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Conference Panel:
A Twenty-Five Year Development Perspective
for Eurasia: Russia, China, and India

The Current Financial System Is Finished--Lothar Komp, EIR Germany
Russia Faces Necessity To Define Its Mission --Prof. Yuri Gromyko
China's Experience in Building Its Economy--Dr. Wen Tiejun
India and the Eurasian Development Perspective--Prof. Sujit Dutta
Egypt and the Project of the 21st Century --Prof. Dr. Mohammed Al-Sayed Selim
Central Asia's Role in the Land-Bridge --By Ramtanu Maitra, former New Delhi EIR bureau chief

Bad Schwalbach Conference
More on Physical Economy
Other Infrastructure Projects

Russia Faces the Necessity
To Define Its Mission


Prof. Yuri Gromyko represents the Moscow Academy of Culture and Educational Development. He delivered this address on May 5, 2001 at a conference of the Schiller Institute in Bad Schwalbach, Germany.

Dear friends, dear colleagues! It is a real honor for me to speak from the podium of this conference, which, according to the program, is devoted in part to these two great names in human world history: Nicolaus of Cusa and Vladimir Vernadsky. It is possible to say, that these two names are sacred names for the Moscow methodological circle that I represent in this hall. This circle is connected with the name of Shchedrovitsky and, more broadly, with the Russian philosopher Ilyenkov and with Pobisk Kuznetsov, the brilliant scholar and initiator of the Russian version of physical economy.[1]

It is cause for happiness, and our real advantage, that Mr. LaRouche is not only an economist, but also a social philosopher of the Socratic-Platonic type, because for rather many people in Russia, it is clear that monodisciplinary economic science—limited to the single discipline of "economics," as such—is a plague on our existing statecraft. Of course, it is possible to talk about there being a good discipline of economics and a bad one, but, on the other hand, it is clear that the phenomenon of monodisciplinary economic science, by its nature, violates the very possibility of thinking about Russia's future.

Most important in the legacy of Nicolaus of Cusa is his idea of docta ignorantia (learned ignorance), the idea of knowledge about non-knowledge, the idea of reflexive knowledge. This suggests a way of shaping programs to construct, to explore, and to investigate new knowledge, and the possibility, on the basis of already-assimilated knowledge, to elaborate new visions and to form new knowledge. The most important and the most interesting, intriguing thing, is to understand how it is possible to develop programs for the elaboration of new knowledge.

For many people, it is not evident that the lack of sound policies in Russia is linked with the absence of knowledge, and the necessity of elaborating knowledge. For example, so far we have no concrete vision of Russia's mission in a new, changing world, nor, of course, of ways of acting in accord with such a mission.

The reason for this, is not only that we lack finances or that we don't understand the investment process correctly; we ourselves have a good understanding, but there are some people who don't understand it correctly. For them, it is possible to say that one need simply change the members of the government, and that it is a question of political will. I don't think so. We lack the most important knowledge right now, and we lack the projects, without which policy-making is simply social maneuvering. To change even only the investment process, it is necessary to have new, very concrete projects, which can become the motive force for an innovative economy of a very different type, on a grass-roots level. These must be long-term projects, by means of which we can stabilize the consciousness of the population, because when such long-term goals are set, there will be strategic forms of employment for the population.

From Post-Industrial to Neo-Industrial

What is not clear just at this moment, and what is very important to investigate, is what the new structure of a new, industrial, post-Soviet system in Russia, with strategic forms of employment, should be, and what will be the new structure of the full-fledged, full-scale productive forces, including educational systems, with all their possibilities, and scientific research institutions with new instrumentalities. Some ideas about these full-fledged, full-scale productive forces, from the economic and technological side, are elaborated in the works of Mark Dvortsin and his group.[2]

In order to elaborate a new vision of a "neo-industrial" system (I have introduced this term, as distinct from the so-called "post-industrial"), it must be seen to differ both from our contemporary, destroyed productive system, and from the Soviet system.

In this situation, people take different positions, for there is a specific positional geometry involved. The first position, is the position of the old and new liberals (who are the same people): namely, that only through monetary manipulation is it possible to do something in Russia. They recognize that we are currently experiencing huge losses—losses of population, and of institutions in education, scientific research, and industry. This is exactly what Sergei Glazyev called "Genocide," in his book, but they—the authors of the genocidal policy—assert that these losses are inevitable events during a transition. For all patriots of Russia, however, it is clear that continuing these reforms is a kind of cannibalism.

The second position is connected with the elaboration of new programs, which oppose the liberal reforms, but fail to answer the very concrete question of how future post-Soviet industrial systems must be organized. For us, this position is a purely ideological one. Its main motto is: We understand, in general, what is to be done, but it is necessary to have real political power, the wheels of political power in our hands in order to implement these ideas and programs. The representatives of this position don't notice that what they want, at best, is to return to the Soviet industrial system, which was already dilapidated and technologically obsolete in the Soviet period, and to have only islets of high-level technological organization. Moreover, that industrial system doesn't even exist any more. They don't notice, that in our situation, the Russian population needs a more specific, and simultaneously more general, understanding of what Russia's mission can be, and of what might be the specific forms of work in new industrial systems, interlinked with educational and scientific research institutions.

The third position is technological in outlook. It is represented by the economic works of Mark Dvortsin and his group. It consists in the idea that the modern industrial complex, interconnected with the two other systems—education, and scientific research—cannot be arbitrarily changed. That complex is the result of a historical, technological evolution and of the mutual penetration of different sectors of industry, with their respective technological and managerial standards, educational and training technologies, and different types of know-how. The very existence of such an industrial-educational-scientific research complex is determined by the interconnections, agreements, and the "fit" between the huge number of intermediate products and components, produced by different manufacturing sectors, with their various standards, know-how, and patterns of doing things that are specific to a given sector.

Innovation in Science and Technology

All of these elements, melded together in real practice, form interconnections (or, the lack of appropriate such interconnections), which are precisely what determine the level of technological organization in an industrial system. It is impossible to tear one fragment out of this complex, and begin a technological upgrade of this component. There is only one thing to be done with such a complex, and that is to organize its evolutionary process as a single unit, as a whole.

The fourth position is connected with the idea of organizing the real process of innovation in science, education, and industry. Here, we need simultaneously to upgrade the level of technological organization of industrial processes, in order to answer the question of what is the new substance of industrial labor in Russia at this time, just what is the new industrialism, and how this labor can be organized; and, to reproduce the structure of full-fledged productive forces, as the totality of interconnections among the neo-industrial, educational, and scientific research institutions.

This is precisely the problem of an innovation economy and of innovation in industry. For it is incorrect, to think that an "innovation economy" means simply high-tech, or computers. After it has been demonstrated that "the information society" is a fraud, it is clear what the challenge is before us. The real challenge is: How is it possible to connect information technology with machine tools, and other new kinds of machinery? This is precisely the problem of organizing advanced manufacturing systems. It is a real challenge, to understand how these things can be put together. On the other hand, it is also clear that innovative technology is not merely the implementation and realization of new, fundamental scientific ideas; rather, it is extremely necessary to change the technological forms of organization of industrial complexes, with corresponding changes in the structure of labor—what professions are required. To organize this requires having very concrete technological projects for the new kind of industrial organization.

Mutual Development of Industry

We must have three different types of projects.

The first type of project is connected with the idea of organizing, on the basis of traditional industries (say, the lumber industry, or the cultivation of flax), locomotives of development. Such locomotives stimulate certain effects, when a specific branch of industry, as a result of its progress through certain phases of development, can transform other industries. The lumber industry, for example, can transform the specialized machinery sector, or the specialized machinery industry can transform the machine-tool sector and instrument-making, and so on. The same goes for the production of flax, the development of which presumes the improvement of flax-processing machinery, the development of special machine-tools for this purpose, the development of the textile industry, the development of machine-building for the textile industry, and the development of clothing and footwear design. All of these connections are well known, but the problem is how to organize them in practice.

It is envisioned that the second type of project, should be connected with the possibility of creating new types of industry, which do not now exist, or are only coming into existence: for example, the optoelectronics, laser, or crystal-growing industries. These new sectors all exist in implicit, embryonic form, as fragments of technologies in laboratories or experimental shops.

Also, it is good and important to have a project for meta-industry, which is a special structure for organizing the very process of transformation and transition from the old structure of industry to the new. This meta-industry must be connected with the cycles of innovation. It subsumes such special organizations as, for example, units for accelerated prototype development, corporate universities, and so on. The main idea of meta-industry, is to identify and differentiate the various layers within the Soviet complex industrial system and to prepare a large number of points and elements within it, to become the sites from which actual comprehensive, multi-level technological innovation will take off.

It is very important to organize an industry that can produce a vast array of instruments, equipment, and specific technological methods, which can be used to transform the existing industrial-technological institutions. The main purpose of such a meta-industry is not merely to replace obsolete technologies and instruments, as such, with new ones, but to organize the evolution of technology and to increase the level of technological organization in industry. It involves, first and foremost, the problem of technologies from the humanities—having to do with thinking, understanding, education, organization, and so forth. It addresses the pivotal point of differentiating, or dividing into layers, the old industrial system—using only the criteria of physical economy, to determine the potential points where energy flux-density and the density of product-flows through the industrial system may be increased.

Breakthroughs under Extreme Conditions

Returning to Nicolaus of Cusa, it is high time to ask once again: What kind of knowledge do we need? In my opinion, we do not so much need the abstract mathematical knowledge of forecasting through a mathematical extrapolation procedure, which automatically prescribes what is to be done, as we need knowledge that is connected with a live vision of the future possibilities to achieve new results. This is the knowledge of foresight, obtained by positioning yourself in a real process of change. It is always connected with the real positions that we occupy in particular situations. And such knowledge has to be the anticipatory knowledge of a project-designer, which provides orientation for the development of an entire system, and which can be obtained only through taking up a position for real action.

It is also my opinion, that the most intensive forms of technological and social-cultural evolution, can be organized under extreme conditions of life, such as in the Arctic north. At the present time, when we have a situation of mass out-migration, a real flight of the population from Russia's northern territories, which is forced by the genocidal economic reforms, it is very important to prepare new programs for mastering and developing life in these barren, extreme northern territories.

In this area, we can see the connection between space flight, and life under very difficult, even terrible conditions; and, how both are oriented against monetarist policies. Pobisk Kuznetsov recalled how, when he was working at a classified company on the project "Functioning of the Supreme Commander-in-Chief's Headquarters in the Event of a Third World War," he explained to members of the Politburo of the CC CPSU, that it is not necessary to take paper money with you on a space flight; paper money has no life-support function on a space flight. Pobisk Kuznetsov, that brilliant Russian scientist, named the work in this area, "Designing Life-Support Systems."

Russia deserves to be characterized as a northern civilization. So, it is impossible even to imagine Russia without a new program to cultivate and promote life under conditions of the Far North. A very important feature of such cultivation and promotion of life above the Arctic Circle, is the idea of development corridors, elaborated by LaRouche and his group, as well as the ideas of "technopolis" and "technopediapolis" (a technology-oriented city with an emphasis on teaching and training). Under such conditions, it is very important to act on the main idea of Vernadsky about the construction of new materials and new types of energy exchange, in order to provide population density in such territories. The very possibility of increasing the density of habitation in such territories, and of organizing modern settlements in certain delimited areas there, demonstrates the expanding scale, on which the space of our planet may be reorganized.

At present, the Center for Strategic Projects and Analysis, in the Northwest district among the seven national districts (each with its Presidential representative), is organizing the preparation of a new program for redeveloping and mastering the territories above the Arctic Circle. It goes without saying, that Vernadsky's distinction between living and non-living systems is most intriguing in this context, as it relates not only to the fate of living matter in the universe, but also to the problems of artificially created entities and their naturalization, as well as the naturalization of artificial quasi-living products, created by sophisticated human efforts.

The main problem of our political life in Russia, at present, is where, and exactly how, it will be possible to organize real change through action. In my opinion, we have only one such possibility. We can do this on the level of the regions, the seven districts established under the plenipotentiary representatives of the President. At the level of federal policy, we have a continuation of Yeltsinism and a total deadlock, because all of our important policies have been totally destroyed. We have no industrial policy, no policy for the development of fundamental research, and no education policy. One might say that, on this level, too, we have the problem of distinguishing between living and non-living systems, which was so important for Vernadsky—but, in a different sense, in the sense of the Christ's words, "Let the dead bury the dead."

The elaboration of concrete projects is currently possible only at the regional district level. Precisely here, there is a possibility to have live contact with the country as a whole, and with its territories, and not to be encapsulated in the ivory tower of federal policy. On the district level, it is very important to find the social and cultural, and simultaneously the technological answer to the question of how the country as a whole will and should develop.

There have been some interesting and inspiring initiatives. For example, in the Volga District a commission has been organized for the development of the entire space of this region, and this commission was explicitly modelled on the legacy of Vernadsky's commission, which worked on the siting of productive forces in the whole country. On the federal level, so far, we have done nothing but destroy the country's political and information space.

In order to bring these programs and projects to life, we need a new, different kind of education and a new, different professional structure. The real challenge here, is to bring about a professional revolution—a transition from the pseudo-industrial type of employment, which was partially the heritage of the Gulag, to an innovative type of employment. Thus means developing not a narrow specialist with his "one-track mind," but a broadly-oriented, multidirectional mind and personality. In order to achieve this, we must restore and develop the education of engineers, medical personnel, teachers, and scientific researchers. The pivot of a professional revolution will be to design a paradigm of thinking and project-making, which incorporates the ability to work with the future. In order to organize such a professional revolution in education, it is very important to answer an old question, which is also a new one: What should be the strategic forms of employment for new undertakings in Russia, especially for young people, wherein the term of each project is not less than 25 years?

'New Deal' for Russia

In Russian, this idea of "novoye delo"—a new cause, new enterprise, or new mission—expressly resonates with Roosevelt's "New Deal" (the linguistic root is the same). It must be determined collectively, what Russia's own, national new cause is to be, and it is very important to characterize such an undertaking, by identifying its seven most important facets.

The mission, seen through the prism of the efforts expended and capabilities developed; in other words, experience.

The mission, seen through the prism of personal development, education, and training; this means a profession.

The mission, seen through the prism of others' utilization of the results and products, accomplished by an individual person; this is labor.

The mission, seen through the prism of resources, methods, approaches, instruments, and technologies; or, activity.

The mission, seen through the prism of project-drafting, conceptualization and planning of the future (future actions); this is thought.

The mission, seen through the prism of a person's confidence that tomorrow will come, and that he will enjoy social protection; that means employment.

The mission, seen through the prism of trade, commerce, and exchange; or, business.

There are very important political changes taking place in post-Yeltsin Russia. It is now clear to a rather large number of people, that Russia cannot adopt or borrow ways of life from outside. Russia cannot imitate or replicate another country's pattern of action; there is no such pattern. Therefore, the people of Russia must set their own goals, and determine the mission of Russia. It is impossible to formally deduce these goals and aims. The mission of Russia consists in launching a new civilization, together with the other countries of Eurasia. Perhaps one should say "a multicivilization," because Eurasia itself is an eternal dialogue between different civilizations.

The main idea of this new multicivilization lies in the cultivation of new ways of life, and in mastering space and time across the vast territories of Eurasia. The northern territories, the ocean floor, marine resources, geological prospecting by satellite, resource- and energy-saving technologies, new kinds of nutrition and food, new kinds of engines, new types of transportation, new energy sources, new technologies in education, and a new style of life—all these things can become reality, within an innovative economy in the center of Eurasia. There is a huge demand for all of these things in Eurasia, and they all exist in embryo, in the not-yet-developed innovation economy. As of yet, however, we have not officially declared the mission of Russia. Real goals, not just for how, are lacking. Thus, I can say that it is very difficult to do something with Russia, if it is viewed only as if it were a bureaucratic corporation.


[1] Georgi P. Shchedrovskitsky (1949-94) was a Russian philosopher, semioticist, mathematician and teacher, who developed a great number of approaches to the reform of scientific research and practice. His work is continued by many groups, known collectively as "the methodological movement." The Russian philosopher Evald V. Ilyenkov (1924-79) wrote on dialectics and the structure of thought, as well as his own conception of the ideal. He and his fellow pedagogue Meshcheryakov developed an original method for teaching blind-deaf-mute children. Pobisk G. Kuznetsov (1924-2000), scientist and brilliant industrial management expert, was known as a leading proponent of the ideas of "physical economy" in Russia.

[2] The economist Mark Dvortsin was Deputy Minister of Industry in the first Yeltsin government, until his dismissal at the instigation of Yegor Gaidar and Anatoli Chubais. He has developed the school of "technodynamics," and currently heads a department at the Plekhanov Economics Academy.

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China's Experience in
Building Its Economy


Dr. Wen is the Executive Secretary General of the China Society for Restructuring the Economic System, of Beijing. The full title of his speech is "The Experience of Constructing Infrastructure in China and the Third Land Bridge." He delivered it on May 5, 2001, at a conference of the Schiller Institute, in Bad Schwalbach, Germany.

I hesitate to tell you, how China has gained high economic growth, because nowadays, a lot of overseas scholars in China have decided that there is a kind of "China miracle." They want to rank China among the "top seven" [economies], and, considering its economic-financial capacity, they want to rank China among the "top three." This is not good. We want to rank our Chinese economy, as the 38th by per-capita GDP, because we are not far enough [developed]. We do not want to be any kind of competitor to any country.

China, in the Chinese language, is the "Middle Country." We have not [developed] far enough, we have not grown enough. I want to say that I am here to learn from you, from all the conference participants from so many countries.

You have discussed the financial crisis taking place in Western countries; I will give you some more information. In the first quarter of this year, foreign direct investment (FDI) has flowed into China very fast. The total amount of the added volume of FDI in China, is $1.4 billion, almost the same amount as the total for 2000. Last year, we had $1.9 billion as foreign currency reserves, making China the second-largest foreign currency reserve-holding country in the world.

But how did we gain such an amount of foreign direct investment? By hard labor. As Lyndon LaRouche has mentioned, we gave our best labor, for the cheapest price. We gave our best natural resources for the cheapest prices. We sell our basic goods to Western countries. For what? For these currency papers. Now, because of the "electronic-money" economy, we do not even have paper; we just have data, recorded on computers. It is basically nothing. When the financial crisis takes place, when the U.S. dollar and deutschemark are downgraded in value, what then of our hard currency foreign reserves? We paid our best labor, we paid our limited resources, and we have just such paper, just data. When these are devalued, we are also destroyed. So, what is Chinese economic growth? We worry about this.

The Lessons of the Past 100 Years

In comparison to our current situation, look at China 100 years ago. A century ago, China was, like most nations of Africa are now, separated into many parts, ruled by war-lords. Behind the war-lords, were the "big power" countries, the so-called imperialists. They sponsored and armed these war-lords, and they occupied different parts of China. They started war, they killed people: Everywhere, were massacres, famine, disease, people dying—like Africa now.

China fought for almost half a century. In the end, in 1949, we gained independence. But what was independence? It was just a word, a concept: We had almost nothing. We had just a few thousand kilometers of railroads; in the interior there were no highways, not even one kilometer: outside the very big cities, there were not even paved roads—most people had to travel by walking on footpaths. We had no industry.

In the second half of the Twenty-First Century, we just finished a period of primary accumulation for industrialization by the state. Some of the foreign scholars call us a communist country, or a socialist country. We respond: We are not any "ism" country; we are China, we are the Middle Country.

We have just completed the period of primary accumulation of state capital for industrializing. This did not produce a booming economy, it was just the first stage. Most of the Western countries took 100-200 years for this period; we took 50 years.

How did we do this? By exploiting ourselves. We had no colonies or imperialism at the expense of other countries; we based our economy on our limited resources and labor inside China. We did not learn, like our Japanese friends did: They wanted to learn from Western countries, and then attacked Asian countries, including China, and then were defeated. But we did not do this; we just worked inside China.

When we finished this period, we learned from our Russian brothers. We called them our "big brother," because when they had finished their primary accumulation for industrialization, they opened to the world, in 1956. Our big brother in Russia, wanted to force China to follow them, but in the 1950s, we had not finished the primary accumulation for industrialization, so we could not follow. This was the debate—the first debate between the two [Communist] parties, and then the two countries. The relationship between China and Russia became worse. It was not that we were not willing to follow Russia; it was that we had no economic base to do so, and we could not follow. Then, forced by military pressure, China thought to communicate with the United States, Japan, and other Western countries, and tried to open to overseas [in the early 1970s].

During the [following] 20 years, China had economic growth, but we also found a complicated situation. We learned a lot from Western countries, especially in the 1990s.

Experience and Lessons

To now focus on the 1990s: This was a very complicated situation, in which we learned a lot from overseas. We not only gained experience, but also learned lessons—good and bad.

In the years 1992-95, China learned from Western countries to set up three markets: the stock market, the real estate market, and the futures market. These were opened to general investment. The real estate market was open to foreign investment, but the others were just for Chinese. These three became very high-risk markets. A large amount of investment flowed in, totalling, by 1995, about RMB 1 trillion [about $1.2 billion]. One result was a big rise in bad loans held by the Chinese banks already by 1996.

This caused serious a financial crisis in China. In 1994, the Chinese currency was devalued by 50%. In 1996, inflation began to rise very fast, to 21%. The consumer price index had risen 24.8%. With the currency devaluation, this became a crisis.

In 1995-97, China took steps. Fortunately, China has still not opened its money market to foreign investors, and all of the banks are owned by the state, so the government has maintained strict control. We were able to achieve a "soft landing" in these three years. So far, there have been no bankrupt banks. Although a large amount of foreign investment has flowed into China, it has gone into enterprises or real estate. Some has flowed indirectly into the markets, but not into the stock market. Currency convertibility, exchange rate, and interest rates are all controlled by the government, so the currency is stable, and remains the most stable in all Asia. This is a key difference between China and other East Asian countries.

China also has a very strong central government. Since 1995, the government has adopted a very special policy to emphasize the physical economy. The years 1995-97, we call the "soft landing," from the crisis which was developing during the 1992-95 bubble economy.

Meeting with LaRouche

In 1994, I had the opportunity to meet and speak with Mr. Lyndon LaRouche for six hours, and he taught me a lot. First, he explained what "physical economy" is. This is a very important concept. He also gave us a warning, about the global financial crisis. We talked about the bubble economy in both China and the Western countries, and he gave some very important suggestions for China, especially about infrastructure, and local development within China. I published this dialogue with Lyndon LaRouche in a Chinese magazine in November 1994, and this was the earliest publication to warn Chinese scholars and politicians about the world financial crisis. LaRouche's forecasts have proven true, year by year—not only about the Chinese economy, but also about the world economy. He was the first to warn China to pay attention to the financial crisis. This was a great lesson for us.

Not only did he warn China to pay more attention to the financial crisis, but he also emphasized the physical economy. He emphasized infrastructure. Fortunately, our government adopted this kind of suggestion. Since 1997, we have put more emphasis on infrastructure in China, even amidst very serious deflation. The central government started a new policy for physical investment. Every year, the government invests 150 billion yuan for infrastructure development. In these years, we have completed a lot of projects in China.

I also discussed with LaRouche, how China was developing its land-bridge to Southeast and South Asia. Currently, this land-bridge has become even more practical, because we have designed an economic strategy for the new century, in which the development of western China is especially important.

We have built a whole new national railroad net: three main vertical and three main horizontal lines across China. This is in addition to the two existing Eurasian land-bridges, which are very effective. There is a booming area in southern China, along the region around Hong Kong and the Pearl River Delta. We have built a railroad from Hong Kong to Guangdong to Guang Xi and Yunnan. We have also built a new, modern railroad from Beijing to Hong Kong. These two form a "big cross," and the construction was just completed in 1998. This railroad links eastern and southern China in one economic area, making communication and transportation much easier. Along the coast, and inside southern China, there are many very rugged mountains, and many big rivers and lakes, so geography is a big challenge, and the building of this infrastructure is essential for economic development. The focus on the physical economy in the 1990s, has been the basis of its rapid development.

Physical Economy

We are trying to create a new concept. Many people think that population is a "burden." Just in the coastal area of China, there are very little land resources, but a large population. But this is not a burden; these people need to improve their lives. There is a very large economic demand, and if the government and enterprises try to provide them with basic goods, and fulfill their demands, the economy should be very healthy. This is physical economy.

However, the focus was only on half of China: The other half, the huge western internal part, still has to be developed. We are now in the new Tenth Five-Year Plan, 2001-05. One very important part of this plan, is to "Accelerate the Western Development," through water projects, and railroad and highway construction. What has been done in eastern China, for preventing a financial crisis, and to encourage high-speed growth, now must be done in western China.

China, like Vietnam, India, and Egypt, has a huge "surplus labor" force: some 200 million people just in China. These people need to be employed, and building such projects can give them this opportunity. Agriculture in China is not enough to support the 900 million people now in this sector: The labor needs to go into other sectors. Chinese people have enough food and basic necessities; this has been achieved since 1949. But still now, especially in agriculture, they cannot earn enough to pay for education, medical care, and other essential needs for developing the next genernation.

In the 1990s, almost 200 million people left the agriculture sector, and went to construct railroads, cities and towns, and highways. Their lives have become better. They have also sent large amounts of money back to their families in the countryside. This year, the government will take steps, to help these migrant workers to settle permanently in the smaller cities and towns.

In the 1990s, China had a successful experience in which, by the construction of infrastructure, we have been able to transfer surplus labor to new sectors. Also, along these railroads and highways, many new small towns and cities have grown up, whose economies have developed together with the transport system.

Developing Relations with Southeast Asia and India

In the last century, China cooperated with European nations, including Russia, and set up the two big land-bridges in the north: the Trans-Siberian Land-Bridge, and the Euro-Asian Continental Land-Bridge through Central Asian nations.

Now, in this century, we will try to develop the third land-bridge, the Afro-Asian Land-Bridge. This has not yet been developed, but we must prepare the research for this project. This must be more effective economically, than the two others. Siberia has huge areas which have very few people, and little infrastructure. This is also true for Central Asia, where there are vast unpopulated areas and deserts. There is little population or economic demand.

The third, Afro-Asian Land-Bridge, would go from Egypt to Hong Kong. From eastern China, with a very large population and booming economy, the whole Afro-Asian Land-Bridge would go through areas which are booming with people and life. This includes Vietnam, Myanmar, Bangladesh, India, Pakistan, Iran, Saudi Arabia, Iraq, and then Egypt in North Africa, and from there to the rest of Africa. This whole area has a huge and very dense population, and they need to improve their lives. The area also urgently needs infrastructure construction. Meeting the needs, to improve the lives of the population, is the energy of economic growth.

Population is real capital, which can be used to develop the economy. The density of the population is a big advantage: It means that every project benefits a concentrated population, and contributes to building the peoples' economy more efficiently.

The Strategic Triangle

We are discussing in this conference today, the "strategic triangle" Russia-China-India. As one of our colleagues from Russia has stated, there are good and growing economic and political relations between Russia and China, and there are projects which benefit both sides; there are also good and growing economic and political relations between Russia and India. But what about China and India? There is very little trade, and little economic relations. But what if we can cooperate to build the third, southern land-bridge, from Egypt to Hong Kong? There are just some hundreds of kilometers of railroad that need to be built, between India and China. We have built up a railroad from Hong Kong to Yunnan. From Yunnan to Laos can be built. South China has large industrial facilities. It has a lot of know-how for construction of railroads, especially in very rugged areas, which is very useful for this whole southern land-bridge region.

India has its own railroad net. But Myanmar, Laos, and northern Thailand have no railroads. If we can do our research to build these projects, we will build our cooperation on this basis. Then, we will have the basis to complete the third side of the triangle, China-India, for the benefit of many nations along this railroad.

In Europe, there is very good know-how and technology, and also large investment capacity. If the European Union could cooperate with China and India, to build the southern land-bridge, this would be very beneficial for both sides. This would not only solve the problem of China-India, but also solve the problems faced by the European countries.

Let me give an example. Yesterday, Dr. Glazyev mentioned that China and Russia's entire trade is calculated in dollars, which means that we help to support the dollar. If we calculated our trade in deutschemarks, immediately this would support the deutschemark; if we calculated in Japanese yen, it would be the same. Who supports the American dollar? Our developing countries, our producers. We give the United States all of these basic goods, and then we get in return—paper! It is true.

Once I discussed this idea with an American professor, a very good friend. I said, that if China sold $10 billion, in the U.S. money market, what would happen? It would devalue the U.S. dollar immediately. If China sells these dollars, who will follow? South Korea, Taiwan, Hong Kong, Singapore, all of these East Asian countries, because they all own dollars. If China sells, it would devalue the dollar, and if other countries sell, it would destroy the dollar. We cannot do that, because we hold such large numbers of dollars. So, this is a kind of contradiction: Whoever can solve it, will win the Nobel Prize.

As LaRouche mentioned, we need a new world financial order, a new world financial institution. Who will create this? Perhaps, the "strategic triangle"—perhaps we can set up an international, alternative credit system, not based on the dollar, not on the deutschemark. Anyone who wanted to join, can join and benefit. Anyone who wants to object, would not benefit. Money can only profit from the physical economy, and where is the important physical economy area? It is the strategic triangle.

Thank you.

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