Monday, July 26, 2021

CPEC - China-Pakistan Economic Corridor

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CPEC - 2020 China-Pakistan Economic Corridor’s Return to the Shadows .
(2020) CPEC Slowdown

The troubles faced by the China Pakistan Economic Corridor (CPEC)—the flagship of China’s Belt and Road Initiative (BRI)—are perhaps the most conclusive demonstration that the BRI model that has been in place for the last few years is no longer sustainable. Even before the coronavirus pandemic, CPEC had stalled. ... The projects that are already underway or that have been completed are far from negligible, however. CPEC represents a marked expansion of China’s economic presence in Pakistan, with approximately $25 billion in investments to date—but this is already pushing close to the framework’s limits rather than the foundations of a more ambitious plan.

CPEC was supposed to act as a vehicle to upgrade the China-Pakistan partnership. Some Chinese analysts used to describe the relationship as a “stool with two legs”: While security and political ties have been strong for decades, economic ties had always been extremely weak — a relationship almost entirely confined to military and intelligence matters, and managed by a very small cast of individuals on the two sides. China was never a factor in day-to-day economic or political life in Pakistan. China's strong approval ratings in opinion polls reflected its unimpeachable reputation as the “all-weather friend” rather than any deeper affinity among the Pakistani public.

... China had to tread carefully to avoid eliciting alarmed reactions in New Delhi or further afield. CPEC was a way of changing that narrative. ... There was also a gamble involved: CPEC was dubbed the “flagship” of the BRI, which tied its fate closely to the reputation of the entire initiative, and even to Xi Jinping himself. ... If CPEC succeeded, other countries would look to replicate it.

For Pakistan, CPEC was an opportunity to draw China into a deeper level of political, security, commercial, and financial commitment to the country, in a highly visible way, at a juncture where U.S. support was being tapered back on all fronts, and international investors were very wary of the security situation. For both sides, the optics are therefore almost as important as the substance. China and Pakistan have a strong incentive to put a good face on CPEC whatever is actually happening in practice.


21-8-20 Protests in Pakistan erupt against China’s Belt and Road plan: Demonstrations shut down Gwadar, where Chinese are blamed for lack of water and electricity and threat to local fishing [Inevitable, it appears.]

Protests have erupted in Pakistan’s port city Gwadar against a severe shortage of water and electricity and threats to livelihoods, part of a growing backlash against China’s multibillion-dollar Belt and Road projects in the country.

This week, demonstrators including fishers and other local workers blocked the roads in Gwadar, a coastal town in Balochistan. They burned tyres, chanted slogans and largely shut down the city, to demand water and electricity and a stop to Chinese trawlers illegally fishing in the nearby waters and then taking the fish to China. Two people were injured when the authorities cracked down on the protesters. 
...
Responsibility for the attack was claimed by the Balochistan Liberation Army (BLA), which like other militant groups in the region accuses Chinese of exploiting Balochistan’s mineral resources, and has previously attacked Chinese nationals and the Chinese consulate in Karachi.

The protests are part of a growing discontent with China’s presence in Gwadar, whose port is an integral part of the China-Pakistan Economic Corridor project (CPEC), in which China has invested billions in infrastructure projects in Pakistan.

Under the project, Pakistan surrendered Gwadar port to a Chinese-backed multinational corporation for a lease of 40 years. It is part of China’s mammoth Belt and Road initiative, which stretches across 70 countries to give China a clear trade route from east Asia to Europe.

The Pakistan government accepted China’s investment in the hope it would help boost the country’s ailing economy. [In all probability, it did fill the purses of corrupt local officials.] But Balochistan is home to a long-running violent insurgency, and China’s presence in Gwadar has been the cause of much social unrest and led to great anti-Chinese sentiment.

There are signs that resentment at Belt and Road is growing across the country. Nine Chinese workers were killed last month when a vehicle laden with explosives and driven by a suicide attacker rammed a convoy heading out to work on the Dasu dam, another flagship CPEC project.

China’s ambassador to Pakistan was also targeted in a terrorist attack on his hotel in April, though he was not hurt.

Sunday, July 25, 2021

Debt-Trap Diplomacy

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21-8-20 Protests in Pakistan erupt against China’s Belt and Road plan: Demonstrations shut down Gwadar, where Chinese are blamed for lack of water and electricity and threat to local fishing [Inevitable, it appears.]

CPEC - 2020 China-Pakistan Economic Corridor’s Return to the Shadows .

Debt-trap diplomacy
is a theory to describe a powerful lending country or institution seeking to saddle a borrowing nation with enormous debt so as to increase its leverage over it. Debt-trap diplomacy has been referred to by several other terms, including "debt-book diplomacy". The term 'debt-trap diplomacy' was introduced by Indian academic Brahma Chellaney in early 2017 and has been widely used in recent years to accuse China of Machiavellian lending policies. Within 12 months the term had quickly spread through the media, intelligence circles, and western governments. It has since expanded to include other parts of the world and was further defined and expanded upon in the context of Chinese geostrategic interests in a 2018 Harvard University report.

The Belt and Road Initiative (BRI) is a multi-billion-dollar expansion project of China, to expand its power through lending to countries to spur their economic growth. The BRI project was launched in 2013 by Chinese leader Xi Jinping to improve the infrastructure of countries in Europe, Africa, and Asia in exchange for global trade opportunities and economic advantage.

The Belt and Road Initiative (BRI, or B&R), known in Chinese and formerly in English as One Belt One Road (OBOR), is a global infrastructure development strategy adopted by the Chinese government in 2013 to invest in nearly 70 countries and international organizations. It is considered a centerpiece of Communist Party of China (CPC) general secretary and Chinese leader Xi Jinping's foreign policy, who originally announced the strategy as the "Silk Road Economic Belt" during an official visit to Kazakhstan in September 2013.

"Belt" is short for the "Silk Road Economic Belt," referring to the proposed overland routes for road and rail transportation through landlocked Central Asia along the famed historical trade routes of the Western Regions; whereas "road" is short for the "21st Century Maritime Silk Road", referring to the Indo-Pacific sea routes through Southeast Asia to South Asia, the Middle East and Africa. Examples of Belt and Road Initiative infrastructure investments include ports, skyscrapers, railroads, roads, airports, dams, and railroad tunnels.

The initiative was incorporated into the Constitution of China in 2017. The Chinese government calls the initiative "a bid to enhance regional connectivity and embrace a brighter future." The project has a target completion date of 2049, which will coincide with the centennial anniversary of the People's Republic of China (PRC)'s founding. Some observers and skeptics, mainly from non-participant countries, including the United States, interpret it as a plan for a sinocentric international trade network. In response the United States, Japan and Australia had formed a counter initiative, the Blue Dot Network in 2019Australia announced on 21 April 2021 via Foreign Minister Marise Payne that Australia would be pulling out of the "Belt and Road" initiative completely. 

The Blue Dot Network (BDN) is a multi-stakeholder initiative formed by the United States, Japan, and Australia to provide assessment and certification of infrastructure development projects worldwide on measures of financial transparency, environmental sustainability, and impact on economic development, with the goal of mobilizing private capital to invest abroad.

It was formally announced on 4 November 2019 at the Indo-Pacific Business Forum in Bangkok, Thailand on the sidelines of the 35th ASEAN Summit. It is led by the U.S. International Development Finance Corporation, Japan Bank for International Cooperation, and Department of Foreign Affairs and Trade of Australia.

The Blue Dot Network is expected to serve as a global evaluation and certification system for roads, ports and bridges with a focus on the Indo-Pacific region. It has been considered as a counter-initiative to China's Belt and Road Initiative.

The theory of debt-trap diplomacy is that the creditor country intentionally extends excessive credit to a debtor country, thereby inducing the debtor into a debt trap. This is done with the intention of extracting economic or political concessions from the debtor country when it becomes unable to meet its debt repayment obligations. The conditions of the loans are often not made public, and the borrowed money commonly pays contractors from the creditor country. Although the term has been applied to the lending practices of many countries and the International Monetary Fund (IMF), it is most commonly alleged towards the People's Republic of China (PRC). Bilateral agreements made as part of China's Belt and Road Initiative have particularly furthered this association, specifically with regard to Chinese infrastructure loans to developing nations and the consequent leveraging of accumulated debt to achieve Beijing's strategic aims.

Proponents of ‘debt-trap diplomacy’ theory have claimed that China's geostrategic interests are served when its partners struggle with debt. The resulting economic crises supposedly would allow Beijing to exploit and seize assets and helps its political influence. But according to a TRT article, the evidence so far contradicts the theory. Far from expanding China's global power, case studies have instead shown that heavily indebted recipients of Chinese loans were a large liability for China. An example would be Pakistan. China has had to slow down its flagship CPEC initiative and provide emergency financing to fend off an economic catastrophe. Pakistan was later forced to approach the IMF for another bailout, which exposed China's loans and investments to global scrutiny and increasing Washington's leverage over Pakistan (given that the US is a majority shareholder in the IMF). This was no political gain for Beijing when Pakistan had struggled to pay back loans.

The validity of allegations against China has been criticized by multiple academic institutions including Rhodium Group, Chatham House and Princeton University, which have denied the narrative of debt-trap diplomacy in the context of Chinese investments.

Princeton University published an article disputing the term and quoted a March 2018 report released by the Center for Global Development, that contradicts the theory as the paper concludes that between 2001 and 2017, China had restructured or waived loans for 51 debtor nations, the majority of BRI participants, without seizing state assets.

BRI - Belt & Road Initiative ..




21-12-22 Sri Lanka plans to pay off Iran oil debt with tea

Sri Lanka plans to settle a debt for past oil imports from Iran by paying it off in tea, a government minister said. Ramesh Pathirana said his country hoped to send $5m (£3.8m) worth of tea to Iran each month to clear a $251m debt. Pathirana said the method of payment would not violate United Nations or American sanctions, because tea was categorised as a food item on humanitarian grounds, and no black-listed Iranian banks would be involved.

Sri Lanka is experiencing a severe debt and foreign exchange crisis, which has been made worse by the loss of tourist income during the coronavirus pandemic. A member of the country's tea board said it was the first time tea had been bartered to settle foreign debt.

Saturday, July 24, 2021

ECE - Economic Corridors - Europe


Geostrategic Projection

Into Europe: The Blue Banana is Europe's first economic corridor. As well as being home to Europe's main financial and political centres, it was the first place where economic integration took place in the European single market. Now other economic corridors are emerging outside of the bloc and the European Union is financing infrastructure Giga-Projects as part of the Trans-European Transport Network. They to connect the economies of its different member states. These economic corridors are connecting Europe together, providing new opportunities for European and International Trade, particularly with Africa.

The Blue Banana (also known as the European Megalopolis or the Liverpool–Milan Axis) is a discontinuous corridor of urbanization spreading over Western and Central Europe, with a population of around 111 million. The concept was developed in 1989 by RECLUS, a group of French geographers managed by Roger Brunet.

It stretches approximately from North Wales through the English Midlands across Greater London to the European Metropolis of Lille, the Benelux states and along the German Rhineland, Southern Germany, Alsace-Moselle in France in the west and Switzerland (Basel and Zürich) to Northern Italy (Milan and Turin) in the south.

The Trans-European Transport Network (TEN-T) is a planned network of roads, railways, airports and water infrastructure in the European Union. The TEN-T network is part of a wider system of Trans-European Networks (TENs), including a telecommunications network (eTEN) and a proposed energy network (TEN-E or Ten-Energy). The European Commission adopted the first action plans on trans-European networks in 1990.

TEN-T envisages coordinated improvements to primary roads, railways, inland waterways, airports, seaports, inland ports and traffic management systems, providing integrated and intermodal long-distance, high-speed routes. A decision to adopt TEN-T was made by the European Parliament and Council in July 1996.[2] The EU works to promote the networks by a combination of leadership, coordination, issuance of guidelines and funding aspects of development.

These projects are technically and financially managed by the Innovation and Networks Executive Agency (INEA), which superseded the Trans-European Transport Network Executive Agency Agency (TEN-T EA) on 31 December 2013. The tenth and newest project, the Strasbourg-Danube Corridor, was announced for the 2014–2020 financial period.

In addition to the various TENs, there are ten Pan-European corridors, which are paths between major urban centres and ports, mainly in Eastern Europe, that have been identified as requiring major investment.

The international E-road network is a naming system for major roads in Europe managed by the United Nations Economic Commission for Europe. It numbers roads with a designation beginning with "E" (such as "E1").

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Energy Geopolitics Eastern Mediterranean


Turkey’s Mediterranean policy has been framed in large measure by the ‘Blue Homeland’ doctrine, driven by its growing energy deficit and a desire for greater geopolitical influence in the region. Meanwhile, Egypt, Israel, Greece, Lebanon and Cyprus, led by their own economic and geopolitical drivers, have developed a common strategy to counter Turkey. Fiona Mullen discusses how increasing tensions over offshore resources and freedom of navigation, together with regional challenges such as migration and terrorism, impact on energy and geopolitics in the East Mediterranean. 

Full panel discussion > .

Energy as Currency

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sī vīs pācem, parā bellum

igitur quī dēsīderat pācem praeparet bellum    therefore, he who desires peace, let him prepare for war sī vīs pācem, parā bellum if you wan...