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.

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.

The Private Production of Defense

Lucas’ post reminded me of a piece that I wrote for his website ThinkIR, in 2013. Most of it I re-used in my book Degrees of Freedom (2015). Of course it is also a piece on its own, that readers of NoL may find of interest. Thanks Lucas!

+++++++++++++++++

It is fun to think about the almost unthinkable. Therefore this contribution is about the idea that no state is needed to provide military security against foreign attack. In modern times the idea goes back to at least the French-Belgian economist Gustave de Molinari and his 1849 pamphlet The Production of Security. The most prominent current defender of this idea is the German economist Hans-Herman Hoppe, a leading anarcho-capitalist thinker, in his essay The Private Production of Defense (also see The Myth of National Defense, which was edited by Hoppe).

Hoppe rightly notices (p.1) that the legitimacy of the modern state is strongly related to the belief in collective security. Following Rothbard in The Ethics of Liberty, he argues that states will always expand, due to the governmental monopoly to tax its inhabitants. This also applies to governments that only have the limited task of protection against aggression and administrating and justice. The only proper solution is therefore to abolish the state altogether, in order to ensure true liberty and individual justice. Consequently, this also means that the provision of security needs to be privatized, as Hoppe does not expect the world to turn into a peaceful utopia (pp. 1- 5).

So how would this work? Basically, to regard the production of security as an insurance, where the expenditures for defense are to be paid by premiums paid by individuals (pp.5-8). The insured people can choose from competing insurance firms, just like in other parts of the insurance market. This is not as improbable at it may seem at first sight. Importantly, insurance companies are already used to deal with risk and other real world dangers. There are already many private security companies in existence, also at the battlefield. The cost of defense in relation to other parts of the insurance market appears large, but do not discount the idea beforehand. For example: Dutch defense expenditure in 2013 is around 7 billion Euro, less than 1% of GDP, while annual turnover of the two largest insurers is around 20 billion. Of course Hoppe would point out that the 7 billion in current defense expenditures needs to be returned to the taxpayers, hence widening the premium base. Presumably, this would work the same in other countries with smaller economies and/or smaller financial sectors (but see the remarks below).

A world without states, but with private security insurance is less war prone, Hoppe argues (p.11-12). Insurers will have an interest in keeping costs down, and will therefore only make unprovoked attacks insurable. People who provoke, or have known to provoke violence in the past, will be excluded from the insurance. After a while, the number of uninsured people will be small. They will face big defense insurance companies if they violate somebody’s property, making this unlikely to happen often, in contrast to interstate war. Yet in my view here Hoppe relies too much on his stated view on human nature: man as rational animal.

A related main defect of the essay is its focus on the role of insurers and their (economic) incentives. This is fine, but the argument quickly loses any of the convincing power it has when Hoppe turns to an analysis of international war. Or more precise, a violent conflict between a free territory, defended by one or more insurance companies, and a state, financed by compulsory taxation. He simply asserts (p. 14) that the state would be in a disadvantage because it is less efficient and that its leaders would lose their legitimacy, because they necessarily fail to convince the population of the justification of an attack on the inherently peaceful free territory.

Yet if an attack would still happen, Hoppe continues, the state-led army of specialists would not only face the defense force of the insurance company (or several insurers and re-insurers cooperating), but also an armed population (p.15). Without much analysis he simply asserts the companies will always be more efficient and also capable to counter all attacks by any state, perform counter-operations in the state territory and be able to kill its leaders, while making sure to minimize any collateral damage. All because they have to justify their insurance fees.

That is as far as Hoppe goes in his argument. He offers no further analysis or other scenario’s, no additional arguments, does not provide any international political analysis, none whatsoever. Only the fact that the insurance companies are private suffices for Hoppe as they must be more efficient and thus able to overcome all possible attack. That is too simplistic, as just three examples illuminate.

Hoppe overlooks some important geopolitical aspects. Take size of territory and population for instance. How likely is it really that a small free territory, say the size of Luxembourg, or The Netherlands for that matter, would be able to raise enough insurance premiums to enable a good defense structure to counter attacks by much larger states? There is a difference between collecting enough money to match current defense expenditures and ensuring defense against all possible attacks, especially given the anarcho-capitalist dislike of international alliances such as NATO.

Apparently Hoppe thinks all necessary technology is either invented by the research and development people of the insurance company, or freely available at the market. This is improbable as far as the state-side of the argument concerns, given today’s relative secrecy in military procurement. Also, the cooperation between insurance companies may fail in this respect. If one company has a superior weapon system, it will be a ground for competition with the other insurer(s). The superiority of one company may quickly make it a monopolist. It may become a threat to its insured, just like states may be threats to their taxpayers. Once the armed forces of the private insurer are in full operation it only takes a powerful CEO with his or her own agenda to turn things sour. Just the fact of private financing does not make much difference.

Also, does economic efficiency always trump state inefficiency? The history of warfare is full of examples where the supposedly superior army loses unexpectedly. So if the state deals a decisive blow it effectively robs the remains of the insurance company, and it’s successors, of its premium paying clients.

To conclude, for liberty loving people the prospect of stateless private security may be tantalizing. However, the quality of the argument as presented by Hoppe thus far is poor and unconvincing. His theoretical arguments largely stem from economics and overlook other relevant facts and arguments, including those from IR. Hoppe’s private production of defense remains a fairy tale.


Links:
Molinari:
http://mises.org/document/2716/The-Production-of-Security

Hoppe:
http://mises.org/document/1221/The-Private-Production-of-Defense

http://mises.org/document/1092/Myth-of-National-Defense-The-Essays-on-the-Theory-and-History-of-Security-Production

Rothbard:
http://mises.org/document/1179/The-Ethics-of-Liberty

First Contact, libertarianism, and astropolitics

Permit me to speculate.

Earth is currently composed of 193 or 195 states, depending on who you ask. There are several more states that have an ambiguous status within the world order. Of these states, dozens have bureaucracies dedicated to scientific research in outer space.

Now suppose there is life on a planet close to ours, say on Proxima centauri b, and suppose further that the life there harbors an intelligence that mirrors our own.

How many countries would be on Proxima centauri b? Given how difficult it has been here on Earth to establish global dominance, I have to assume that the same difficulties face other extraterrestrial life in nearby star systems. I assume this because if they haven’t been able to contact us, or are unable to contact us, they are likely on the same playing field as us when it comes to intelligence.

What if the United States or its much more libertarian successor, the Federation of Free States, allies with a country on Proxima centauri b, while China allies itself with another country on proxima centauri b and Russia allies itself with a third Centaurian country?

I think this would be the most realistic scenario for First Contact. If there are species out there with higher intelligence and better technology, I don’t think they would even bother with us or with the Centaurians, not even if they needed our help. Would we, as humans, ask for the help of baboons if we were stranded in the desert with a broken arm? Have we ever thought it necessary to eliminate another species simply because it existed or even because it might pose a future threat? I think those of us who can achieve the same type of reasoning based on the same limited cognitive ability of our brains will be brought together in our section of the Milky Way.

Basically, I think when First Contact happens, it will be the same ol’ geopolitics playing out, but instead of being geopolitics it will be astropolitics. All the more reason for libertarians to eschew unilateralism in favor of federation.

Cixin Lui’s trilogy has been on my mind, as has Neill Blomkamp’s short film Rakka.

Nightcap

  1. Promotions galore for hawkish Chinese diplomats Tian & Zhai, Reuters
  2. The allocation of essential supplies during a crisis Peter Boettke, Coordination Problem
  3. Racism and the contamination of freedom Fabio Rojas, Bleeding Heart Libertarians
  4. Indo-Pacific versus Asia-Pacific Francis Sempa, Asian Review of Books

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.

Nightcap

  1. Obama, Houellebecq, and modernity Christopher Caldwell, Commentary
  2. Meet the “reocons” (“reactionary conservatives”) Laura Field, Open Society
  3. The vigorous foreign policy debate on the Right Conor Friedersdorf, Atlantic
  4. On the liberal world order’s resiliency Duedney & Ikenberry, Foreign Affairs

Nightcap

  1. Magna Carta for the world? Daniel Hulsebosch, NC Law Review
  2. Restoring the global judiciary Jeremy Rabkin, Law & Liberty
  3. The costs of Poland’s resistance Richard Overy, History Today
  4. Towards indigenous-settler federalism Dylan Lino, Public Law Review

Nightcap

  1. We’re still living in Stalin’s world Diana Preston, New York Times
  2. The state is a predator, not a tool Joseph Salerno, Mises Wire
  3. The world is increasingly fragile Scott Sumner, MoneyIllusion
  4. Facts about Gustav Klimt Zoë Vanderweide, Sotheby’s

Nightcap

  1. The first Great Powers: Babylon & Assyria John Butler, ARB
  2. We don’t want economic growth Chris Dillow, Stumbling & Mumbling
  3. Comparative disadvantage Oren Cass, Law & Liberty
  4. The Nazification of the Ku Klux Klan Assael & Keating, Politico

New thorns in the Special Relationship: Persian, Chinese, and populist

The past few days have been witness to some important statements made in the context of the Joint Comprehensive Program for Action (JCPOA) — also referred to as the Iran Nuclear deal. US allies, including the UK and some EU member states, do not seem to be in agreement with the US President’s Iran policy in general, and especially his inclination towards scrapping entirely the JCPOA.

Boris Johnson’s interviews and his comments on the JCPOA

In an interview to the BBC on January 14, 2020, British Prime Minister Boris Johnson stated that the JCPOA could be renegotiated, and seemed to be accommodative towards Trump. Said Johnson: ‘Let’s work together to replace the JCPOA and get the Trump deal instead.’ Johnson’s remarks came a day after the UK, Germany, and France had issued a joint statement announcing that all three countries were totally in favor of keeping the JCPOA alive. The UK, Germany, and France had also said that they were keen to ensure that the nuclear non-proliferation regime is kept intact, and that Iran is prevented from developing nuclear weapons.

Earlier, in a telephonic conversation last week with Johnson, US President Donald Trump told him that the deal was ‘foolish‘ and that the other signatories should also walk out of it.

During the course of his interview with the BBC, which happened to be Johnson’s first interview with the media after the victory of the Conservative Party in the UK’s recent general election. Johnson, while having a dig at Trump, said that the US President thought himself of as a good negotiator, as did many others. Johnson also made the point that the current deal had been negotiated by Trump’s predecessor, Barack Obama, and alluded that this was one of the key reasons why Trump wanted to renegotiate the JCPOA.

Members of Johnson’s cabinet and their comments on the Iran deal

UK Foreign Secretary Dominic Raab, while criticizing Iran for failing to meet with the compliances related to the JCPOA, also stated that the UK is keen to keep the deal intact. Before Raab, another member of Johnson’s cabinet, British Defence Secretary Ben Wallace, had also indulged in some straight talk, lambasting the Trump administration for its increasingly isolationist approach towards global issues, and Trump’s tendency of taking Washington’s allies for granted. Wallace had also stated that US support for the UK’s coalition should not be taken for granted.

Responses of Trump and Rouhani to Johnson’s remarks

Trump’s response to Johnson’s suggestion regarding a fresh JCPOA was predictable: he welcomed it. Meanwhile, Iranian President Hassan Rouhani, in an aggressive address on January 15, 2020, lashed out at the EU and UK, saying that all Trump knew was violation of contracts, so there was no question of a new Iran deal.

UK-US relations

Interestingly, Johnson in his interview to the BBC, had also said that there was no real need for the UK to have been informed in advance by the US with regard to the killing of Iranian General Qasem Soleimani. It would be pertinent to point out that not just members of the Labor Party, but even a senior Tory MP, Tom Tugendhat, who is also a former chairman of the Commons Foreign Affairs Committee, criticized the US for not consulting the UK.

This brings us to another important point. While Johnson’s main challenge is perceived to be the withdrawal of the UK from the EU by January 31, 2020, there are likely to be important differences between Washington and London over dealing with Iran. A close advisor of Trump, Richard Goldberg, who until recently was a member of the White House national security council (NSC), has already stated, for example, that if Johnson wants a UK-US Free Trade deal, the UK should immediately pull out of the Iran deal.

US-UK FTA and Trump’s support for the same

Trump has been in favor of a Free Trade Agreement (FTA) with the UK (which happens to be the 5th largest trading partner of the US) for some time. In fact, in his congratulatory tweet to Johnson after his victory in December 2019, Trump had said that Britain and the U.S. will now be able to forge a significant new trade deal after Brexit. At the G7 Summit in 2019, Trump had spoken about how the US would sign a pathbreaking trade deal with the UK, post Brexit.

It has been argued that while the conservative lobby in both the US and UK has been in favor of bilateral FTA, there are lobbies in both countries which are fervently opposed to such an idea. It also remains to be seen whether the Trump Administration is serious about imposing conditionalities on the UK regarding the FTA — such as, supporting the US stance vis-à-vis Iran. Given the reactions by some members of Johnson’s cabinet (to Trump’s handling of the Iran issue), it is tough to really predict the UK’s reaction.

Not just Iran, US-UK also differ over Huawei

Another issue that could be an impediment to the further consolidation of economic and strategic relations between the US and the UK is the British use of Huawei’s hardware for the development of next-generation 5G wireless networks. Johnson’s predecessor, Theresa May, had stated that non-core technologies of 5G were acceptable while core parts would be banned. At a meeting of the National Security Council (NSC) in 2019, some of May’s colleagues, including Jeremy Hunt (then Foreign Secretary), Sajid Javid (then Home Secretary and now treasury secretary), Gavin Williamson (then Defence Secretary), and Penny Mordaunt (then international development secretary), had opposed May’s decision. Interestingly, Williamson had been sacked for allegedly leaking the proceedings of the meeting.

Johnson’s approach towards Huawei

In the interview to BBC, Johnson stated that he did not want to jeopardize cooperation with any of the other “5 Eyes Intelligence alliance partners” (Australia, Canada, New Zealand, and the US are the other members of this network). While hinting at the US stand on Huawei, Johnson said that those criticizing one technology also needed to provide an alternative.

Differences between US and other allies over other crucial economic and strategic issues

It is not just the UK but other allies, like India, who will be closely watching Trump’s approach on crucial geopolitical issues. For instance, the US had earlier stated that India would get a waiver from CAATSA (Countering America’s Adversaries Through Sanctions Act) even if it went ahead with the purchase of S400 missiles from Russia, but a State Department spokesperson recently commented on the waiver to India and stated that there was no blanket waiver. Of course later, the State Department spokesperson did clarify that the US views these issues on a case by case basis.

Conclusion

If one were to look at the scenario for bilateral relations between the UK and the US (defined as a ‘special relationship’ first by Winston Churchill in 1946), there are numerous challenges. There is a tendency to oversimplify bilateral relationships by looking to the personal chemistry of leaders or to leaders’ ideological inclinations, as in the case of Johnson and Trump. There are likely to be a number of obstacles which may come in the way of the bilateral relationship (discussed above).

In addition to this, there is a note of caution for other allies like EU member states (especially Germany and France), Canada, and Japan, which have already borne the brunt of Trump’s insular economic policies, and his myopic and transactional approach towards complex geopolitical issues.