Italy and the Belt and Road Initiative

There has been a growing scepticism with regard to the Belt and Road Initiative (BRI) project in many quarters, due to the lack of transparency with regards to terms and conditions as well as the economic implications for countries which are part of the project. A report published in April 2018 by the Center for Global Development (CGD) in Washington flagged 8 countries (including Pakistan, Maldives, Laos, and Djibouti) where the level of debts are unsustainable.

Apart from the red flag raised by a number of researchers, the removal of Pro-China leadership in countries like Malaysia, Maldives, and Sri Lanka has also resulted in problems with the BRI project, and China’s economic dealings (which are clearly skewed in favour of Beijing) with other countries is drawing more attention.

The most vocal critic of China’s economic links has been Malaysian Prime Minister Mahathir Mohamad. During a visit to China in August 2018, Mahathir, alluded to China’s trade relations with poorer countries as ‘a new version of colonialism’. Mahathir later on denied that his statement was targeted at China or the BRI. The fact is that the Malaysian Prime Minister did scrap projects estimated at well over $20 billion (which includes a rail project, East Coast Link, as well as two gas pipelines).

Top officials in the Trump Administration, including US Vice President Mike Pence, have also been critical of the BRI project for a variety of reasons. The major criticism from US policy makers has been the economic ‘unsustainability’ of the project as well as the point that the project is skewed in favour of China.

Italy to join BRI Continue reading

Nightcap

  1. Richard Rorty’s political turn Alan Malachowski, Aeon
  2. Empathy in political discourse Zak Woodman, NOL
  3. Stuck between Berlin and Moscow Iulia-Sabina Joja, American Interest
  4. Stuck between Berlin and Paris  Posaner, Gurzu, and Tamma, Politico EU

The nature of the China-US-Vietnam economic triangle

While addressing a joint press conference in Hanoi, after his summit with North Korean Leader Kim Jong Un, US President Donald Trump spoke not just about the Summit, but also the current state of US-China relations. Trump criticised his predecessors for not doing enough to address the trade imbalance with China, while also making the point that he was all for China’s economic progress and growth, but not at the cost of the US.

If one were to look beyond the Summit in terms of the US-Vietnam economic relations, top US companies – Boeing and General Electric – sealed some important deals.

Given the focus of Trump’s visit (which was the Summit with Kim), perhaps these deals did not draw the attention they ought to have. The fact is that the US has begun to recognise Vietnam’s economic potential, as well as its geopolitical significance in Asia. This long note will give a backgrounder to Vietnam’s economic growth story in recent years, highlight some of it’s key strategic relationships, and then examine the nature of the China-US-Vietnam economic triangle.

Vietnam’s growth story: The key reasons Continue reading

The American objective of isolating Iran continues to be a failure

Recent days have been witness to important events; The Middle East Conference at Warsaw, co-hosted by Poland and the US State Department on February 13 & 14, and the Munich Conference. Differences between the EU and the US over dealing with challenges in the Middle East, as well as Iran, were reiterated during both these events.

The Middle East Conference in Warsaw lacked legitimacy, as a number of important individuals were not present. Some of the notable absentees were the EU Foreign Policy Chief, Federica Mogherini, and the Foreign Ministers of Germany, France, and Italy. Significantly, on February 14, Iranian President Hassan Rouhani, Russian President Vladimir Putin, and Turkish President Recep Tayyip Erdogan met in Sochi, Russia to discuss the latest developments in Syria and how the three countries could work together.

Personalised aspect of Trump’s Diplomacy

In addition to the dissonance between EU and US over handling Iran, the dependence of Trump upon his coterie, as well as personalised diplomacy, was clearly evident. Trump’s son-in-law and Senior Aide, Jared Kushner, spoke about the Middle East peace plan at the Warsaw Conference, and which Trump will make public after elections are held in Israel in April 2019. The fact that Netanyahu may form a coalition with religious right wingers could of course be a major challenge to Trump’s peace plan. But given his style of functioning, and his excessive dependence upon a few members within his team who lack intellectual depth and political acumen, this was but expected.

EU and US differences over Iran

As mentioned earlier, the main highlight of both events was the differences over Iran between the EU and Israel, the US and the GCC (Gulf Cooperation Council) countries. While Israel, the US, and the Arabs seemed to have identified Iran as the main threat, the European Union (EU), while acknowledging the threat emanating from Iran, made it amply clear that it disagreed with the US method of dealing with Iran and was against any sort of sanctions. US Secretary of State Mike Pompeo went to the degree of stating that the goal of stability in the Middle East could only be attained if Iran was ‘confronted’.

The EU differed not just with the argument of Iran being the main threat in the Middle East, but also with regard to the methods to be used to deal with Iran. The EU, unlike the US, is opposed to the US decision to get out of the Joint Comprehensive Plan of Action (JCPOA) and is all for engaging with Iran.

At the Warsaw Conference Vice President Mike Pence criticised European Union member countries for trying to circumvent sanctions which were imposed by the US. Pence was referring to the SPV (Special Purpose Vehicle) launched by Germany, France, and Britain to circumvent US sanctions against Iran. The US Vice President went to the extent of stating that the SPV would not just embolden Iran, but could also have a detrimental impact on US-EU relations.

US National Security Adviser John Bolton has, on earlier occasions, also spoken against the European approach towards the sanctions imposed upon Iran.

Differences at Munich Conference

The differences between the US and the EU over Iran were then visible at the Munich Conference as well. While Angela Merkel disagreed with Washington’s approach to the Nuclear Deal, she agreed on the threat emanating from Iran but was unequivocal about her commitment to the JCPOA. While commenting on the importance of the Nuclear Agreement, the German Chancellor said:

do we help our common cause… of containing the damaging or difficult development of Iran, by withdrawing from the one remaining agreement? Or do we help it more by keeping the small anchor we have in order maybe to exert pressure in other areas?

At the Munich Conference too, the US Vice President clearly flagged Iran as the biggest security threat to the Middle East. Pence accused Iran of ‘fueling conflict’ in Syria and Yemen, and of backing Hezbollah and Hamas.

GCC Countries at the Warsaw Conference

It is not just the US and Israel, but even representatives of the GCC which took a firm stand against Iran. (A video leaked by Israeli Prime Minister Benjamin Netanyahu revealed this.)

Bahraini Foreign Minister Khaled bin Ahmed Khalifa went to the extent of stating that it is not the Israeli-Palestinian Conflict but the threat from Iran which poses the gravest threat in the Middle East. Like some of the other delegates present at the Warsaw Conference, the Bahraini Foreign Minister accused Iran of providing logistical and financial support to militant groups in the region.

Similarly, another clip showed the Saudi Minister of State for Foreign Affairs (Adel al-Jubeir) saying that Iran was assisting and abetting terrorist organisations by providing ballistic missiles.

Iran was quick to dismiss the Middle East Conference in Warsaw, and questioned not just its legitimacy but also the outcome. Iranian President Hassan Rouhani stated that the conference produced an ‘empty result’.

US allies and their close ties with Iran

First, the US cannot overlook the business interests of its partners not just in Europe, but also in Asia such as Japan, Korea, and India. India for instance is not just dependent upon Iran for oil, but has invested in the Chabahar Port, which shall be its gateway to Afghanistan and Central Asia. New Delhi in fact has taken over operations of the Chabahar Port as of December 2018. On December 24, 2018, a meeting – Chabahar Trilateral Agreement meeting — was held and representatives from Afghanistan, Iran, and India jointly inaugurated the office of India Ports Global Chabahar Free Zone (IPGCFZ) at Chabahar.

The recent terror attacks in Iran as well as India have paved the way for New Delhi and Tehran to find common ground against terror emanating from Pakistan. On February 14, 2019, 40 of India’s paramilitary personnel were killed in Kashmir (India) in a suicide bombing (the dastardly attack is one of the worst in recent years). Dreaded terror group Jaish-E-Muhammad claimed responsibility. On February 13, 2019, 27 members of Iran’s elite Revolutionary Guards were killed in a suicide attack in the Sistan-Baluchistan province which shares a border with Pakistan. Iran has stated that this attack was carried out by a Pakistani national with the support of the Pakistani deep state.

Indian Foreign Minister Sushma Swaraj met with Iranian Deputy Foreign Minister Seyed Abbas Aragchchi en route to Bulgaria. In a tweet, the Iranian Deputy Foreign Minister stated that both sides had decided to strengthen cooperation to counter terrorism, and also said that ‘enough is enough’. This partnership is likely to grow, in fact many strategic commentators are pitching for an India-Afghanistan-Iran security trilateral to deal with terrorism.

Conclusion

So far, Trump’s Middle Eastern Policy has been focused on Iran, and his approach suits both Saudi Arabia and Israel but it is being firmly opposed by a number of US allies. It is important that the sane voices are heard, and no extreme steps are taken. As a result of the recent terror attack in Pulwama, geopolitical developments within South Asia are extremely important. Thus, the US and GCC countries will also need to keep a close watch on developments in South Asia, and how India-Pakistan ties pan out over the next few weeks. New Delhi may have its task cut out, but will have no option but to enhance links with Tehran. Trump needs to be more pragmatic towards Iran and should think of an approach which is acceptable to all, especially allies. New Delhi-Tehran security ties are likely to grow, and with China and Russia firmly backing Iran, the latter’s isolation is highly unlikely.

Nightcap

  1. Is there an actual China-Japan thaw happening? Wijaya & Osaki, Diplomat
  2. The occupation of France after Napoleon Christine Haynes, Age of Revolutions
  3. Ilhan Omar and the power of clarity Michael Koplow, Ottomans & Zionists
  4. Blackmail! (Libertarian red meat!) Tyler Cowen, Marginal Revolution

RCH: Five facts about Emancipation Proclamation

That’s the subject of my weekend column over at RealClearHistory. An excerpt:

4. The Confederacy was, for all intents and purposes, an independent country. When Lincoln issued the Emancipation Proclamation, the Confederacy had long since declared independence from the United States and set up a federal government of its own. Montgomery, Ala. acted as its capital city until 1861, when the Confederacy’s government moved to Richmond, Va. Lincoln viewed Richmond’s diplomacy with the British and French as the most dangerous element of the Confederacy’s secession. If Richmond could somehow manage to get a world power on its side, the consequences for the future of the republic would be dire. For London and Paris, the calculations were a bit different. If either one joined the side of the Confederacy, the other would officially join the north and a global war could ensue. The Confederacy lobbied especially hard for the British to fight on their side, but there was one issue London’s hawks, the factions that wanted a war with Washington, couldn’t get past.

Please, read the rest.

My son is being born right about now (I scheduled this post). I hope everything goes well (it’s a c-section). Wish me luck!

Nightcap

  1. The Indo-Pacific, the Belt and Road, and the Arctic Samir Saran, WEF
  2. Another neoliberal miracle Scott Sumner, EconLog
  3. Dear libertarians, refrain from using the “neoliberal” label Vincent Geloso, NOL
  4. Will social democracy return? Branko Milanovic, globalinequality