On Joe Biden and America’s relationship with Iran

One of the important foreign policy priorities of President-elect Joe Biden, which will have an impact not just on the US but a number of its allies in the West – such as the UK, Germany, France (the E3), India, and Japan – is Washington’s ties with Iran. 

It will be interesting to see the ultimate shape which Biden’s Iran foreign policy takes place. Days before the announcement of the election result, Iran’s Foreign Minister Javad Zarif stated, in an interview to CBS news, that Iran viewed the statements emanating from the Biden camp positively, though Iran would have to wait and watch. 

While commenting on the Biden-Harris victory, Iranian President Hassan Rouhani urged the US to return to the JCPOA (Joint Comprehensive Plan of Action). Said Rouhani

Now, an opportunity has come up for the next U.S. administration to compensate for past mistakes and return to the path of complying with international agreements through respect of international norms 

Donald Trump’s withdrawal from the JCPOA – Iran/P5+1 agreement in 2018, had been criticized by allies, including the E3, who were signatories to the agreement. 

President-elect Joe Biden has also unequivocally stated that he is open to the US rejoining JCPOA, subject to the fact that Iran returns to compliance with the nuclear agreement. Biden, who also served as Vice President under Obama (who had fervently backed the JCPOA), has been critical of the Trump Administration’s approach towards Iran, dubbing it as a failure. During the midst of the coronavirus pandemic, Biden, along with many US allies, had also advocated that the US relax Iranian sanctions temporarily on humanitarian grounds. 

In recent months, Washington has imposed more sanctions on Iran, the latest instance being sanctions imposed days before the election on Iran’s Ministry of Petroleum, the National Iranian Oil Company, and its oil-tanker subsidiary. The reason cited for sanctions is the financial support provided by these companies to Iran’s Islamic Revolutionary Guards Corps (IRGC). It would be pertinent to point out that the US was unable to snapback Iranian sanctions which had been removed under the JCPOA – UNSC members blocked US attempts. While there is skepticism with regard to the revival of the deal given that incumbent Iranian President Hassan Rouhani himself is likely to face elections soon, and there is limited room for manuevre given that hardliners in Iran (whose clout has increased as a result of Trump’s Iran policy), are averse to any engagement with the West. Senior Iranian officials have also stated that they will not accept any conditionalities from Washington.

Biden may have fundamental differences in his approach vis-à-vis the Middle East as compared to Trump for a variety of reasons. 

First, Biden is likely to be less confrontationalist vis-à-vis Iran as has already been indicated by him. 

Second, Donald Trump had a far better relationship with Gulf Cooperation Council (GCC) countries, like UAE, Saudi Arabia, and others like Turkey and Egypt. Trump made no qualms about getting along with authoritarian leadership of these countries, and turning a blind eye to human rights violations in Saudi Arabia.  

Trump touted agreements between Middle Eastern countries Bahrain, the UAE, and Israel as one of his major achievements. To be fair, even his critics would grant him credit for the same. What puzzled many was his flexibility vis-à-vis North Korea and his obduracy in engaging with Iran. Former President Obama while commenting on the US withdrawal from JCPOA had remarked: 

Indeed, at a time when we are all rooting for diplomacy with North Korea to succeed, walking away from the JCPOA risks losing a deal that accomplishes – with Iran – the very outcome that we are pursuing with the North Koreans

Third, a more flexible engagement will prevent Iran from further swaying towards China, something Washington would want to prevent. One of the key factors cited for the Iran-China 25-year agreement (which will bolster economic and strategic relations between both countries) is the approach of the Trump Administration vis-à-vis Iran. 

Apart from this, Biden, who has repeatedly reiterated the point about engaging with allies, is likely to take their advice. The US President-elect has already proposed a global democracy summit where common challenges confronting the world will be discussed and it is expected that the US will seek the views of allies. 

UK, France, and Germany (E3), and Japan and India, are likely to be in favor of a different approach vis-à-vis Iran, given their economic and strategic interests.  

It is not necessary that Biden is likely to follow a policy identical to Obama’s given that global geopolitical dynamics in general and the situation in the Middle East have witnessed a significant shift. Yet a more flexible and pragmatic US approach towards Iran could prevent Tehran from veering further towards Beijing. It is also important for the US to give more space to its allies to strengthen economic linkages with Tehran. Joe Biden has numerous other challenges, and Iran’s President Hassan Rouhani too has a number of problems to cope with but there is a limited window for at least getting back to the dialogue table and reducing tensions.

New Zealand’s elections and the geopolitics of the Pacific

Introduction 

The convincing victory of Jacinda Ardern is important for more than just one reason. First, the 40 year-old Ardern’s centre-Left Labour party has won convincingly — securing 49% of the vote, and securing 64 seats in the 120 seat assembly. Ardern has delivered the biggest election victory for her party in half a century. The victory gives Ardern and her party the opportunity to form a single party government.  

Second, while there is often talk of a right-wing political discourse being dominant globally, it is important that a center-left leader has won. Many commentators of course would argue that New Zealand is a small country, with a small population of less than 5 million – and that not much should be read into the electoral result.

Third, Ardern’s successful handling of the Covid19 pandemic, along with other women leaders – including German Chancellor Angela Merkel, Taiwanese President Tsai Ing Wen, Bangladeshi Prime Minister Sheikh Hasina, and Denmark’s Mette Frederiksen – has been acknowledged globally. A study published by the World Economic Forum and The Center for Economic and Policy Research makes this point and has cited some of the reasons for the success of the these leaders. The success has been attributed to the fact that all these leaders were quick to react to the crisis. 

Fourth, at a time when the world is becoming insular, the New Zealand PM has been firmly pitching for open immigration policies, has taken a strong stance vis-à-vis Islamophobia (something which leaders of other liberal democracies have failed to do), and repeatedly argued in favor of a more inclusive society. In March 2019, shootings at a Mosque in Christchurch by white supremacists had resulted in the killing of 50 people. Ardern, while expressing solidarity with members of the community, donned a head scarve, or hijab, and this gesture was appreciated. In her victory speech the New Zealand PM stated that the world is becoming increasingly more polarized and that “New Zealanders have shown that this is not who we are.” 

The New Zealand PM has her task cut out on issues related to the economy (the economy had shrunk by 12% in the second quarter thanks to the impact of the lockdown). Like other countries, there have been many job losses. Some of the sectors which have witnessed job losses, such as retail, hospitality, and tourism – employ women (according to some estimates a whopping 90% of people who have lost jobs are women). Some commentators also believe that the Labour government has not been able to deliver on key promises related to housing, child welfare, and the economy. There is also an argument that Ardern’s first tenure was not transformational, and after her win the expectations from her will be much higher.

Foreign Policy Challenges  

New Zealand, in spite of being a small country, is important in the context of foreign policy issues. There are two important dimensions: New Zealand’s ties with China, and as a part of the 11-member Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP).

As far as New Zealand’s ties with China are concerned, there are various layers to the bilateral relationship. Jacinda Ardern’s government has largely gone along with other 5 eye countries when it comes to the issue of allowing Huawei entry into New Zealand’s 5G network. On issues pertaining to Hong Kong, the Uygurs, and the South China Sea too, New Zealand has taken a firm stance vis-à-vis Beijing. After the imposition of the National Security Law in Hong Kong, New Zealand suspended its extradition treaty with Hong Kong, and it also made revisions with regard to its policy on military and dual-use goods and technology exports to Hong Kong, subjecting the city to the same as the People’s Republic of China (PRC). 

During her speech at the China-New Zealand Summit, Ardern said: 

As you know, this has come to the fore recently around developments like Hong Kong’s new security law, the situation of the Uyghur people in Xinjiang province, and Taiwan’s participation in the World Health Organisation.

Like its neighbour Australia, New Zealand has also been taking cognizance of increasing political interference in its domestic politics, via governments, political parties, and universities. There has been bipartisan support for taking measures to check the same. Some policies have been introduced with regard to political donations as well as Foreign Direct Investment. 

At the same time, New Zealand has a close economic relationship with China and this is strong reiterated by figures. In 2019, China accounted for a staggering 33% of New Zealand’s dairy exports, over 40% of meat experts and contributed to 58.3% of international education earnings (it is estimated that in 2019, 87% of New Zealand’s service export earnings from China came from education-related travel and personal tourism).

While there has been a shift in New Zealand’s approach vis-à-vis China, officials have also repeatedly made the point, that it will not blindly toe any other country’s stance vis-à-vis China. 

CPTPP

Another important foreign policy component of New Zealand is as member of the 11-member CPTPP. Along with other countries, New Zealand worked towards keeping supply chains going in the midst of the pandemic. For instance in April, New Zealand sent a first plane load of essential supplies to Singapore. (This included commodities like lamb and beef which were sent by a chartered plane.)

New Zealand and other CPTPP members have also been working to resume essential travel, while Singapore opened a travel bubble with New Zealand on September 1, 2020 (which means that quarantine-free travel will be allowed). 

New Zealand and its neighbour Australia, another member of CPTPP, have opened an air bubble too (though this is one-way as yet only passengers from New Zealand can travel to Australia). The bubble currently is applicable only to two Australian states New South Wales and the Northern Territory.

Conclusion  

In conclusion, the election result is important not just in the context of domestic politics, but in sending a message that there is space for centrist and inclusive politics and that it is not necessary to have a Strong Man image cultivated by many right-wing leaders. It is also important to bear in mind that liberal democracies, which respect diversity, are in a far better position to provide an alternative narrative to that of China. Apart from this, while the shortcomings of globalization do need to be acknowledged and addressed, inward looking economic and immigration policies need to be firmly rejected.

A short note on Iran and India

Introduction

Ever since the withdrawal of the US from the JCPOA (Joint Comprehensive Plan of Action), or the Iran nuclear deal, in 2018, Iran-India economic linkages have taken a hit. The impact on the bilateral economic relationship between New Delhi and Tehran became even more pronounced after India stopped purchasing oil from Tehran in 2019. The US had ended the waiver from sanctions, which had provided to India and a number of other countries, the continued ability to import oil from Iran.

In 2018-2019, bilateral trade between India and Iran was estimated at over $17 billion (mineral oil and fuel imports accounted for a significant percentage of the $17 billion). In 2019-2020, for the period from April-November, bilateral trade was estimated at $3.5 billion. There was a significant drop in Iran’s imports to India, owing to the reduction of Iranian petroleum imports by India to zero.

Downward trajectory in the bilateral relationship

2019 witnessed a downward trajectory as far as New Delhi-Tehran ties were concerned, with Iran expressing its disappointment with New Delhi for not taking a firm stance against Washington. Iranian Foreign Minister, Javad Zarif, in 2019, while making the above point in an interaction with Indian journalists, also stated that ‘if you can’t lift oil from us, we won’t be able to buy Indian rice.’

Chabahar Port and the India-Iran relationship

The US on its part has exempted the strategically important Chabahar Port Project, India’s gateway to Afghanistan, from sanctions. The Port was earlier touted by many as India’s counter to the Gwadar Port (Balochistan Province, Pakistan), which is at a distance of 70 kilometres and an important component of the China-Pakistan Economic Corridor (CPEC). The Government of India had taken over Phase 1 of the Shahid Beheshti Port in December 2018 (according to an agreement India was to operate two berths within Phase 1 of the project). During the Covid-19 pandemic, India had used the Chabahar Port to deliver relief materials to Afghanistan.

After India’s decision to stop the purchase of oil from Iran, and the souring of ties between both countries, Iran has given indicators that it is keen to get Pakistan (Iran had proposed to connect the Chabahar Port with Gwadar Port) and China on board. Iran has also complained that progress on the Chabahar Port was slow due to India’s cautious attitude towards the project, (as a result of both American pressure and delays in funding).

In the aftermath of the Iran-China 25-year agreement, India has been paying greater attention to ties with Iran in general, and the Chabahar Project in particular, a point strongly reiterated by the back-to-back visits of India’s Defence Minister, Rajnath Singh, and External Affairs Minister S. Jaishankar, to Tehran respectively. Connectivity, economic linkages, and issues of regional security (specifically Afghanistan) were discussed during both visits.

There were reports that India had been elbowed out of the Chabahar-Zahedan railway project, an important component of the Chabahar Project, but Iran has categorically dismissed this claim.

Indian exports of Basmati to Iran hit by sanctions

While the India-Iran bilateral relationship is often viewed from the prism of the Chabahar Port and Oil, Iran also accounts for a large percentage of India’s Basmati (an aromatic long grain rice) exports – 34%. There is likely to be a dip this year, due to sanctions, and Iran is already substituting Indian Basmati with Pakistani basmati.

The North Indian states of Punjab and Haryana account for 75 percent of Basmati exports. Indian Basmati exporters and growers have expressed their concern over the likely fall in exports to Iran (which is an important market).

Conclusion

The impact of US sanctions on Iran’s economic ties with India, with Basmati exports being an important example, reiterate the point that the Iran-India relationship is far deeper and multifaceted than is often perceived. While the thrust is on connectivity and geopolitics, the economic links are often overlooked. It is important for New Delhi to seek the views of all domestic stakeholders as far as economic ties with Iran are concerned.

New Delhi should also take a cue from the UK, France, and Germany – also referred to as the E3 – which set up a special purpose vehicle (SPV), known as Instrument in Support of Trade Exchanges (INSTEX), in 2019, to circumvent US sanctions. (During the Covid-19 pandemic, INSTEX was used to provide relief materials to Iran). New Delhi clearly needs to think out of the box, and accord its ties with Iran greater priority given the economic, historical, and political context. The visits of India’s Defence Minister, Rajnath Singh, and External Affairs Minister S. Jaishankar to Tehran in the month of September clearly emphasize the point that India is doing a re-think with regard to its Iran policy, factoring its strategic and economic importance. There is also a realization that Washington’s approach towards Tehran may witness a significant shift if there is a change of guard in November 2020 (which can not be ruled out).

Post-pandemic trends in post-Brexit British foreign policy: Asia or the Atlantic?

Introduction

In January 2020, the UK had given a go-ahead to Chinese telecom giant Huawei to participate in its 5G network – with restrictions and conditions. The Trump administration conveyed its displeasure to the Boris Johnson administration. Not just the US President, but senior officials of the US administration are supposed to have said that this decision would impact economic and security relations between the UK and the US.

In the aftermath of the Covid-19 pandemic, ties between the UK and China have steadily deteriorated. As a result of increasing strains with Beijing, and the imposition of strong US sanctions against Huawei, London began to rethink its approach towards Huawei’s role in its 5G network.

First, it was decided that Huawei’s participation would be reduced to zero by 2023. In May, Britain had also proposed a multilateral grouping of 10 countries, D10 (G7+ India, South Korea and Australia), which could work collectively for reducing dependence upon Chinese technologies.

UK-China ties after the imposition of the National Security Law in Hong Kong

London further hardened its stance vis-à-vis China after the imposition of the National Security Law in Hong Kong, which, according to the UK, is a violation of the ‘one country two systems’ arrangement safeguarded by the ‘Basic law’ of Hong Kong and the Sino-British joint declaration signed in 1985. According to the Boris Johnson administration, the National Security Law will impinge upon not just the autonomy of Hong Kong but freedoms and rights of the residents of the former British colony, guaranteed by the 1985 declaration (these rights were to remain in place for a period of fifty years from 1997 – the year in which British left Hong Kong and handed over sovereignty to China).

Decision regarding Huawei

On July 14, 2020, on the recommendation of National Cyber Security Centre (NCSC), the Boris Johnson administration decided that Huawei will be removed from the 5G network by 2027. It was also decided that the purchase of 5G kits from Huawei will not be allowed after the end of December 2020.

China reacted strongly to the UK’s recent announcement, while it was welcomed by US President Donald Trump. China stated that the UK’s decision will exacerbate tensions, while the US President stated that the Johnson administration took this decision as a result of pressure from Washington. A top official in Boris Johnson’s administration stated that this decision was not driven by US pressure. Said the British Foreign Secretary Dominic Raab:

But I think that decision was made not because the US said it was a good decision but because the leadership in the UK concluded the right thing to do was to make that decision for the people of the UK.

Interestingly, some media reports suggest that British officials have stated that the recent ban on Huawei was imposed with a view to placate Trump, and the UK could revise its decision, if the mercurial US President is voted out in November 2020.

UK-Japan relations

Britain has already begun to look for alternatives to Huawei for developing its 5G network. On July 16, 2020, just two days after the decision was taken to remove the Chinese telecom giant altogether by 2027, British officials are supposed to have met with their Japanese counterparts and sought assistance for developing Britain’s 5G network. Two companies which were discussed as possible alternatives to Huawei were NEC Corp and Fujitsu Limited.

It would be pertinent to point out that in recent months Britain has been aiming to strengthen trade ties with Japan, and is also looking to secure a Free Trade Agreement (FTA) with Japan. Both countries have also been at the forefront of pitching for diversifying global supply chains.

Conclusion

While it remains to be seen whether Britain and Japan can work together for developing the former’s 5G network, the London-Tokyo relationship has witnessed an upswing in the aftermath of Covid-19. Both countries have already begun to take steps for reducing economic reliance on China. It would be interesting to see if Britain sticks to its announcement of removing Huawei from its 5G network by 2027, in case Donald Trump loses in 2020. While Britain is seeking to strengthen ties with countries wary of China’s increasing economic dominance, the former would not likely to be perceived as a mere appendage of Washington.

International students, international trends

Introduction

In the aftermath of the COVID-19 pandemic, there have been numerous discussions with regard to the impact it will have on the sphere of international higher education. Recent decades have witnessed a rise in the number of international students pursuing higher education in the US, the UK, and Australia (in recent years, Chinese and Indian nationals have been the two largest groups within the international student community in these countries).

According to UNESCO, there were over 5.3 million international students in 2017. This was nearly thrice the number of 2000 (2 million). The rise of globalization, which has led to greater connectivity and more awareness through the internet, have contributed towards this trend. It would be pertinent to point out that the global higher education market was valued at a whopping $65.4 billion in 2019.

In a post-corona world, a number of changes are likely to take shape in terms of higher education.

Likely changes in a post-corona world

The first change likely to occur in a post corona world is a drop in the number of Chinese students seeking to enroll at higher education institutions in not just the US, but also in Britain and Australia.

In the case of the US, a number of changes have been introduced with regard to student visas for Chinese students. In 2018, certain changes had already been introduced for Chinese students enrolled in Science, Technology, Engineering, and Management (STEM) courses. Only recently, further changes have been made in the context of student visas for Chinese nationals. According to the new policy, F1 and J1 visas cannot be issued for graduate level work to individuals involved with the People’s Republic of China’s military-civil fusion strategy.

China has warned students planning to pursue higher education in Australia to reconsider their decision given both the COVID-19 pandemic and instances of racism against Asians. Chinese students account for a staggering 28% of the total international community (estimated at 750,000).

And, in Britain, where students from China were issued a total of 115,014 visas in 2019 (a whopping 45% of the total), recent tensions with China after the imposition of the National Security Law in Hong Kong could mean a significant drop in the number of Chinese students enrolling at British universities.

Second, given the disruptions in international travel, a number of students have revised plans with regard to pursuing higher education overseas. According to estimates, international student enrollment in the US could drop by 25%, which will have a significant impact on the economy (in Britain and Australia too, there is likely to be a drop in the number of students enrolled).

Third, universities have made concessions in terms of entrance tests, waiving application fees and even financial assistance, so as to ensure that there is not a drop in take. A number of universities have already confirmed that they are shifting to an online mode of education for the academic year 2020. This includes top universities like Harvard (USA) and Oxford (UK).

Fourth, countries that have an open door immigration policy, like Canada, are still likely to be attractive for international students — especially from India.

Importance of international students

What has also emerged from recent developments is that while governments may not be sensitive to the concerns of international students, universities (and companies) realize the value which international students add by way of talent and skills. Two US institutions, Harvard and MIT, filed a law suit against the US government (Department of Homeland Security and Immigration and Custom Enforcement) for bringing out a notification which stated that international students studying at institutions where classes were being held online would either need to transfer or return home.

All Ivy league institutions and 59 other private colleges signed a court brief supporting the law suit. The Presidents’ Alliance on Higher Education and Immigration, which includes 180 colleges, also lent support to Harvard and MIT. As a result of this law suit, the Trump Administration had to rescind its decision, which would have impacted 1 million students.

Commenting on the judgment, Harvard University President Lawrence Bacow said:

“We all recognize the value that international students bring to our campuses, to this nation, and to the world.”

Conclusion

In recent decades, the free movement of students has been taken for granted. Higher education was an important bridge between countries. In the aftermath of the pandemic, and the souring of ties between China and the rest of the world, international higher education is likely to witness major changes. At the same time, the use of technology also provides opportunities, and there is space for greater collaborations between higher education institutions in the US, the UK, Canada, Australia, and those in the developing world.

The View from New Delhi: China’s post-pandemic belligerence

Introduction

In the aftermath of the Covid-19 pandemic, the increasingly belligerent behaviour exhibited by China in South Asia and South East Asia, and China’s imposition of the National Security Law in Hong Kong, it is interesting to see the tone of the English language media on China.

Yet a genuinely comprehensive peek into the Chinese view on crucial political, economic, and geopolitical issues requires a perusal of the Chinese language papers. This is imperative. The Global Times, the mouthpiece of the Communist Party, is important because it covers the views of Chinese academics and strategic analysts who, through their opinion pieces, provide a deep insight into China’s approach towards those aforementioned crucial issues.

From the opinion pieces at the Global Times over the past few months, one thing is evident: that with the US becoming increasingly unpredictable under Trump, China is virtually invincible. There is a growing belief that Beijing is formidable both in the economic and strategic context. Strategic analysts and journalists writing for the English language daily have also tried to drive home the point that Beijing is in a position to take on the US and its allies, and that any attempt to isolate China would not be taken lying down.

Other articles in the Global Times warn against anti-China alliances, and explain why these alliances will not be possible due to the fault lines between the US and other countries. It has also not refrained from using strong language against countries like Australia and Canada by insinuating that they are acting as mere appendages of the US.

Aggressive stance vis-à-vis countries which blamed China for lack of transparency with regard to the outbreak of the pandemic

Beijing has been scathing in its criticism not only of the US, which took a firm stand against China in regards to the suppression of crucial information pertaining to the pandemic, but also Australia, which had the temerity to ask for an enquiry into the origins of the deadly pandemic. The Global Times lashed out and labelled Australia as a mere appendage of the US, even dubbing it a ‘poodle’ and ‘dog of the US’.

It has also warned other countries, especially Australia, of the economic consequences of taking on Beijing. An article titled ‘Australia’s economy cannot withstand Cold War with China’, written by Wang Jiamei, concludes by saying:

‘…..If a new Cold War leads to a China-Australia showdown, Australia will pay an unbearable price. Given Australia’s high dependence on the Chinese economy, an all-around confrontation will have a catastrophic effect on the Australian economy’

China has followed this harsh rhetoric with sanctions on imports of certain Australian commodities, like barley, and suspended the import of beef. China has also issued warnings to students and tourists that ask them to reconsider travelling to Australia.

This was done days after China’s envoy in Australia, Cheng Jingye, in an interview to an Australian media outlet, had warned of strong economic repercussions (the envoy was referring not just to the impact on Australia-China trade, but on Chinese students pursuing education in Australia and tourists visiting Australia) if Australia continued to adopt a strong stance against China on the issue of an enquiry into the origins of the Covid-19 pandemic (Australia reacted very strongly to this threat).

Beijing unsettled by emerging alliances?

One interesting point is that while commentaries and reportage in the Global Times try to send out the message that China’s rise is inexorable and that Beijing is not daunted by emerging alliances and emerging narratives of reducing economic dependence upon China, it seems to be wary of partnerships and alliances which seek to challenge it. The newspaper repeatedly warns India, the UK, Australia, and various EU member states about the perils of strengthening ties with the US. Even in the midst of recent tensions between India and China, Global Times tried to argue that India would never openly ally with the US and if it did so, this would be damaging. An article in the Global Times states:

It won’t be in the interest of India, if it really joins the Five Eye intelligence alliance. The role of a little brother of the US within a certain alliance is not what India really wants.

The article also tries to dissect differences between the US and India over a number of issues, which are not wrong, but the piece forgets that the two countries do not have differences over strategic and economic issues.

Strong language against Canada

It is not just the US, Japan, Australia, EU member states, and India that the English-language daily has recently threatened. The Global Times has also adopted an aggressive posture vis-à-vis Canada. One article, titled China-Canada ties wane further as Ottawa becomes Washington’s puppet over HK’, suggests that Justin Trudeau was in the ‘pole position in the circle of bootlickers pleasing the US’ and castigates him for the measures he has taken after China tightened its control over Hong Kong via the imposition of National Security Law. Steps taken by Trudeau include suspension of the extradition treaty with Hong Kong and a decision to end the export of sensitive military items to the region.

Cracks in the bilateral relationship had begun to emerge between Canada and China after Canada detained the CFO of Huawei, Meng Wanzhou, on a US extradition warrant (at the end of May, a Canadian court had ruled that Wanzhou could be extradited to the US, much to the chagrin of the Chinese), while Beijing in return has detained two Canadians, Michael Kovrig and Michael Spavlor (both were charged with espionage in June 2020). It would be pertinent to point out that Beijing has signaled its displeasure with Canada by reducing imports of Canadian products like pork and canola oil.

Conclusion

While Beijing itself is becoming more aggressive and belligerent, it cannot expect other countries to stick to their earlier position on crucial strategic issues. It is somewhat unfair to assume that the Global Times, the mouthpiece for China’s Communist Party, can cover the fact that China is on the defensive. Other countries are now finding common ground in the strategic and economic sphere. While the results may not come overnight, partnerships are likely to concretize and gather momentum, because Beijing seems in no mood to give up on its hegemonic mindset and patronizing approach. Yet, other countries and regional blocs also need to have a clear vision to counter China and divergences over minor issues will not help. It is true that a zero-sum approach vis-à-vis China is not beneficial, but for that to happen Beijing too needs to act responsibly, which seems doubtful given its behavior on a number of issues.

The View from New Delhi: Trump vs. Biden

Introduction

In the run-up to the US elections, presumptive Democrat candidate Joe Biden’s lead over Donald Trump has been steadily rising, and is well over 10%, according to various polls. There are four months to the election, however, and it is too early predict the outcome. Many believe that the mercurial Trump is likely to have an ace up his sleeve, and that his popularity within his core constituency is very much intact. Interestingly, one area where Trump has a lead over Biden is confidence with regard to handling the US economy. Trump also scores over Biden in terms of enthusiasm. The current President is lagging behind Biden in terms of important issues like law enforcement and criminal justice issues, foreign policy, the coronavirus outbreak, race relations, and keeping the country united.

Commentators, strategic analysts, and policymakers the world over are keeping a close watch on the US election. The question on everybody’s mind is whether Biden’s foreign policy will be similar to earlier Democrat Presidents like Clinton and Obama, or distinct given the massive economic and geopolitical changes which have taken place globally. According to Trump’s former National Security Advisor, John Bolton – whose memoirs The Room Where it Happened: A White House Memoir have stirred up controversy and come at the wrong time for Trump – a Biden Presidency would essentially mean ‘another four years’ of Obama’s foreign policy.

It is true that Biden has been part of what is dubbed as the ‘Beltway.’ and would be preferred by US liberals and the class of ‘East Coast Intellectuals’ who are dominant not just in academic circles, but the policy circuit as well, given the fact that he may not be as isolationist as Trump, and is likely to be less abrasive vis-à-vis US allies.

In the changed economic and geopolitical environment, globally, the former Vice President will need to tweak his approach on complex economic and geopolitical issues. We may thus witness a significant departure from the policies of Bill Clinton and Barack Obama, for example, as attitudes towards trade had already begun to change during the Obama presidency.

One strong reiteration of the above point is Biden’s stand on the Trans Pacific Partnership (TPP), which was former President Barack Obama’s brainchild, and an important component of what had been dubbed the ‘Pivot to Asia’ policy, which sought to contain China’s growing role in the Asia-Pacific region. (The Trump Administration has sought to build strategic partnerships in Asia through the ‘Free and Open Indo-Pacific’ narrative.) Biden said that he would only join a ‘re-negotiated TPP’ (one of the first steps which Donald Trump had taken when elected to office was to pull the US out of the TPP).

On China, too, Biden is likely to be more hawkish than Obama, though maybe he is less predictable and abrasive than Trump. Biden has already referred to some anecdotes in Bolton’s memoirs, where the Former NSA highlights the point that Trump, in a meeting with Chinese President Xi Jinping on the sidelines of the G20 Summit in Osaka, lent support to draconian measures against the Uighur minority in Xinjiang

Interestingly, in spite of Trump’s tough stance against China on economic issues, such as the imposition of trade tariffs as well as sanctions against Huawei (only recently, Chinese telecom vendors Huawei and ZTE Corporation were declared ‘national security’ threats), a number of Chinese commentators seem to prefer Trump, mostly because he has a simplistic approach, with US business interests being his primary concern. The US President has also not been very vocal on Human Rights Issues. Apart from this, Trump has given mixed signals vis-à-vis US allies. On the one hand, the Administration has spoken about the US working closely with its allies to take on China, and on the other hand Trump has taken measures which have riled allies. A recent instance being the Trump Administration’s announcement of withdrawing US troops stationed in Germany.

Similarly, Trump’s call for reforming the G7 and including Russia was not taken too kindly by countries like Germany and Canada, who believe that an expanded G7 should consist of democracies.

Trump’s rapport with authoritarian leaders

While Trump’s lack of gravitas in foreign policy has had an adverse impact on relations with US allies, he has got along well with authoritarian rulers like Russian President Vladimir Putin, North Korean dictator Kim Jong-un, and Chinese President Xi Jinping, and even praised them. Trump has not just turned a blind eye to human rights violations in Xinjiang, but looked the other way when it came to the brutal killing of Egyptian journalist Jamal Khashoggi in 2018 (the CIA concluded that the Saudi Crown Prince, Muhammad Bin Salman, with whom Trump shares a close rapport, was involved in the killing of Khashoggi).

In the midst of the pandemic, and India’s escalating tensions with China, the US President also suspended non-immigrant work visas, including H1Bs (in recent years, Indians have received well over two-thirds of the total H1B visas which have been issued) until the end of the year. Biden, on the other hand, has been an ardent advocate for closer economic ties with India. The former Vice President had also backed the Indo-US Nuclear deal in 2008 (Biden was then a Senator), and during his visit to India in 2013 he also spoke in favour of a greater role for India in Asia, and the need for both countries to work closely towards this goal.

What has irked many in India, however, is Biden’s criticism of the CAA (Citizenship Amendment Act), NRC (National Register of Citizens), and his support for the restoration of liberties in Kashmir on Biden’s campaign website. It would be important to note that not just Democrats, but even many Republicans, have criticised the increasing religious polarization in India in recent years, and a US government report also underscored the need for religious pluralism in India, highlighting cases of discrimination against minorities. Many right-thinking Indians, too, have been emphasizing on the point that India can not progress without social cohesion and warned against the perils of religious polarization and social divisions.

Conclusion

No US administration can afford to be soft on China any longer, and neither can India with its rising clout be ignored. The US under Biden is likely to cement ties with countries like India and Vietnam while ensuring that allies like Germany, France, and Australia are kept in good humor. What could change is the simplistic approach of Trump, where even links with allies are driven by short term economic gains. It is important to realize that US-India relations are driven by mutual interests, not just individual chemistry between leaders.

The Three T’s in a post-coronavirus world

As countries look to recover from the economic setback caused by the coronavirus pandemic, the three t’s – trade, travel, and technology – are likely to play an important role in getting the global economy back on the rails.

Trade

Even in the midst of the pandemic, countries have been in talks regarding Free Trade Agreements (FTA’s). The UK is seeking to sign an FTA with not just the US but also Japan, so as to buttress the bilateral economic relationship and get entry into the 11-member Comprehensive Partnership for Trans Pacific Partnership (CPTPP). Vietnam’s national assembly also ratified an FTA with the European Union known as EUVFTA (European Union Vietnam Free Trade Agreement) on June 8, 2020. According to the FTA, the EU will lift 85% of its tariffs on Vietnamese exports, while the remaining tariffs will be removed over a period of 7 years. Vietnam on the other hand will lift nearly half (49%) of its import duties on EU goods, while the rest of the tariffs will be removed over a period of 10 years.

The CPTPP is also likely to expand in the near future. Japan is seeking to get Thailand, Taiwan, Indonesia, and the Philippines on board. Tokyo’s aim is to reduce dependence on China by creating an alternative set of supply chains through multilateral networks.

Technology

In recent weeks, there has also been a growing debate with regard to creating new technologies, so that the dependency upon Chinese technologies is reduced. One important step in this direction is the UK’s suggestion for creating an organisation, called D10, which consists of the original G7 countries plus India, South Korea, and Australia. The aim of the D10 is to provide alternative technologies so that dependence upon Chinese technologies is reduced.

At London Tech Week, a report titled “Future Tech Trade Strategy” was given by British Trade Secretary Elizabeth Russ. Russ spoke about a new £8 million initiative which would enable British companies to expand tech ties with Asia-Pacific countries, especially Japan and Singapore. British companies will also be assisted by tech experts stationed in its high commissions and embassies in these countries.

Travel

In recent days, the resumption of international air travel has also also been an important matter of discussion. Three members within the 11-member CPTPP – Japan, New Zealand, and Australia – have already been in talks for resuming air connectivity. Japan is also likely to ease its entry ban from countries like Vietnam and Thailand where Covid-19 cases have reduced.

Singapore, another member of the CPTPP, is also in talks with South Korea, Malaysia, and New Zealand for resumption of air connectivity. (Singapore Airlines and Silk Air have been flying passengers from select destinations in Australia and New Zealand to Singapore’s Changi Airport throughout the pandemic.)

China, too, has been seeking to revive air travel. While China has recently set up a travel corridor with South Korea, it has also signed an agreement with Singapore for reciprocal travel for essential purposes – business and official. Initially, this arrangement will be for 6 provinces – Shanghai, Tianjin, Chongqing, Guangdong, Jiangsu, and Zhejiang (travellers will need to apply for a visa in advance, and get tested for the corona virus both before departing for China and after arriving there).

Vietnam, which removed its lockdown at the end of April and resumed domestic flights, is also reviving international travel with a few select countries, such as South Korea (South Korean students can enter the ASEAN country through a special permit).

The EU is seeking to resume air connectivity with non-EU countries by the 1st week of July (the EU has already opened travel within EU member states), and it is likely that air connectivity with countries considered low risk will also resume shortly.

The resumption of travel will of course be undertaken on a step-by-step basis. Japan, for instance, has indicated that it will open its air connectivity with other countries in stages; first for businessmen, then students, and finally tourists. What is fascinating to observe is that the narrative with regard to the three t’s is not being set by the West, it is being set by Asian countries. Even within Asia, it is not just a China-driven narrative. Japan is playing an important role and, from within ASEAN, it is not just Singapore but Vietnam as well which has emerged as an important stakeholder.

Conclusion

In a post-corona world there are likely to be a number of changes, with geopolitical and economic dynamics in Asia likely to witness a significant shift.

What is also interesting to note is that travel and technology – two of the three t’s – were broadly thought of as key ‘soft power’ tools prior to the Covid-19 pandemic. Post the pandemic, there will be a strong ‘hard Power’ component to these two t’s. While in the context of travel, each country will be cautious with regard to opening up air travel, and stick to linkages with countries that have managed to control the corona virus; as far as technology is concerned, due to the rising tensions with China, the creation of alternative technologies is likely to be viewed as a security requirement (trade, the third t, had already acquired a strong strategic component even before the outbreak of the pandemic).

What will a post-pandemic British foreign policy look like?

Introduction

The United Kingdom’s post-corona foreign policy is likely to be driven by some crucial economic factors. On the one hand, it will continue to work closely with countries like the United States, Japan, Australia, and India to reduce its dependence upon China. On the other hand, the UK cannot totally bank on the US for achieving its economic goals, given the unpredictability of US President Donald Trump.

The UK needs to look at new Free Trade Agreements (FTA’s) and also be part of multilateral arrangements, such as the Trans Pacific Partnership, which will enable it to diversify its supply chains.

Important upcoming economic decisions

Given the changing environment of the post-corona world, London now has an eye on enhancing self-sufficiency and reducing reliance on China.

The Boris Johnson government has set up a committee — ‘Project Defend’ — which seeks to study the UK’s economic dependence with hostile countries (with a specific thrust on China), especially for sensitive imports. Based on the findings of Project Defend’s report, for example, the UK will work towards the relocation of pharmaceutical companies. While changing supply chains overnight may not be an easy task, the Boris Johnson Administration has made an important decision.

The UK’s recent decision on Huawei

The Boris Johnson Administration has also recently decided to reduce Huawei’s participation in the 5G network to zero by 2023. In January 2020, Boris Johnson had given a go ahead to Huawei’s participation in the ‘non-core’ element of the 5G network, with important restrictions, as well as a 35% market share cap. This decision drew flak from a section of Conservative Party politicians, who for long have been arguing that the UK needs to be cautious with regard to close economic ties with China, since this has serious security implications. The Trump administration had also expressed its displeasure with the Boris Johnson administration. The US President and senior officials in his administration have publicly expressed their unhappiness, saying that this decision could have an impact on security cooperation between both countries.

In the aftermath of the coronavirus pandemic, ties between the UK and China have gone downhill (senior officials of the Johnson administration have criticized China for suppressing information with regard to the outbreak of the pandemic), and Johnson’s decision was driven by two factors: 1) increasing pressure from Conservative MP’s who had threatened to vote against the government’s decision, and 2) the fact, that the UK is keen to go ahead with an FTA with the US (there have been differences between the US and UK, however, on the issue of the FTA, with the US urging the UK to make a choice between China and the US).

Apart from this, the recent US sanctions imposed on Huawei have also played a role in Johnson’s decision of reducing Huawei’s participation by 2023 (the Trump administration has made it compulsory for foreign manufacturers using U.S. chipmaking equipment to obtain a license before being able to sell chips to Huawei).

D10 network

Interestingly, the UK has also proposed that a group of 10 countries, dubbed as D10, joins hands to provide an alternative to Huawei’s 5G network and other technologies with the aim of reducing dependence upon China. The proposed grouping would consist of the US, Italy, Japan, the UK, South Korea, India, Germany, France, Canada, and Australia.

The UK has thus taken the lead in providing an alternative to the now bipolar status quo. Significantly, Trump has also stated that he is keen to expand the G7 and include not only India and South Korea but Russia as well.

UK also keen to play an important role in the TPP

While on the one hand the UK is trying to reduce its dependence upon China by joining hands with the US and like-minded countries, on the other the UK is also seeking membership within the Comprehensive and Progressive Agreement for Trans Pacific Partnership (TPP), which consists of 11 members (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam).

While the idea of the TPP was proposed by former US President Barack Obama, the first decision taken by Trump after his electoral triumph in 2016 was to withdraw from the agreement. Japan has been playing an important role in the TPP, and efforts are being made to expand its membership so that democratic dependence on China is still further reduced.

The UK faces numerous challenges and while it does need to reshape its economic relationship with China, London recognizes that this cannot be done overnight, so enhancing FTAs and joining the TPP are important steps in geopolitical context.

From a purely strategic perspective, the UK-US relationship has been important and with Johnson and Trump at the helm, and increasing convergence on attitudes vis-à-vis China, this is likely to get further strengthened (though of course there will be differences on both economic and geopolitical issues). The idea of the D10 grouping mooted by the UK has also sent a clear message that in spite of numerous economic challenges, the UK is keen to emerge as an important player, in its own right, in the post-corona world order.

Multilateralism is alive and well in the Indo-Pacific

Introduction

The Comprehensive and Progressive Agreement for Trans Pacific Partnership (CPTPP) trade agreement, also known as CPTPP 11, consists of 11 member states (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam).

The TPP agreement was a brain child of former US President Barack Obama. The main objective of the agreement was to bolster Obama’s ‘Pivot to Asia’ vision, and it was signed in February 2016.

Significantly, one of the first decisions taken by US President Donald Trump upon his election was to withdraw from the agreement. The main reason cited by Trump for this decision was that the TPP agreement was not favourable towards US workers. During the Presidential campaign of 2016, Trump had repeatedly said that apart from leading to job losses of US workers, the agreement would undermine US independence.

In April 2018, Trump had stated that the US was willing to join the TPP if it was offered a better deal, but by then other countries which were part of the original TPP had moved on, and the CPTPP 11 came into force in the end of 2018 (after a majority of signatories, Australia, Canada, Japan, Mexico, New Zealand, and Singapore ratified the agreement).

How the agreement has enhanced trade linkages between member states

CPTPP 11 has helped in bolstering economic cooperation between a number of member states such as Japan, Canada, and Vietnam. During Shinzo Abe’s visit to Canada in 2019, Canadian PM Justin Trudeau made a mention of how the deal had enabled Canada to increase its exports threefold to Japan. Trudeau also stated that the deal had been beneficial for strengthening economic ties between Canada and Japan.

According to estimates, the agreement has also helped in bolstering trade not just between Vietnam and Japan, but also between Vietnam and Canada.

Efforts to keep supply chains intact

In the midst of the corona virus pandemic, CPTPP 11 member states like Japan, Singapore, and New Zealand have been working assiduously towards keeping supply chains intact.

Singapore has been exporting meat and medical products from New Zealand and has also been seeking to strengthen its economic ties with Japan in the midst of the pandemic. In April, several CPTPP 11 members — Singapore, Australia, New Zealand, and Brunei — issued a joint statement along with Myanmar (a non-CPTPP 11 member) on the issue of opening trade lines, including air and sea freight.

Singapore, Australia, New Zealand, and Canada, along with non-CPTPP 11 member South Korea, have also been exploring the possibility of resuming essential travel.

What is also interesting is the success of some of the CPTPP 11 member states in dealing with the coronavirus pandemic, especially Vietnam and New Zealand. As of May 16, 2020, Vietnam recorded 318 coronavirus cases and did not register a single death. The ASEAN nation began to ease the lockdown in the end of April. As of May 16, 2020, the number of coronavirus cases in New Zealand was 1149, and number of deaths was 21 (New Zealand ended a 7 week lockdown on May 14, 2020).

Efforts to rope in new members into the partnership

After the coronavirus pandemic, more countries are likely to get on board with the CPTPP 11, including the United Kingdom. In Asia, Japan is also trying to get Malaysia and Thailand on board with the CPTPP 11. The main aim of Japan, which will chair the CPTPP 11 in 2021, in getting these countries on board is reducing its dependence upon China (Tokyo imports over 20% of its intermediate goods from China). Thailand could be an important addition to the CPTPP 11 because it has been relatively successful in dealing with the pandemic as of now, and apart from its economic relevance, Thailand has been working closely with several CPTPP 11 members in their endeavor to resume essential travel.

Conclusion

The CPTPP is thus important for a number of reasons. First, it is providing an alternative narrative to China’s Belt and Road Initiative — especially in the context of the Indo-Pacific (Japan’s desire to get new countries on board is a strong reiteration of the same).

Second, the CPTPP is a clear reiteration that globalization in a post-corona world is not likely to be driven by Washington and Beijing (many members of the partnership, such as Japan, New Zealand, and Vietnam, have an important role to play).

Third, it is an interesting instance of an arrangement where not all member states have similar political systems, but are bound by common economic interests.

In the post-corona world, the relevance of the CPTPP is likely to rise, and it remains to be seen how Beijing and Washington react to this.

Expect a new, decentralized narrative in the post-Coronavirus world

Introduction

Many analysts have argued that the US and China will continue to be the two most important global players in a post-corona world, but they will not be the sole drivers of the narrative with regard to economic and geopolitical issues. While the US has become insular under Trump and has failed to foster a spirit of international cooperation even during the midst of the coronavirus pandemic, China’s suppression of crucial information with regard to the coronavirus has been criticized by a number of countries – not just the US.

During the midst of the coronavirus pandemic itself, many countries have risen to the occasion not just in terms of dealing with the pandemic, but also providing assistance to other countries. This includes the Asian countries of South Korea, Taiwan and Vietnam, and Western countries like Germany and France, which have both risen to the occasion by speaking up for removal of sanctions against Iran, and also providing financial assistance.

Increasing importance of South Korea, Taiwan, and Vietnam

If one were to look at the instance of Asia, countries like South Korea, Taiwan, and even Vietnam, which has been successful in controlling the virus, are likely to enhance their stature globally, and will become even more relevant in the economic and strategic sense not just in Asia, but on the global stage.

All three countries have provided medical assistance to a number of countries, including the US. Taiwan and Washington have also joined hands to carry out research and to develop a vaccine for finding a cure for the virus.

The success of South Korea and Taiwan blunts the narrative about authoritarian governments being in a position to control the epidemic better, an argument which Beijing has been trying to push. The success of Vietnam has shown that resources are helpful, but not necessary, for handling situations like pandemics. Even with meagre resources, the ASEAN nation has restricted the number of cases and not recorded a single death so far. This has been attributed to the timely response by the country’s leadership. Vietnam has also been able to relax the lockdown and open certain businesses.

India too has been able to contain the spread of the virus and has provided aid and assistance to a number of countries in spite of a paucity of responses.

In a post-corona world, China is not likely to drive the Asian narrative.

Western narrative: Not driven by the US

In the West, while Trump has been criticised for his handling of the coronavirus, Germany has been relatively successful in containing the outbreak of the virus compared to other EU member states. What is interesting is that while Germany has publicly criticised China it has not taken the US stand on a number of issues.

First, along with the UK and France, Germany provided medical assistance to Iran via the Special Purpose Vehicle (SPV), which had been set up to circumvent sanctions imposed against Iran (the medical assistance reached Iran on March 31, 2020).

Second, when Trump reduced US funding to the World Health Organisation (WHO), Merkel spoke in favor of greater international cooperation, and support to WHO at this point of time, while also indirectly criticizing the step taken by Trump. Even in the past, Merkel has been at variance with Trump on numerous issues including the US approach to Iran and Trump’s approach towards globalization.

Emmanuel Macron too has been critical of China, but not necessarily echoing the US line. Both leaders have also been emphasizing the need for revival of the European Union (EU) and making it relevant.

Conclusion

In a post-corona world, a number of changes are likely to occur in the world order. First, if smaller countries have been successful in dealing with the pandemic their stature will rise, and they will benefit both in economic terms as well as geopolitical clout.

Second, the belief that a democratic system is incapable of dealing with a crisis like the coronavirus has also been challenged.

Third, the international world order will have numerous layers, and the influence of both Washington and Beijing on the narrative are likely to reduce with new players likely to speak up on crucial economic, environmental, and strategic issues. While trade and travel may be restricted, there is a possibility of greater ‘international cooperation’ and a new narrative which does not emanate merely from Washington or Beijing, but collectively from a number of countries.

Finally, cooperation will not be restricted merely to regional blocs or geography. In a number of instances, medical aid and assistance has been extended by one country to another far flung country. The new world order promises to be an interesting one, though it will be complex.

The view from New Delhi: Pakistan and the coronavirus

Introduction

The number of cases arising out of coronavirus in Pakistan continues to rise steadily. As of April 14, 2020, there were well over 5,000 cases (5,716) and deaths due to the virus totaled 96. China is providing assistance to Pakistan in dealing with the virus, and apart from medical assistance in the form of materials (including ventilators, masks, test kits, protective clothes), a team of medical experts reached Pakistan on March 28 for a period of two weeks. The team of Chinese medical experts argued for the extension of the lockdown in Pakistan (especially the province of Punjab, which has been hardest hit by the epidemic), arguing that one of the factors which helped China in controlling the further spread of the outbreak was the lockdown.

While the Chinese delegation laid great emphasis on extending the lockdown, and greater ‘social distancing’, one of the major challenges for the Pakistan PM, Imran Khan, has been the state of Pakistan’s economy. It is for this reason that he was reluctant to go in for a lockdown, but eventually pressure from opposition parties (the province of Sindh went for a lockdown even before the Federal Government) and, more importantly according to some, from the Army was what finally compelled Khan to go in for the lockdown.

On April 12, in an appeal on social media to the international community, the United Nations Secretary General, and the world’s international financial institutions, Khan appealed for ‘debt relief’ to developing countries.

Khan also pointed to the fact that the challenges faced by developing and developed countries were markedly different. Said the Pakistan PM:

While in the developed world, the main dilemma is containing with the coronavirus through lockdowns and then dealing with the economic impact, in the developing world, apart from containing the virus and dealing with the economic crisis, our biggest worry now is people dying of hunger.

He also pointed to the need for an initiative with a thrust on ‘Global Debt Relief’, one where all stakeholders are brought on board for coming up with a well-thought out economic and health response to the pandemic.

Welfare measures by the government

As the number of cases has been rising continuously, Khan has warned people to take the necessary precautions, saying that the country’s hospitals may not be able to cope with the rising number of cases. The Pakistan PM – who had earlier announced a stimulus package (to the tune of Rupees 1.2 Trillion Pakistan) to provide relief to labourers, businessmen, as well as the middle class – also stated that the government would start distributing cash to poor families through a program: ‘Ehsas Emergency Cash Program’. According to this program, Rs. 144 billion (Pakistani) would be distributed amongst 12 million low income families.

Chinese Assistance

While Chinese assistance to Pakistan has been drawing attention, with both countries laying emphasis on the point that the bilateral relationship is an all weather one and that the ‘Pakistan-China All-weather Strategic Cooperative Partnership’ has grown under the leadership of Chinese President Xi Jinping and Khan. Pakistan Foreign Minister, Shah Mehmood Qureshi, while receiving the team of Chinese medical doctors which arrived in Pakistan on March 28 stated:

Chinese have once again shown to the world that they are friends of Pakistan. They care for us. We stand with each other in difficult times. This is a unique relationship and such testing times tell us how close we are to each other.

China on more than one occasion has thanked Pakistan for the assistance, which it had provided when the coronavirus outbreak had begun and has assured full support to Pakistan. Pakistan’s President, Arif Alvi, had also undertaken a trip to China in March, in order to show solidarity with it’s ‘all weather’ ally (he was the first head of state to visit China after the outbreak of the deadly epidemic). Alvi’s China visit took place days before the lockdown was initiated in Pakistan, and a number of MOU’s were signed between both sides to counter the deadly epidemic. While Pakistan wanted to extend its solidarity with China, something which was acknowledged by Beijing, it also got assurance regarding its own fight against the coronavirus.

Commenting on his China visit, Alvi said:

China trip was very beneficial to show support & counter propaganda. We also need to get technical help from them for biggest health crisis Pakistan is going to face. Their experience is unique. Six hours of exhaustive meetings took place. Signed many MOUs for #iFightCorona.

Assistance from other quarters

While it is true that Beijing has been quick to provide logical assistance to Pakistan, China’s financial assistance would not have been sufficient for Pakistan to provide much-needed relief to the not-so-privileged in Pakistan. In this context, the International Monetary Fund has acceded to Pakistan’s request of $1.4 billion (under the Rapid Finance Instrument for fighting the coronavirus) according to sources. This amount would help Pakistan to increase it’s foreign exchange reserves as well as provide budgetary support at a time when the country faces a serious economic slowdown. The World Bank and Asian Development Bank (ADB) have also provided Pakistan aid – to the tune of $1 billion and $1.5 billion, respectively. The Pakistan PM had referred to the assistance provided by international financial institutions in his social media recording on Sunday.

It would be pertinent to point out that Pakistan is already working with the IMF on a three year program called the Extended Fund Facility Program (EFF). The organization had sanctioned $6 billion and, according to analysts and rating agencies, it is the reform program of the IMF, which had played a key role in Pakistan being able to stabilize its economy (in December 2019, Moody’s Investors Services had raised Pakistan’s credit rating to ‘stable’ from negative). Pakistan has reiterated its commitment to the EFF (due to the current crisis, the IMF will be unable to release the third trance, $450 million, of the $6 billion total loan).

Not only has the assistance from IMF, ADB, and World Bank come as a major relief for Pakistan as it battles the coronavirus, Islamabad will also be heaving a sigh of relief after the review of Pakistan’s greylisting by the  FATF (Financial Action Task Force) has been pushed from June to August/September 2020. Pakistan, which was put on the watchdog’s greylist in 2018, was given 27 points to comply with, and it has only been given two extensions after failing to convince FATF on 13 of the 27 points (Beijing has been extending support to Pakistan). While Islamabad was supposed to submit its progress in April 2020, it has now got time till July 2020 to address the points it needs to comply with. In the long run, it will need to address the points raised by FATF if it wants access to international financial institutions and needs to carry out transactions without any problem.

Imran Khan’s dilemma with regard to the lockdown

In the last few months, Pakistan’s economy was beginning to show some signs of a revival, and this was acknowledged by international agencies and a number of countries who had begun to show interest in investing in the country. There is no doubt whatsoever that the coronavirus has come as a sudden setback. With the number of cases steadily rising, Khan’s challenges are only going to increase and the dilemma for the Khan administration will be the length of time of the lockdown. Businesses have been opposed to the lockdown and sooner or later are likely to pressure Khan to lift lockdown orders (a decision has already been taken to open some companies, which supply to brands like Puma and Nike, with only essential employees, while taking key precautions such as ensuring regular disinfection), as well as a more comprehensive package which Khan’s government may not be able to provide. Opposition parties, the Pakistan army (which has not been on the same page as Khan on a number of issues, including the handling of the coronavirus), and China, upon whom Pakistan is dependent, have of course been backing the lockdown. Given the lack of medical facilities, there may not be any other option but to lockdown.

Conclusion

In the midst of all these challenges, there is some relief for Pakistan:

First, while Islamabad may publicly hail China for its assistance, the assistance from multilateral bodies like the IMF, World Bank, and ADB has been what’s helped Pakistan deal with the coronavirus crisis. The assistance provided by these institutions also raises the point of whether the obituary of ‘internationalism’ and ‘multilateralism’ and the relevance of international institutions, with all their flaws, was rather premature.

Second, the delay in the FATF gives Pakistan some more time, though it will have to address the remaining points and can not be evasive in the long run. Turning a blind eye to the activities of terror groups and their financing is not likely to benefit Pakistan in any way.

Islamabad’s task is cut out however, and it remains to be seen how the government deals with the multiple problems arising out of the coronavirus (Pakistan’s growth forecast for 2020 has been reduced from 2.6% to 0.8% for the current fiscal year). In the short run, it may be able to weather the storm, albeit with great difficulty, but in the longer run it is in for some serious problems. Pakistan’s government would however be relieved with the above two developments at this point of time.

Coronavirus and the BRI

The Corona Virus epidemic has shaken the world in numerous ways. The virus, which first emerged in the Chinese city of Wuhan (Hubei province), has led to the loss of over 12,000 lives globally. The three countries most impacted so far have been Italy (4,825 lives lost), China (3,287 lives lost), and Iran (1,500 lives lost) as of Saturday, March 21, 2020.

While there are reports that China is limping back to normalcy, the overall outlook for the economy is grim, to say the least, with some forecasts clearly predicting that even with aggressive stimulus measures China may not be able to attain 3% growth this year.

The Chinese slow down could have an impact on the country’s ambitious Belt and Road Initiative (BRI). While China has been trying to send out a message that BRI will not be impacted excessively, the ground realities could be different given a number of factors.

One of the important, and more controversial, components of the BRI has been the $62 billion China Pakistan Economic Corridor (CPEC), which has often been cited as a clear indicator of ‘Debt Trap Diplomacy’ (this, some analysts argue, is China’s way of increasing other country’s dependency on it, by providing loans for big ticket infrastructural projects, which ultimately lead to a rise in debts).

The US and multilateral organizations like the International Monetary Fund (IMF) have predictably questioned the project, but even in Pakistan many have questioned CPEC, including politicians, with most concerns revolving around its transparency and long-term economic implications. Yet the Imran Khan-led Pakistan Tehreek-E-Insaaf (PTI) government, and the previous Pakistan Muslim League (Nawaz) (PML-N) government, have given the project immense importance, arguing that it would be a game changer for the South Asian nation.

On more than one occasion, Beijing has assured Pakistan that CPEC will go ahead as planned with China’s Ambassador to Pakistan, Yao Jing, stating on numerous occasions that the project will not be hit in spite of the Corona Virus. Senior officials in the Imran Khan government, including the Railway Minister Sheikh Rashid Ahmed and Foreign Minister Shah Mehmood Qureshi, in an interview with the Global Times, stated that while in the short run Corona may have an impact on CPEC, in the long run there would be no significant impact.

Analysts in Pakistan however, doubt that there will be no impact, given the fact that a large number of Chinese workers who had left Pakistan are unlikely to return. Since February 2020, a number of reports have been predicting that the CPEC project is likely to be impacted significantly.

Similarly, in the cases of other countries too, there are likely to be significant problems with regard to the resource crunch in China as well as the fact that Chinese workers cannot travel. Not only is Beijing not in a position to send workers, but countries hit by COVID-19 themselves will not be in a position to get the project back on track immediately, as they will first have to deal with the consequences of the outbreak.

Some BRI projects which had begun to slow down even before the outbreak spread globally were in Indonesia and Bangladesh. In Indonesia, a high speed rail project connecting Jakarta with Bandung (estimated at $6 billion) has slowed down since the beginning of the year, and ever since the onset of the Corona Virus, skilled Chinese personnel have been prevented from going back to Indonesia. Bangladesh too has announced delays on the Payra Coal power plant in February 2020. As casualties arising out of the virus increase in Indonesia and other parts of Asia and Africa, the first priority for countries is to prevent the spread of the virus.

While it is true that Beijing would want to send a clear message of keeping its commitments, matching up to its earlier targets is not likely to be a mean task. Even before the outbreak, there were issues due to the terms and conditions of the project and a number of projects had to be renegotiated due to pressure from local populations.

What China has managed to do successfully is provide assistance for dealing with COVID-19. In response to a request for assistance from the Italian government, China has sent a group of 300 doctors and corona virus testing kits and ventilators. The founder of Ali Baba and one of Asia’s richest men, Jack Ma, has also taken the lead in providing assistance to countries in need. After announcing that he will send 500,000 coronavirus testing kits and 1 million masks to the United States, Ma pledged to donate more than 1 million kits to Africa on Monday March 17, 2020, and on March 21, 2020, in a tweet, the Chinese billionaire said that he would be donating emergency supplies to a number of South Asian and South East Asian countries — Afghanistan, Bangladesh, Cambodia, Laos, Maldives, Mongolia, Myanmar, Nepal, Pakistan, and Sri Lanka. The emergency supplies include 1.8 million masks, 210,000 test kits, 36,000 protective suits and ventilators, and thermometers.

China is bothered not just about it’s own economic gains from the BRI, but is also concerned about the long term interests of countries which have signed up for BRI.

The Corona Virus has shaken the whole world, not just China, and the immediate priority of most countries is to control the spread of the pandemic and minimize the number of casualties. Countries dependent upon China, especially those which have joined the BRI, are likely to be impacted. What remains to be seen is the degree to which BRI is affected, and how developing countries which have put high stakes on BRI related projects respond.

Coronavirus and the spirit of internationalism

Introduction

Iran has asked the International Monetary Fund (IMF) for emergency funding (it is for the first time since 1962 that Iran has sought IMF assistance) to fight the deadly Corona Virus outbreak (COVID19).

As of Saturday, March 14, 2020, Iran reported over 600 deaths (611) and over 12,000 cases arising out of the deadly virus. That makes Iran the third most affected country in the world after China and Italy. A number of prominent personalities, including the country’s Vice President (Eshaq Jahangari) and two other senior cabinet members, have contracted the virus.

On Wednesday, March 4, 2020, the IMF’s managing director, Kristilina Georgieva, stated that developing countries will be supported in their efforts to take on the Corona Virus through the Fund’s Rapid Financial Instrument. The IMF announced a $50 billion aid package with the aim of specifically assisting ‘low income’ and ‘emerging market’ economies. (On Monday, the World Bank had announced a $12 billion package to deal with the epidemic.)

Iran’s Central Bank chief, Abdolnaser Hemmati, said on Thursday that he had written to the IMF requesting $5 billion in emergency funding via the latter’s Rapid Financing Instrument. In a tweet on Thursday, the Iran’s Foreign Minister, Javad Zarif, urged the IMF to release this amount immediately. The Iranian Foreign Minister also said that Iran was facing a severe shortage of medicines and equipment. US sanctions on Iran, which have prevented it from selling oil or participating fully in the world’s financial ecosystem, have had a detrimental impact on the country’s economy. Iran, in a letter to the UN Secretary General Antonio Guerres, stated that US sanctions should be suspended keeping in mind the current crisis.

Iran’s apprehensions

Even if the IMF were to agree to releasing $5 billion for Iran, there are a number of obstacles that may result in Iran not being able to get the money from the IMF. First, the US is part of the IMF’s decision-making board (interestingly, in his tweet Zarif had stated that the IMF/IMF board should act responsibly) and even if the IMF agrees to disburse the amount, given the strains between Washington and Tehran it is quite possible that the US will veto such a move by the IMF. If Trump is willing to annoy US allies like the EU (on Wednesday, Trump took a decision to suspend flights from 26 Schengen countries to US, for a period of 30 days without consulting the EU), there is no reason why he will adopt a nuanced approach towards Iran.

Second, the Financial Action Task Force (FATF) has blacklisted Iran, which means that even if IMF agrees to provide the loan, banks and financial institutions can block such transactions.

Corona Virus is an opportunity for the US to exhibit statesmanship and maturity, and also lower tensions with Iran. While Trump has claimed to being open towards engaging with the Iranians, and seems to have changed his approach towards Tehran, he has not really exhibited much statesmanship in dealing with Tehran. Ever since the killing of Iranian General Qasem Soleiman (a major general in the Islamic Revolutionary Guard Corps) in a drone attack, in January 2020, ties went further downhill.

Opportunity for the US

This is an opportunity for the US to send a positive message to the international community, and to also distinguish between the Iranian public and its political class. China’s messaging with regard to helping the international community has been far better. On March 12, 2020, a team of Chinese doctors reached Italy (Italy, which is the most worst hit nation after China, had requested assistance from the latter). A number of Italian leaders have also criticised EU countries for being slow in reacting to Italy’s call for assistance.

Positive steps taken by China

What is also significant is that at a time when Washington and Beijing have been engaged in unnecessary mud-slinging with regard to the virus, with the US Secretary of State Mike Pompeo dubbing the Corona Virus as ‘Wuhan Virus’, and a senior Chinese diplomat responding by calling it a ‘conspiracy’ by the US army, on Friday March 13, 2020, Chinese billionaire Jack Ma stated in a tweet that he would donate one million face masks and 500,000 corona virus testing kits to the US. Earlier, Jack Ma’s charitable foundation, and his China-based company’s foundation, the Alibaba Foundation, had already donated supplies to a number of countries including  Japan, Korea, Italy, Iran, and Spain.

Conclusion

In case, the US does not agree to provide immediate assistance to Iran, other countries should step in including US allies like the UK, EU member states, and Japan. It is also important for multilateral organizations to show their teeth and not allow petty politics to come in the way of the fight against COVID 19. The Corona Virus is a clear reiteration of the point that while there may be numerous problems with economic globalization, we live in a truly interconnected world however much we may try to obliterate this fact. Humanity should trump petty politics and bickering, and this is an opportunity to revive the true spirit of internationalism.

Biden vs. Sanders: The view from New Delhi

After Joe Biden’s remarkable performance on Tuesday, March 3, 2020, where he won 10 states, Wall Street surged on Wednesday. Many argue that the former Vice President, with his centrist economic views as compared to Senator Bernie Sanders, would be more acceptable not just to centrist supporters of the Democrats, as well as US corporates, but interestingly even some Republicans who are not comfortable with Trump’s economic policies. Donors of the Democratic Party are also rallying behind Biden, and Sanders is trying to use this point in his favor, saying that the ‘political establishment’ is not happy with his rise. The Vermont Senator, with his radical economic policies, has based his campaign on challenging the current status quo (where a section of the elite have disproportionate influence).

If one were to look at Biden’s key stand on foreign policy issues, his remarks on Afghanistan were criticised not just by Afghan leaders but also strategic analysts. Biden stated that US should not be concerned with ‘nation building’ in Afghanistan, but rather with countering terrorism. Reacting to his remarks, spokesman for Afghan President Ashraf Ghani stated:

Afghanistan fought and stood as a whole nation to the face of tyrants such as the Soviet Invasion, Terrorism invasion and now, it is in the front lines so that the other nations are safer. ISIS [Daesh] & the Taliban, the major terror networks and the enemies of the world are defeated here.

Former Afghan President Hamid Karzai stated that Biden’s remarks were ‘unrealistic and immature’ and sent a message that US was not really concerned about nation building in Afghanistan. Other observers of Afghanistan were also surprised by Biden’s remarks (as number 2 in the Obama Administration, he played a key role in the formation of the Unity government in 2014).

On China, Biden’s approach seems to be more nuanced than Trump’s. In May 2019, he stated that while US needed to watch its own interests, excessive paranoia vis-à-vis China was uncalled for. A month later (in June 2019) he stated that “China poses a serious challenge to us, and in some areas are a real threat.”

At the same time, like the Republicans and Democrats, Biden has opposed the entry of Huawei into the United States’ 5G network, arguing that this would be a security threat (in a presidential primary debate, Biden alluded to this point along with other candidates). Interestingly, an article in China’s main English-language daily, Global Times, argues that Biden would be a better bet for China than Bernie Sanders given that he is more predictable and has experience in dealing with China.

One issue on which Biden has drawn flak from Bernie Sanders is the Trans Pacific Partnership (TPP), a brain child of former President Barack Obama (TPP was an important component of Obama’s ‘Pivot to Asia’ policy which sought to counter China’s economic and strategic influence in the Asia-Pacific region – now referred to as Indo-Pacific).

Sanders’ approach to TPP is identical to that of Trump (whose first decision was to pull out of the TPP). Sanders had praised Trump’s decision saying that this decision was in the interest of American workers.

The Vermont Senator has argued that Biden supported the TPP, which would be damaging to American workers. While seeing the popular mood, Biden has revised his stand and stated that he would go ahead with the deal but will renegotiate it (interestingly, Trump’s 2016 opponent Hillary Clinton also turned against the TPP even though as Secretary of State she had fervently backed the deal).

When in power, the approach to crucial policy issues changes and that could be the case as far as Joe Biden is concerned. On issues like China and TPP it is highly unlikely that Biden will take a fundamentally different position from the Republican Party given the current narrative prevalent in the US. Having been an insider, it is likely though that he will follow a more cautious approach and not upset the apple cart too much.