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Chapter 465: The Birth of a Constitutional Monarchy (3)

When the Volga-Don Canal in Russia did not exist, any European goods were supplied to countries around the Caucasus through Georgia, which was adjacent to the Black Sea.

Then in 1952, Russia connected the Black Sea and the Caspian Sea by establishing the canal between the Volga and Don rivers. The Russian canal had reduced the geopolitical importance of Georgia. However, due to the Crimean Peninsula crisis, it became difficult to pass the Russian canal through the Black Sea. Because of this, Georgia had just begun to be illuminated again.

The countries of the Caspian Sea, which had to comply with Russia’s capricious nature in order to use the Russian canal, had begun to pay attention to routes through Georgia in case of emergency. People realized that it would be more advantageous to secure the train route connecting Georgia’s Batumi port or Poti Sea Port to Azerbaijan’s Port of Baku in the long run.

At Tbilisi Airport in Georgia, the Secretary of Defense politely greeted Youngho.

It was a little strange that the defense minister came out instead of the foreign minister.

“Welcome to Georgia.”

“It’s an honor to be greeted by the Secretary of Defense.”

In Georgia, the status of the defense minister was in the next rank of prime minister.

“I volunteered myself to see the duke. The president is on a trip to Europe, and the foreign minister is accompanying him.”

“I just stopped by to discuss the railway project. But it’s a surprise that the defense minister came out.”

“I’m here because I know why you’re visiting Georgia.”

“I see. I guess you must have been very anxious too.”

“Of course, we’re in the same position as Kazakhstan. A common interest makes us friends.”

“Shall we talk as we move?”

No one knew how the stance of the new government of Kazakhstan toward Russia would change yet. However, the Secretary of Defense of Georgia was being friendly as if he knew the next steps of Kazakhstan. Georgia and Russia had now recovered their relations. But only recently, Georgia had deployed forces to block the separation of South Ossetia by Russia in 2008. It soon had to surrender unconditionally to the Russian military. Georgians had to watch the separation of Abkhazia and South Ossetia, which belonged to Georgia. Naturally, Georgians were not fond of Russia.

“Duke, congratulations! We, Georgians could not hide our excitement as we watched the pro-Russian president stepping down and a constitutional monarchy being born.”

“Thank you for your support.”

Georgia’s current president was known to be pro-Russian, and the minister’s remarks were denying it. If it was the foreign minister, he would not have said such remarks. Usually, foreign ministers of different countries tended to use ambiguous remarks strategically not to reveal their intentions.

But the defense minister did not use such diplomatic rhetoric. He seemed to have revealed his innermost thoughts.

“Wouldn’t Central Asia as well as the Caucasus rise from the shadow of Russia when Kazakhstan becomes stronger?”

“We’re just taking our first steps now. I think you have high expectations for us.”

“It’s important to know that we have hope. Russia is a country that we can’t compete against on our own. If Central Asia joined forces together, it would be a different story.”

Countries around the Black Sea and the Caspian Sea mostly did not like Russia except for Armenia since it needed Russia’s support as it was in a territorial dispute with Azerbaijan.

“Russia wants to influence its neighbors rather than expand its territory. There will be no more places like the Crimea.”

“Georgians don’t see it that way. The fact that Russian troops have been stationed in the capital city of Tbilisi is not possible unless there was an intention to annex the whole of Georgia. When South Ossetia was annexed, Georgia would’ve disappeared from the map if it wasn’t for the United States.”

He could not possibly mean that Georgia would have a war against Russia again with its weak forces, but it was refreshing to hear such words from a Georgian government minister.

Although Georgia was a third of the size of the Korean Peninsula and had less than 100,000 people, Georgians had a sense of pride to have fought against Russia.

“Kazakhstan’s change and the desire to have power are for deterrence, not to have a war against Russia. But if the countries of Caucasus are under undue pressure from Russia, we will deal with it together.”

“Hearing such words from you is a big support for Georgia. We formed an alliance with the United States, but the U.S. was not a big help during the South Ossetia crisis because the U.S. troops were too far away from us.”

“I don’t know how much we’d be able to help you, but I promise to help you if there is any difficulty.”

***

The only route replacing the Russian canal was the railway between Georgia and Azerbaijan. The one that existed now was the only single track which took a lot of time to move logistics. There was a limit to digest the export and import volume of Central Asia and the Caucasus with just one open track.

The purpose of Youngho’s visit to Georgia was to encourage the railway double-track project. Georgia was, of course, interested, too, because the government would also take transport revenues from the double-track business, but it had not been able to start the project due to the lack of fund.

The Georgian government was happy to hear that Youngho would be investing in the double-track project. He would be paying half of the construction cost. As Georgia agreed to this, Azerbaijan also replied that it would proceed with the railway double-track project from its side.

Once the double-track construction was finished, the shipping cost would be dramatically reduced, as well as the time, compared to using the Russian canal. Most of all, counties would not have to comply with Russia’s unpredictable policy changes. They would not have to worry about the canal being closed and high canal charges.

Returning to Astana after a hectic schedule, Youngho began working on the social infrastructure of Kazakhstan.

The Soviet Union had made a railway network that was tightly woven as a spider cob in order to take resources from Kazakhstan. So, if the old facilities were replaced, Kazakhstan’s transport system could be advanced up to the level of advanced countries.

The problem was the cost of replacing old facilities. The only way to accomplish it was to attract private capital.

Youngho was discussing the matter with Eriksson.

“Attracting foreign capital would lead to the outflow of national wealth, but it’s also unclear to attract Kazakh entrepreneurs who don’t have much capital.”

“Why don’t we take advantage of the wealthy Russian entrepreneurs in the north?”

“Will they move so easily?”

“They won’t be able to easily reject the royal request. If they do, they would be losing the reputation of their business.”

“First, I’ll keep my promise to establish a daily necessities factory in the north. That way, the rich mine owners and factory owners will respond positively to the royal family too.”

“Now that we’re talking about mine owners, we need to control the gold mine as government level. The gold mine has been neglected for so long. The owners don’t report their production rate accurately and quite a lot of their production outflows to other countries.”

“How did you find that out?”

“Gold circulating in Europe’s underground markets is rumored to be either Russian or Kazakh. Most of the mine owners are siphoning off gold in secret. The gold collected by our company is mostly bought from underground markets.”

“How much have your company saved so far?”

“We have about ten tons. The biggest deal was the one you introduced for us.”

“If we nationalize the mines, there’s going to be a lot of resistance. Do you have a plan to deal with that?”

“They’ve committed a crime of misreporting their production amount and distributing it out of the country. That alone is subject to judicial action. There won’t be any stumbling block to nationalize the mines.”

“All right, let’s declare that all gold mines are under state control as of tomorrow, and investigate every person involved, including mine owners.”

“You should start with the travel ban right now and search for their homes and workplaces.”

“I’ll tell General Kasim.”

***

Most of the gold mines in the East were scattered in mountainous areas.

Although there were some in the Midwest, most of the gold was scattered in the form of alluvial gold in the valley or river basin, so their economic feasibility was quite low.

It was reported that Kazakhstan’s estimated gold deposit was over 30,000 tons. Given that the amount of gold produced worldwide was around 2,200 tons per year, Kazakhstan had a lot of gold buried in the land.

Despite the large deposits of gold, Kazakhstan’s gold holdings were only 250 tons, with its world ranking hovering around 20th place. As the dollar was faltering as a world currency, it was necessary to increase the gold holdings.

Advanced countries had a lot of gold in case of emergency. The United States had 3,300 tons, Germany had 8,100 tons, Italy and France each had 2,400 tons, and China and Russia had about 1,800 tons each. In other words, they were ready to return to the gold standard one day.

As for Kazakhstan, it had a decent amount of gold including Youngho’s gold holdings, which were about 480 tons now. However, it fell far short of what the advanced countries had. The only way to resolve this issue was to actively increase their gold holdings from now on.

“You stirred up big trouble.”

Jong-il spoke as he walked into Youngho’s office.

“Should we just leave it alone when the national wealth is leaking? The intelligence department should be in charge of cleaning this up.”

“Why are you doing this openly?”

“It’s only fair to do this in public. The people should know.”

“But the Chinese’s reaction is funny. It doesn’t matter if we nationalize it or not. Why is the Chinese government overly reacting to this?”

“It’s only admitting that it has been illegally buying Kazakhstan’s gold.”

The Chinese government bluntly expressed its opposition to Kazakhstan’s nationalization of the gold mine, saying that Kazakhstan was disturbing the world’s economic order. It was funny since it did not say a thing when the revolution took place.

The Chinese government was keeping domestic production of gold at the highest level to increase its gold holdings and focusing on buying in gold to the point where it was enough to cause the world’s gold prices to falter.

Youngho did not know how much gold was leaked from Kazakhstan to China, but China’s reaction was telling that it had been quite a lot.

“Should we take this opportunity to temporarily close the free trade zone at the border? China can’t say a thing when we say we’re stopping the gold outflow.”

“Let’s wait a little longer, and instead, we need to mobilize all the intelligence agents to monitor the border areas. There must be a leaking hole somewhere.”

“We can’t afford to cover the entire border area with our current number of agents. So I’m going to mobilize the Foreign Legion soldiers. Is that alright?”