7/13/15 7/13/15

2015 at dawn.com)

Entangled in the Greek debt crisis, few European policymakers had the time or interest this week to pay attention to the summit talks in the Russian city of Ufa between the leaders of Brazil, Russia, India, China and South Africa (BRICS).True, Europe has its hands full with Greece and the looming possibility of a Greek exit from the Eurozone. But the world doesn’t stop for Europe. And pretending that the BRICS and their self-confident leaders don’t matter — or matter little — is not an option.Discussions about the rapidly-transforming world, the role and influence of the BRICS and Europe’s relations with the emerging powers appear to be off the European Union agenda. For now, the focus is rightly on the existential threat posed by Grexit, the acrimony the Greek crisis has triggered across the EU and the worsening relationship among Eurozone leaders.Solving the Greek problem should of course take priority. But Europeans know that more is at stake. Italy’s Prime Minister Matteo Renzi has so far been most vocal in signalling his fears that the fury unleashed by the difficulties in Greece is damaging the very existence of the EU. But this thought is also in many other minds. If Europe can’t get its house in order, it really does run the risk of becoming irrelevant on an increasingly crowded global stage.For the moment, most Europeans seem to fall into two categories: those who fear the rapidly-changing world order and the increasingly long list of nations clamouring for a stronger role on the world stage and those who hope that if they look the other way, firm up their bonds with the United States, the world won’t change too much and the BRICS will gradually fade away.There are some, wiser, people in the middle: they may not be enthusiastic about the changes being made to the global status quo; but they also know that times are changing fast and that Europe needs to adapt, adjust and accommodate.It was on the advice of such people that despite strong pressure from the US not to do so, several EU countries decided to join the Asian Infrastructure Investment Bank (AIIB) set up by China.While many Europeans voice fear that China is “buying up” European assets, cooler heads are urging the EU to join forces with China’s ambitious ‘One Belt, One Road’ transport networks to boost domestic growth and jobs.Similar arguments for and against cooperating with emerging nations are likely to come to the fore as Europeans discuss membership of the New Development Bank (NDB) being set up by the BRICS to fund projects in member countries.Headquartered in Shanghai, the bank is expected to be operational by end of 2015. Once fully operational, it will become an alternative financing source for the BRICS nations and other emerging markets.Like the head of the AIIB, the first chief of the BRICS bank, India’s K. V. Kamath has been quoted as saying that the NDB sees other multilateral lending institutions such as the International Monetary Fund (IMF), World Bank and Asian Development Bank (ADB) as partners rather than rivals.And yet many continue to be suspicious. The US and Japan have not yet joined the AIIB and many EU policymakers continue to voice fears that the new banks will fall short of high Western standards of transparency and accountability.The BRICS have made clear that they don’t really care. The Old Guard is welcome to come on board, but the world is moving on and they won’t stop for the laggards.Russia, given its tense relations with the West following the crisis in Ukraine and the annexation of Crimea, has taken the toughest line in its dealing with Europe and America. As Foreign Minister Sergei Lavrov underlined in Ufa, emerging nations represent a “new polycentric system of international relations” and demonstrate new global centres of power.As he shook hands with his Chinese, Indian, South African and Brazilian counterparts, a beaming Russian President Vladimir Putin made clear that he was far from the sad and isolated man that the West wants him to be.And it’s not just about the BRICS. An array of newly-empowered nations and groupings are challenging Europe and America’s dominance of the post World War II order. Mexico, Indonesia, Korea, Turkey and Australia are part of MIKTA which claims to act as a bridge between old and new powers.New Zealand says it is the champion of “small nations” without whose support nothing can be achieved on the global stage. The Group of 20 remains relevant as a forum which brings together industrialised and emerging countries.And then there is also the Shanghai Cooperation Organisation (SCO) which EU and Nato policymakers also tend to shrug off as an impotent “paper tiger”.They shouldn’t. As India and Pakistan set out on the road to membership of the SCO, it is clear that while the security organisation does not see itself as a rival to Nato, it does intend to make its voice heard on global security challenges.Underlining just how significantly the world has changed, the five BRICS countries and the six SCO members which include China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan — joined by India, Pakistan, Afghanistan, Iran and Mongolia which have observer status — held a joint summit in Ufa.The Greek crisis was on the BRICS agenda of course. While Europe may not like the new world out there, emerging nations know that in an interconnected and interdependent world, what happens in Europe affects them. And that a failed Europe is in nobody’s interest.

6/29/15 6/29/15

View from Abroad: All aboard the Silk Road express (Originally published 27/06/2015 at dawn.com)

Europe has been slow in its response to China’s ‘One Belt, One Road’ initiative. This may be about to change. If both sides play their cards right, the EU-China Summit on June 29 could kick-start a much-needed conversation on synergies between China’s ambitious vision of an interconnected world and Europe’s mega investment plan to boost jobs and growth.The rewards of such cooperation could be enormous. Increased EU-China connectivity will increase bilateral trade between the two partners, create new business opportunities for European and Chinese enterprises, and boost employment, growth and development in Europe and China — and in countries along the routes.To start the dialogue, Europeans will have to take the long view. With the possibility of a Greek exit from the Eurozone getting ever closer, Britain’s plans for a referendum on its EU membership becoming more strident and growing discord over how to deal with the refugee crisis, European policymakers are thinking local, not global.It’s not just about domestic difficulties; Europe’s neighbourhood is also on fire.And yet, if Europe is to fulfil its ambitions of becoming a global actor while also meeting the domestic imperative of generating stronger economic growth and creating jobs, the EU policymakers must look beyond current emergencies to Europe’s medium-to-long-term needs.This is the logic behind the $315bn investment plan drawn up by European Commission President Jean Claude Juncker to modernise Europe’s infrastructure. With its focus on investments in energy, digital, transport and innovation, the blueprint has the potential to revitalise European economies over the next decade.But Europe can’t possibly do it alone. This is why it is important that EU governments, business leaders and academics start paying more attention to China’s headline-grabbing ‘One Belt, One Road’ initiative — and ways in which this could fit in with the EU’s own investment masterplan.After months of staying relatively silent on the subject, the EU policymakers are beginning to talk about — and explore — the advantages of synergies between the Juncker plan and the ‘One Belt, One Road’ initiative.Clearly, joining forces will unleash more resources. Implementing the EU investment plan will require the mobilisation of billions of euros of private and public funds as well as capital from the European Investment Bank (EIB). As European Commission Vice-President Jyrki Katainen said recently, the EU is hoping to attract Chinese investors to stump up some of the capital for the Juncker plan. The point has also been made by European Trade Commissioner Cecilia Malmstrom as well as by the European Commission president himself.The hope is clearly that the EU connectivity projects will be able to interest both the Silk Road Fund and the Asian Infrastructure Investment Bank (AIIB). The EU is particularly interested in meeting the long-term infrastructure needs in southern, eastern and central European countries and in the Balkan states. Greece as well as some members of the so-called ‘16+1’ group of central and eastern European countries have already indicated their strong interest in such Chinese investments. If all goes according to plan, the eastern part of Europe could connect seamlessly with the western projects on the new Silk Road.As the different ‘One Belt, One Road’ projects come on stream, business opportunities will open up for construction, transport and logistical companies — including European enterprises — across the route. EU-China trade is likely to get an important boost from the expected reduction in transport time and costs while EU exporters and investors will gain access to new growth markets in inland China and Central Asia. Such a development would give an added fillip to the current EU-China negotiations on a bilateral investment treaty.As it passes through often-volatile and less-developed countries and regions, the ‘One Belt, One Road’ has the potential to unleash economic potential across the way, bringing stability as well as growth to Europe — and China’s — neighbourhood. Such a conversation could be especially useful within the 53-member Asia Europe Meeting (ASEM) where connectivity is also climbing up the agenda.It’s not just about money, technology and goodwill, however. The EU insists that investment projects selected for financing under the ‘One Belt, One Road’ initiative must meet strict governance, environmental and technical standards, and result in sustainable development.Moving from dialogue to action will require time and effort — and willingness to compromise. China has taken its time in putting flesh on the bones of the project and in explaining its many facets to a closely-watching world. A more detailed dialogue is now necessary before the EU and China get down to identifying and working on the nuts and bolts of their cooperation. Given their different working methods and cultures, European and Chinese policymakers, bankers and business leaders won’t find it easy to work together.The devil will certainly be in the detail. Expectations will have to be managed on both sides. Selecting projects will be difficult and time-consuming. And there will be no quick results.But in a world desperate for money, jobs and modern infrastructure, China has once again shown its capacity to surprise and to think big. Europeans must come on board the Silk Road ‘express’, not just watch it from the sidelines.

5/12/15 5/12/15

Shada Islam interview: ‘AIIB will bring important input to infrastructure investment'

http://www.youtube.com/watch?v=OyFf1t1VnSw

5/7/15 5/7/15

Bandung and a changing world order

For proof that the world is a much-changed place, look no further than last week’s impressive Asia-Africa conference in Bandung, Indonesia, marking the 60^th anniversary of the original Cold War era summit in the same city led by Indonesia’s then leader-Sukarno.The talk in Bandung six decades ago among representatives from twenty-nine Asian and African governments of Asian and African nations was of the role of the “Third World” in the Cold War, economic development, and decolonisation.The meeting’s final resolution laid the foundation for the nonaligned movement during the Cold War. The heady talk among leaders was on the potential for collaboration among Asian and African nations and their determination to reduce their reliance on Europe and North America.Fast forward to Bandung last week and replace references to the “Third World” with the more modern “emerging nations” and it’s clear that Asia and Africa have changed dramatically since 1955.The two regions – as well as Latin America – are simultaneously driving the transformation of the global landscape and thriving because of it.The mood may be morose in Washington and EU capitals – but Asia, Africa and Latin America are on a roll. Trade is booming – including between the three regions, investments are pouring in and an emerging middle class is changing social, political and economic lifestyles.Interestingly – and worth reflecting on – is the fact that much of the transformation is the result of China’s rise and its gradual but sustained emergence as an important regional and global actor.The West, especially the United States, is finding it difficult to adjust and accommodate the deep-seated paradigm shift in power taking place around it. That’s not difficult to understand given that the US as the current dominant global power has the most to lose from the shift of power to the East.But Europe also needs to come to terms with a changed world. Here in Brussels as the European Union prepares to hammer out a new European Security Strategy to replace the one written 12 years ago it needs to pay special attention to the myriad ways in which the world is becoming different, almost daily. And it needs to forge a new outlook on China and Asia.The world viewed from Europe is indeed violent, messy and dangerous. The EU faces a host of domestic problems – Greece, unemployment, and of course the deteriorating refugee crisis. Europe is surrounded as some say by a “ring of fire”: in the east by Russia and in the south, by a turbulent Arab world.But the EU should be wary of projecting its own morosity on other regions – and indeed of basing its assumptions of Asia’s future on Europe’s tragic, war-racked past.While Europe and its neighbours are in turmoil, the rest of the world is doing better than expected – and certainly better than 60 years ago.The economies of most of the African and Asian countries gathered in Bandung are booming. Steps are being taken to combat poverty, there were successful elections in Afghanistan and Indonesia – and changes are underway in Myanmar and Vietnam next year.Emerging countries are setting their own agenda, defining their interests, building partnerships and rallying together to forge a joint vision for the future.This time the talk is also of breaking the chains of colonialism – but of a different kind; today’s African and Asian governments want an end to the economic domination of the West and of Western insitutions.As the Bandung meeting pointed out last week, the focus is on establishing a new global order that is open to emerging economic powers and leaves the "obsolete ideas" of Bretton Woods institutions in the past.President Xi Jinping of China told the conference that “a new type of international relations” was needed to encourage cooperation between Asian and African nations.Indonesian President Joko “Jokowi” Widodo, the conference host, said those who still insisted that global economic problems could only be solved through the World Bank, International Monetary Fund and Asian Development Bank were clinging to a long-gone past.“There needs to be change,” he said. "It's imperative that we build a new international economic order that is open to new emerging economic powers.”In 1955, the 29 countries which met in Bandung accounted for less than a quarter of global economic output at that time; today they contribute to more than half of the world economy.Many of those countries, such as China, India and Indonesia, are now themselves at top tables like the Group of 20 and wield significant economic power.Indonesia’s Jokowi said the group was meeting again in a changed world but still needed to stand together against the domination of an unspecified “certain group of countries” to avoid unfairness and global imbalances.The creation of the China-backed Asian Infrastructure Investment Bank (AIIB) is one way in which emerging nations are challenging the Western-dominated economic stage. While the US has decided to stay out of the AIIB, many European countries have offered to be founding members of the new bank.Asia’s future will depend to a large extent on the economic future of China. And on relations between China and Japan.Tensions between Asia’s two biggest economies have flared in recent years due to feuds over wartime history as well as territorial rows and regional rivalry.Memories of Japan’s past military aggression run deep in China, and Beijing has repeatedly urged Japan to face up to history.In an encouraging move, Japanese Prime Minister Shinzo Abe and President Xi did meet in Bandung, prompting hopes of a cautious rapprochement between the two economic giants.Peace and prosperity in Asia hinge on cordial relations, even partnerships between the region’s leading powers. And who knows if China and Japan can sidestep their historical enmities, perhaps India and Pakistan could – one day – do the same?

3/23/15 3/23/15

View from abroad : Transatlantic alliance: fact and fiction (Originally published 21/03/2015 at dawn.com)

So here’s the fiction: America and Europe stand united against the “rest of the world”. The transatlantic alliance is strong, solid and a bulwark against the machinations of China and the world’s other emerging nations.Washington and Brussels are like-minded, like-thinking entities which see eye to eye on almost everything. Together, they can still rule the world.Perhaps in the 20th century — but no longer. Here are the facts: the world has changed from unipolar to multi-polar or even “no-polar”. For all its military might, the US no longer rules the world. For proof, look no further than the way Israeli Prime Minister Benyamin Netanyahu is obstructing progress on US-Iran nuclear talks.And here are some more facts: America and the EU are divided over the death penalty, Guantanamo Bay, illegal renditions, the use of torture and the revelations of spying by the National Security Agency as revealed by Edward Snowden.They disagree over how to deal with Russia and Ukraine. And while America sees China mainly as a strategic competitor, Europe is happy to work with Beijing on tackling many 21st century challenges.Certainly, there are some points of convergence. Significantly, negotiations are underway on a Transatlantic Trade and Investment Partnership (TTIP), seen by many as the last attempt by a declining West to impose its economic rule-making model on a watching world.But even as they seek agreement on TTIP, many European states are posing the BIGGEST challenge to the US by deciding to join the Chinese-led, Chinese-inspired $50 billion Asia Infrastructure Investment Bank (AIIB) which Washington continues to firmly oppose.So far, EU members Britain, France, Germany and Italy have said they want to be founding members of the AIIB. But other Europeans will undoubtedly join their ranks.The story is not just about Washington vs Beijing; it’s about a changing world order, the shift of power from west to east, the rise of China and its challenge to years of US domination.It’s about the need to change and reform post-World War II multilateral institutions, including the World Bank and the International Monetary Fund.And it’s about a world desperately in need of cash, especially for badly-needed infrastructure projects — and a rising China which has more money than it can handle.To be fair, US Secretary of Treasury Jack Lew has said that the US was not opposed to the creation of the AIIB. “There are obviously vast needs in Asia and many parts of the world for infrastructure investment,” he told a Congressional hearing on the status of the international financial system.The US concern, he said, has always been whether such an international investment bank will adhere to the high standards such as in protecting workers’ rights, the environment and dealing properly with corruption issues.The bank, proposed by President Xi Jinping in 2013 during a visit to Indonesia, is expected to be launched formally by the end of this year.All Asian countries can apply to become founding members until March 31.Chinese experts say they are looking less for European financial support and more for Europe’s management experience to share with the AIIB.France, Germany and Italy announced they would join the Bank after Britain said it was doing so last week. Australia, a key US ally in the Asia-Pacific region which had come under pressure from Washington to stay out of the new bank, has also said that it will now rethink that position. South Korea is also expected to join.Other European countries are expected to follow the bigger EU nations’ lead. And why not? Like most Asian countries, Europeans are looking to invest in new infrastructure to raise levels of connectivity across the continent.Policymakers are hoping that China will be an important contributor to the 300 billion dollar infrastructure fund announced earlier this year by European Commission President Jean-Claude Juncker.Britain hopes to establish itself as the number one destination for Chinese investment. China is also a strong investor in Germany and in France.Analysts point out that the US has misplayed its hands and that the best way to ensure that China doesn’t dominate the AIIB is to fill it with other powers. This, they argue would result in much stricter governance rules and safeguards.The AIIB is not the only regional project China has proposed that Washington will have to grapple with. Beijing’s “one belt, one road” Silk Road projects are moving rapidly from theoretical to actual, much to the dismay of America and some European states.The Asian Development Bank has estimated Asia’s infrastructure needs at $750 billion a year, far beyond the ADB’s capacity. With connectivity the buzzword across the region, the new Bank is expected to be very busy pumping money into major infrastructure projects.China has also been quick to respond to huge and acute infrastructure needs in the developing world, in contrast with the lengthy project processes required by other lenders.In response to the Chinese initiatives, the Japanese government has also said it wants to focus on infrastructure projects in developing countries.World leaders at the G20 Summit in Brisbane in 2014 recognised infrastructure demand in the developing world as a new source of global growth in the aftermath of the global financial crisis.The transatlantic trade deal may see the light of the day by end-2015 — even though negotiations are tough and public resistance to the pact is high. But even if they do clinch an agreement on trade, America and Europe will not always share a similar vision of life in a rapidly-changing 21st century.