Middle-East and OBOR Trade Integration

Abstract

The Middle East is one of the OBOR biggest economic today, China One Belt, one road (OBOR) initiative is being referred to as the platform to promote global economic and trade vision. Ideologies and regional integrations have been the main focus of the gulf region. In this challenge, Saudi Arabia one the pioneer of Gulf Cooperation Council (GCC) and regional leader of Middle-East plan to play an essential role in infrastructure development and regional economic integration. In this paper, the essential role of Saudi Arabia is investigated. Based on Middle-East regions regional analysis in terms of trade, transport cost and travel time, this study compares the existing routes and the new Eurasia route to evaluate current performance and project future prospective. The research methodology uses qualitative and descriptive. First, variables (transport cost and travel time) are calculated and compared with existing data set to estimate the current level on economic exchange. Second, the economic impacts, dynamic correlation (DC) and Vector Autoregression (VAR) factors investigation are interpreted. To establish the essential impact on trade and bilateral contribution between China OBOR and the GCC region with a focus on import-export policies. Finally, the results show that transport cost for 40-foot container between Kashgar and destination ports in the Middle East is decreased at $1450 dollars, the impact on destination ports in Europe is decreased by $1350 dollars. Additionally, travel time is reduced from 24 to 21 days. This position strengthens the current contribution of OBOR projects in Middle-East which represent a strategic contributor inside the region, providing a positive perspective of transportation infrastructure integration.