- Understanding Homo Economicus in Deeper Terms Garreth Bloor, Law & Liberty
- The Homo Economicus is “The Body” of the Agent Federico Sosa Valle, NOL
- Worker ownership: threat or promise? Chris Dillow, Stumbling & Mumbling
- Flower Fires Setsuko Adachi, Berfrois
Year: 2018
China-Myanmar Economic Corridor and the limits of ‘Cheque Book Diplomacy’
On September 9, 2018 Myanmar and China signed a memorandum of understanding (MoU) for establishing the China-Myanmar Economic Corridor (CMEC), as part of China’s ambitious Belt and Road Initiative (BRI). The corridor will traverse a distance of approximately 1700 kilometres and seeks to connect Kunming (in China’s Yunnan Province) with Myanmar’s key economic points – Mandalay, Yangon, and Kyauphkyu.
According to the MOU, both sides have agreed to collaborate in a number of areas. Some of the important areas identified for collaboration by both countries are: infrastructure, construction, manufacturing, agriculture, transport, finance, human resources development, telecommunications, and research and technology.
Chinese Foreign Minister Wang Yi had first announced the proposal to build CMEC during his meeting with Myanmar’s State Counselor Aung San Suu Kyi in November 2017. The MOU had been finalized in February 2018.
The CMEC is an ambitious project from which Myanmar could benefit immensely. Yet, there have been apprehensions with regard to the economic feasibility of the project, and Myanmar does not want to meet the fate of other countries which have fallen into what has been dubbed as a ‘Debt Trap’.
Opposition to Kyauphkyu
There has been skepticism with regard to the BRI project in general, and China’s involvement in the SEZ and Sea Port to be set up in Kyauphkyu (a coastal town in the Rakhine Province) in particular. Large sections of the population have been questioning the economic rationale of the project – and the benefits for Myanmar. CITIC (China’s biggest financial conglomerate) was awarded both projects, but it had to reduce its stake from 85 percent to 70 percent in the Sea Port after vehement opposition from the local population. Locals found the 85-15 arrangement unreasonable. Fearing a debt trap, the NLD government in Myanmar has also reduced the initial value of the Sea Port project – a whopping $7.3 billion USD to $1.3 billion. There has been opposition to the SEZ as well (mainly on environmental grounds), and while the initial Chinese take in the SEZ (originally valued at $2.7 billion) was 51 percent, it is likely to be revised.
U Kan Zaw, a Minister in the erstwhile Than Sein government (and Chairman of the Kyauphkyu SEZ tender committee), confessed that Myanmar was not very keen for Chinese investment (it had sought investments from the UK and Europe), but it was not left with any other option once other countries declined to invest.
China beginning to acknowledge shortcomings of BRI projects
Of late Beijing has expressed a willingness to re-examine some aspects of BRI-related projects (including CMEC and the China Pakistan Economic Corridor – CPEC). On the face of it, at least Beijing seems open to addressing the worries of countries which are part of the BRI.
Chinese media itself is trying to send a message that Beijing is responsive to concerns of countries which are part of the BRI initiative. A recent example is an article in CGTN on CMEC, which acknowledged not just the drawbacks of the project, but also the fact that the response to CMEC has been tepid so far in Myanmar. Said the article:
CMEC is temporarily suffering from a cold reception, we believe that it is an excellent endeavor.
The authors of the article also makes a significant point: that Chinese businessmen are not familiar with Myanmar. While the article could be referring to the lack of familiarity with Myanmar’s policies, many host countries have been critical not just of the ‘one sided’ nature of Chinese economic investments, but their unwillingness to understand local cultures, and the fact that they remain aloof from the local population.
On a number of occasions, Chinese businessmen have even misbehaved with locals. In Pakistan, on two occasions, Chinese businessmen have beaten up policeman, and this did not go down well with the local population.
While alluding to the failure of big ticket infrastructure projects, the article also refers to the need for Chinese investments in ‘light industry’ as opposed to ‘heavy industry’ (in a reference to infrastructural mega projects, such as those which were scrapped by Malaysian Prime Minister Mahathir Mohammad).
One of the interesting aspects of CMEC is that Myanmar was keen to have third party investments, and not restrict itself only to Chinese investments. Investments will come from countries in South East Asia and East Asia — Thailand, South Korea, and Japan. While China’s economic presence in Myanmar is staggering, this has not gone unchallenged and of late countries like South Korea are also increasing their presence in Myanmar. The authors of the CGTN article also try to pitch for Chinese cooperation with other countries, arguing that joint investments will mean not only lesser economic and political burden for China, but that they could also reduce hostilities between Western and Chinese companies.
Finally, the article speaks about the need for greater cooperation between Myanmar and China in the sphere of agriculture (especially aquaculture), and that this cooperation should be economically beneficial for the local population.
Conclusion
It remains to be seen whether China will actually acknowledge the genuine concerns of countries participating in the BRI, and whether or not it will actually take some tangible steps to address the apprehensions. As stated earlier, Beijing seems slightly more flexible in its negotiations, but whether this is a short term trend (which many would argue is a consequence of Malaysian PM Mahathir Mohammad’s straight talking with China) or not remains to be seen.
China may be further compelled to change its approach towards overseas economic investments after the recent electoral rout of Abdulla Yameen (outgoing Maldivian President), considered to be pro-China. One trend which is clearly emerging, as was evident from the electoral verdict of Maldives, was that leaders (many of whom position themselves as strongmen) blindly following Chinese diktats for short term economic goals does not go down well with ordinary citizens, and China may need to address its perception problem by looking beyond Cheque book Diplomacy.
Nightcap
- Imagining post-abortion America Rachel Lu, the Week
- A visit to Noah’s Ark Stephen Cox, Liberty Unbound
- Adam Smith as centre-left economist (and nothing else) Branko Milanovic, globalinequality
- Tequila and US-Mexican security relations Raúl Benítez Manaut, War on the Rocks
Nightcap
- The Druze are losing their young (to secularism) Bruce Clark, Erasmus
- If Brett Kavanaugh Drops Out, Will Trump Pick Amy Coney Barrett? Damon Root, Reason
- Trump’s dirty war in Yemen Conor Friedersdorf, the Atlantic
- How to find a beer in Muslim West Africa Will Brown, 1843
India’s approach towards BRI: Need for pragmatism
(new title)
Recently, China’s consular general in Kolkata, Ma Zhanwu, while speaking at a function, proposed a bullet train connecting Kunming (in China’s Yunnan Province) with Kolkata, the capital of India’s eastern state of West Bengal. Said Ma:
With joint efforts of India and China, a high-speed rail link could be established between the two cities.
It would be pertinent to point out that the proposal for a bullet train connecting Kunming and Kolkata had been discussed earlier at the Greater Mekong Subregion (GMS) meet in 2015. In fact, enhancing connectivity between India and China through the Kolkata-Kunming multi-modal corridor (officially the Bangladesh-China-India-Myanmar Economic Corridor, or BCIMEC), which covers a distance of 2,800 kilometres, has been under discussion for over 2 decades, through the Track II K2K (Kolkata-Kunming) dialogue. During former India Prime Minister Manmohan Singh’s China visit, in October 2013, sister city relations were established between Kunming and Kolkata.
In recent years, China has been pro-actively reaching out to West Bengal Chief Minister Mamata Banerjee, and has invited her to visit on repeated occasions, though she has been unable to visit (she was all set to visit in June 2018, but her trip was cancelled at the last moment). Apart from this, a number of Chinese investors have expressed interest in investing in West Bengal and even attended the Bengal Global Business Summit 2018.
Given the increasing emphasis on connectivity with South East Asia, through India’s North East (one of the key aims of India’s ‘Act East Policy’), it was believed that the BCIMEC would tie in neatly with India’s vision for connectivity.
However, tensions between India and China – due to the Doklam standoff as well as Beijing’s insistence that BCIMEC be included in its official Belt and Road Initiative (BRI) – have contributed to a wane in New Delhi’s interest in the project, at least for the time being. The Rohingya crisis, and more general tensions between Bangladesh and Myanmar, are also a major impediment to the project.
The China Myanmar Economic Corridor: Why New Delhi should pay close attention
While a high speed train is an ambitious project, New Delhi can not be closed to the BCIMEC and should pay close attention to the China-Myanmar Economic Corridor (the Memorandum of Understanding for this project was signed on September 9, 2018). While the China-Myanmar Economic Corridor (CMEC) has been under discussion for some time, there have been numerous debates with regard to the economic implications for Myanmar (the Kyaukphyu Deep Sea Port project, as well as Special Economic Zones, have been contentious). The increasing debate on the issue of ‘debt trap diplomacy’ has only increased apprehensions within sections of the Myanma government (the stake of Chinese conglomerate CITIC in the deep sea port has been reduced from 85 percent to 70 percent due to domestic pressures). Myanmar has also made it clear that it would not like to depend only on Chinese investments, and the recently-signed MOU categorically states that third party investments from Japan, South Korea, and Thailand in CMEC projects are more than welcome. Interestingly, an article on CMEC in Chinese media acknowledges some of the apprehensions vis-à-vis CMEC, and also bats for closer cooperation between China and other Asian and Western countries.
The proposal for the bullet train connecting Kolkata-Kunming came days after the agreement had been signed between China and Myanmar. China would like to extend this corridor all the way to India (while speaking about rail connectivity between Kunming and Kolkata, the Chinese diplomat also spoke about an industrial cluster along the route).
How should New Delhi play it?
While New Delhi’s objections to the BRI are valid, it does need to shed blinkers. It is free not to participate in those components of the project with which it is not comfortable, but there are projects, like the BCIMEC, where it can easily find common ground with China. This will give a boost to India’s infrastructure in the eastern and northeastern part of the country, and complement it’s Act East Policy. If third countries are allowed to invest in CMEC, Indian companies should explore opportunities, as this will enhance their presence in Myanmar while also bolstering the Act East Policy.
China’s narrative in South Asia
Post the Wuhan Summit, there has been a clear change of narrative from the Chinese side. China has expressed its keenness to work jointly with India in Afghanistan – in capacity-building projects. This was unthinkable a few years ago.
China’s burgeoning economic relationship with Nepal has sent alarm signals in New Delhi. China’s decision to give Nepal access to its ports (Tianjin, Shenzhen, Lianyungang and Zhanjiang) raised the hackles in New Delhi. Pragmatists realize that New Delhi can not dictate Nepal’s ties with China, and the fact is that Kathmandu would like to benefit economically from its ties with both China and India.
Interestingly, China has been urging Nepal to strengthen economic ties with India. During his visit to Beijing, Nepal’s Prime Minister, K.P. Oli, made an unequivocal pitch for strong ties between Kathmandu and New Delhi (as well as Kathmandu and Beijing). He stated that the economic progress of both India and China was an opportunity for Nepal, and stated that Nepal wanted to emerge as a bridge between both countries, and would not like to get embedded in zero sum geopolitical games. Nepal’s former Prime Minister, Prachanda, during his visit to India, also referred to the need for close ties with both India and China.
India should also keep in mind a few other points
While many in New Delhi are pointing to Malaysian Prime Minister Mahathir Mohammad’s stand against Chinese projects, it is important to keep in mind that while the Malaysian PM has scrapped a few projects, he has continued to reiterate the relevance of the China-Malaysia relationship (there is need for nuance). Second, it is one thing to point out the shortcomings of the BRI project, but India needs to prove its own track record in big ticket connectivity projects (New Delhi has been extremely slow when it comes to the implementation of connectivity projects within the neighbourhood). Third, there are areas where India is already working with China, so rigidity and paranoia do not make much sense. If even Japan is willing to participate in certain projects of BRI, there is absolutely no reason why India should not at least be open to elements of the project. It is also important to look at connectivity from an economic dimension and not a narrow security prism as large sections of India’s strategic community do. Finally, New Delhi can not put all its eggs in the American basket. While India’s strategic relationship with the US has witnessed an improvement, and Washington has repeatedly spoken about the need for greater connectivity within the ‘Indo-Pacific’, the US is not likely to invest significantly in economic connectivity projects. India thus can not be totally dismissive of Beijing-led connectivity initiatives.
While New Delhi needs to exhibit pragmatism, Beijing on its part needs to address the concerns of India, and other countries, with regard to the BRI.
Nightcap
- Symmetry and Asymmetry as Elements of Federalism: A Theoretical Speculation Charles Tarlton, Journal of Politics
- The asymmetry of European integration, or why the EU cannot be a ‘social market economy’ Fritz Scharpf, Socio-Economic Review
- The past and future of European federalism: Spinelli vs. Hayek Federico Ottavio Reho, Martens Centre
- Secular Nationalism, Islamism, and Making the Arab World Luma Simms, Law & Liberty
Nightcap
- The conversations that cryptocurrency kills Sonya Mann, Jacobite
- How and why the 1st Amendment became a weapon for the right Jedediah Purdy, the Nation
- Are libertarians crazy? Pierre Lemieux, EconLog
- As Venezuelans starve, Maduro gives oil away to Cuba Jorge Carrasco, CapX
RCH: 10 corporations that gave capitalism a bad name
That’s the subject of my weekend column over at RealClearHistory. An excerpt:
5. Dutch East India (1602-1799). The VOC, as the Dutch East India Company was known, exemplified corporate plunder and colonial oppression in the 17th and 18th centuries. Its demise was only met after Napoleon’s revolutionary armies conquered the Netherlands, and for nearly 200 years the VOC brutally oppressed and exploited Asian lands in the name of monopoly and Dutch interests of state. The VOC was created to give the Netherlands a presence in the burgeoning world of global trade that had been started by Spain and Portugal after the former’s colonization efforts in the New World. The VOC wanted to cut off Spain and Portugal (and, later, the U.K., France, and U.S.) from world trade, and monopolize industries in order to benefit Dutch society. This logic led directly to not only the horrible things that happened in VOC-governed territory, but also to the corruption and unnecessary wars that happened in the Netherlands.
Please, read the rest.
Nightcap
- How a Huguenot philosopher realised that atheists could be virtuous Michael Hickson, Aeon
- Christian Pentecostalism has crept to the center of public life in Nigeria Ebenezer Obadare, Africa is a Country
- Last words about Nancy MacLean’s attack on James Buchanan Henry Farrell, Crooked Timber
- Are tariffs a big threat to China? Scott Sumner, EconLog
Nightcap
- Meet “Ninja,” electronic gaming’s first big star Elaine Teng, ESPN
- India’s response to China’s rise TV Paul, War on the Rocks
- The Dutch in Java Jenny Watson, Berfrois
- Nancy MacLean’s bad faith is getting tiresome Steven Teles, Niskanen
Nightcap
- How Buddha became a popular Christian saint Blake Smith, America
- Russia, Germany at loggerheads over Idlib Yekaterina Chulkovskaya, Al-Monitor
- Arab melancholia Thomas Patier, Los Angeles Review of Books
- Does Locke’s entanglement with slavery undermine his philosophy? Holly Brewer, Aeon
Nightcap
- On “Madison’s nightmare” Ilya Somin, Volokh Conspiracy
- Good parenting versus good citizenship Gina Schouten, Crooked Timber
- The birth of the British East India Company Francis Sempa, Asian Review of Books
- The bitterness of Adam Smith Branko Milanovic, globalinequality
Nightcap
- Identity: the lies that bind Laura Miller, Slate
- Puzzles about college Javier Hidalgo, Bleeding Heart Libertarians
- Nike is winning the culture war David French, National Review
- Oslo is dead. Long live Oslo! Martin Indyk, the Atlantic
INDIA: A case study in the demise of representative democracy
India of 1947 had battled decades of colonialism to embrace self-rule. Whatever divisions seeped through party ranks, coalesced – and how beautifully – to fight for the right the people to a democracy. Having a common enemy helped. Compounded by the ability of the political leaders of that time to weave magic through words, connecting the plights of the millions to the queen-ship of one propelled movements across the breadth of the Indian subcontinent. While much has been said of the academic prowess as well as the oratory skills of the Founders, it was their ability to connect across barriers of identity that ultimately pushed the wheel. How dearly they protected their freedom of speech, expression and press is perhaps telling of the importance they assigned to being connected with those they had chosen to represent. How is it then that a deeply flawed election system and disjointed lines of public communication yielded one of the biggest civil disobedience movements the world had ever seen?
In terms of representation and reach, India 2018 is better abled than India 1947. And yet, it fell upon the unelected shoulders of four men and one woman to correct a deeply violent, colonial and bigoted law. The right to sexual identity was granted by five cis heterosexual individuals; the ones in need of representation reduced to being mere petitioners. India celebrated breaking off one more shackle, the Judiciary reveled in being the harbinger of liberal values to the Indian legal system yet one more time and the Parliament, as always, stayed mum. It is not that either of the institutions have embraced staunch anti/pro liberal positions. The Indian judiciary has its share of misogynists much like the Parliament. Misogyny is not illegal. But what is illegal is the Parliament’s distance from her electorate. Even if one were to contend that a majority of India does not support homosexuality, the increasing momentum of the movement should have propelled an informed debate within and without the Parliament. Instead, the government chose to not object to the petitions filed in favor of decriminalizing homosexuality as if that is the extent of the responsibility they owe to the LGBTQ community of the country. The distance between a judicial decriminalization of homosexuality and one done through a legislative device is the distance between a populist democracy and a representative one. The counter-majoritarian difficulty seems almost trivial when democratic institutions lose their representative character.
The biggest reason behind the rising legitimacy of an essentially non-democratic institution as the Judiciary is not a power grab by the Supreme Court judges. Howsoever activist they might get, the requirement of giving a reasoned decision tempers their emotions. The Indian Parliament, on the other hand, has come to rely on this increasing politicization of the judiciary to avoid political battles that might require concessions from their mostly unreasoned manifestos. The result is a lack of deliberation that is disturbingly dismal for a democracy as huge as India. The requirements of representation have come to be restricted to a periodical holding of elections. Members of Parliament are neither Burkean agents nor Pateman’s representatives. They are a political class unto themselves working towards a steady demise of the largest democracy in the world.
Notes On Liberty 