A short note from New Delhi on the 2018 Eastern Economic Forum

Chinese President Xi Jinping recently attended the Eastern Economic Forum (EEF), hosted by the Russian city of Vladivostok, which was held on September 11th and 12th of 2018. President Xi (who became the first Chinese President to attend the EEF) met with Russian President Vladimir Putin for the third time in as many months. Significantly, Japanese Prime Minister Shinzo Abe also attended the Forum, which was titled “The Russian Far East: Expanding the Range of Possibilities.”

Both Xi and Putin repeatedly referred to not just their close personal rapport (Chinese President Xi Jinping, while referring to their individual ties, stated that his and Putin’s ‘friendship was getting stronger all the time’), but also the deepening of economic and strategic ties between Russia and China, as well as the convergence on key global issues (neither side missed the opportunity to target the US for it’s inward looking economic policies).

China was also participating in military exercises, held in Siberia, which have been dubbed ‘Vostok 2018’ (Beijing clarified that these military exercises were not targeted at any third party). The military exercise (September 11-17, 2018) involves 300,000 troops, 1,000 planes, and a number of warships. China sent over 3,000 People’s Liberation Army personnel for the military exercises.

China-Russia Economic Times

A number of issues were discussed during the course of the Forum. Both sides agreed that there was a need to accelerate bilateral economic ties. Trade has witnessed a significant rise in recent years, while in 2017 it was estimated at over $80 billion. In 2018, bilateral trade could surpass $100 billion. Chinese investments in Russia have also been increasing. According to the Russia-China Investment Fund (RCIF; set up in 2012), 150 representatives from China and Russia have already identified 73 projects estimated at $100 billion. Also according to the RCIF, 7 projects estimated at well over $4 billion have already been undertaken.

Both sides also agreed to promote stronger synergies between the Belt and Road Initiative (BRI) and the Eurasian Economic Union (EEU).

Given the fact that the Forum was held in Russia’s Far Eastern Region (RFE), the need to increase Chinese investment in the RFE was high on the agenda. President Xi stated that China has always been a key participant in development projects in the Eastern parts of Russia. China’s Shandong Hi-Speed Group is also likely to invest in highway projects in the RFE.

Recent years have witnessed an increasing Chinese economic presence in Khabarovsk, which is the second largest city in the Eastern Region and 800 kilometres from Vladivostok. It may also be pertinent to point out that a large number of Russians have been uncomfortable with the growing Chinese economic clout, as well as immigrants. In 2010, the Chinese population in the Russian Far East was estimated at less than 30,000, though according to some estimates the population is much higher.

Protectionism

Both Russia and China warned against growing economic protectionism. Xi stated that he was all for greater international cooperation, and even lashed out at the growing tendency towards protectionism. Xi’s views were echoed by Putin, who stated that ‘the world and global economy are coming up against new forms of protectionism today with different kinds of barriers which are increasing.’

Putin made the point that protectionism was a threat, especially to Asia-Pacific (significantly, the current Trump administration has been using the term ‘Indo-Pacific,’ much to the chagrin of the Chinese).

What was also significant was that Xi came down heavily on ‘unilateralism’ at a time when China itself is being accused of ‘expansionist tendencies’ and promoting ‘Debt Trap Diplomacy.’ What was even more interesting was a reference to ‘UN Charter.’

The message emanating from the forum was clear: that the economic as well as strategic partnership between Moscow and Beijing is likely to strengthen, and both will try to develop an alternative narrative to that currently emerging from Washington.

Significance of meeting: Why India would be watching

New Delhi would be observing the Forum and meetings between Putin and Xi, since it’s own relations between Russia and China are of vital importance. While Russia is important in the security context, economic ties with Beijing are important for New Delhi.

New Delhi attaches immense significance to ties with Moscow

There are many in analysts in New Delhi who argue that India should be cautious in strengthening strategic ties with the US, given that this could cause friction in New Delhi’s relations with Moscow (Russia’s improved defense ties with Pakistan are often cited as a consequence of New Delhi moving too close to Washington DC). There are others who argue that New Delhi’s ties with Moscow are robust and time-tested, and will not be impacted by close ties with Washington DC. Russian President Vladimir Putin will be visiting India in October 2018 (for the 19th annual India-Russia Summit), while Indian External Affairs Minister Sushma Swaraj, during her Moscow visit, met with Deputy Prime Minister Yuri Borisov. Both of them jointly chaired the 23rd India-Russia Inter-Governmental Commission on Trade, Economic, Scientific, Technical, and Cultural Cooperation (IRIGC-TEC) meeting. A number of issues, including the need to boost bilateral trade and enhance people-to-people contact, were discussed. Significantly, this was Swaraj’s third visit to Russia in 11 months and she stated that India accorded ‘high priority’ to ties with Russia.

The fact that Swaraj’s visit to Russia took place after a successful 2+2 dialogue with the US, where a number of important defense agreements including COMCASA were signed, shows that New Delhi realizes the importance of ties with Russia. India is likely to sign a deal with Russia for the procurement of the S-400 air defence system, even though the USA has not given India any assurances with regard to a waiver from CAATSA (Countering America’s Adversaries through Sanctions Act) if India purchases defence equipment from Russia. During the visit, India is also likely to go ahead with an agreement with Russia for four frigates for the Indian Navy. While two of these will be manufactured in Kaliningrad, two will be manufactured in Goa.

New Delhi-Beijing ties

The issue of trade tariffs, which was highlighted by Putin and Xi, has also not gone unnoticed by New Delhi. One of the reasons (apart from the desire for peace and tranquility on borders) why India has been pro-actively reaching out to China is a convergence on economic issues. In fact, days after the 2+2 Summit, US President Trump, while referring to India and China, stated that the US has been providing subsidies to India and China for far too long and can not afford to do so any longer.

In terms of investments, there has not been much progress so far due to political disputes, but there is scope for greater economic cooperation between both countries through enhanced connectivity. New Delhi, on its part, should be open to projects like BCIM Corridor (Bangladesh, China, India, Myanmar). The recent proposal out of Beijing to start a railway line from Kunming to Kolkata may not seem possible in the short run, but in the long run it is definitely worth examining, and would give a boost to economies of India’s Eastern and North Eastern states. Interestingly, on September 9th, 2018, Myanmar signed a memorandum of understanding (MoU) with China for agreeing to establish the China-Myanmar Economic Corridor (CMEC). New Delhi should see this connectivity project as an opportunity rather than an obstacle.

Conclusion

New Delhi, while enhancing strategic cooperation with Washington, needs to keep in mind that there is a plethora of economic as well as other issues of global importance where New Delhi can find common ground with Beijing and Moscow. India bilaterally shares robust economic ties with China, and a strategic relationship with Russia. All three countries are also working closely in BRICS as well as SCO. New Delhi also needs to keep in mind that while strategic ties with Washington are important, Trump’s unpredictability will compel New Delhi to keep all its options open and think in a nuanced manner. While historically New Delhi shares close ties with Moscow, the logic of geography can not be ignored in the context of India-China ties.

Nightcap

  1. The Art of War re-translated and reconsidered Peter Gordon, Asian Review of Books
  2. Interview with Svetlana Alexievich (life behind the Iron Curtain) Julian Tompkin, Deutsche Welle
  3. Mutually nonconsensual sex (Title IX is a joke) Caitlin Flanagan, the Atlantic
  4. Reagan’s Right Turn George Nash, Modern Age

“The Dutch Empire”

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

6. The Dutch Empire vied for supremacy with the Portuguese empire, which, beginning in 1580 with the Iberian Union of Spain and Portugal, was a rival Catholic state attempting to establish a global hegemony of its own. The Portuguese were actually the first Europeans to establish trading forts throughout the world, but the aforementioned Iberian Union severely weakened Lisbon’s plans for global hegemony due to the fact that the union made Portugal the junior partner. The Dutch conquered and then established colonial rule at Portuguese colonies on four different continents, and unlike the Portuguese, focused on commercial interests rather than converting the natives to Catholicism and creating a politically connected empire. Because of the commercial nature of the Dutch project, many of the indigenous factions were happy to switch from Portugal to the Netherlands as business partners. And partners they were. Both the Portuguese and the Dutch (as well as the British and French later on) paid rent to local political units on the trading forts they built throughout the world. Such was the nature of power on the world scene before the end of the Napoleonic Wars in the early 19th century.

Please, read the rest.

Can you spot the most important information in this title?

The Diplomat has a piece up with the following title: “Russia’s Sole Aircraft Carrier to Be Fitted With Advanced New Air Defense System.”

The author of the piece goes on to wax poetic about the advanced new air defense system, but that’s not the most important information being conveyed. It’s the fact that Russia – Russia – has a single aircraft carrier.

Here is Popular Mechanics on countries and their aircraft carriers.

Beijing and the India-Pakistan conundrum

During the course of the Shanghai Cooperation Organization (SCO) meeting in China, and days before Indian Prime Minister Narendra Modi arrived in China for his summit with Chinese President Xi Jinping, an editorial in Pakistan’s premier English-language daily (Daily Times) titled ‘China’s re-assurance on CPEC‘ made an interesting point:

If anything Beijing has been asking Islamabad to engage with New Delhi and keep tensions to a minimum. Such an environment is also conducive to timely completion of various projects under CPEC [China-Pakistan Economic Corridor] and transforming South and Western Asia into a high economic growth zone. Keeping the economy first is a lesson that our state has yet to learn from its big brother in the hood.

Zardari’s recommendation in 2012

Interestingly, during his meeting with former Indian Prime Minister Dr Manmohan Singh, in April 2012, former Pakistan President Asif Ali Zardari (Pakistan People’s Party — PPP) had also stated that Pakistan and India should seek to follow the Pakistan-China model of engagement. Zardari meant that, like India and China, India and Pakistan too should follow an incremental approach, with more frequent high level interactions and a heavy focus on economic cooperation.

It might be mentioned that between 2012 and 2013 some important leaps were made in the economic sphere between both countries, with the most noteworthy development being the setting up of the Integrated Check Post (ICP) at Attari (Amritsar, India). The ICP’s motive was to accelerate bilateral trade through the only land crossing (Attari-Wagah) between India and Pakistan. During this period, a number of high level delegations interacted, including the Commerce Ministers of both countries.

Pakistan also seemed prepared to grant India MFN status, but a change of government (along with domestic opposition from certain business lobbies as well as hardliners) in Islamabad (2013) and then New Delhi (2014) meant that this decision could not go ahead. Since then, relations have been tense, and there has been no opportunity to make any progress on this.

Tensions in the past 4 years: CPEC and terrorism emanating from Pakistan Continue reading

Weed, and the Libertarian Party’s future

Last week, the Trump administration announced it would be pursuing a federalist approach to cannabis legislation, effectively allowing states to create their own rules about how the drug is classified and sold.

This is a big change in American drug policy. One common opinion of the Obama era is that the federal government took a relaxed approach toward policing states that were decriminalizing marijuana. The 2008-2016 administration shifted the financial language of the drug war from a law-and-order crackdown to a public safety effort, and placed a low priority on intervening in states with medical legality. Real reform was introduced like the Rohrabacher-Farr amendment which prohibited the Department of Justice from policing medical marijuana states with federal funds. However, DEA raids and reconnaissance missions continued — like in my home state, where counter-economizing Californians sold a whopping five times more weed than they consumed (often to states where it is illegal).

Under Obama, it looked like, with a president less enthusiastic about beating up stoners, American drug policy might start to approach the 21st century. Some skepticism was reintroduced when Senator Sessions was appointed Attorney General under President Trump. Jeff “Good People Don’t Smoke Marijuana” Sessions is explicit about supreme federal authority for drug laws, and supported overturning Rohrabacher-Farr. This, indeed, would be a return to normalcy. For the last half century, it has not been characteristic of the federal government to stay out of drug use — rather than the Trump administration being a Republican re-installation of the war on drugs, we would be witnessing a general return to the 20th century status quo. However, Trump’s announcement makes it seem like we can finally welcome the unexpected.

Trump’s representatives have positioned this move to give up cannabis regulation to the states in a philosophy of states’ rights. Whether or not Trump cares about dual federalism, the repeal of marijuana prohibition — medical, recreational and federal — sweeping across states the last decade is a big win for individual liberty, and, since neither Party has been particularly friendly to cannabis, would seem to point to mainstream party acceptance of libertarian ideas.

What is the Party’s track record on cannabis? The Libertarian Party explicitly opposed drug laws in its first 1972 national platform. Now, in our present day, drug decriminalization is not a radical stance but something more mainstream. Failed or ex-politicians from either party have made a habit of coming out in support of legalizing marijuana the last few years, and up north, the Canadian Liberal Party may now endorse wide-scale reforms. Just yesterday, Senate Minority Leader Chuck Schumer announced he would introduce a bill to directly decriminalize marijuana as a federally classified substance. We’ll see how it goes. But it is now clear that in the same way Libertarians supported gay marriage decades before either partisan establishment now does, one doesn’t have to seek out a minarchist anymore to find someone who opposes drug laws or mass incarceration. (One mainstream policy position that hasn’t budged — war.)

So although we see radically unlibertarian moves nearly every day in Congress and the executive (e.g., FOSTA and Syria), some of the ideas of liberty have spread and reached mainstream status.

This raises some questions about the state of the philosophy and the Party, and more than just drug policy. What does it mean when our more eccentric ideas gain traction in the bigger political world? This question is tied to the purpose of an embedded libertarian political party in the first place.

Economist David Friedman made the point in the postscript to Machinery of Freedom that the purpose of the Libertarian Party is to not have a Libertarian Party. David’s argument is not the same thing as Austin Peterson’s brand slogan, to “Take over government in order to leave people alone.” Instead, David’s argument was built around a public choice understanding of political institutions, but the same conclusion follows from several different premises about the nature of third parties and especially those with a goal of mitigating or eliminating politics.

For American institutional reasons — codified in law and practice — a third party is almost certainly never going to win an election. David thinks, therefore, the purpose of a fringe political party is aspire to the legacy of the Socialist Party of the early 1900s. The Socialist platform in 1928 has succeeded in infiltrating establishment policy, even if the Party last election drew less than a tenth of 1% of the vote. Fringe parties are more successful as beacons of alternative policy than legitimate political competitors. The Party does not pursue political success but influence; hopefully, we will one day not need it to affirm liberty.

So, let’s return to cannabis decriminalization, where we are seeing a libertarian idea achieve mainstream political support.

Legalizing weed is a victory for libertarian ideas and a defeat for the Libertarian Party. Part of the simplistic draw of Libertarianism is “fiscal conservatism and social progressivism,” which, as a one-liner, allows recruitment from both the Republican and Democratic Parties. Now, however, if the progressive leaders, and the Republicans, are co-opting drug decriminalization, there is a lot less draw for social liberals to vote for Party alternatives more aligned with their radical agenda. (I know this, for instance, because drug legalization as an issue first drew me from Democratism to libertarianism in high school.) Hillary Clinton could have partially avoided her image as a crony neoliberal if she adopted more social freedoms, which would only leave her smears on the Left as an imperialist and capitalist.

A recent, rather strange video by AJ+ took aim at libertarianism (read: the Libertarian Party) as “ultra far-right” and spent seconds noting that libertarians are, on the flip side, “anti-NSA, anti-intervention and anti-drug laws.” These are not the only policies that small government people have to offer to the Left if they properly understand themselves. But, as libertarians, we should actually hope this list grows smaller and smaller; the more it shrinks, the more it means that establishment parties are appropriating libertarian positions. Pretty soon, being “anti-drug law” may disappear from the elevator pitch. Subsequently, the “worthwhile aspects” of the Libertarian Party fade to the back, and the draw of the Party (to the left, or the right) decreases until it looks heavily status quo.

So, we could expect that the influence of the Libertarian Party shrinks with the increasing influence of libertarian ideas in general society, as the general electorate pressures establishment politicians to adjust their policy space.

However, a lot of things are being taken for granted here. Do politicians actually respond to the general public consensus and public desire? Is it the case that “libertarian” ideas are spreading to the mainstream, or is it more “progressive” or “traditionalist” ones that are moving it in ostensibly similar directions? Can the ideas alone move policy positions without backing money?

Screenshot_5

We also know that the power of the Libertarian Party has greatly increased since its humble beginnings (whether or not its reputation has improved). My hypothesis is that the influence of libertarian ideas in society at large pressures the estabishment parties to adjust their positions, which in turn makes the Libertarian Party more irrelevant. This is not disproved by an increase in Libertarian Party power. The ideas, even if libertarian, still need to be seen as “libertarian” for it to hurt the Party. For instance, Chuck Schumer said “Looking at the numbers” guided him toward decriminalizing cannabis at the federal level and cited the ACLU.  These “numbers” have been available for decades, from a potpourri of alternative political thinktanks. Citing them from the ACLU will not embed the bill — also faux-embedded in a philosophy of states’ rights — in libertarianism, but in the context of mass incarceration, criminal justice racial disparity and THC research opportunity. These are all good contexts. But the individual freedom element key to libertarianism will be missing, and of course it is, because Schumer says nothing about the other plethora of federal drug laws which prohibit freedom. Recognition of the libertarian aspect of ideas which are libertarian, I think, is essential for them to harm a Party which bases itself around the philosophy.

All of this means that there will be perverse incentives in third-party leadership. Politicians want job security like the next guy, and organizations in some sense want to “survive,” so the interests of libertarianism and the Libertarian Party are in one way opposed (or environmentalism and the Green Party). Liberty is more advanced by incumbent politicians (who are liberty-advancing, of course) than defeated politicians. And the mainstream parties are successful, the fringe parties are not. Thus, liberty is better spread when our ideas take off and get mainstream acceptance, but this will only serve to weaken the Libertarian Party itself, as its attraction as a political outlier fades. This must be obvious: no Libertarian Party candidate is going to claim the White House in our lifetime, and the best hopes of libertarian success are in influencing other parties. So, even when we gain more percent of the vote, the success is in getting people to hear about libertarianism, not in actually convincing people to vote Libertarian.

Conflicting incentives (working in the Party and advancing liberty) means that the Party could be taken over by bad actors like any other political organization, and indeed David predicts this with the increase of political clout. Parties with political power have plenty of favors to dish out, and it only takes a few non-ideological Party members to break ranks. As some of the ideas become more mainstream, this is one possibility. Another is disintegration: there might be no reason for the Libertarian Party to continue, given that its unique draw has suffused into larger bases. A third option is that more radical contingents, like the Mises Caucus, achieve ideological supremacy as the moderate libertarians leave for the newly-libertized Democrat and Republican parties.

In any case, libertarianism faces a conundrum in its Party format. Much of the problems apply to other third parties, but some are unique to libertarianism. One brutal confrontation is the acknowledgement that legalizing cannabis will advance liberty and simultaneously hurt the liberty movement. To this end, Saul Alinsky’s reflection in Rules for Radicals is potent.

The Woodlawn Organization in Chicago is trying to stop the University from bulldozing the black ghetto. The activists issued five demands for the city council, grew in power, and defeated the construction project. Eight months later, the city crafts a new policy on urban renewal to the frustration of the Woodlawn Organization, who barge into Alinsky’s office denouncing the policy statement. But “Through the tirade it never occurred to any of the angry leaders that the city’s new policy granted all the five demands for which the Woodlawn Organization began. Then they were fighting for hamburger; now they wanted filet mignon; so it goes. And why not?”

The solution to one problem creates a new problem, and there are always future problems to work on. Liberty will just have to keep trucking through the victories, and learn from our friends the Socialists of 1928 and Saul Alinsky, who never joined a political party.

Happy 4/20.