Inter Press Service » Regional Alliances http://www.ipsnews.net Turning the World Downside Up Wed, 02 Sep 2015 22:57:32 +0000 en-US hourly 1 http://wordpress.org/?v=4.1.7 Opinion: Developing Nations Set to Challenge Rich Ahead of SDG Summithttp://www.ipsnews.net/2015/07/opinion-developing-nations-set-to-challenge-rich-ahead-of-sdg-summit/?utm_source=rss&utm_medium=rss&utm_campaign=opinion-developing-nations-set-to-challenge-rich-ahead-of-sdg-summit http://www.ipsnews.net/2015/07/opinion-developing-nations-set-to-challenge-rich-ahead-of-sdg-summit/#comments Mon, 27 Jul 2015 14:18:12 +0000 Soren Ambrose http://www.ipsnews.net/?p=141756

Soren Ambrose is Head of Policy, Advocacy & Research at ActionAid International

By Soren Ambrose
NEW YORK, Jul 27 2015 (IPS)

The final round of negotiations on the Sustainable Development Goals – the successor to the Millennium Development Goals, due to be inaugurated in September at the U.N. General Assembly – is now underway in New York.

Courtesy of Soren Ambrose/ActionAid

Courtesy of Soren Ambrose/ActionAid

The United Nations and many member governments want to conclude the debates by the end of July, so that there will not be open debate during the SDG Summit. But reports indicate that the atmosphere in the room is one of seething distrust.

That’s because of what happened during the Financing for Development (FfD) conference in Addis Ababa, Ethiopia last month.

The developing countries – those grouped together in the “G77,” which 50 years after its founding actually has 134 members – were pushing a proposal for a universal intergovernmental organisation, within the U.N., which would have as its mandate reform and maintenance of the international tax system.

While this proposal would not have immediately remedied any of the myriad ways that corporations dodge taxes in developing countries, it would be a decisive change to the system that has allowed such activities to flourish.

To the extent that there are international rules, or standards and guidelines, on taxation now, they are proposed and elaborated by the Organization for Economic Cooperation & Development (OECD), a club of 34 of the world’s richest countries. Every once in a while they make a show of consulting those other 134 countries, but those others never actually get a vote.Ultimately it’s the pressure of the people which will force their governments to be responsible. The movement to stand up to those who have hijacked our power is building.

In the new proposed way of making decisions on international tax rules, every country would have an equal voice and equal vote. This fight matters is because developing countries are confronting the need to change how the rules are made, and who makes the rules.

Until they manage that, they will always, at best, be running to stay in place. Changing who makes the rules is a necessary, although not sufficient condition, for creating permanent change.

Taxation is vital because wealthy companies and individuals get and stay rich by using a portion of their considerable resources to hire lawyers and accountants to guide them in dodging the taxes they should be paying in the countries where they excavate, grow, or purchase their raw materials, assemble their products, and make an increasing proportion of their sales.

If they don’t have such staff in-house, they can hire the services of big accounting firms for whom this is the most lucrative activity.

Most big companies manipulate “tax treaties” between countries and tax havens like Switzerland, Mauritius, and the Cayman Islands to create legal fictions that exempt them from paying most of the taxes they owe.

What they do is usually not technically illegal, because of the impossibility of keeping up with the tactics of the armies of experts dedicated to avoiding taxes. But neither is it quite ethical.

This deprives countries of the revenue – to the tune of at least 100 billion dollars every year – that they need to fund development, and ensures the perpetuation of the concentration of wealth in the hands of a very few. That wealth translates to power – a veritable global plutocracy.

The OECD, to be fair, has made some moves to clamp down on the most egregious forms of tax avoidance, including their “base erosion and profit shifting” (BEPS) process begun in 2013.

The corporate lawyers and accountants were a little nervous about BEPS, but with the process winding up, it appears that any reforms it demands will not be manageable. The promises at the outset of the process to include developing countries never amounted to much.

The FfD process in the U.N. was, of course, universal. The U.N. and national governments usually like to have the “outcome document” finalised before a summit meeting. The prospect of a messy negotiation with thousands of advocates just outside the door makes them nervous.

But after months of negotiations in New York and a series of missed deadlines, the big debate over the tax body was not resolved. The ministers would go to Addis facing open negotiations.

Bolstered by the support of hundreds of civil society groups, the G77 governments – a group that has to accommodate the interests of very disparate countries – held together. Three BRICS countries – South Africa as the chair of the G77, along with India and Brazil – were vocal actors on the side of the developing countries, something they can’t always be relied on to do as they ascend the global power ladder.

With negotiators starting to meet before the formal start of the meetings on July 13, there were several days filled with ever-shifting rumours. But on the evening of July 15, the eve of the scheduled end of the conference, the announcement came: there would be an outcome document little changed from the unsatisfactory draft they brought from New York.

Promises were made to expand the resources and prestige of the existing U.N. Committee of Tax Experts, but nothing more. No universal membership, and no mandate for reform.

The G77 held out to the end. But the rich countries, led by the United States with the steady support of the European Union, Canada, Japan, and Australia, refused to give up the regime of loopholes and havens and double-dealing that adds up to billions in lost revenue every year.

Make no mistake, ordinary people in rich countries also lose out as corporations dodge taxes. But with their territories serving as the leading facilitators of tax avoidance in the world, their governments showed they want the present system to endure.

The current global hyper-capitalism now puts no constraints on capital. Unlimited profits, unlimited wealth, and unlimited power have been accruing to the finance industry and the wealthy corporations and individuals it serves for over 40 years.

The rich countries’ politicians not only put up with it, they tout the “private sector” as the panacea for development in poor countries, with nearly no evidence to support them.

And at home, they cut public services and impose austerity, explaining that government just can’t afford to serve the people. Their priority has been corporations’ and investors’ bottomless appetite for profit and power.

As my colleague Ben Phillips has written about the FfD, it’s actually good news that the rich countries had to put an ugly stop to the negotiations, with barely a face-saving compromise to point to. Usually they manage to find a way to assign the blame to someone else.

Forcing them to show their hand is valuable; it’s clear that those making the rules are far more identified with a powerful few than with the public they claim to serve.

The next step is at the SDG Summit at the end of September, at the time of the annual U.N. General Assembly meetings. There we will learn whether and to what extent the developing countries will stand up to those who have monopolised power for so long. If they do, we may be on the road to reversing parts of the system that perpetuates the status quo.

Whatever happens, we aren’t going anywhere. Civil Society won’t change this global dynamic by attending these conferences, or through polite lobbying. We will have to endure many more meetings, and more setbacks.

But ultimately it’s the pressure of the people which will force their governments to be responsible. The movement to stand up to those who have hijacked our power is building.

Edited by Kitty Stapp

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Opinion: A BRICS Bank to Challenge the Bretton Woods System?http://www.ipsnews.net/2015/07/opinion-a-brics-bank-to-challenge-the-bretton-woods-system/?utm_source=rss&utm_medium=rss&utm_campaign=opinion-a-brics-bank-to-challenge-the-bretton-woods-system http://www.ipsnews.net/2015/07/opinion-a-brics-bank-to-challenge-the-bretton-woods-system/#comments Wed, 22 Jul 2015 08:12:45 +0000 Daya Thussu http://www.ipsnews.net/?p=141689

Daya Thussu is Professor of International Communication at the University of Westminster in London.

By Daya Thussu
LONDON, Jul 22 2015 (IPS)

The formal opening of the BRICS Bank in Shanghai on Jul. 21 following the seventh summit of the world’s five leading emerging economies held recently in the Russian city of Ufa, demonstrates the speed with which an alternative global financial architecture is emerging.

The idea of a development-oriented international bank was first floated by India at the 2012 BRICS summit in New Delhi but it is China’s financial muscle which has turned this idea into a reality.

Daya Thussu

Daya Thussu

The New Development Bank (NDB), as it is formally called, is to use its 50 billion dollar initial capital to fund infrastructure and developmental projects within the five BRICS nations – Brazil, Russia, India, China and South Africa – though it is also likely to support developmental projects in other countries.

According to the 43-page Ufa Declaration, “the NDB shall serve as a powerful instrument for financing infrastructure investment and sustainable development projects in the BRICS and other developing countries and emerging market economies and for enhancing economic cooperation between our countries.”

The NDB is led by Kundapur Vaman Kamath, formerly of Infosys, India’s IT giant, and of ICICI Bank, India’s largest private sector bank. A respected banker, Kamath reportedly said during the launch that “our objective is not to challenge the existing system as it is but to improve and complement the system in our own way.”

The launch of the NDB marks the first tangible institution developed by the BRICS group – set up in 2006 as a major non-Western bloc – whose leaders have been meeting annually since 2009. BRICS countries together constitute 44 percent of the world population, contributing 40 percent to global GDP and 18 percent to world trade.“Our objective is not to challenge the existing system as it is but to improve and complement the system in our own way” – Kundapur Vaman Kamath, head of the New Development Bank (NDB)

In keeping with the summit’s theme of ‘BRICS partnership: A powerful factor for global development’, the setting up of a developmental bank was an important outcome, hailed as a “milestone blueprint for cooperation” by a commentator in The China Daily.

The Chinese imprint on the NDB is unmistakable. The Ufa Declaration is clear about the close connection between the NDB and the newly-created Asian Infrastructure Investment Bank (AIIB), also largely funded by China. It welcomed the proposal for the New Development Bank to “cooperate closely with existing and new financing mechanisms including the Asian Infrastructure Investment Bank.” China is also keen to set up a regional centre of the NDB in South Africa.

If economic cooperation remained the central plank of the Ufa summit, there is also a clear geopolitical agenda.

The Global Times, China’s more nationalistic international voice, pointed out that the establishment of the NDB and the AIIB will “break the monopoly position of the International Money Fund (IMF) and the World Bank (WB) and motivate [them] to function more normatively, democratically, and efficiently, in order to promote reform of the international financial system as well as democratisation of international relations.”

The reality of global finance is such that any alternative financial institution has to function in a system that continues to be shaped by the West and its formidable domination of global financial markets, information networks and intellectual leadership.

However, China, with its nearly four trillion dollars in foreign currency reserves, is well-placed to attempt this, in conjunction with the other BRICS countries. China today is the largest exporting nation in the world, and is constantly looking for new avenues for expanding and consolidating its trade relations across the globe.

China is also central to the establishment of the Shanghai Cooperation Organisation (SCO), a Eurasian political, economic and security grouping whose annual meeting coincided with the seventh BRICS summit. Founded in 2001 and comprising China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, the SCO has agreed to admit India and Pakistan as full members.

Though the BRICS summit and the SCO meeting went largely unnoticed by the international media – preoccupied as they were with the Iranian nuclear negotiations and the ongoing Greek economic crisis – the economic and geopolitical implications of the two meetings are likely to continue for some time to come.

For host Russia, which also convened the first BRICS summit in 2009, the Ufa meeting was held against the background of Western sanctions, continuing conflict in Ukraine and expulsion from the G8. Partly as a reaction to this, camaraderie between Moscow and Beijing is noticeable – having signed a 30-year oil and gas deal worth 400 billion dollars in 2014.

Beijing and Moscow see economic convergence in trade and financial activities, for example, between China’s Silk Road Economic Belt initiative for Central Asia and Russia’s recent endeavours to strengthen the Eurasian Economic Union. The expansion of the SCO should be seen against this backdrop. Moscow has also proposed setting up SCO TV to broadcast economic and financial information and commentary on activities in some of the world’s fastest growing economies.

Whatever the outcome, it is clear that a new international developmental agenda is being created, backed by powerful nations, and to the virtual exclusion of the West.

China is the driving force behind this. Despite its one-party system which limits political pluralism and thwarts debate, China has been able to transform itself from a largely agricultural self-sufficient society to the world’s largest consumer market, without any major social or economic upheavals.

China’s success story has many admirers, especially in other developing countries, prompting talk of replacing the ‘Washington consensus’ with what has been described as the ‘Beijing consensus’. The BRICS bank, it would seem, is a small step in that direction.

Edited by Phil Harris    

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

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Opinion: ASEAN Must Unite Against Climate Changehttp://www.ipsnews.net/2015/07/opinion-asean-must-unite-against-climate-change/?utm_source=rss&utm_medium=rss&utm_campaign=opinion-asean-must-unite-against-climate-change http://www.ipsnews.net/2015/07/opinion-asean-must-unite-against-climate-change/#comments Wed, 08 Jul 2015 19:26:15 +0000 Jed Alegado http://www.ipsnews.net/?p=141487 Stanzin Dolma of Choglamsar-Leh breaks down while showing the ruins of her home, wrecked by the August floods and landslides in India in 2010. Credit: Athar Parvaiz/IPS

Stanzin Dolma of Choglamsar-Leh breaks down while showing the ruins of her home, wrecked by the August floods and landslides in India in 2010. Credit: Athar Parvaiz/IPS

By Jed Alegado
MANILA, Jul 8 2015 (IPS)

The Association of Southeast Asian Nations (ASEAN) started as a cooperation bloc in 1968. Founded by five countries – Thailand, Singapore, Malaysia, Indonesia and the Philippines – ASEAN has since evolved into a regional force which is slowly changing the landscape in global politics.

Five decades later, amid changing geopolitics and dynamics in the region, ASEAN faces a daunting task this year as it gears up for ASEAN 2015 economic integration amidst uncertainty in light of climate change impacts.

Agriculture – ASEAN’s key driver of growth

ASEAN banks on agriculture as the key driver of growth in the region. Its member-countries rely on agriculture as the primary source of income for their peoples. Food security, livelihoods and other needs of ASEAN citizens are at stake in the region’s vast resources, such as forests, seas, rivers, lands and ecosystems. However, climate change is threatening shared growth reliant on agriculture and natural resources.

With a region dependent on agriculture for food security and livelihoods, ASEAN needs to step up its fight against climate change. Oxfam GROW East Asia campaign recently released a report titled “Harmless Harvest: How sustainable agriculture can help ASEAN countries adapt in a changing climate.”

It argues that “climate change is undermining the viability of agriculture in the region and putting many small-scale farmers’ and fisherfolk’ livelihoods at risk.”

Data from the International Rice Research Institute (IRRI) revealed that rice yields drop as much as 10 percent for every 1 percent rise in temperature – an alarming fact for a region which counts rice as the staple food.

ASEAN 2015 in Paris?

The planned 2015 economic integration is unveiling amidst a backdrop of threats to agriculture in the region due to impacts of climate change. For ASEAN 2015 integration to prosper and its promised economic growth to be shared mutually, ASEAN must unite against climate change by taking a definitive stand as a regional bloc.

First, at the global climate negotiations of the United Nations Framework Convention for Climate Change, ASEAN leaders must unite behind a fair and binding agreement toward building a global climate deal in Paris this year.

Second, in terms of climate change mitigation, ASEAN needs to harmonise existing policies on coal and level the playing field where renewable energies can compete with other sources of energy. Furthermore, the 2015 economic integration must be clear on charting a low-carbon development plan for the region.

Third, ASEAN must ensure that its economic community-building is geared toward low-carbon development anchored on sustainability and inclusive growth. It can start by ensuring that regional policies in public and private investments in agriculture and energy do not threaten food security, improve resilience against climate-related disasters, and respect asset reform policies and the rights of small food producers.

Lastly, ASEAN leaders must also ensure that policies will be in place to shift the funding support from industrial agriculture to sustainable agricultural practices promoting agro-ecology and sustainable ecosystems.

ASEAN can do this by ensuring that each governments allocate sufficient financial resources for community-driven climate change adaptation practices while working with communities and peoples’ organisations on knowledge-sharing and learning best practices.

Edited by Kitty Stapp

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The U.N. at 70: United Nations Disappoints on Its 70th Anniversary – Part Onehttp://www.ipsnews.net/2015/06/the-u-n-at-70-united-nations-disappoints-on-its-seventieth-anniversary-part-one/?utm_source=rss&utm_medium=rss&utm_campaign=the-u-n-at-70-united-nations-disappoints-on-its-seventieth-anniversary-part-one http://www.ipsnews.net/2015/06/the-u-n-at-70-united-nations-disappoints-on-its-seventieth-anniversary-part-one/#comments Wed, 24 Jun 2015 21:52:45 +0000 James A. Paul http://www.ipsnews.net/?p=141296

James A. Paul served for 19 years as Executive Director of Global Policy Forum, an organization monitoring the UN. He earlier worked at the Middle East Research & Information Project. In 1995, he founded the NGO Working Group on the Security Council and he has been active in many NGO initiatives and policy projects. He was an editor of the Oxford Companion to Politics of the World and has authored more than a hundred articles on international politics.

By James A. Paul
NEW YORK, Jun 24 2015 (IPS)

It is hard to imagine today the public enthusiasm that greeted the founding of the U.N. in 1945.  After massive suffering and social collapse resulting from the Second World War, the U.N. seemed almost miraculous – a means at last to build peace, democracy, and a just society on a global scale.

Courtesy of Global Policy Forum

Courtesy of Global Policy Forum

Everywhere, hopes and aspirations were high.  Seven decades later, results have fallen far short.  On this anniversary, we can ask: what might have been possible and what is still possible from this institution that has inspired such passion, positive and negative, over the years?

The organisation, of course, was not set up by the United States and its allies to fulfill the wishes of utopian thinkers.  Though the Charter of 1945 invokes “We the Peoples,” the war victors structured the U.N. as a conclave of nation states that would express the will of its members – particularly themselves, the richest and most influential countries.

Despite statesmen’s pronouncements about noble intentions, the U.N.’s most mighty members have never seriously considered laying down their arms or sharing their wealth in an unequal world.  They have been busy instead with the “Great Games” of the day – like securing oil and other resources, dominating client states and bringing down unfriendly governments.Faced with urgent needs and few resources, the U.N. holds out its beggar’s bowl for what amounts to charitable contributions, now totaling nearly half of the organisation’s overall expenditures.

Nevertheless, through the years, the U.N. has regularly attracted the hopes of reforming intellectuals, NGOs, humanitarians and occasionally even some governments – with ideas about improvement to the global system and well-being on the planet. In the run-up to the Fiftieth Anniversary in 1995, many reports, conferences and books proposed U.N. institutional reform, some of which advocated a direct citizen role in the organisation.

Among the ideas were a chamber of directly-elected representatives, a vitalised General Assembly and a more representative Security Council, shorn of vetoes.  Some thinkers wanted an institution “independent” from – or at least buffered against – the sordid arena of great power politics.  But most reforming ideas, including relatively moderate changes, have come to naught.

Governments of all stripes have had a very short-term perspective and a narrow, outmoded conception of their “national interest” in the international arena.  They have shown remarkably little creativity and far-sightedness and they have taken care not to threaten powerful status quo interests.

The U.N.’s seventieth anniversary has come at a moment of exhaustion and frustration among reformers that has sapped belief in creative change. We are at a low-point in U.N. institutional prestige and public support.  Not surprisingly, the organisation has attracted few proposals and initiatives this time around.

As we know, the planet is facing unprecedented problems that the U.N. is in business to address: poverty, gross inequality, civil wars, mass migration, economic instability, and worsening climate change.  Secretaries General have regularly appointed panels of distinguished persons to consider these “threats,” but member states have not been ready to produce effective solutions.

Most of the money and energy at the U.N. in recent years has poured into “peacekeeping,” which is typically a kind of military intervention outsourced by Washington and its allies. The organisation, dedicated in theory to ending war, is ironically now a big actor on the world’s battlefields. It has a giant logistics base in southern Italy, a military communications system, contracts with mercenaries, an intelligence operation, drones, armored vehicles and other accouterments of armed might.  Meanwhile, the Department of Disarmament Affairs has seen its funding and status decline considerably.

The richest and most powerful states like to blame the smaller and poorer countries for the U.N. reform impasse (fury at the “G-77” – the group of “developing” countries – can often be heard among well-fed Northern diplomats at posh New York restaurants).  But in fact the big powers (with Washington first among them) have been the most ardent “blockers” – strenuously opposed to a strong U.N. in nearly every respect, except military operations.

The big power blocking has been especially strong when it comes to global economic policy, including proposals to strengthen the Social and Economic Council.  The same powers have also kept the U.N. Environment Programme weak, while opposing progress in U.N.-sponsored climate negotiations.

Poor countries have complained, but they are not paragons of reform either: their  leaders are inclined to speak in empty populist rhetoric, demanding “aid” while pursuing personal enrichment. We are far from a game-changing “new Marshall Plan” or a global mobilisation for social justice that reformers rightly call for.  Well-meaning NGOs repeat regularly such ideas, with little effect, in comfortable conference venues.

The U.N. has weakened as its member states have grown weaker.  The IMF, the World Bank and global financial interests have pushed neo-liberal reforms for three decades, undermining national tax systems and downsizing the role of public institutions in economic and social affairs.  Governments have privatized banks, airlines and industries, of course, and they have also privatized schools, roads, postal services, prisons and health care.

The vast new inequalities have led to more political corruption, a plague of lobbying, and frequent electoral malfeasance, even in the oldest democracies.  As a result, nation states command less loyalty, respect and hope than they did in the past.  Traditional centrist parties are losing their voters and the public is sceptical about governing institutions at all levels, including the U.N.

When nations cut their budgets, they cut the budget of the U.N. too, small as it is.  Bold steps to improve the U.N. would require money, self-confidence and a long-term view, but member states are too weak, politically unstable, timid and financially insecure to take on such a task.  As states slouch into socially, economically and politically conservative policies, the U.N. inexorably follows, losing its public constituency in the process.

Tightening U.N. budgets have tilted the balance of power in the U.N. even more sharply towards the richest nations and the wealthiest outside players.  Increasingly, faced with urgent needs and few resources, the U.N. holds out its beggar’s bowl for what amounts to charitable contributions, now totaling nearly half of the organization’s overall expenditures.

This “extra-budgetary” funding, enables the donors to define the projects and set the priorities.  The purpose of common policymaking among all member states has been all but forgotten.

Edited by Kitty Stapp

Part Two of this article can be found here.

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Opinion: The Oceans Need the Spotlight Nowhttp://www.ipsnews.net/2015/06/opinion-the-oceans-need-the-spotlight-now/?utm_source=rss&utm_medium=rss&utm_campaign=opinion-the-oceans-need-the-spotlight-now http://www.ipsnews.net/2015/06/opinion-the-oceans-need-the-spotlight-now/#comments Mon, 22 Jun 2015 11:10:30 +0000 Dr. Palitha Kohona http://www.ipsnews.net/?p=141237

Dr. Palitha Kohona was co-chair of the U.N. Ad Hoc Open-ended Informal Working Group to study issues relating to the conservation and sustainable use of marine biological diversity beyond areas of national jurisdiction

By Dr. Palitha Kohona
COLOMBO, Jun 22 2015 (IPS)

The international community must focus its energies immediately on addressing the grave challenges confronting the oceans. With implications for global order and peace, the oceans are also becoming another arena for national rivalry.

Amb. Palitha Kohona. Credit: U.N. Photo/Mark Garten

Amb. Palitha Kohona. Credit: U.N. Photo/Mark Garten

The clouds of potential conflict gather on the horizon. The U.N. resolution adopted on June 19 confirms the urgency felt by the international community to take action.

His Holiness the Pope observed last week, “Oceans not only contain the bulk of our planet’s water supply, but also most of the immense variety of living creatures, many of them still unknown to us and threatened for various reasons. What is more, marine life in rivers, lakes, seas and oceans, which feeds a great part of the world’s population, is affected by uncontrolled fishing, leading to a drastic depletion of certain species… It is aggravated by the rise in temperature of the oceans.”

The oceans demand our attention for many reasons. In a world constantly hungering for ever more raw material and food, the oceans, which cover 71 percent of the globe, are estimated to contain approximately 24 trillion dollars of exploitable assets. Eighty-six million tonnes of fish were harvested from the oceans in 2013, providing 16 percent of humanity’s protein requirement. Fisheries generated over 200 million jobs.

However, unsustainable practices have decimated many fish species, increasing competition for the rest. The once prolific North Atlantic cod, the Pacific tuna and the South American anchovy fisheries have all but collapsed with disastrous socio-economic consequences.Increasingly the world's energy requirements, oil and gas from below the sea bed, as well as wind and wave power, come from the realm of the oceans, setting the stage for potentially explosive confrontations among states competing for energy sources.

Highly capitalised and subsidised distant water fleets engage in predatory fishing in foreign waters causing tensions which could escalate. In a striking development, the West African Sub Regional Fisheries Commission recently successfully asserted, before the International Tribunal for the Law of the Sea (ITLOS), the responsibility of flag States to take necessary measures to prevent illegal, unreported and unregulated fishing.

Increasingly the world’s energy requirements, oil and gas from below the sea bed, as well as wind and wave power, come from the realm of the oceans, setting the stage for potentially explosive confrontations among states competing for energy sources. The sea bed could also provide many of the minerals required by strategic industries.

As these assets come within humanity’s technological reach, inadequately managed exploitation will cause damage to the ocean ecology and coastal areas, demonstrated dramatically by the BP Horizon blowout in the Gulf of Mexico. (Costing the company over 42.2 billion dollars).

Cross-border environmental damage could give rise to international conflicts. A proposal to seek an advisory opinion from the ICJ on responsibility for global warming and sea level rise was floated at the U.N. by Palau in 2013.

The oceans will also be at the centre of our efforts to address the looming threat of climate change. With ocean warming, fish species critically important to poor communities in the tropics are likely to migrate to more agreeable climes, aggravating poverty levels.

Coastal areas could be flooded and fresh water resources contaminated by tidal surges. Increasing ocean acidification and coral bleach could cause other devastating consequences, including to fragile coasts and fish breeding grounds.

The ocean is the biggest sink of greenhouse gases (GHGs). The Intergovernmental Panel on Climate Change has warned that the rapid increases in anthropogenic GHGs will aggravate ocean warming and the melting of the ice caps. Some small island groups might even disappear beneath the waves.

Scientists now believe that over 70 percent of anthropogenic GHGs generated since the turn of the 20th century were absorbed by the Indian Ocean which is likely to result in unpredictable consequences for the littoral states of the region, already struggling to emerge from poverty.

The increasing ferocity of natural phenomena, such as hurricanes and typhoons, will cause greater devastation as we witnessed in the cases of Katrina in the U.S. and the brutal Haiyan in the Philippines.

The socio-economic impacts of global warming and sea level rise on the multi-billion-dollar tourism industry (476 billion dollars in the U.S. alone) would be far reaching. All this could result in unmanageable environmental refugee flows. The enormous challenge of ocean warming and sea level rise alone would require nations to become more proactive on ocean affairs now.

The international community has, over the years, agreed on various mechanisms to address ocean-related issues. But these efforts remain largely uncoordinated and with the developments in science, lacunae are being identified progressively.

The most comprehensive of these endeavours is the laboriously negotiated Law of the Sea Convention (LOSC) of 1982. The LOSC, described as the constitution of the oceans by Ambassador Tommy Koh of Singapore, who presided over the final stages of the negotiations, details rules for the interactions of states with the oceans and with each other with regard to the oceans.

Although some important states such as the U.S., Israel, Venezuela and Turkey are not parties to the LOSC (it has 167 parties), much of its content is accepted as part of customary international law. It also provides a most comprehensive set of options for settling inter-state disputes relating to the seas and oceans, including the ITLOS, headquartered in Hamburg.

The LOSC established the Sea Bed Authority based in Kingston, Jamaica which now manages exploration and mining applications relating to the Area, the sea bed beyond national jurisdiction, and the U.N. Commission on the Continental Shelf before which many state parties have already successfully asserted claims to vast areas of their continental shelves.

With humanity’s knowledge of the oceans and seas expanding rapidly and the gaps in the LOSC becoming apparent, the international community in 1994 concluded the Implementing Agreement Relating to Part XI of the LOSC and in 1995, the Straddling Fish Stocks Agreement.

Additionally, the United Nations Environment Programme has put in place a number of regional arrangements, some in collaboration with other U.N. agencies such as the FAO and the IMO, for the conservation and sustainable use of marine resources, including fisheries.

The IMO itself has put in place detailed agreements and arrangements affecting the oceans and the seas in relation to shipping. The FAO has been instrumental in promoting regional mechanisms for the sustainable use of marine and coastal fisheries resources.

In 2012, the U.N. Secretary-General launched the Oceans Compact. States negotiating the Post-2015 Development Goals at the U.N. have acknowledged the vast and complex challenges confronting the oceans and have proceeded to highlight them in the context of a Sustainable Development Goal.

The majority of the international community now feel that the global arrangements for the sustainable use, conservation and benefit sharing of biological diversity beyond national jurisdiction need further strengthening. The negotiators of the LOSC were not fully conscious of the extent of the genetic resources of the deep. Ninety percent of the world’s living biomass is to be found in the oceans.

Today the genetic material, bio prospected, harvested or mined from the oceans is providing the basis for profound new discoveries pertaining to pharmaceuticals. Only a few countries possess the technical capability to conduct the relevant research, and even fewer the ability to convert the research into financially beneficial products. The international community’s concerns are reflected in the U.N. General Assembly resolution adopted on June 19.

Many developing countries are concerned that unless appropriate regulatory mechanisms are put in place now by the international community, the poor will be be shut out from the vast wealth, estimated at three billion dollars per year, expected to be generated from this new frontier. Over 4,000 new patents, the number growing at 12 percent a year based on such genetic material, were registered in 2013.

A U.N. working group, initially established back in 2006 to study the question of concluding a legally binding instrument on the conservation, sustainable use and benefit sharing of biological diversity beyond the national jurisdiction of states, and co-chaired by Sri Lanka and The Netherlands from 2009, submitted its report in January 2015, after years of difficult negotiations.

For nine years, consensus remained elusive. Certain major powers, including the U.S., Russia, Japan, Norway and the Republic of Korea held out, contending that the existing arrangements were sufficient. These are among the few which possess the technological capability to exploit the genetic resources of the deep and convert the research in to useful products.

The U.N. General Assembly is now expected to establish a preparatory committee in 2016 to make recommendations on an implementing instrument under UNCLOS. An intergovernmental conference is likely to be convened by the GA at its 72nd Session for this purpose.

The resulting mechanism is expected to complement the existing arrangements on biological genetic material under the FAO and the Convention on Biological Diversity (Nagoya Protocol) applicable to areas under national jurisdiction.

This ambitious U.N. process is likely to create a transparent regulatory mechanism facilitating technological and economic progress while ensuring equity.

A development with long term impact, especially since Rio+20, was the community of interests identified and strengthened between the G 77 and China and the EU with regard to the oceans.

Life originated in the primeval ocean. Humanity’s future may very well depend on how we care for it.

Edited by Kitty Stapp

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Chinese Public Most Worried About Climate Changehttp://www.ipsnews.net/2015/06/chinese-public-most-worried-about-climate-change/?utm_source=rss&utm_medium=rss&utm_campaign=chinese-public-most-worried-about-climate-change http://www.ipsnews.net/2015/06/chinese-public-most-worried-about-climate-change/#comments Tue, 09 Jun 2015 17:37:22 +0000 Kitty Stapp http://www.ipsnews.net/?p=141047 Parked bicycles in China. Credit: Whoisgalt/cc by 3.0

Parked bicycles in China. Credit: Whoisgalt/cc by 3.0

By Kitty Stapp
UNITED NATIONS, Jun 9 2015 (IPS)

A new survey finds that China leads the world in public support for government action on climate change.

Conducted by YouGov, it covers 15 countries on four continents, including the two biggest emitters of greenhouse gases, the United States and China, and seven members of the G20 group of major economies.

Some 60 percent of respondents in China favour a leadership role for their country, versus 44 percent in the United States and 41 percent in Britain.

The results come as nations prepare for a new round of climate talks in Paris in December, and confirms that the vast majority of people surveyed, in both developed and developing countries, want a strong deal to reduce greenhouse gas emissions.

A 10-day meeting to hone the draft text of the Paris climate agreement began last week in Bonn, Germany.

Also meeting in Germany Monday, the Group of Seven (G7) announced that it will push for nations to aim for emission cuts near 70 percent of 2010 levels by mid-century.

But China may already be ahead of the game.

A new study by the London School of Economics (LSE) released Monday predicted that China’s greenhouse gas emissions could peak by 2025, five years earlier than the time frame indicated by Beijing, thanks to steady reductions in coal consumption.

Scientists say the earlier peaking would restrict emissions to between 12.5 and 14 billion tonnes of carbon dioxide, and could help avoid a potentially catastrophic two-degree C global temperature increase.

According to the YouGov survey, fears about climate change are greatest in the Asia-Pacific region, which is especially vulnerable to sea-level rise, droughts and storms.

Some 82 percent in Indonesia consider climate change a “very” serious problem, along with 69 percent in Malaysia and 52 percent in China, the median figure for the region.

In Europe, a median figure of 41 percent consider climate change very serious. Germans are most concerned (50 percent) and Britons least (26 percent). Americans fall somewhere in the middle of the Europeans, with 38 percent very concerned.

In most countries, the most popular strategy for governments to take leadership roles at the Paris talks was by setting ambitious targets.

The deal (which is far from certain) comes on the heels of fairly weak pacts made in Kyoto and Copenhagen fell short, and could be humanity’s last chance to avoid the worst effects of climate change.

Only a small minority want to see no agreement made.

There are some big differences between some of the countries polled, including some of the worst polluters. Sixty percent in China favour a leadership role for the country, versus only 44 percent in the United States and 41 percent in Britain.

Americans are also the most likely to want no involvement in an international climate change agreement, at 17 percent. Some 48 percent of the French public, who will be hosting the talks, support the most ambitious approach, while 35 percent opt for moderation and 3 percent want to play no part.

A bare majority – 51 percent – of Americans don’t think their government is doing enough to address climate change. This is higher than the European median of 45 percent (though the American public is also most likely to say the government is doing too much, at 21 percent).

In Denmark, home to the failed 2009 climate conference, only 37 percent desire additional government action. On the other hand, 57 percent of Germans and 58 percent of the French want their country to do more.

Edited by Kanya D’Almeida

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Opinion: The Bumpy Road to an Asian Centuryhttp://www.ipsnews.net/2015/06/opinion-the-bumpy-road-to-an-asian-century/?utm_source=rss&utm_medium=rss&utm_campaign=opinion-the-bumpy-road-to-an-asian-century http://www.ipsnews.net/2015/06/opinion-the-bumpy-road-to-an-asian-century/#comments Mon, 01 Jun 2015 08:06:03 +0000 Shyam Saran http://www.ipsnews.net/?p=140894 “Just as the world is moving towards multi-polarity, so is Asia … The economic fragmentation of the region and the competitive pursuit of security interests may well consign the Asian Century into a brief interlude rather than a millennial transformation”. Photo credit: Public domain via Wikimedia Commons

“Just as the world is moving towards multi-polarity, so is Asia … The economic fragmentation of the region and the competitive pursuit of security interests may well consign the Asian Century into a brief interlude rather than a millennial transformation”. Photo credit: Public domain via Wikimedia Commons

By Shyam Saran
NEW DELHI, Jun 1 2015 (IPS)

It has been apparent for some time that we are in the midst of a historic shift of the centre of gravity of the global economy from the trans-Atlantic to what is now becoming known as the Indo-Pacific.  

This is an emerging centre of economic dynamism and comprises what was earlier confined to the Asia-Pacific but now includes the South Asian region as well.

This is a region which now accounts for nearly 40 percent of world gross domestic product (GDP), which is likely to rise to 50 percent or more by 2050.  Its share of world trade is now 30 percent and growing.

Shyam Saran

Shyam Saran

This year, the region has become the largest source of foreign direct investment (FDI), surpassing the European Union (EU) and the United States. China has been the main driver of this historic shift, but other Asian economies have also made significant contributions.

As the Chinese economy begins to slow, India shows promise of regaining an accelerated growth trajectory under a new and decisive political leadership. This will help extend the scale and direction of this shift. Its geopolitical consequences will be profound.

It must be recognised that the economic transformation of Asia, in particular the spectacular growth of China, has been enabled by an unusually extended and liberal global economic environment, underpinned by the faith in globalisation and open markets.

It has also been enabled by a U.S.-led security architecture in the region which kept in check, though did not resolve, the long-standing political fault lines and regional conflicts over competing territorial claims and unresolved disputes.

This relatively benign and supportive economic and security environment is in danger of unravelling precisely at a time when the situation in the region is becoming more complex and challenging.  Paradoxically, this is partly a consequence of the very success of the region in achieving relative economic prosperity.“The danger is that instead of an inclusive and regionally integrated Asia, we may end up with exclusive and competing clusters, moving at different speeds, with different norms and standards. This may well undermine the very basis of Asia’s economic dynamism”

We are witnessing new trends in the region which, unless managed with prudence and foresight, may well sour the prospects of an Asian Century.

The relatively open and liberal trade and investment regime, in particular access to the large consuming markets of the United States, European Union and Japan, is now under serious threat.

Protectionist trends are already visible in these advanced economies as they struggle with prolonged economic stagnation which is the fall-out of the global financial and economic crisis of 2007-2008.

Instead of the consolidation and expansion of the open and inclusive economic architecture that had hitherto been the hallmark of the regional and global economy, we are witnessing its steady fragmentation.

In the Indo-Pacific region, there are competing regional trade arrangements and investment regimes, with no clarity on the contours of a new and emerging economic architecture.

The United States is spearheading its Trans-Pacific Partnership (TPP) which will include some Asian economies, but not India and China.

China has countered by proposing a free trade area encompassing the current Asia-Pacific Economic Cooperation (APEC) membership.  This will include China and the United States but not India and some of the Association of Southeast Asian Nations (ASEAN) economies.

The Regional Cooperation Economic Partnership (RCEP) would include all ASEAN countries plus China, Japan, Republic of Korea, India, Australia and New Zealand, but not the United States.

And finally, there is the East Asia Summit process (EAS) which includes all the above-mentioned countries but also the United States and Russia.

The danger is that instead of an inclusive and regionally integrated Asia, we may end up with exclusive and competing clusters, moving at different speeds, with different norms and standards.  This may well undermine the very basis of Asia’s economic dynamism.

In the security field, too, we are witnessing a growing salience of inter-state tensions and competitive military build-up.

The U.S.-led security architecture remains in place formally but its erstwhile predominance is diminished.

The gap between the military capabilities of China and the United State is closing steadily. As China’s security footprint expands beyond its shores, it will inevitably intersect with the existing deployment of the forces of the United States and its allies and partners.

Faced with an increasingly uncertain security environment and threatened by a more insistent assertion of territorial claims by China, the countries of the region, including Japan, Republic of Korea, members of ASEAN, Australia and India are building up their own defences, in particular maritime capabilities, and this itself is escalating tensions.

There is as yet no emerging regional security architecture which could help manage inter-state tensions in the region. This includes the growing possibilities of confrontation between the United States and China.

In the absence of such a regional security architecture, based on a broad political consensus and a mutually acceptable Code of Conduct, the region may well witness a heightening of tension and even conflict.  These developments would inevitably and adversely impact on the dense network of trade and investment relations that bind the countries of the region together and erode the very basis of their prosperity.

In this context, mention may be made of the Chinese One Belt One Road (OBOR) initiative which seeks to deploy China’s surplus capital to build a vast network of transport and infrastructural links not only across the Indo-Pacific but also straddling the Eurasian landmass.

The newly established Asian Infrastructure Investment Bank (AIIB) initiated and led by China would become a key financing instrument for the OBOR.  China has also recently come out with a new Defence White Paper, which puts forward a new strategy of Open Seas, shifting the emphasis from coastal and near sea defence to an expanding naval presence which matches China’s growing global profile and world-wide location of Chinese-controlled economic assets.

While China’s investment in regional infrastructure in Asia may be welcome, it will inevitably be accompanied by a security dimension which may heighten anxieties among countries in the Asian region and beyond.

It is apparent from the above analysis that it is no longer possible for any major power in the Indo-Pacific to unilaterally seek a position of overweening economic dominance or military pre-eminence of the kind that the United States enjoyed over much of the post-Second World War period.

Just as the world is moving towards multi-polarity, so is Asia.  It is now home to a cluster of major powers with significant economic and security capabilities and interests. The only practical means of avoiding a unilateral and potentially destructive pursuit of economic and security interests would be to put in place an inclusive economic architecture underpinned  by a similarly inclusive security architecture which provides mutual reassurance and shared opportunities for promoting prosperity.

The economic fragmentation of the region and the competitive pursuit of security interests may well consign the Asian Century into a brief interlude rather than a millennial transformation. (END/COLUMNIST SERVICE)

Edited by Phil Harris   

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, IPS – Inter Press Service. 

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ACP Aims to Make Voice of the Moral Majority Count in the Global Arenahttp://www.ipsnews.net/2015/05/acp-aims-to-make-voice-of-the-moral-majority-count-in-the-global-arena/?utm_source=rss&utm_medium=rss&utm_campaign=acp-aims-to-make-voice-of-the-moral-majority-count-in-the-global-arena http://www.ipsnews.net/2015/05/acp-aims-to-make-voice-of-the-moral-majority-count-in-the-global-arena/#comments Wed, 27 May 2015 23:20:04 +0000 Valentina Gasbarri http://www.ipsnews.net/?p=140829 Opening Ceremony of the 101st Session of the ACP Council of Ministers, May 2015, with Secretary-General Dr Patrick I. Gomes (third from left) and President of the Council of Ministers Meltek Sato Kilman Livtuvanu (third from right). Credit: Valentina Gasbarri/IPS

Opening Ceremony of the 101st Session of the ACP Council of Ministers, May 2015, with Secretary-General Dr Patrick I. Gomes (third from left) and President of the Council of Ministers Meltek Sato Kilman Livtuvanu (third from right). Credit: Valentina Gasbarri/IPS

By Valentina Gasbarri
BRUSSELS, May 27 2015 (IPS)

“Four decades of existence is a milestone for the ACP as an international alliance of developing countries,” Dr Patrick I. Gomes of Guyana, newly appointed Secretary-General of the African, Caribbean and Pacific group of countries, said at the opening of the 101st Session of the group’s Council of Ministers.

“With the organisation currently repositioning itself for more strategic engagements with regards to its future, this is an opportunity not only to review the past, but also to project to the decades ahead, especially in terms of how to be effective and better respond to the development needs of our member countries in the 21st century,” he added.“From the viewpoint of the poor and vulnerable, we are the moral majority. Not only do we count, but we must continue to make our voice count in the global arena if we are to transform the ACP Group of States into a truly effective global player” – Meltek Sato Kilman Livtuvanu, President of the ACP’s Council of Ministers

The meeting, which opened May 26, brought together more than 300 officials from the ACP group who are determined to put an emphasis on re-positioning the ACP group as an effective player in a challenging global landscape.

At the group’s 7th Summit of Heads of State and Government held in Equatorial Guinea in December 2012, the group issued the Sipopo Declaration which noted that “at this historic juncture in the existence of our unique intergovernmental and tri-continental organisation, the demands for fundamental renewal and transformation are no longer mere options but unavoidable imperatives for strategic change”.

Meltek Sato Kilman Livtuvanu, Minister of Foreign Affairs of Vanuatu and President of the ACP’s Council of Ministers, told the opening session of this week’s Council meeting that “from the viewpoint of the poor and vulnerable, we are the moral majority. Not only do we count, but we must continue to make our voice count in the global arena if we are to transform the ACP Group of States into a truly effective global player.”

A key focus of the 40th anniversary is how to enhance regional and intra-ACP relations in order to better position the ACP group to deliver on development goals in the post-2015 era, starting with playing a decisive role at the Third International Conference on Financing for Development to be held in July in Addis Ababa, Ethiopia, as well as at the U.N. Summit on the Post-2015 Development Agenda to be held in New York in September.

ACP Secretary-General Dr Patrick I. Gomes (left) and President of the Council of Ministers Meltek Sato Kilman Livtuvanu at the opening ceremony of the 101st Session of the ACP Council of Ministers, May 2015. Credit: Valentina Gasbarri/IPS

ACP Secretary-General Dr Patrick I. Gomes (left) and President of the Council of Ministers Meltek Sato Kilman Livtuvanu at the opening ceremony of the 101st Session of the ACP Council of Ministers, May 2015. Credit: Valentina Gasbarri/IPS

For ACP Secretary-General Gomes, the most critical meeting for the group will be the 8th ACP Summit, which had originally been scheduled to be held in November in Suriname before that country had to withdraw due to multiple commitments.

Inviting member countries to step forward and offer to host the event, Gomes said that the 8th Summit “must be a beacon that refines our strategic policy domains for the next decade and project a powerful political vision to serve the ACP in our engagement with the European Union.”

More importantly, that summit would provide the strategic direction and financial commitment necessary to build the capacity of the ACP group to address the development needs of its populations.

Viwanou Gnassounou of Togo, ACP Assistant Secretary-General for Sustainable Economic Development and Trade, told IPS that the group “will be fully engaged in 2015 in high-level negotiations not only calling for a strategic approach but also trying to raise our common voice in a more holistic manner.”

He said that the ACP is finalising a position paper to be presented in December at the U.N. Climate Change Conference in Paris, as well as at the 10th Ministerial Conference of the World Trade Organisation (WTO) in Nairobi in December.

Participants at the Council of Ministers meeting agreed that the plethora of priorities facing the ACP today calls for widening its partnership with the European Union and beyond, embracing the global South as well as emerging economies with greater determination, and promoting South-South and triangular cooperation.

The Cotonou Partnership Agreement which currently governs relations between the ACP and the European Union expires in 2020 and the ACP Secretariat has commissioned a consultancy exercise to formulate the ACP Group’s position future relations with the European Union.

The ACP-EU Joint Council of Ministers, which meets May 28, is expected to place a special focus on migration and discuss recommendations from an ACP-EU experts’ meeting on trafficking in human beings and smuggling of migrants following the unacceptable loss of thousands of lives in the Mediterranean Sea as people try to reach Europe.

The two sides are also expected to exchange views on the broad range of issues affecting the ACP-EU trade relations at multilateral and bilateral levels, as well as financing for development as a follow up to the ACP-EU Declaration on the Post-Development Agenda approved in June 2014, which called for “an ambitious financing framework to adequately tackle sustainable development issues and challenges.”

In this context, the declaration said that a “coherent response based on a global comprehensive and integrated approach, fuelled by traditional and innovative financing solutions and governed by principles for efficient resource use seems the most appropriate way to finance sustainable development.”

Edited by Phil Harris  

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Opinion: South-South Cooperation Vital for Sustainable Developmenthttp://www.ipsnews.net/2015/05/opinion-south-south-cooperation-vital-for-sustainable-development/?utm_source=rss&utm_medium=rss&utm_campaign=opinion-south-south-cooperation-vital-for-sustainable-development http://www.ipsnews.net/2015/05/opinion-south-south-cooperation-vital-for-sustainable-development/#comments Fri, 08 May 2015 12:54:12 +0000 Dr. Palitha Kohona http://www.ipsnews.net/?p=140497

Dr. Palitha Kohona is Sri Lanka’s former Permanent Representative to the United Nations.

By Dr. Palitha Kohona
COLOMBO, May 8 2015 (IPS)

Sustainable development is central to a range of key discussions at the United Nations and elsewhere at the moment.

Amb. Palitha Kohona. Credit: U.N. Photo/Mark Garten

Amb. Palitha Kohona. Credit: U.N. Photo/Mark Garten

The role of South-South cooperation in the context of sustainable development deserves greater recognition as significant numbers of developing countries begin to ascend the development ladder in a sustainable manner, causing fundamental changes to the development infrastructure the world has known up to now.

The steady expansion of South-South cooperation is causing a lasting impression on the existing order of things.

First, the best practices adopted by the more economically advanced developing countries could provide workable and relevant models for the others.

Some developing countries have recorded impressive economic successes and the policies they have successfully implemented could be shared. Contrary to existing practice, models of development will increasingly be borrowed from outside the developed world.

Secondly, some advanced developing countries have accumulated considerable international currency reserves and developed relevant technology which could be effectively deployed in the rest of the developing world. This is happening already.

Thirdly, the flow of funding and technology from other developing countries to the rest of the South will result in dramatic changes to relationships largely based on post-colonial and historical dependencies and the inevitable conditionalities. This would create an uncomfortable challenge for those used to the current relationship patterns.The traditional development cooperation patterns, many dependent on former colonial ties, perpetuating a dependent mindset and loaded with conditionality, may be sputtering to an end as a new framework of South South cooperation consolidates itself in the global arena.

Sustainable development was the underlying concept that inspired States as they painstakingly negotiated the Rio+20 outcomes document, The Future We Want.

The Member States are currently working on the Post-2015 Development Agenda, essentially drawing on the report of the Open Working Group (OWG), to produce a master plan for progress, to be realised by 2030, that will ensure just, equitable and inclusive growth. The report of this exercise will be submitted for adoption to the U.N. High Level Summit to be held in September 2015 in New York.

The Post-2015 Development Agenda will seamlessly expand the significant achievements secured under the Millennium Development Goals which targeted eight specific areas. The new enterprise will touch upon many more aspects of our lives, including of women, youth, children, the disadvantaged and the marginalised, in a manner that the Millennium Development Goals did not.

A process culminating in a meeting of States Parties in Addis Ababa in July on Financing for Development will build on the accords of Monterrey and Doha and will adopt recommendations on the funding aspect for the Post-2015 Development Agenda.

The alleviation of poverty and the elimination of hunger are at the core of this exercise. We live in a world where close to 800 million people go to bed hungry every night. It is estimated that ending poverty in the world will cost 66 billion dollars per year. Over one billion live on less than 1.25 dollars per day. Over 2.5 billion have no access to clean water and proper sanitation resulting in massive health issues, including the stunting of children.

The number of least developed countries has remained the same since the year 2000, the year the MDGs were adopted, although progress has been made towards making the world a better place over the last 15 years.

Along with addressing poverty and hunger, the international community is discussing the related challenges, inter alia, of providing better health care and education for all, creating better cities and communities, ensuring decent work, confronting the daunting challenges facing the oceans, the imminent threat of climate change and biodiversity loss, mainstreaming women and children’s issues, providing energy for all, ensuring sustainable industrialisation, and building global partnerships.

The way humanity will address the threats confronting the oceans, in particular, its riches valued at an estimated 24 trillion dollars, will have a major impact on the environment, climate change, the livelihoods of millions of people and the economies of many countries, especially the Small Island Developing States and the Less Developed Countries.

In the implementation of the Millennium Development Goals adopted in 2000, the international community failed specifically on Goal 8 which focused on partnerships. The commitments made on the delivery of assistance to the developing world by the traditional donor community, including technology transfer, failed to materialise to the extent anticipated despite the solemn accords reached at Monterrey, Doha and elsewhere.

The gap between the rich and the poor has continued to grow and the elimination of poverty in many developing countries remains an ever distant dream, affecting a huge proportion of the global population.

Against this challenging background, the advances made by some developing countries provide practical examples of useful best practices and provide possible opportunities for a new framework for development cooperation.

China has pulled out over 680 million from extreme poverty in a short period of 30 years. This is an unprecedented achievement in human history. Its economy, which was at the bottom end of the world in the 1950s, is second only to that of the United States today and is expected to grow further.

Despite its headlong rush towards development and the enormity of the attendant challenges, China is also making impressive gains in the harnessing of alternative energy such as hydro, solar, wind, bio mass and gassified coal, bringing in to question the defensive contention of those industrialised countries which have argued that such a comprehensive embrace of alternative energy would result in major job losses and negative effects on their economies.

The initially costly, but essential, shift to renewable energy will facilitate continuing development in a sustainable manner, and the experiences of countries such as China, India and Brazil may provide an attractive model for other developing countries.

Many countries in South East Asia are also making rapid economic progress with Indonesia expected to become the sixth largest economy of the world by 2030. Sri Lanka, despite its developing country status, has attained enviable targets in the delivery of education services, health care and the integration of women to the national economy.

UNICEF highlights Sri Lanka as a success story. State-sponsored agricultural extension services which increasingly emphasise sustainability have been a major factor in the impressive advances made in this sector by Sri Lanka.

Bangladesh has halved the number of people living in poverty. While the experiences of any one developing country, or the technical knowhow deployed, may not necessarily be duplicated in another, useful lessons can still be learnt.

The lessons that can be shared are evident and South-South Cooperation has become a significant trove of experiences that can be accessed as the challenge of development is addressed. Interestingly, China studied the Greater Colombo Export Processing Zone of Sri Lanka before it established its spectacularly successful Shenzhen Zone.

Infrastructure projects could be and have been funded from public private partnerships, government to government arrangements or by the private sector. Africa’s current spurt of growth has been facilitated by a combination of these mechanisms, with much of the crucial funding and technology coming from China and a lesser amount from India, Brazil, etc..

Sri Lanka’s recent surge in economic expansion depended much on Chinese, and to a lesser extent on Indian, funding and technology. China’s initiative to establish an Asian Infrastructure Investment Bank (AIIB), which was initially proposed in 2013 by President Xi Jingping, is attracting even traditional donor states in unexpected numbers (57 as of now), despite initial reservations.

It is clear that South-South cooperation is playing a crucial role, especially in developing countries, in adding zest to their economies. Important lessons are being learnt and fundamental changes to established frameworks in global cooperation are being introduced. It may even be argued that the catalyst that propelled many developing country economies to a different level was the recent expansion of cooperation from other developing countries.

The traditional development cooperation patterns, many dependent on former colonial ties, perpetuating a dependent mindset and loaded with conditionality, may be sputtering to an end as a new framework of South South cooperation consolidates itself in the global arena. The states negotiating the Post-2015 Development Agenda will be conscious of the need to reflect the changing nature of the global development framework in their work.

Edited by Kitty Stapp

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Afghanistan’s Economic Recovery: A New Horizon for South-South Partnerships?http://www.ipsnews.net/2015/03/afghanistans-economic-recovery-a-new-horizon-for-south-south-partnerships/?utm_source=rss&utm_medium=rss&utm_campaign=afghanistans-economic-recovery-a-new-horizon-for-south-south-partnerships http://www.ipsnews.net/2015/03/afghanistans-economic-recovery-a-new-horizon-for-south-south-partnerships/#comments Fri, 27 Mar 2015 14:39:08 +0000 Kanya DAlmeida http://www.ipsnews.net/?p=139889 The Asian Development Bank (ADB) has invested 1.2 billion dollars in Afghanistan for roads, railways, and airport projects. Credit: Giuliano Battiston/IPS

The Asian Development Bank (ADB) has invested 1.2 billion dollars in Afghanistan for roads, railways, and airport projects. Credit: Giuliano Battiston/IPS

By Kanya D'Almeida
UNITED NATIONS, Mar 27 2015 (IPS)

First the centre of the silk route, then the epicenter of bloody conflicts, Afghanistan’s history can be charted through many diverse chapters, the most recent of which opened with the election of President Ashraf Ghani in September 2014.

Having inherited a country pockmarked with the scars of over a decade of occupation by U.S. troops – including one million unemployed youth and a flourishing opium trade – the former finance minister has entered the ring at a low point for his country.

“Our goal is to become a transit country for transport, power transmissions, gas pipelines and fiber optics.” -- Ashraf Ghani, president of Afghanistan
Afghanistan ranks near the bottom of Transparency International’s most recent Corruption Perceptions Index (CPI), tailed only by North Korea, Somalia and Sudan.

A full 36 percent of its population of 30.5 million people lives in poverty, while spillover pressures from war-torn neighbours like Pakistan threaten to plunge this land-locked nation back into the throes of religious extremism.

But under this sheen of distress, the seeds of Afghanistan’s future are slumbering: vast metal and mineral deposits, ample water resources and huge tracts of farmland have investors casting keen eyes from all directions.

Citing an internal Pentagon memo in 2010, the New York Times referred to Afghanistan as the “Saudi Arabia of Lithium”, an essential ingredient in the production of batteries and related goods.

The country is poised to become the world’s largest producer of copper and iron in the next decade. According to some estimates, untapped mineral reserves could amount to about a trillion dollars.

Perhaps more importantly Afghanistan’s landmass represents prime geopolitical real estate, acting as the gateway between Asia and Europe. As the government begins the slow process of re-building a nation from the scraps of war, it is looking first and foremost to its immediate neighbours, for the hand of friendship and mutual economic benefit.

Regional integration 

Speaking of his development plans at the New York-based Council on Foreign Relations (CFR) Thursday, Ghani emphasised the role that the Caucasus, as well as Pakistan and China, can play in the country’s transformation.

“In the next 25 years, Asia is going to become the world’s largest continental economy,” Ghani stressed. “What happened in the U.S. in 1869 when the continental railroad was integrated is very likely to happen in Asia in the next 25 years. Without Afghanistan, Central Asia, South Asia, East Asia and West Asia will not be connected.

“Our goal is to become a transit country,” he said, “for transport, power transmissions, gas pipelines and fiber optics.”

Ghani added that the bulk of what Afghanistan hopes to produce in the coming decade would be heavy stuff, requiring a robust rail network in order to create economies of scale.

“In three years, we hope to be reaching Europe within five days. So the Caspian is really becoming central to our economy […] In three years, we could have 70 percent of our imports and exports via the Caspian,” he claimed.

Roads, too, will be vital to the country’s revival, and here the Asian Development Bank (ADB) has already begun laying the groundwork. Just last month the financial institution and the Afghan government signed grant agreements worth 130 million dollars, “[To] finance a new road link that will open up an east-west trade corridor with Tajikistan and beyond.”

Thomas Panella, ADB’s country director for Afghanistan, told IPS, “ADB-funded projects in transport and energy infrastructure promote regional economic cooperation through increased connectivity. To date under the Central Asia Regional Economic Cooperation (CAREC) programme, 2.6 billion dollars have been invested in transport, trade, and energy projects, of which 15 are ongoing and 10 have been completed.

“In the transport sector,” he added, “six projects are ongoing and eight projects have been completed, including the 75-km railway project connecting Hairatan bordering Uzbekistan and Mazar-e-Sharif of Afghanistan.”

Afghanistan’s transport sector accounted for 22 percent of the nation’s gross domestic product (GDP) during the U.S. occupation, a contribution driven primarily by the presence of foreign troops.

Now the sector has slumped, but financial assistance from the likes of the ADB is likely to set it back on track. At last count, on Dec. 31, 2013, the development bank had sunk 1.9 billion dollars into efforts to construct or upgrade some 1,500 km of regional and national roads, and a further 31 million to revamp four regional airports in Afghanistan, which have since seen a two-fold increase in usage.

In total, the ADB has approved 3.9 billion dollars in loans, grants, and technical assistance for Afghanistan since 2002. Panella also said the bank allocated 335.18 million dollars in Asian Development Fund (ADF) resources to Afghanistan for 2014, and 167.59 million dollars annually for 2015 and 2016.

China too has stepped up to the plate – having already acquired a stake in one of the country’s most critical copper mines and invested in the oil sector – promising 330 million dollars in aid and grants, which Ghani said he intends to use exclusively to beef up infrastructure and “improve feasibility.”

Both India and China, the former through private companies and the latter through state-owned corporations, have made “significant” contributions to the fledgling economy, Ghani said, adding that the Gulf states and Azerbaijan also form part of the ‘consortium approach’ that he has adopted as Afghanistan’s roadmap out of the doldrums.

‘A very neoliberal idea’

But in an environment that until very recently could only be described as a war economy, with a poor track record of sharing wealth equally – be it aid, or private contracts – the road through the forest of extractive initiatives and mega-infrastructure projects promises to be a bumpy one.

According to Anand Gopal, an expert on Afghan politics and award-winning author of ‘No Good Men Among the Living’, “There is a widespread notion that only a very powerful fraction of the local elite and international community benefitted from the [flow] of foreign aid.”

“If you go to look at schools,” he told IPS, “or into clinics that were funded by the international community, you can see these institutions are in a state of disrepair, you can see that local warlords have taken a cut, have even been empowered by this aid, which helped them build a base of support.”

Although the aid flow has now dried up, the system that allowed it to be siphoned off to line the pockets of strongmen and political elites will not be easily dismantled.

“The mindset here is not oriented towards communities, it’s oriented towards development of private industries and private contractors,” Gopal stated.

“When you have a state that is unable to raise its own revenue and is utterly reliant on foreign aid to make these projects viable […] the straightforward thing to do would be to nationalise natural resources and use them as a base of revenue to develop the economy, the expertise of local communities and the endogenous ability of the Afghan state to survive.”

Instead what happens is that this tremendous potential falls off into hands of contracts to the Chinese and others. “It’s a very neoliberal idea,” he added, “to privatise everything and hope that the benefits will trickle down.

“But as we’ve seen all over the world, it doesn’t trickle down. In fact, the people who are supposed to be helped aren’t the ones to get help and a lot of other people get enriched in the process.”

Indeed, attempts to stimulate growth and close the wealth gap by pouring money into the extractives sector or large-scale development – particularly in formerly conflict-ridden countries – has had disastrous consequences worldwide, from Papua New Guinea, to Colombia, to Chad.

Rather than reducing poverty and empowering local communities, mining and infrastructure projects have impoverished indigenous people, fueled gender-based violence, and paved the way for the concentration of wealth in fewer and fewer hands.

A far more meaningful approach, Gopal suggested, would be to directly fund local communities in ways that don’t immediately give rise to an army of middlemen.

It remains to be seen how the country’s plans to shake off the cloak of foreign occupation and decades of instability will unfold. But it is clear that Afghanistan is fast becoming the new playground – and possibly the next battleground – of emerging players in the global economy.

Edited by Kitty Stapp

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Argentina Moves Towards Marriage of Convenience with Chinahttp://www.ipsnews.net/2015/02/argentina-moves-towards-marriage-of-convenience-with-china/?utm_source=rss&utm_medium=rss&utm_campaign=argentina-moves-towards-marriage-of-convenience-with-china http://www.ipsnews.net/2015/02/argentina-moves-towards-marriage-of-convenience-with-china/#comments Mon, 23 Feb 2015 22:33:52 +0000 Fabiana Frayssinet http://www.ipsnews.net/?p=139304 The entrance to Chinatown in Buenos Aires, where a sign promotes the renovation of Argentina’s railways, partly financed by Beijing. Credit: Fabiana Frayssinet/IPS

The entrance to Chinatown in Buenos Aires, where a sign promotes the renovation of Argentina’s railways, partly financed by Beijing. Credit: Fabiana Frayssinet/IPS

By Fabiana Frayssinet
BUENOS AIRES, Feb 23 2015 (IPS)

The government of Argentina is building a marriage of convenience with China, which some see as uneven and others see as an indispensable alliance for a new level of insertion in the global economy.

The process forms part of a radical change with respect to Argentina’s diplomacy, which years back involved ties with the United States described as “carnal relations.”

President Cristina Fernández called the new relationship with China an “integral strategic alliance,” after signing a package of 22 agreements with Chinese leader Xi Jinping in Beijing on Feb. 4.

The accords include areas like space technology, mining, energy, financing, livestock and cultural matters. They cover the construction of two nuclear and two hydropower plants, considered key to this country’s goal of energy self-sufficiency.

“Although they are important, the new agreements and others that were signed earlier are insufficient to gauge the dimension of the bilateral commitment,” said Jorge Castro, the director of the Strategic Planning Institute and an expert on China.

“For Argentina, the relationship with China has elements that are essential for insertion into the international system of the 21st century, along with other countries of the South, headed by Brazil,” he told IPS.

“These ties are between the new fulcrum of the global economy, China-Asia, and Argentina as a nation and as a regional unit,” he said.

Castro pointed out that Asia’s giant is currently South America’s leading trade partner, due to the volume of its purchases of raw materials, which implies a level of interdependence given that “China has placed the food security of its population in the hands of South American countries.”

In the case of Argentina, China is its second-largest trading partner, after neighbouring Brazil – displacing long-time partners like the United States and European countries.

In 2014, exports to China totalled five billion dollars while imports stood at 10.8 billion dollars – a bilateral record which represented 11.5 percent of this country’s trade balance, according to Argentina’s Chamber of Commerce.

Prior accords that cemented the alliance

Before Fernández’s visit to China, the two countries had already signed investment agreements in strategic sectors, such as the one between China’s Sinopec and Argentina’s YPF, two state-owned oil companies, for the exploitation of one of the Loma Campana deposits of unconventional oil and gas resources in Vaca Muerta in southern Argentina.

There was also an accord for China to provide some 2.5 billion dollars in financing for the reconstruction of the railway of the Belgrano Cargas y Logística company, which will transport Argentine and Brazilian agricultural products to Chilean ports on the Pacific ocean.

“The investment agreements with China are important to the extent that they facilitate the conditions to continue generating, for example, the infrastructure for development that Argentina needs, in a scenario” of a shortage of foreign currency, economist Fernanda Vallejos told IPS.

The Chinese space station under construction in the southern Argentine province of Neuquén, rejected by the political opposition of all stripes and social groups. Credit: Courtesy of DesarrolloyDefensa

The Chinese space station under construction in the southern Argentine province of Neuquén, rejected by the political opposition of all stripes and social groups. Credit: Courtesy of DesarrolloyDefensa

In July 2014, Argentina reached an 11 billion dollar currency swap agreement with China, to shore up this country’s weakened foreign reserves, of which it received one billion dollars in December.

The swap “has been a very powerful instrument,” which is added to measures by the government and the Central Bank to promote exchange stability and help slow down inflation, said Vallejos, a member of a group that advises the Ministry of the Economy and Public Finance.

Critical voices

Sectors of the business community are critical of the alliance with Beijing, such as the Argentine Industrial Union (UIA) or the Chamber of Exports, which sounded a warning about the asymmetrical nature of the relationship.

This country’s exports to China are only half of what it imports from the Asian giant, and they are basically raw materials or farm products. A full 75 percent is soy or by-products.

Imports, by contrast, are mainly machinery and electronics, computers, telephones, chemical products, motorcycles or parts for household appliances.

The UIA said the framework agreement on economic cooperation and investment, signed in July 2014 and pending final approval by the legislature, “contains clauses that pose an enormous risk to Argentina’s development.”

“Over the last decade, China’s strategy has pursued two central objectives: to consolidate its transnational companies in global value chains and to obtain commodities and inputs with little value-added, for its growing productive and employment needs,” the UIA said in a communiqué.

“In free trade agreements in this era of globalisation, the essential thing is not trade but investment,” said Castro, who questioned the concept of “asymmetry” and backed the agreement with China.

The China expert said the relationship should be analysed in a broader context. For example, by remembering that in the next 10 years, China’s foreign direct investment is estimated to climb to 1.1 trillion dollars.

“The question is how to manage to be part of China’s flow of investment in industry in the next 10 to 20 years,” Castro said.

The UIA agrees that it is important to be part of that current, but with allocations that would not harm local goods and services, which have no chance of receiving Chinese financing, the business chamber said.

The UIA and some trade unions also worry that Chinese labour power, which is included in several projects, will displace local workers.

“Don’t worry, we continue to defend Argentine workers and the business community’s participation,” said centre-left President Fernández, who urged those sectors to engage in technical discussions about the accords.

The new empire?

Some in Argentina see the China of the 21st century as the new England of the 19th century or the United States of the 20th century, in terms of economic and territorial hegemony and domination.

They also question the construction of a Chinese space tracking and control station in the southern Argentine province of Neuquén, which according to the government will monitor, control and gather data as part of China’s programme of missions to explore the moon and outer space.

Raúl Dobrusin, an opposition legislator from Neuquén, told IPS that the agreement, which grants China the use of 200 hectares for 50 years and is opposed by left-wing groups and social organisations, did not go through the Neuquén provincial legislature, which was not informed of the details of the accord.

So far there is no Chinese military presence in the construction project, said Dobrusin, but in his view, the space station poses “major geopolitical risks.”

“If there is a confrontation between powerful nations, we will be a place to be taken into account by the enemies of China…In short, we are getting into an area where the possibility of deciding whether or not to participate in conflicts is no longer a sovereign decision, they won’t ask us,” he warned.

“The alliance transcends economic matters and forms part of the search for independence, on both the economic and political fronts, which makes it possible to reach economic and social development goals, by breaking the yoke of neoliberalism and the empire-dependence logic,” said Vallejos.

China, in her view, “is far from the voracity of the Western powers…It is part of a new global order that is struggling to be born, where the role of emerging countries is no longer one of colonialism but of assuming the position of builders of our own destiny,” said the economist.

“That does not mean that China isn’t obtaining benefits from its ties with our nations, but that it is possible to build a win-win relationship for all of the parties involved,” she said.

Edited by Estrella Gutiérrez/Translated by Stephanie Wildes

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OPINION: A New Era of Hemispheric Cooperation Is Possiblehttp://www.ipsnews.net/2015/01/opinion-a-new-era-of-hemispheric-cooperation-is-possible/?utm_source=rss&utm_medium=rss&utm_campaign=opinion-a-new-era-of-hemispheric-cooperation-is-possible http://www.ipsnews.net/2015/01/opinion-a-new-era-of-hemispheric-cooperation-is-possible/#comments Sun, 18 Jan 2015 18:34:54 +0000 Luis Almagro http://www.ipsnews.net/?p=138705 Luis Almagro, Minister for Foreign Affairs of Uruguay, addresses the opening of the 16th session of the Human Rights Council, in Geneva, Switzerland. Credit: UN Photo/Jean-Marc Ferré

Luis Almagro, Minister for Foreign Affairs of Uruguay, addresses the opening of the 16th session of the Human Rights Council, in Geneva, Switzerland. Credit: UN Photo/Jean-Marc Ferré

By Luis Almagro
MONTEVIDEO, Jan 18 2015 (IPS)

Two decades after the first Summit of the Americas, a lot has changed in the continent and it has been for the good. Today, a renewed hemispheric dialogue without exclusions is possible.

Back in the mid-1990s, at the time of the Miami summit, it was the time of imported consensus, models of economic and social development exclusively based on the market and its supposed perfect allocation of resources through the invisible hand.Today, all voices count, and if they do not, they will have to. The powerful club of the G8 turned into the G20; still, this is not enough to embrace the new reality of our hemisphere.

Hidden under a development rationale, the greatest wave of privatisation and deregulation took over the continent. The role of the state was reduced to be a facilitator of a process based on the principle of survival of the fittest. Solidarity, equity and justice were all values from the past and poverty a necessary collateral damage.

However, these values were in the top of the minds of the people of the hemisphere, who turned their backs to these policies and instead during the past 15 years, have forcefully supported the alternatives that combine economic growth with social inclusion, broadening opportunities for all citizens.

Economic growth went hand in hand with social inclusion, adding millions to the middle class – which today accounts for 34 percent of Latin Americans – surpassing the number of poor for the first time in the history.

If this was possible it was because governments added to the invisible hand of the market, the very visible hand of the state.

And this took place within the context of the worst post war global financial crisis that led to an unprecedented recession in the United States and Europe, which the latter still strives to leave behind.

Growth with social equity turned out to be the new regional consensus.

Today, this binds the region together.

Today, conditions are present to set up a more realistic cooperation in the Americas, where all members could partner in equal conditions, from the most powerful to the smallest islands in the Caribbean.

Today, nobody holds the monopoly over what works or does not; neither can anybody impose models because the established truths have crashed against reality. While in the 1990s social exclusion in domestic policies and voice exclusion at the international level were two sides of the same token, this in not any longer acceptable.

Today, all voices count, and if they do not, they will have to. The powerful club of the G8 turned into the G20; still, this is not enough to embrace the new reality of our hemisphere.

To the existing bodies, the region has added in this past decade the dynamic UNASUR in South America and CELAC in the Americas, thus leaving the OAS as the only place for dialogue among all countries of the Americas, whether large, medium, small, powerful or vulnerable.

But, governmental or inter-governmental actors by themselves are not the only answer to the problems of today´s world. Non-state actors of the non-governmental world, the private sector, trade unions and social organisations must be part of the process.

Leaders need to interpret the time in order to generate an agenda for progress, but progress that is tangible for people, for citizens, to whom we are accountable to.

Therefore, in a more uncertain international economic environment, we should focus on maintaining and expanding our social achievements and a new spirit of cooperation in the Americas can be instrumental for that.

The Summit of the Americas in Panama, in April 2015, may be the beginning of this new process of confidence building, where all countries can feel they can benefit from a cooperative agenda. This will be a historical moment because this time there will be no exclusions.

The recent good news on the diplomatic front related to the normalisation of diplomatic ties between the U.S. and Cuba and the participation of Cuba in the Summit represent an additional positive signal. Panama deserves the support of the entire region before and during the Summit.

This will be a great opportunity to strengthen democratic values, the defence of human rights, institutional transparency and individual freedoms together with a practical agenda for cooperation for shared prosperity in the Americas.

Edited by Kitty Stapp

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Can China’s Silk Road Vision Coexist with a Eurasian Union?http://www.ipsnews.net/2014/11/can-chinas-silk-road-vision-coexist-with-a-eurasian-union/?utm_source=rss&utm_medium=rss&utm_campaign=can-chinas-silk-road-vision-coexist-with-a-eurasian-union http://www.ipsnews.net/2014/11/can-chinas-silk-road-vision-coexist-with-a-eurasian-union/#comments Thu, 20 Nov 2014 00:03:26 +0000 Chris Rickleton http://www.ipsnews.net/?p=137833 Russian President Vladimir Putin meets with Chinese President Xi Jinping at a signing ceremony of bilateral documents during the APEC summit in Beijing on Nov. 9. The two big powers are looking separately toward Central Asia to expand trade, economic, and political relations. Credit:  Russian Presidential Press Service

Russian President Vladimir Putin meets with Chinese President Xi Jinping at a signing ceremony of bilateral documents during the APEC summit in Beijing on Nov. 9. The two big powers are looking separately toward Central Asia to expand trade, economic, and political relations. Credit: Russian Presidential Press Service

By Chris Rickleton
BISHKEK, Nov 20 2014 (EurasiaNet)

There is a good chance that economic jockeying between China and Russia in Central Asia will intensify in the coming months. For Russia, Chinese economic expansion could put a crimp in President Vladimir Putin’s grand plan for the Eurasian Economic Union.

Putin has turned to China in recent months, counting on Beijing to pick up a good portion of the trade slack created by the rapid deterioration of economic and political relations between Russia and the West. Beijing for the most part has obliged Putin, especially when it comes to energy imports. But the simmering economic rivalry in Central Asia could create a quandary for bilateral relations.At the APEC gathering, Xi and Putin were all smiles as they greeted each other, dressed in summit attire that was likened by journalists and observers to Star Trek-style uniforms. Yet, the public bonhomie concealed a “complicated relationship."

Chinese President Xi Jinping elaborated on Beijing’s expansion plans, dubbed the Silk Road Economic Belt initiative, prior to this year’s Asia Pacific Economic Cooperation (APEC) forum, which concluded Nov. 12.

The plan calls for China to flood Central Asia with tens of billions of dollars in investment with the aim of opening up regional trade. Specifically, Xi announced the creation of a 40-billion-dollar fund to develop infrastructure in neighbouring countries, including the Central Asian states beyond China’s westernmost Xinjiang Province.

An interactive map published on Chinese state media outlet Xinhua shows Central Asia at the core of the proposed Silk Road belt, which beats a path from the Khorgos economic zone on the Chinese-Kazakhstani border, through Kyrgyzstan and Tajikistan, before snaking into Uzbekistan and Iran. Turkmenistan, already linked to China by a web of pipelines, would not have a hub on the main route.

The fund’s aim is to “break the bottleneck in Asian connectivity by building a financing platform,” Xi told journalists in Beijing on Nov. 8. Such development is badly needed in Central Asia, where decaying Soviet-era infrastructure has hampered trade among Central Asian states, and beyond.

No matter the need, Russia, which is busy promoting a more protectionist economic solution for the region in the form of the Eurasian Economic Union (EEU), may not share Beijing’s enthusiasm for the Silk Road initiative.

At the APEC gathering, Xi and Putin were all smiles as they greeted each other, dressed in summit attire that was likened by journalists and observers to Star Trek-style uniforms. Yet, the public bonhomie concealed a “complicated relationship,” according to Bobo Lo, an associate fellow at the Russia and Eurasia Program at Chatham House.

The Silk Road Economic Belt is a case in point, explained Lo. The “mega project”, much like the original Silk Road, could eventually encompass several routes and benefit Russia’s own infrastructurally challenged east, he noted. But it might well dilute Russian influence in its traditional backyard of Central Asia.

“If you are sitting in Moscow, you are hoping that Russia will be the main trunk line [of the belt], but it seems likely it will be more of an offshoot,” said Lo. “[The belt’s] main thrust will be through Central and South Asia.”

Chinese leaders are intent on linking their Silk Road initiative to a broader project, the Free Trade Area of the Asia Pacific (FTAAP), which they touted during the APEC gathering.

FTAAP and the Silk Road Economic Belt, along with a similar strategic plan called the 21st Century Maritime Silk Road, are pro-trade in the broadest sense, seeking to break “all sorts of shackles in the wider Asia-Pacific region to usher in a new round of higher level, deeper level of opening up,” according to Li Lifan, an associate research professor at the Shanghai Academy of Social Sciences.

Under the Chinese vision, its “grand idea” would seek to “absorb the Eurasian economic integration [project] led by Russia,” Li told EurasiaNet.org via email.

In contrast to the expansive Chinese vision for Eurasia, early evidence suggests a Russia-led union, with its tight border controls and levied tariffs, could end up stifling cross-border trade among members and non-members. Under such conditions, Central Asian states could experience a decline in their current level of trade with China. The existing Kremlin-dominated Customs Union is set to evolve into the Eurasian Economic Union on Jan. 1.

At least since the build-up to the 2013 summit of the Shanghai Cooperation Organization (SCO), a Central Asia-focused security organisation of which China and Russia are both members, Beijing has been very public about wielding its economic might in the region. Back then, Xi jetted across the region speaking of the belt for the first time as he signed deals worth tens of billions of dollars, most notably energy contracts with Turkmenistan and Kazakhstan.

Ever since, discussions of how to turn the belt into a reality have been uncomfortable. Moscow is reportedly steadfastly opposed to the idea of turning the SCO – which also comprises all four Central Asian countries positioned along the proposed belt’s route – into an economic organisation.

Uzbekistan has refused to join the Customs Union, which also excludes China. But the Kremlin expects Kyrgyzstan to join at the beginning of next year and Tajikistan to follow. Currently, the bloc’s only members other than Russia are Kazakhstan and Belarus.

For countries that have already been on the receiving end of Chinese largesse, the prospect of deeper economic integration with Russia may begin to seem like a limitation.

During a Nov. 7 meeting in Beijing ahead of the APEC summit, Xi and Tajik President Emomali Rahmon signed agreements securing Chinese credit for a railway to connect Tajikistan’s north and south, a new power plant and local agricultural projects. They also agreed on investments for the state-owned aluminium smelter Talco, an entity that once enjoyed close ties with the Russian conglomerate RusAl. Bilateral trade for the first eight months of this year increased by 40 percent compared with the same period last year, reaching 1.5 billion dollars.

“If we compare something like the Customs Union to the Silk Road Economic Belt, then of course the belt is preferable for Tajikistan,” Muzaffar Olimov, director of the Sharq analytical centre in Dushanbe, told EurasiaNet.org in a telephone interview. Tajikistan “has not decided” if it wants to join the economic bloc [the EEU], he added.

Editor’s note:  Chris Rickleton is a Bishkek-based journalist. This story originally appeared on EurasiaNet.org.

Edited by Kitty Stapp

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As Winds of Change Blow, South America Builds Its House with BRICShttp://www.ipsnews.net/2014/07/as-winds-of-change-blow-south-america-builds-its-house-with-brics/?utm_source=rss&utm_medium=rss&utm_campaign=as-winds-of-change-blow-south-america-builds-its-house-with-brics http://www.ipsnews.net/2014/07/as-winds-of-change-blow-south-america-builds-its-house-with-brics/#comments Fri, 18 Jul 2014 14:36:36 +0000 Diana Cariboni http://www.ipsnews.net/?p=135624 Russian President Vladimir Putin, Prime Minister of India Narendra Modi, President of Brazil Dilma Rousseff, President of China Xi Jinping and South African President Jacob Zuma take a family photograph at the 6th BRICS Summit held at Centro de Eventos do Ceara' in Fortaleza, Brazil. Credit: GCIS

Russian President Vladimir Putin, Prime Minister of India Narendra Modi, President of Brazil Dilma Rousseff, President of China Xi Jinping and South African President Jacob Zuma take a family photograph at the 6th BRICS Summit held at Centro de Eventos do Ceara' in Fortaleza, Brazil. Credit: GCIS

By Diana Cariboni
MONTEVIDEO, Jul 18 2014 (IPS)

While this week’s BRICS summit might have been off the radar of Western powers, the leaders of its five member countries launched a financial system to rival Bretton Woods institutions and held an unprecedented meeting with the governments of South America.

The New Development Bank (NDB) and the Contingent Reserve Arrangement signal the will of BRICS countries (Brazil, Russia, India, China and South Africa) to reconcile global governance instruments with a world where the United States no longer wields the influence that it once did.“The U.S. government clearly doesn't like this, although it will not say much publicly.” -- Mark Weisbrot

More striking for Washington could be the fact that the 6th BRICS summit, held in Brazil, set the stage to display how delighted the heads of state and government of South America – long-regarded as the United States’ “backyard”— were to meet Russia’s president Vladimir Putin.

At odds with Washington and just expelled from the Group of Eight (G8) following Russia’s intervention in the Ukrainian crisis, Putin was warmly received in the region, where he also visited Cuba and Argentina.

In Buenos Aires, Putin and the president of Argentina, Cristina Fernández, signed agreements on energy, judicial cooperation, communications and nuclear development.

Argentina, troubled by an impending default, is hoping Russian energy giant Gazprom will expand investments in the rich and almost unexploited shale oil and gas fields of Vaca Muerta.

Although Argentina ranks fourth among the Russia’s main trade partners in the region, Putin stressed the country is “a key strategic partner” not only in Latin America, but also within the G20 and the United Nations.

Buenos Aires and Moscow have recently reached greater understanding on a number of international issues, like the conflicts in Syria and Crimea, Argentina sovereignty claim over the Malvinas/Falkland islands and its strategy against the bond holdouts.

Meanwhile, the relationship between Washington and Buenos Aires remains cool, as it has been with Brasilia since last year’s revelations of massive surveillance carried out by the National Security Agency against Brazil.

Some leftist governments –namely Bolivia, Venezuela and Ecuador— frequently accuse Washington of pursuing an imperialist agenda in the region.

But it was the president of Uruguay, José Mujica –whose government has warm and close ties with the Barack Obama administration— who better explained the shifting balance experienced by Latin America in its relationships with the rest of the world.

Transparency clause

In an interview before the summit, Ambassador Flávio Damico, head of the department of inter-regional mechanisms of the Brazilian foreign ministry, said a clause on transparency in the New Development Bank’s articles of agreement “will constitute the base for the policies to be followed in this area.”

Article 15, on transparency and accountability, states that “the Bank shall ensure that its proceedings are transparent and shall elaborate in its own Rules of Procedure specific provisions regarding access to its documents.”

There are no further references to this subject neither to social or environmental safeguards in the document.

After a dinner in Buenos Aires and a meeting in Brasilia with Putin, Mujica said the current presence of Russia and China in South America opens “new roads” and shows “that this region is important somehow, so the rest of the world perhaps begins to value us a little more.”

Furthermore, he reflected, “pitting one bloc against another… is not good for the world’s future. It is better to share [ties and relationships, in order to] keep alternatives available.”

Almost at the same time, Washington announced it was ready to transfer six Guantanamo Bay detainees to Uruguay, one of the subjects Obama and Mujica agreed on when the Uruguayan visited the U.S. president in May.

Mujica has invited companies from United States, China and now Russia to take part in an international tender to build a deepwater port on the Atlantic ocean which, Uruguay expects, could be a logistic hub for the region.

But beyond Russia, which has relevant commercial agreements with Venezuela, the real centre of gravity in the region is China, the first trade partner of Brazil, Chile and Perú, and the second one of a growing number of Latin American countries.

China’s president Xi Jiping travels on Friday to Argentina, and then to Venezuela and Cuba.

“The U.S. government clearly doesn’t like this, although it will not say much publicly,” said Mark Weisbrot, co-director of the Center for Economic and Policy Research.

“With a handful of rich allies, they have controlled the most important economic decision-making institutions for 70 years, including the IMF [International Monetary Fund], the World Bank, and more recently the G8 and the G20, and they wrote the rules for the WTO [World Trade Organisation],” Weisbrot told IPS.

The BRICS bank “is the first alternative where the rest of the world can have a voice.  Washington does not like competition,” he added.

However, the United States’ foreign priorities are elsewhere: Eastern Europe, Asia and the Middle East.

And with the exception of the migration crisis on its southern border and evergreen concerns about security and defence, Washington seems to have little in common with its Latin American neighbours.

“I wish they were really indifferent. But the truth is, they would like to get rid of all of the left governments in Latin America, and will take advantage of opportunities where they arise,” said Weisbrot.

Nevertheless, new actors and interests are operating in the region.

The Mercosur bloc (Argentina, Brazil, Paraguay and Uruguay) and the European Union are currently negotiating a trade agreement.

Colombia, Chile, México and Perú have joined forces in the Pacific Alliance, while the last three also joined negotiations to establish the Trans-Pacific Partnership.

In this scenario, the BRICS and their new financial institutions pose further questions about the ability of Latin America to overcome its traditional role of commodities supplier and to achieve real development.

“I don’t think that the BRICS alliance is going to get in the way of that,” said Weisbrot.

According to María José Romero, policy and advocacy manager with the European Network on Debt and Development (Eurodad), the need to “moderate extractive industries” could lead to “changes in the relationship with countries like China, which looks at this region largely as a grain basket.”

Romero, who attended civil society meetings held on the sidelines of the BRICS summit, is the author of “A private affair”, which analyses the growing influence of private interests in the development financial institutions and raises key warnings for the new BRICS banking system.

BRICS nations should be able “to promote a sustainable and inclusive development,” she told IPS, “one which takes into account the impacts and benefits for all within their societies and within the countries where they operate.”

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Public Stockholding Programmes for Food Security Face Uphill Strugglehttp://www.ipsnews.net/2014/07/public-stockholding-programmes-for-food-security-face-uphill-struggle/?utm_source=rss&utm_medium=rss&utm_campaign=public-stockholding-programmes-for-food-security-face-uphill-struggle http://www.ipsnews.net/2014/07/public-stockholding-programmes-for-food-security-face-uphill-struggle/#comments Thu, 17 Jul 2014 22:12:26 +0000 Ravi Kanth Devarakonda http://www.ipsnews.net/?p=135617 By Ravi Kanth Devarakonda
GENEVA, Jul 17 2014 (IPS)

Framing rules at the World Trade Organization for maintaining public stockholding programmes for food security in developing countries is not an easy task, and for Ambassador Jayant Dasgupta, former Indian trade envoy to the WTO, “this is even more so when countries refuse to acknowledge the real problem and hide behind legal texts and interpretations in a slanted way to suit their interests.”

“The major problem is that the WTO’s Agreement on Agriculture (AOA) was negotiated in early 1990s and there are many issues which were not taken into account then,” says Ambassador Dasgupta, who played a prominent role in articulating the developing countries’ position on food security in the run-up to the WTO’s ninth ministerial meeting in Bali, Indonesia, last year.

“If the WTO has to carry on as an institution catering for international trade and its member states, especially the developing and least-developed countries, the rules have to be modified to ensure food security and livelihood security for hundreds of millions of poor farmers,” Ambassador Dasgupta told IPS Thursday.

Ironically, the rich countries – which continue to provide tens of billions of dollars for subsidies to their farmers – are insisting on inflexible disciplines for public stockholding programmes in the developing world.“Credible disciplines for food security are vital for the survival of poor farmers in the developing countries who cannot be left to the vagaries of market forces and extortion by middlemen” – Ambassador Jayant Dasgupta, former Indian trade envoy to the WTO

The United States, a major subsidiser of farm programmes in the world and charged for distorting global cotton trade by the WTO’s Appellate Body, has called for a thorough review of farm policies of  developing countries seeking a permanent solution for public stockholding programmes to address food security.

“Food security is an enormously complex topic affected by a number of policies, including trade distorting domestic support, export subsidies, export restrictions, and high tariffs,” says a United States proposal circulated at the WTO on July 14.

“These policies [in the developing countries],” continues the proposal, “can impede the food security of food insecure peoples throughout the world.” The United States insists that food security policies must be consistent with the rules framed in the Uruguay Round of trade negotiations that came into effect in 1995.

“Public stockholding is only one tool used to address food security, and disciplines regarding its application are already addressed in the Agreement on Agriculture,” the United States maintains.

The agriculture agreement of the trade body was largely based on the understandings reached between the two largest subsidisers – the European Union and the United States – which culminated in what is called the Blair House Agreement in 1992. The major subsidisers were provided a “peace clause” for ten years (1995-2005) from facing any challenges to their farm subsidy programmes at the WTO.

The AOA also includes complex rules regarding how its members, especially industrialised countries, must reduce their most-distorting farm subsidies.

In the face of increased legal challenges at the WTO and also demands raised for steep cuts in subsidies during the current Doha trade negotiations, several industrialised countries shifted their subsidies from what are called most trade-distorting “amber box” measures to “green box” payments which are exempted from disputes. Jacques Berthelot, a French civil society activist, says that the United States has placed some of its illegal subsidies into the green box.

When it comes to disciplines on food security, however, the United States says it is important to ensure that “[food security] programmes do not distort trade or adversely affect the food security of other members.”  The United States has suggested several “elements” for a Work Programme on food security, including the issue of public stockholding programmes, for arriving at a permanent solution. Washington wants a thorough review of how countries have implemented food security in developing countries.

The U.S. proposal, says a South American farm trade official, is aimed at “frustrating” the developing countries from arriving at a simple and effective solution that would enable them to continue their public stockholding programmes without many hurdles. “The United States is interested in preserving the Uruguay Round rules but not address the issues raised by the developing countries in the Doha Round of trade negotiations that seek to address concerns raised by developing countries,” the official adds.

The G-33 group – with over 45 developing and least-developed countries – has brought the food security issue to the centre-stage at the WTO. Over the last two years, the G-33, led by Indonesia with China, India, Pakistan, the Philippines, Kenya, Nigeria, Zimbabwe, Bolivia, Cuba and Peru among others, has called for updating the external reference price based on 1986-88 prices to ensure that they can continue with their public stockholding programmes under what is called de minimis support for developing countries.

Following the G-33’s insistence on a solution for public stockholding programmes for food security, which became a make-or-break issue at the WTO’s Bali ministerial meeting, trade ministers had agreed on a decision “with the aim of making recommendations for a permanent solution.” The ministers directed their negotiators to arrive at a solution in four years.

Over the last six months, there has been little progress in addressing the core issues in the Bali package raised by developing countries, including food security. “We are deeply concerned that the Ministerial Decision on Public Stockholding for Food Security Purposes is getting side-lined,“ India told members at the WTO on July 2.

“In this and other areas, instead of engaging in meaningful discussion, certain members have been attempting to divert attention to the policies and programmes of selected developing country members,” says New Delhi, emphasising that “the issues raised are in no way relevant to the core mandate that we have been provided in the Bali Decisions.”

At a time when the industrialised countries want rapid implementation of the complex agreement on trade facilitation, their continued stonewalling tactics on the issues raised by developing countries has created serious doubts whether food security issue will be addressed in a meaningful manner at all.

“Credible disciplines for food security are vital for the survival of poor farmers in the developing countries who cannot be left to the vagaries of market forces and extortion by middlemen,” says Ambassador Dasgupta. “The delay in addressing food security will pose problems for millions of people below poverty who are dependent on public distribution programmes.”

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International Reform Activists Dissatisfied by BRICS Bankhttp://www.ipsnews.net/2014/07/international-reform-activists-dissatisfied-by-brics-bank/?utm_source=rss&utm_medium=rss&utm_campaign=international-reform-activists-dissatisfied-by-brics-bank http://www.ipsnews.net/2014/07/international-reform-activists-dissatisfied-by-brics-bank/#comments Thu, 17 Jul 2014 21:39:24 +0000 Mario Osava http://www.ipsnews.net/?p=135613 Chandrasekhar Chalapurath, an economist at Jawaharlal Nehru University in New Delhi, talks about development banks in India, at the International Seminar on the BRICS Bank. Credit: Mario Osava/IPS

Chandrasekhar Chalapurath, an economist at Jawaharlal Nehru University in New Delhi, talks about development banks in India, at the International Seminar on the BRICS Bank. Credit: Mario Osava/IPS

By Mario Osava
FORTALEZA, Brazil, Jul 17 2014 (IPS)

The creation of BRICS’ (Brazil, Russia, India, China and South Africa) own financial institutions was “a disappointment” for activists from the five countries, meeting in this northeastern Brazilian city after the group’s leaders concluded their sixth annual summit here.

The New Development Bank (NDB) and the Contingent Reserve Arrangement (CRA), launched Tuesday Jul. 15 at the summit in the northeastern Brazilian city of Fortaleza, represent progress “from United States unilateralism to multilateralism,” said Graciela Rodriguez, of the Brazilian Network for the Integration of Peoples (REBRIP).

But “the opportunity for real reform was lost,” she complained to IPS at the International Seminar on the BRICS Bank, held in this city Wednesday and Thursday Jul. 16-17 as a forum for civil society organisations in parallel to the sixth summit.

The format announced for the NDB “does not meet our needs,” she said.

The NDB will promote “a new kind of development" only if its loans are made conditional on the adoption of low-polluting technologies and are guided by the Millennium Development Goals and their successors, the Sustainable Development Goals. -- Carlos Cosendey, international relations secretary at the Brazilian foreign ministry
The bank’s goal is to finance infrastructure and sustainable development in the BRICS and other countries of the developing South, with an initial capital investment of 50 billion dollars, to be expanded through the acquisition of additional resources.

“We want an international system that serves the majority, not just the seven most powerful countries (the Group of Seven),” that does not depend on the dollar and that has an international arbitration tribunal for financial controversies, said Oscar Ugarteche, an economics researcher at the National Autonomous University of Mexico.

“It is unacceptable that a district court judge in New York should put a country at risk,” he told IPS, referring to the June ruling of the U.S. justice system in favour of holdouts (“vulture funds”) in their dispute with Argentina, which could force another suspension of payments.

“We need international financial law,” similar to existing trade law, and an end to the dominance of the dollar in exchange transactions, which enables serious injustice against nations and persons, like embargoes on payments and income in the United States, he said.

“Existing international institutions do not work,” and the proof of this is that they have still not overcome the effects of the 2008 financial crisis, said the Mexican researcher.

Major powers like the United States and Japan have unsustainable debt and fiscal deficits, yet are not harassed by the International Monetary Fund (IMF), in contrast to the treatment meted out to less powerful nations, particularly in the developing South.

During the seminar, organised by REBRIP and Germany’s Heinrich Böll Foundation, oft-repeated demands were for civil society participation, transparency, environmental standards and consultation with the populations affected by projects financed by the NDB.

These demands have not yet been included in the NDB but may be discussed during its operational design over the next few years, while the group’s parliaments ratify its approval, said Carlos Cosendey, international relations secretary at the Brazilian foreign ministry, in a dialogue with activists.

Participants at one of several panels at the International Seminar on the BRICS Bank, held Jul. 16-17 in Fortaleza, Brazil. Credit: Mario Osava/IPS

Participants at one of several panels at the International Seminar on the BRICS Bank, held Jul. 16-17 in Fortaleza, Brazil. Credit: Mario Osava/IPS

Cosendey said that a disadvantage of the multilateral bank was the need for its regulations not to be confused with infringement of national sovereignty of member states. The political, cultural, legal and ethnic differences between the five countries could pose a major obstacle to the adoption of common criteria, he said.

The NDB can be constructive “if it integrates human rights” into its principles and presents solutions for the social impacts of the projects it finances, said Nondumiso Nsibande, of ActionAid South Africa, an NGO.

“We need roads, other infrastructure and jobs, as well as education, health and housing,” but big projects tend to harm poor communities in the places where they are carried out, she told IPS. It is still not known what levels of transparency and social concern the bank will have, she said.

In the view of Chankrasekhar Chalapurath, an economist at Jawaharlal Nehru University in New Delhi, the NDB will alleviate India’s great needs for infrastructure, energy, long distance transport and ports. However, he does not expect it to make large investments in one key service for Indians: sanitation.

Having an Indian as the bank’s first president, as the five leaders have decided, will help attract more investments, but he said people’s access to water must remain a priority.

Cosenday said the NDB will promote “a new kind of development.”

But Chalapurath told IPS that this will only happen if its loans are made conditional on the adoption of low-polluting technologies and are guided by the Millennium Development Goals and their successors, the Sustainable Development Goals, as well as human rights and other best practices.

Adopting democratic processes within the bank will facilitate dialogue with social movements, parliaments and society in general, he said.

Incorporating environmental issues and gender parity is also essential, said Ugarteche and Rodriguez, who regards this as necessary in order to make progress towards “environmental justice.”

Not only roads and ports need to be built; even more important is the “social infrastructure” that includes sanitation, water, health and education, said Rodriguez, the coordinator of the REBRIP working group on International Economic Architecture.

Mobilising resistance to large projects that affect local populations in the places they are constructed will be part of the response to the probable priority placed by the NDB on financing physical infrastructure projects, she announced.

The social organisations gathered in Fortaleza, with representatives from Brazil, India, China, South Africa and other countries that are not members of the group, are preparing to coordinate actions to influence the way the bank and its policies are designed, and to monitor its operations and the actions of the BRICS group itself.

Brazilian economist Ademar Mineiro, also of REBRIP, said there was potential for national societies to influence the format and policies of the NDB, and time for them to organise and mobilise. “It is an unprecedented opportunity,” he told IPS.

Russia did not originally support the BRICS bank, preferring private funding. But Mineiro said its position changed after the United States and the European Union involved multilateral financial institutions like the World Bank in sanctions against Moscow for its annexation of Crimea, a part of Ukraine.

BRICS evolved “from the economic to the political,” with its members demanding more power in the international system. The alliance is one of the pillars of the Chinese strategy to conquer greater influence, including in the West, said Cui Shoujun, a professor at the School of International Studies of Renmin University in China.

“The BRICS need China more than the other way round,” he told IPS, adding that the Chinese economy is 20 times larger than South Africa’s and four times larger than those of India and Russia.

As well as seeking natural resources from other countries, among the reasons why China has joined and supports BRICS is strengthening the legitimacy in power of the Communist Party through internal stability and prosperity, the academic said.

(END)

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BRICS Forges Ahead With Two New Power Drivers – India and Chinahttp://www.ipsnews.net/2014/07/brics-forges-ahead-with-two-new-power-drivers-india-and-china/?utm_source=rss&utm_medium=rss&utm_campaign=brics-forges-ahead-with-two-new-power-drivers-india-and-china http://www.ipsnews.net/2014/07/brics-forges-ahead-with-two-new-power-drivers-india-and-china/#comments Thu, 17 Jul 2014 18:07:51 +0000 Shastri Ramachandaran http://www.ipsnews.net/?p=135604 By Shastri Ramachandaran
NEW DELHI, Jul 17 2014 (IPS)

The Sixth BRICS Summit which ended Wednesday in Fortaleza, Brazil, attracted more attention than any other such gathering in the alliance’s short history, and not just from its own members – Brazil, Russia, India, China and South Africa.

Two external groups defined by divergent interests closely watched proceedings: on the one hand, emerging economies and developing countries, and on the other, a group comprising the United States, Japan and other Western countries thriving on the Washington Consensus and the Bretton Woods twins (the World Bank and the International Monetary Fund).

The first group wanted BRICS to succeed in taking its first big steps towards a more democratic global order where international institutions can be reshaped to become more equitable and representative of the world’s majority. The second group has routinely inspired obituaries of BRICS and gambled on the hope that India-China rivalry would stall the BRICS alliance from turning words into deeds.The stature, power, force and credibility of BRICS depend on its internal cohesion and harmony and this, in turn, revolves almost wholly on the state of relations between India and China. If India and China join hands, speak in one voice and march together, then BRICS has a greater chance of its agenda succeeding in the international system.

In the event, the outcome of the three-day BRICS Summit must be a disappointment to the latter group. First, the obituaries were belied as being premature, if not unwarranted. Second, as its more sophisticated opponents have been “advising”, BRICS did not stick to an economic agenda; instead, there emerged a ringing political declaration that would resonate in the world’s trouble spots from Gaza and Syria to Iraq and Afghanistan.

Third, and importantly, far from so-called Indian-China rivalry stalling decisions on the New Development Bank (NDB) and the emergency fund, the Contingency Reserve Arrangement (CRA), the Asian giants grasped the nettle to add a strategic dimension to BRICS.

With a shift in the global economic balance of power towards Asia, the failure of the Washington Consensus and the Bretton Woods twins in spite of conditionalities, structural adjustment programmes and “reforms”, financial meltdown and the collapse of leading banks and financial institutions in the West, there had been an urgent need for new thinking and new instruments for the building of a new order.

Despite the felt need and multilateral meetings that involved developing countries, including China and India which bucked the financial downturn, there had been no sign of alternatives being formed.

It is against this backdrop – of the compelling case for firm and feasible steps towards a new global architecture of financial institutions – that BRICS, after much deliberation, succeeded in agreeing on a bank and an emergency fund.

From India’s viewpoint, this summit of BRICS – which represents one-quarter of the world’s land mass across four continents and 40 percent of the world population with a combined GDP of 24 trillion dollars – was an unqualified success. The success is sweeter for the National Democratic Alliance (NDA) government led by the Bharatiya Janata Party (BJP) because the BRICS summit was new Prime Minister Narendra Modi’s first multilateral engagement.

For a debutant, Modi acquitted himself creditably by steering clear of pitfalls in the multilateral forum as well as in bilateral exchanges – particularly in his talks with Chinese President Xi Jiping, with Russian President Vladimir Putin and with Brazilian President Dilma Rousseff – and by delivering a strong political statement calling for reform of the U.N. Security Council and the IMF.

In fact, the intensification and scaling up of India-China relations by their respective powerful leaders is an important outcome of the meeting in Brazil, even though the dialogue between the Asian giants was on the summit’s side-lines. Nevertheless, Modi and Xi spoke in almost in one voice on global politics and conflict, and on the case for reform of international institutions.

The new leaders of India and China, with the power of their recently-acquired mandates, sent out an unmistakable signal that they have more interests in common that unite them than differences that separate them.

Against this backdrop, Indian Prime Minister Modi’s outing was significant for other reasons, not least because of the rapport he was able to strike up, in his first meeting, with Chinese President Xi. The stature, power, force and credibility of BRICS depend on its internal cohesion and harmony and this, in turn, revolves almost wholly on the state of relations between India and China. If India and China join hands, speak in one voice and march together, then BRICS has a greater chance of its agenda succeeding in the international system.

As it happened, Modi and Xi hit it off, much to the consternation of both the United States and Japan. They spoke of shared interests and common concerns, their resolve to press ahead with the agenda of BRICS and the two went so far as to agree on the need for an early resolution of their boundary issue. They invited each other for a state visit, and Xi went one better by inviting Modi to the Asia-Pacific Economic Cooperation meeting in China in November and asking India to deepen its involvement in the Shanghai Cooperation Organisation (SCO).

Modi’s “fruitful” 80-minute meeting with Xi highlights that the two are inclined to seize the opportunities for mutually beneficial partnerships towards larger economic, political and strategic objectives. This meeting has set the tone for Xi’s visit to India in September.

Although strengthening India-China relationship, opening up new tracks and widening and deepening engagement had been one of former Indian Prime Minister Manmohan Singh’s biggest achievements in 10 years of government (2004-2014), after a certain point there was no new trigger or momentum to the ties. Now Xi and Modi are investing effort to infuse new vitality into the relationship which will have an impact in the region and beyond.

As is the wont when it comes to foreign affairs and national security, Modi’s new government has not deviated from the path charted out by the previous government. BRICS as a foreign policy priority represents both continuity and consistency. Even so, the BJP deserves full marks because it did not treat BRICS and the Brazil summit as something it had to go through with for the sake of form or as a chore handed down by the previous government of Manmohan Singh.

Before leaving for Brazil, Modi stressed the “high importance” he attached to BRICS and left no one in doubt that global politics would be high on its agenda.

He pointed attention to the political dimension of the BRICS Summit as a highly political event taking place “at a time of political turmoil, conflict and humanitarian crises in several parts of the world.”

“I look at the BRICS Summit as an opportunity to discuss with my BRICS partners how we can contribute to international efforts to address regional crises, address security threats and restore a climate of peace and stability in the world,” Modi had said on eve of the summit.

Having struck the right notes that would endear him to the Chinese leadership, Modi hailed Russia as “India’s greatest friend” after he met President Vladimir Putin on the side-lines of the summit.

India belongs to BRICS, and if BRICS is the way to move forward in the world, then BRICS can look to India, along with China, for leading the way, regardless of political change at home. That would appear to be the point made by Modi in his first multilateral appearance.

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New BRICS Monetary Fund May Reproduce Inequalitieshttp://www.ipsnews.net/2014/07/new-brics-monetary-fund-may-reproduce-inequalities/?utm_source=rss&utm_medium=rss&utm_campaign=new-brics-monetary-fund-may-reproduce-inequalities http://www.ipsnews.net/2014/07/new-brics-monetary-fund-may-reproduce-inequalities/#comments Sat, 12 Jul 2014 00:11:13 +0000 Mario Osava http://www.ipsnews.net/?p=135511 Mega-projects like the Itaipú hydropower station shared by Brazil and Paraguay could in future be financed by the new fund and new bank to be launched by BRICS leaders in the Brazilian city of Fortaleza. Credit: Mario Osava/IPS

Mega-projects like the Itaipú hydropower station shared by Brazil and Paraguay could in future be financed by the new fund and new bank to be launched by BRICS leaders in the Brazilian city of Fortaleza. Credit: Mario Osava/IPS

By Mario Osava
FORTALEZA, Brazil, Jul 12 2014 (IPS)

The first common institutions to be set up by Brazil, Russia, India, China and South Africa – the BRICS – are financial, and have arisen as a result of reforms to an international system that continues to largely ignore the growing influence of emerging countries.

But the Contingency Reserve Arrangement (CRA), the BRICS countries’ monetary fund, will also be unbalanced in the composition of its resources, leading to the possible reproduction of these inequalities. The cement that binds the BRICS together is their aspiration to wield more power in international economic bodies.

The CRA and a development bank will be formally established at the Sixth BRICS Summit, to be held in Brazil on Tuesday Jul. 15 in the northeastern city of Fortaleza and on Wednesday Jul. 16 in Brasilia. On Monday, preparatory meetings will take place between ministers, members of the business community and the group’s central banks.

The reserve fund will have 100 billion dollars to come to the rescue of any of its members suffering an exchange crisis. China would contribute 41 percent of the total, South Africa – the smallest partner – five percent, and the other countries 18 percent each.

These percentages reflect the size of each country’s economy. However, participation in the New Development Bank (NDB), the other instrument that will be established at the summit, will be on the basis of equal shares: 10 billion dollars each and equal voting rights for each member.

This is the big difference between the NDB and the World Bank, of which it is a reflection. “The NDB is democratic,” Christopher Wood, a researcher for the South African Institute of International Affairs in Johannesburg, told IPS.

This aspect of the NDB is also very different from the CRA, where China, as the largest country, “will probably have a disproportionate influence,” but it is hoped that the design of the institution will prevent it from being overly one-sided, Wood said.

Negotiations have been under way to create the development bank and the monetary mechanism since 2012, and now only a legal review is required before they are signed by the five BRICS leaders in Fortaleza, announced José Alfredo Graça Lima, the undersecretary- general for political affairs at the Brazilian foreign ministry.

BRIC, an acronym coined in 2001 by U.S. economist Jim O’Neill for the four emerging powers that are changing the shape of the world, began to hold meetings of heads of state and government in 2009, forming “a coalition” that was joined by South Africa in 2011.

“It is not a bloc” that adopts common policies for trade and other sectors, Brazilian diplomats said in response to critical observations about the discrepancies between the countries in different economic or political international forums.

The huge countries, or “whale-economies,” are getting to know each other and have expanded their dialogue. They have “a positive role in democratising international relations,” Graça Lima said.

Cooperation between the five countries is already ongoing in more than 30 areas, and their societies are also interacting through business and academic forums and other means, said Flavio Damico, the head of the Brazilian foreign ministry’s department of inter-regional mechanisms.

But the cement that binds the BRICS together is their aspiration to wield more power in international economic bodies. “The structure of power and privileges” of the global financial and political system “has remained set in stone” since 1945, and will have to change “to adjust to present reality,” he said.

The blocking of a proposed reform of the International Monetary Fund (IMF) in the U.S. Congress spurred the BRICS countries to make headway with their own solutions. The CRA will probably “not substantially change the world economic order in the short term, but it certainly could erode the centrality of the IMF in the long run,” said Wood.

The CRA is being formed in the context of persistent after-effects of the 2008 financial crisis and the “systemic imbalances in the global economy, perpetuated by the monetary policies of advanced economies, such as the United States and the European Union,” Vivan Sharan, an expert on BRICS with the Observer Research Foundation in India, told IPS.

With the “monetary safety net,” BRICS will be signalling “lesser levels of dependence on Bretton Woods institutions such as the IMF, which urgently requires structural and governance reform,” he said. But the group is not aiming at “a recalibration of the global economic order,” he said.

Brazilian economist Fernando Cardim, professor emeritus of economics at the Federal University of Rio de Janeiro, doubts the CRA will be successful. Its resources will be too few, as its entire funds would not even be able to protect Brazil alone from mass capital flight, he argued.

Moreover, it will not necessarily prevent potential intra-BRICS strife, as China will have decisive powers “similar to or even greater than those of the United States over the IMF,” and is likely to wield power with less subtlety, he said.

But the BRICS institutions are not seeking to substitute for or confront the IMF or the World Bank. The CRA’s goal is to “complement” them, as “an additional line of defence” for the five countries, which are not facing balance of payment difficulties, according to Graça Lima.

The IMF’s resources total 937 billion dollars, more than nine times the value of CRA funds, and it will continue to play a key role for the CRA itself and other monetary mechanisms created to combat financial crises, Wood said.

In the Chiang Mai Initiative, a similar mechanism adopted by the Association of Southeast Asian Nations after the region’s 1997-1998 crisis, and which is backed by China, South Korea and Japan, countries must first request IMF assistance if they wish to draw a large loan from the funding pool, said Wood.

The NDB, already known as the BRICS Development Bank, is less controversial, although it has drawn criticism from social and environmental activists. The plan is for it to begin financing infrastructure and sustainable development projects in two years’ time, after obtaining parliamentary approval from member countries.

Its starting capital of 50 billion dollars is limited in comparison with the needs of BRICS members and other developing countries that could benefit from loans and even join the bank. It is less than the amount loaned annually by Brazil’s National Bank for Economic and Social Development (BNDES).

The Indian government, for instance, estimates that one trillion dollars are needed for financing domestic infrastructure projects over the next five years, around half of which is to come from the private sector.

However, new sources of funding are important because Indian infrastructure projects are facing serious liquidity challenges, as they are over-dependent on banking sector finance due to “the non-existence of a robust corporate bond market,” said Sharan in New Delhi.

“South Africa has a lot to gain,” as the NDB will focus on large infrastructure projects, a common problem amongst all the BRICS, and can offer long-term financing which is often difficult to obtain, particularly from the private sector, Wood said.It will also support project preparation, like surveying work, which often needs to be done before financing for the project can be accessed.

The NDB is authorised to double its funds, but its key importance is that co-financing projects acts as a catalyst, by reducing the risk and cost burden for other lenders and so attracting resources from private investors and national and multilateral development banks around the world, according to Wood and the Brazilian diplomats.

With additional reporting from Ranjit Devraj in New Delhi and Brendon Bosworth in Johannesburg.

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Argentina Once More on the Map, Invited by BRICShttp://www.ipsnews.net/2014/06/argentina-once-more-on-the-map-invited-by-brics/?utm_source=rss&utm_medium=rss&utm_campaign=argentina-once-more-on-the-map-invited-by-brics http://www.ipsnews.net/2014/06/argentina-once-more-on-the-map-invited-by-brics/#comments Wed, 18 Jun 2014 18:55:43 +0000 Fabiana Frayssinet http://www.ipsnews.net/?p=135068 “Family photo” at the fifth BRICS Summit, held in 2013 in Durban, South Africa. Credit: Government of South Africa

“Family photo” at the fifth BRICS Summit, held in 2013 in Durban, South Africa. Credit: Government of South Africa

By Fabiana Frayssinet
BUENOS AIRES, Jun 18 2014 (IPS)

As Argentina starts to mend fences with the international financial markets, the emerging powers that make up the BRICS bloc invited it to their next summit. This could be a step towards this country’s reinsertion in the global map, after its ostracism from the credit markets since the late 2001 debt default.

For now, there is no letter “A” in the BRICS acronym, which stands for Brazil, Russia, India, China and South Africa. But in Buenos Aires speculation is rife about whether it should be called BRICSA, ABRICS or BRICAS, if Argentina is admitted.

The invitation for President Cristina Fernández to participate in the group’s sixth summit, scheduled for Jul. 15 in the northeast Brazilian city of Fortaleza, is seen as another sign that Latin America’s third-largest economy may be incorporated, after India, Brazil and South Africa indicated their interest.

“This is very significant for Argentina,” Fernanda Vallejos, an economist at the University of Buenos Aires (UBA), told IPS.

“It not only points to the recognition by the rest of the members of Argentina’s importance and potential, but also opens a door for our country to gain greater political and economic clout on the international stage.”

Vallejos stressed the key role played by BRICS over the last decade in the growth of the global economy at a time of financial crisis in the industrialised North.

The term BRICS was coined for the world’s major emerging markets in 2001 by economist Jim O’Neill of investment bank Goldman Sachs. Together, these countries represent around one-quarter of global GDP, 43 percent of the planet’s population, and 20 percent of global investment.

In addition, as Argentina’s foreign ministry stressed, the five countries account for 45 percent of the world’s labour force, hold over three trillion dollars in combined foreign reserves, and produce two billion tonnes a year of agricultural products.

Vallejos said that in a world where blocs are playing a bigger and bigger role, BRICS has a growing voice in international forums, where the members are “demanding participation in accordance with the weight of their economies.”

“The proposal set forth by India – with which bilateral trade expanded 30 percent in 2013 – and backed by Brazil and South Africa also puts paid to the opposition’s tired complaint about our country supposedly being isolated from the world,” said Vallejos, who is also a researcher at the Energy, Technology and Infrastructure Observatory for Development (OETEC).

The formal invitation to Fernández was issued by Russia, which also thus confirmed its support.

“I think this shows that Argentina is fully inserted in international relations, not ‘isolated from the world’,” Nicolás Tereschuk, a political scientist at UBA, told IPS. “It simply doesn’t toe the line with the policies of the central countries at just any cost or in any circumstances, as it used to do at other times in its history.”

Argentina’s invitation from BRICS came almost simultaneously with the May 28 announcement of an agreement reached by the Fernández administration and the Paris Club, which this country owed 9.7 billion dollars since the default 13 years ago.

Some political sectors here see the public debt contracted by the 1976-1983 military dictatorship as illegitimate. But the centre-left Fernández administration hopes the agreement with the Paris Club will facilitate the renewed flow of international credit and investment.

Economist Diego Coatz said the agreement and other measures adopted by the government such as “improving” its economic data, whose reliability was questioned by the International Monetary Fund (IMF), point to a “shift” by the authorities aimed at “reintegration in the world in financial terms…and at positioning the country better on the international front.”

Coatz, with the research centre of the Argentine Industrial Union – the country’s leading industrial employer federation – said that if Argentina is admitted to the BRICS bloc, “it will once more be seen as an emerging developing country with great potential.”

In addition, incorporation in the bloc would open a new window for external financing, when Argentina is in need of foreign exchange and investment, he said.

At the Fortaleza summit a formal decision could be reached on creating a regional development bank as an alternative to international financial institutions like the IMF, World Bank or Interamerican Development Bank.

The new bank would have a 50 billion dollar fund for financing infrastructure in the bloc’s member countries. It would also establish a joint foreign exchange reserves pool of 100 billion dollars, “which would serve as insurance against the volatility of the markets,” Vallejos said.

“Argentina could access financing at very beneficial rates compared to the heavy interest rates of other international institutions” in order to finance infrastructure for development, she underscored.

“The strengthening of international trade by the possible admission to BRICS means important possibilities for Argentina to make significant progress towards a more developed industrial sector, with insertion in global production chains, the development of strategic sectors and the industrialisation of the countryside,” Vallejos said.

The interest would appear to be mutual.

“The invitation came after the turmoil in emerging markets early this year, after which the ‘establishment’ international financial press talked about a ‘decline’ of BRICS,” Tereschuk said.

In addition, “growth in China is slowing down, India is at a decisive moment, with the dilemma of faster growth or stagnation, and the Brazilian economy is not really flourishing at this time,” the economist said.

So for them and the rest of the members of the bloc, “joining together with a periphery country that makes up the G20 [Group of 20] would seem to be a decision of interest to the BRICS countries,” he said.

The G20 block of leading industrialised and emerging economies “is in somewhat of a crisis itself, because of the crisis that the central countries are still immersed in.”

For that reason, according to Tereschuk, Argentina would be useful to the BRICS so that the voice of their two South American leaders, Argentina and Brazil, “would be heard in unison in the greatest number of places possible.”

The political scientist said Brazil and Argentina have led a “shift to the left with growth, reduction of poverty and inequality in a framework of democracy and greater political, civilian and social rights for their citizens.

“The other members of BRICS cannot offer all of these characteristics combined,” he said.

Vallejos, for her part, stressed Argentina’s role as a supplier of raw materials. “We are an agricultural powerhouse,” she pointed out.

In addition, “Argentina has the world’s second-largest reserves of lithium, one of the biggest reserves of gold – nearly 10,000 tonnes – 500 million tonnes of copper, and 300,000 tonnes of silver, while we are becoming the third-largest global exporter of potassium,” she said.
“We are sitting on the world’s third- largest platform of unconventional fossil fuels. And to that you have to add our technological development, and the development of nuclear energy for peaceful purposes,” she added.
So would it be “BRICAS”, “ABRICS” or “BRICSA”? At any rate, what is at stake is a bit more than deciding on a new acronym.

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Asian Nations Bare Teeth Over South China Seahttp://www.ipsnews.net/2014/06/asian-nations-bare-teeth-over-south-china-sea/?utm_source=rss&utm_medium=rss&utm_campaign=asian-nations-bare-teeth-over-south-china-sea http://www.ipsnews.net/2014/06/asian-nations-bare-teeth-over-south-china-sea/#comments Wed, 11 Jun 2014 20:38:51 +0000 Richard Heydarian http://www.ipsnews.net/?p=134936 Chinese People's Liberation Army-Navy sailors stand watch on the submarine Yuan at the Zhoushan Naval Base. Credit: Chairman of the Joint Chiefs of Staff/CC-BY-2.0

Chinese People's Liberation Army-Navy sailors stand watch on the submarine Yuan at the Zhoushan Naval Base. Credit: Chairman of the Joint Chiefs of Staff/CC-BY-2.0

By Richard Heydarian
SINGAPORE, Jun 11 2014 (IPS)

China’s early-May decision to dispatch the state-of-the-art oil rig, HYSY981, into Vietnam’s 200-nautical-mile Exclusive Economic Zone (EEZ), has intensified ongoing territorial disputes in the South China Sea, raising fears of uncontrolled military escalation in one of the world’s most important waterways.

It wasn’t long before Vietnamese and Chinese maritime forces were locked in a dangerous naval standoff, which led to low-intensity clashes in the high seas.

China’s unilateral action sparked outrage across Vietnam, paving the way for unprecedented anti-China protests, which snowballed into massive destruction of foreign-owned factories, principally owned by China and Taiwan, and the exodus of thousands of Chinese citizens to neighbouring Cambodia.

The whole episode undermined years of painstaking negotiations between Hanoi and Beijing aimed at peacefully resolving bilateral territorial disputes across the South China Sea.

Shortly after, the Philippines also released photos suggesting Chinese construction activities on the Johnson South Reef, a disputed feature that falls within the Philippines EEZ in the Spratly Island chain in the South China Sea.

Later, China confirmed that it was indeed engaged in reclamation activities on the disputed reef, but it tried to justify it by claiming it exercised “indisputable and inherent” sovereignty over the said feature based on Beijing’s notorious “nine-dash-line” doctrine, which covers almost the entirety of the South China Sea.

The Philippines and Vietnam contend that China has flagrantly violated the 2002 Declaration on the Conduct of Parties in the South China Sea, which explicitly discourages claimant states from unilaterally altering the status by engaging in, among other things, construction activities on disputed features.

Alarmed by the intensifying territorial disputes between China and other claimant states, the Association of Southeast Asian Nations (ASEAN) expressed “serious concern” and called for a rule-based, peaceful resolution of the disputes.

Expecting a more vigorous response from ASEAN, Vietnamese and Filipino leaders called for the swift finalisation of a legally-binding Code of Conduct (CoC) in the South China Sea, and vowed to forge a bilateral “strategic partnership” to counter China’s territorial assertiveness. Meanwhile, other Pacific powers such as Japan and the U.S. have also stepped up their criticism of China’s recent actions, underscoring their direct national interest in preserving freedom of navigation in international waters.

“Whatever construction China carries out on the [Johnson South] reef is a matter entirely within the scope of China’s sovereignty,” argued China’s Ministry of Foreign Affairs Spokeswoman Hua Chunyin, dismissing protests by Filipino officials.

Confronting an increasingly assertive and powerful China, the Philippines and Vietnam have moved closer to a genuine alliance. On the sidelines of the World Economic Forum (WEF) on East Asia in late-May, Philippine President Benigno Aquino III and visiting Vietnamese Prime Minister Nguyen Tan Dung agreed to forge a bilateral strategic partnership, with a particular focus on maritime and defense cooperation vis-à-vis the ongoing disputes in the South China Sea.

“We face common challenges as maritime nations and as brothers in ASEAN,” declared Aquino during his meeting with his Vietnamese counterpart, underscoring Manila’s desire to establish a closer partnership with neighbouring countries.

“In defense and security, we discussed how we can enhance confidence building, our defense capabilities and interoperability in addressing security challenges.”

“More than ever before, ASEAN and the international community need to continue raising a strong voice in protesting against [China’s territorial assertiveness], securing a strict observance of the international law, and peace and stability in the region and the world,” lamented Dung, underscoring Hanoi’s urgent desire for the multilateral resolution of the ongoing disputes.

Recognising China’s military superiority, and the inefficacy of existing diplomatic mechanisms, both the Philippines and Vietnam have been looking towards external powers such as Japan and the U.S. to counter China’s territorial assertiveness.

Much of Asia’s trade and energy transport passes through the South China Sea, and there is a growing fear that ongoing territorial disputes will spiral into a prolonged, destructive conflict, which could affect all regional economies.

Influential actors across the region have been desperately searching for new mechanisms to deescalate ongoing territorial tensions, preventing claimant states, primarily China, from undertaking any destabilising action.

“Japan intends to play an even greater and more proactive role than it has until now in making peace in Asia and the world something more certain,” declared Japanese Prime Minister Shinzo Abe in the recently-concluded 13th Shangri-La Dialogue in Singapore, which brought together leading defense officials, experts, and journalists from around the world, and saw spirited exchanges between top officials from Japan, the U.S. and China.

During the high-level gathering, Abe, the keynote speaker, sought to present Japan as a counterweight to China, with Tokyo relaxing its self-imposed restrictions on arms exports, increasing its defense spending, and seeking new ways to expand its security role in the Asian region.

“We take no position on competing territorial claims [in the South China Sea]… But we firmly oppose any nation’s use of intimidation, coercion or the threat of force to assert these claims,” argued U.S. Defense Secretary Chuck Hagel, underscoring Washington’s growing alarm over China’s territorial posturing in the Western Pacific.

In response, China’s top representative, Lt. Gen. Wang Guanzhong, deputy chief of staff of the Chinese military, was uncharacteristically blunt in his criticisms, describing Hagel’s remarks as “excessive beyond . . . imagination [and] suffused with hegemonism . . . threats and intimidation.”

Under a new nationalist government, led by Prime Minister Narendra Modi, India is also expected to play a more pro-active role in the region, given New Delhi’s growing trade with East Asia and its large-scale investments in the hydrocarbon-rich areas of the South China Sea. The U.S.’ treaty allies such as Australia have also stepped up their efforts at containing China’s rising territorial assertiveness, as the two Pacific powers deepen their naval interoperability and defense cooperation.

Overall, it seems that China’s rising assertiveness has encouraged a flexible counter-alliance of like-minded countries, which are heavily concerned with the economic and geopolitical fallout of the brewing conflict in the South China Sea. It remains to be seen, however, whether China will relent on its territorial claims amid growing international pressure.

(END)

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