rhythms and mechanics that one can look at and the Silk Roads show us a very different pathology of how our connections work. And they show us a very different way of looking back at the past, for example, at how Britain and Western Europe managed to rise to colonise all these regions. That too was about taking control of commodities, assets and being able to dominate.

And the story of how we did that looks very different, I think, when set against what you're trying to control and how, rather than looking at it from the safety of London.

Merryn: Yes. Now, your final chapter of the book is about the new Silk Roads, and you finish by saying the Silk Roads are rising again. So, you're obviously seeing a shift in global power from this part of the world to that part of the world what does it look like in 20 years?

Peter: Well, I think it's very hard to future gaze with real certainty, because there are so many variables that can dislocate. I mean, I think this time 100 years ago, the conviction in Germany, for example, was that the next 100 years were going to be the century of the Slavs and the Slavonic peoples. That rise in Russia and related areas was inexorable.

The growth of the steel industries, the growth of the natural resources, the population size, meant that it was inevitable that Russia would have its moment in the sunshine. And the First World War changed all of that. I thought 15 years ago, before 9/11, a similar process looked likely that there was this transition that was happening. We couldn't have foreseen the intervention, and heavy intervention in Afghanistan and Iraq, and now with the dislocations, that's thrown out as well.

So it's quite hard, I think, to really talk in the knowledge that these events might not happen: the unpredictable, where suddenly the American government decided to actively seek regime change across multiple countries. One would have seen that would have, could have happened.

But I think the basic premise must be the decisions that are made today about the global economy, about financial institutions, investment strategies and about the geo-political, it must be more significant what's being discussed in Moscow, Tehran, New Delhi and Mumbai, Beijing, Shanghai, and the western provinces of China.

And arguably, I always burn a candle for Turkey with it's very hard hand to play, which I would have thought should have looked west to Europe or east to the Silk Roads areas. I think that these capital cities and the political classes that control them will shape our next two or three decades. Whether we like it or not, whether we don't get on with the particularly individuals in question. I think it's hard, towards the end of 2015, where it feels like we're at the bottom of a commodities cycle. Where oil and gas have had a proper dislocation the last 18, 24 months, to try to anticipate what will happen with those and other metals and so on.

And so there is a bit of dancing on the graves of people in Europe thinking well, obviously it serves Russia, Saudi, Iran, China right that they're experiencing contractions and so on. But I think that these are relatively normal in the rebirthing process, where ultimately, looking over the long term, as a long term investor would do, you try to work out what are the assets and commodities that actually matter to help us all grow and who has control over those.

And I suppose the great story of Europe's past is that we fundamentally don't have anything that really matters. That might be one reason why Europe's history is so ultra-violent, why we fight so much, because there's very little differential between our different countries and the things we need today. Like I said, rare earths, uranium, oil...

Merryn: Yes, we don't have them.

Peter: ...gas, so on. And it means that we have a very tricky hand to play with heavily urbanised populations, a densely populated European Union, where our resource base is contracting. And over the long run, there's obviously fat in our systems, all sorts of ways of trying to trim things out, some more painful than others.

But that rising world in the East is one that we will have to engage with and have to understand, and have to understand how they perceive and see us. And see their own past, I suppose.

Merryn: Now, clearly this is something that the UK government is attempting to engage with. We have the Chinese visit here this week and talks about all kinds of investments the Chinese may make in the UK, interestingly, prawn farming through to infrastructure and power stations. Are we doing the right thing here, are we getting the balance right, do you think, in the way that we are connecting with China in particular?

Peter: Well, I've written something for MoneyWeek about just that, and I think it's a bit like a date, isn't it, where George Osborne was out in China a couple of weeks ago talking very lavishly about Britain's relationship with China and very much offering up all the opportunities that we might be able to bring and work on together. A sort of plea that was earnest enough to worry Washington, you know, our involvement in the AIIB (Asian infrastructure investment bank), has raised eyebrows. But that idea that maybe Britain's special relationship with the United States is also in flux, and that Britain also, like Turkey, is looking in both directions, because why wouldn't we?

The problem is, I think, the Chinese perceive what we're doing in Britain slightly differently. They see the opportunities here being slightly different. So this morning on the radio, I heard Phillip Hammond saying, it's great the Chinese are coming here as investors, they're just after a return. In which case, if any investor is after a return, why prioritise one over the other? Why make it easier for a Chinese investor than for anybody else? And if the Chinese are prepared to look for returns here and accept those, are we assuming that they want a lower return level than other investors, and therefore, they are a better fit? Or we haven't really thought about what those returns might be.

And interestingly Xinhua, the Chinese news agency, talk of Britain's infrastructure as, basically, like it's Victorian and falling apart. In fact, it calls Britain's standards as not being up to international levels.

Merryn: That's entirely reasonable in some areas.

Peter: Well, having come up by train today from Oxford there are elements that I can also agree with. But there is that fear, I think, that what history teaches you, whether it's the British in India or the Greeks in Central Asia in antiquity, is that that first wave of investments and that first wave of co-equal trading, normally, historically trips at some point where your investor and trading partner looks to develop a competitive edge over your local industries and your local investors that is irreversible. And that is something that I think is probably not understood by governments that have a very strong vested interests in looking for short-term wins.

And that ultimately is why these great European trading empires could set up in West Africa, East Africa, in the Persian Gulf and in India, was for the same reason, where if you can take cash up front, you're very attractive as an investor. And if the Chinese are able to do that, where we have an economic deficit here, structural needs that are to reinforce and rebuild train lines, runways, roads, as the Chinese see it, then it's very hard to turn that kind of investment down.

But I think we all know, and your Money Week readers more than anyone, that choosing not just your investor, but your moment for investment is absolutely critical. And I think there is a degree to which the cart can run away with the horse with these kinds of things. Because there has been a good reception in China, China for the first time, really in 100 years, is looking beyond its frontiers. It's been a very introspective century for the Chinese, very keen to make friends, very keen to be seen to be a global strategist, and very keen to be a global player. It's music to China's ears when Osborne says that the Chinese should have a greater role in the IMF, for example.

But those kinds of promises are very easy to give away, and so I mean, I'm not party to any of the discussions that are going on with the Chinese, but...

Merryn: but you do have a sense of expectation that on both sides you're going to end up slightly different?

Peter: I do think there's a mismatch and part of that mismatch is that our very clever civil servants and our politicians, who may or may not be, equally clever, I think it's very difficult when we are reliant on a window of muscle memory that goes back ten, 20 years. You know, we've got no concept of these great rhythms in global history.

And to that extent I suppose that Chinese visit fits alongside a much bigger reorientation of global power where, despite Russia's interventions in the Ukraine and in Syria and so on, it looks to me that there is a birthing process going on. Where that rhetoric of discomfort at what the West looks like, how we talk about ourselves, how we lecture, hector and patronise, is something that does unite the Russian government of Putin with, even in it's worse case, Isis, but also Modi in India, the rejection of the things that we take absolutely for granted as being our tolerances, our freedoms of speech and so on. And increasingly these parts of the world look at Europe and say, "well, it's easy for you to talk like that and to celebrate your own glories and pat yourselves on the back". But, women got the vote in Uzbekistan and Azerbaijan, before they did in Britain.

There was an official policy of segregation in the United States, only just before I was born; homosexuality, the things we have now absolutely stamped down on any forms of discrimination it's brand new to us. And other people's pasts have not gone through that violence. We've learnt about religious tolerance, partly through the Holocaust and the horrors of what we are able to do to each other because of our views of other people's ethnicity or their racial background or their beliefs. And other parts of the world have not had that profile of persecutions and we don't understand that.

The problem is because we have a very eloquent media, it looks to us that these parts of the world are deeply dislocated and they're always problematic and troublesome. But actually comparing the rhythms of warfare in Europe, where there wasn't a decade between 1350 and the Second World War where there wasn't a major war involving European powers and this big sweep from, well, let's say Syria, eastwards to China, where people have learnt how to get on much better.

And part of the reason for that is that the societies in the Middle East and the Arabic speaking world, even in China, have tended to be more meritocratic and less hierarchical, and with much lesser inequalities.

Our problem is here in Europe is that story of inequality is one that we've really struggled with from what used to be called the feudal system' academics don't like the word feudal' at the moment it's a voguish way but that top down, that few having lots of power and those at the bottom being dispossessed and disenfranchised is something that looks very different across most of the Silk Roads area.

Merryn: Peter, I think we'll have to leave it there, but thank you so much. And I think readers, we'd better all read this. Thanks Peter.

Peter:Thanks Merryn.