As often happens, China is at a significant political turning point: the National People’s Congress, the single House of the Chinese Parliament, made up of approximately 3,000 delegates, has opened.
It has the power to oversee Government’s activities, to legislate and directly appoint some of the most important State’s leaders.
Together with the National Committee of the Chinese People’s Political Consultative Conference of the People, the National People’s Congress is the highest legislative Chinese body.
The Congress is elected every five years and meets every spring for about 12-15 days in a row, usually in the Great Hall of the People in Tiananmen Square.
At the opening of the current Congress on Saturday, March 5, Prime Minister Li Kekiang, also in his capacity as Head of the State Council, reaffirmed that the GDP growth rate set by the government would be 6.5-7%, lower than previously set, but certainly much higher than the GDP growth rate of any Western economy.
According to the data analyzed by Li Kekiang, in the last financial year China’s GDP amounted to 67.7 trillion yuan, with a 6.9% increase as against the previous year.
Agricultural production has also increased for the twelfth time in a row, while consumer prices are growing much more slowly than GDP and agricultural and industrial production.
Last year 13.12 million new jobs were created in urban areas, a figure higher than the previous NPC forecasts.
The service sector accounts for 50.5% of the total GDP, just to dispel the usual, old and taken for granted analysis that sees China growing only in labour-intensive and low technology sectors.
Gone are the days when China was a replacement economy; the country is now a global leader of technological innovation.
Conversely, China will take advantage of the current period of reduced GDP growth – which, however, remains a mirage for us – to invest in high-tech and labour-saving, but high value added, sectors which will compete directly, or better, absorb our high technical and product innovation sectors.
Li Kekiang said that the Internet has now reached all Chinese enterprises, with the number of new businesses which in 2015 grew by 21.6%, equivalent to nearly 12,000 new start-ups a day.
Again according to the Chinese government, the per capita disposable income increased by 7.4% in real terms while, since the end of last year, bank deposits have grown by 8.5% – equivalent, in absolute terms, to four trillion yuan.
For the first time 64.34 million Chinese people living in rural areas have had access to pure and drinking water – a transformation which will lead – in China as in Europe in the past – to the most significant and stable increase of average life expectancy.
Chinese people living below the poverty line have decreased by 14.42 millions. It is a sign that the current transformation of the Chinese economy is not only heading for the expansion of the internal market, but also for fewer social inequalities.
It was the theme of the recent speeches “within” the Party made by Secretary Xi Jinping, that relates the fight against corruption to greater social equality – a theme that has focused again attention on the specific type of Chinese economic development.
It is no longer a simple phase of capitalist accumulation, as described by classic political economy theories (and by Marx), but a socialist system where growth adds to the fight against poverty and the increase in wages and consumption.
China has never been, not even in the early days of the “Four Modernizations”, a socialist economy that adapted itself to an export-led development.
This is the economic and ethical-moral importance of the fight against corruption, which has characterized Xi Jinping’s leadership and direction from the very beginning.
As announced by Xi Jinping in mid-January, the anti-corruption campaign will hit not only the higher ranks of the regime, but also the most modest and peripheral sectors and functions.
Clearly Xi Jinping wants to use the fight against corruption to eliminate its old enemies, those who blocked his rise to the CPC Secretariat for at least two years – but there is more in the new ethics of the Party and its ruling class.
For Xi, the issue lies in using two criteria: the abolition of the informality of procedures, but rather the strengthening of their strict formal legality, and also the restoration of all the ancient cultural and ethical values of tradition and ancient culture within the Chinese society.
It is socialism which favours Confucius, not the other way round.
Hence a new Cultural Revolution to avoid China’s mere adhesion to the mindset, consumption and business style of “Western dogs”, as Europeans were called during the “Boxer rebellion”.
Over a thousand “economic fugitives”, guilty of very severe crimes of corruption and illegal enrichment, coming from the United States, Canada, Australia and New Zealand, have already been brought to Chinese justice.
The “tigers”, namely the corrupt people – just to use the terminology of the Chinese press – have been exposed in the Central Military Commission, in the intelligence services, in the People’s Liberation Army and in many State and Party’s ruling bodies.
For Wang Qishan, the Head of the Central Commission for Discipline Inspection, the main anti-corruption body in the country, during 2016 three types of officials will be scrutinized: those who have continued their corrupt practices after the results of the 18th CPC Congress, in 2012, when Xi rose to power; those who have “serious problems” and have generated a “fierce people’s reaction”, and finally all those who occupy key posts and are waiting for promotion.
Reverting to Li Kekiang’s analysis at the National People’s Congress underway, the CPC and especially Xi Jinping’s “line” want: a) to maintain stable growth, perhaps less rapid than in previous years, thus avoiding risks in the global financial market while making the necessary structural adjustments, which are usually expensive and unpopular.
Furthermore, b) a new proactive fiscal policy has been implemented, which has allowed to reduce some taxes, domestic rates and use local budgets productively.
Another factor, c), are the 3.2 billion yuan in new governments’ and local authorities’ bonds, which have been used to pay off previous debts, with a decrease in debt servicing for peripheral governments equal to approximately 200 million yuan.
Funds have also been created for special operations, especially for water management, for the most deprived urban areas, and for rural residential areas, while d) private spending has been targeted to the sectors which are the most promising for the government and the CPC: travels, on-line shopping, information technology equipment.
In short, the Chinese government’s choice has been to put an end to the generic stimulus policies, which have radial effects on the whole economic system, so as to foster structural reforms.
311 types of products have been liberalized; 123 professions and activities no longer need permits authorizations or government concessions; 85% of the authorizations for new economic activities have been abolished, while only one business license with a unified tax code is now used in China.
Administered prices have fallen by 80% and those regulated by local governments by over 50%.
Hence liberalization has the function of balancing the system, not of generating the old Marxist (and Ricardian) “primitive accumulation”.
Restrictions on Chinese investment abroad have fallen by 50%, while over 90% of Chinese projects funded abroad can be implemented only on the basis of investors’ reports, without further constraints.
The aim is clear: to boost China’s export mix to avoid asymmetric shocks.
In 2015 China also used over 126.3 billion US dollars of foreign investment in its business, with a 5.6% increase, while the non-banking and financial Foreign Direct Investment (FDI) operating in China amounted to 118 billion US dollars, with a 14.7% increase.
Moreover the Asian Infrastructure Investment Bank was inaugurated, involving also Italy, and particularly the Silk Road Fund, while the renminbi has recently been included in the currencies of the International Monetary Fund’s “basket” for its “special drawing rights”, the currency issued by the IMF.
Finally, d) the “Made in China 2025 Initiative” has been launched to update the manufacturing productive systems and, above all, to finance and update the small and medium-sized enterprises’ technologies.
In the best Maoist tradition of the “balance between regions”, this corresponds to the development of the Beijing-Tianjin-Hebei integration and to the expansion of the Yangtze’s Economic Belt.
With a view to rebalancing the masses’ purchasing power and stabilizing society, 7.2 million housing units subsidized by the central government have been built, with a new initiative to build schools in rural areas and make compulsory education universal.
In the current NPC, reference has also been made to rural areas to spread a new political formula, namely the “Three Stricts, Three Honests” internal education campaign, initiated by Xi Jinping in December 2014, which is meant to strengthen public ethics and “political ecology”.
With this campaign, Xi wanted to hit political careerism and the overlap between political elites and economic and business elites.
It is worth recalling that the “Three Honests” are: “be honest in making decisions”, “be honest in forging a career” and “be honest in personal behaviour”.
The Three Stricts are: “be strict in moral conduct”, “be strict in exercising power”, “be strict in disciplining yourself”.
As we can infer from this brief description, Xi Jinping’s (and Li Kekiang’s) theory and slogans are perfectly suited to the current economic policy, not only with regard to corruption, but also to everything relating to the expansion and stabilization of economic development in a context of democratization of income and support for the old and new Chinese poor walks of society.
Hence, for Xi and Li Kekiang, the political and economic project is now clear: to preserve a high rate of economic development, despite the external conditions and asymmetric shocks coming from countries in crisis (and from the United States), and then to perfect the structural adjustments, which have a clear significance.
Their significance is the urbanization of China’s people, 50% of whom lives in cities; the reduction of private energy consumption, which fell by 18.2%, with a pollution rate which decreased by 12%; the growth of transport infrastructure, with 121,000 km of railway lines, 19,000 of which are high-speed; finally, the promotion of scientific and technological innovation.
This is the reason why the economy of the service sector, adequately backed by the Chinese government, will anyway support growth, while the structural undervaluation of renmbimbi, the axis of the financial protection of Chinese assets, will continue to play its role as a de facto subsidy to Chinese exports.
The Chinese economy learns from its mistakes very quickly, also thanks to its centralization, and the share of GDP generated by services will optimally support the Chinese expansion in an international market where the share of manufacturing and old technologies is shrinking.
China’s soft power and its Lunar New Year’s Culture
Authors: Liu Hui & Humprey A. Russell*
As a common practice, China has celebrated its annual Lunar new year since 1984 when the leaders of the day decided to open mysterious country in a more confident and transparent way. So far, the lunar new year gala has become a part of Chinese cultural life and beyond. The question then arises why China or its people have been so thrilled to exhibit themselves to the world, as its economy has already impressed the world by its rapid pace and tremendous capacity.
As it is well-known, in international relations, peoples from different cultural and ethnical backgrounds need to enhance their understanding which eventually leads to mutual respect and tolerance as the key to the world peace and stability. China is well-aware of this norm. As a rising power with 1.3 billion people, it is necessary for China to introduce its culture and notion of the peaceful rise to the audiences globally. Joseph Nye, Jr., the founder of the concept of the soft power, has argued: “The currency of soft power is culture, political values, and foreign policies. During the information age, credibility is the scarcest resource.”In light of this, China has been steadily involved in cultural promotions abroad.
China is an ancient civilization but diplomatically it is a new global player in terms of its modern involvement into the world affairs, particularly in terms of reform and openness. Yet, since China has aspired to rejuvenate itself as one of the leading powers globally, it is natural for the world en bloc to assume Beijing’s intention and approach to the power transition between the rising power like itself and the ruling powers such as the United States and the G-7 club. Consider this, China has exerted all efforts to project but not propagate its image to the world. Here culture is bound to play the vital role in convincing the countries concerned that “culturally China has no the gene of being a threat to other peoples,” as Chinese President Xi has assured. The annual lunar gala is evidently a useful instrument to demonstrate Chinese people, culture and policies as well.
Culturally speaking, the Chinese New Year celebrations can be seen as follows. In a general sense, similar themes run through all the galas with the local cultural and ethnical ingredients, for instance, Chinese opera, crosstalk and acrobatics, as well as the lion-dancing or the dragon-dancing from time to time. Yes, the galas play the role of promoting the Chinese communities over the world to identify themselves with the Chinese culture which surely strengthen the cultural bonds among the Chinese, in particular the younger generations. Moreover, the dimension of the Chinese culture can be found beyond the country since its neighbors like Japan, Vietnam, South Korea and Malaysia, as well as Chinese communities in many other areas also perform those arts at the holiday seasons. The message here is clear that China, although it is a rising great power, has never abandoned its cultural tradition which has emphasized the harmony among the different races and ethnics.
Recently, the lunar new year celebrations across China have invited professional and amateur artists from all over the world. Those foreign guest artists and many overseas students studying in China have been able to offer their talents in either Chinese or their mother tongues. No doubt, this is a two-way to learn from each other because Chinese performers are benefited from the contacts with their counterparts globally. In terms of public diplomacy, Beijing aims to send a powerful and sincere message to the world: China can’t be in isolation from the world because it has aspired to be a great and inclusive country as well. To that end, the rise of China is not going to challenge the status quo, but will act as one of the stakeholders.
As usual, realists have difficulties and even cultural bias to accept the rhetoric from a country like China since it has been regarded by the ruling powers of the world as an ambitious, assertive and communist-ruled country with its unique culture. To that challenge, the Chinese government and the people have done a great deal of works to successfully illustrate Chinese practice of harmony at the societal level idealized by Confucius’ doctrines. This social harmony is made possible only by the realization of the Taoist ideal of harmony with nature – in this case, harmony between humans and nature. This explains why panda and many other rare animals are now viewed as new national symbol of China. Although they are unnecessarily an indispensable part of the lunar new year gala, the viewpoint is that the rise of China would not be completed at the cost of the ecological environment like many other countries did in history.
Practically speaking, the lunar new year celebrations are being conducted in a rich variety of ways such as concerts, cuisines, folk entertainments and even forums and receptions around the world. Major global commercial centers have also served to create a Chinese holiday atmosphere, adapt to the needs of Chinese tourists, attract active participation from local residents, and provide such diversities of cultural and social events. What is worth mentioning is that some Chinese-North American non-profit, non-partisan organizations are beginning to celebrate Chinese lunar gala in partnership with other local counterparts. For instance, the Chinese Inter-cultural Association based in California, recently hosted a Chinese New Year party in a Persian restaurant in partnership with a local non-profit, non-partisan organization called the Orange County Toastmaster Club, part of Toastmaster International. Also, in another Chinese New Year celebration that was open to people of all races in Pasadena, two Americans played the guitar and sang songs in fluent Chinese! Both galas were attended by people of all racial backgrounds around the world. Given this, it is fair to say that China’s soft power supported by its annual lunar new year festival is on the rise globally with a view to promoting mutual respect and friendship among the peoples of various cultural, ethnical and racial origins.
Yet, though the impressive feats are achieved, it has noted that China still has a long way to go in terms of its twin-centennial dreams. First, as a developing country with its unique culture, it is necessary for China to promote its great ancient culture abroad, but it is also imperative to avoid “introducing” China rashly into the globe. Essentially, soft power is more the ability to attract and co-opt than to use force or give money as a means of persuasion. Thereby, it is the very ability to shape the preferences of others through appeal and attraction. As cross-cultural communication is a long process, Nye admitted a few years ago, in public affairs, “the best propaganda is not propaganda.”
This is the key to all the countries. In 2014,President Xi formally stated, “China should increase its soft power, give a good Chinese narrative, and better communicate its messages to the world.” In light of this, Chinese lunar new year gala surely acts as soft power to project the image of China internationally.
* Humprey A. Russell (Indonesia), PhD candidate in international affairs, SIPA, Jilin University.
China’s step into the maelstrom of the Middle East
The Middle East has a knack for sucking external powers into its conflicts. China’s ventures into the region have shown how difficult it is to maintain its principle of non-interference in the internal affairs of other states.
China’s abandonment of non-interference is manifested by its (largely ineffective) efforts to mediate conflicts in South Sudan, Syria and Afghanistan as well as between Israel and Palestine and even between Saudi Arabia and Iran. It is even more evident in China’s trashing of its vow not to establish foreign military bases, which became apparent when it established a naval base in Djibouti and when reports surfaced that it intends to use Pakistan’s deep sea port of Gwadar as a military facility.
This contradiction between China’s policy on the ground and its long-standing non-interventionist foreign policy principles means that Beijing often struggles to meet the expectations of Middle Eastern states. It also means that China risks tying itself up in political knots in countries such as Pakistan, which is home to the crown jewel of its Belt and Road Initiative — the China–Pakistan Economic Corridor (CPEC).
Middle Eastern autocrats have tried to embrace the Chinese model of economic liberalism coupled with tight political control. They see China’s declared principle of non-interference in the affairs of others for what it is: support for authoritarian rule. The principle of this policy is in effect the same as the decades-old US policy of opting for stability over democracy in the Middle East.
It is now a risky policy for the United States and China to engage in given the region’s post-Arab Spring history with brutal and often violent transitions. If anything, instead of having been ‘stabilised’ by US and Chinese policies, the region is still at the beginning of a transition process that could take up to a quarter of a century to resolve. There is no guarantee that autocrats will emerge as the winners.
China currently appears to have the upper hand against the United States for influence across the greater Middle East, but Chinese policies threaten to make that advantage short-term at best.
Belt and Road Initiative-related projects funded by China have proven to be a double-edged sword. Concerns are mounting in countries like Pakistan that massive Chinese investment could prove to be a debt trap similar to Sri Lanka’s experience.
Chinese back-peddling on several Pakistani infrastructure projects suggests that China is tweaking its approach to the US$50 billion China–Pakistan Economic Corridor. The Chinese rethink was sparked by political volatility caused by Pakistan’s self-serving politics and continued political violence — particularly in the Balochistan province, which is at the heart of CPEC.
China decided to redevelop its criteria for the funding of CPEC’s infrastructure projects in November 2017. This move seemingly amounted to an effort to enhance the Pakistani military’s stake in the country’s economy at a time when they were flexing their muscles in response to political volatility. The decision suggests that China is not averse to shaping the political environment of key countries in its own authoritarian mould.
Similarly, China has been willing to manipulate Pakistan against its adversaries for its own gain. China continues to shield Masoud Azhar (who is believed to have close ties to Pakistani intelligence agencies and military forces) from UN designation as a global terrorist. China does so while Pakistan cracks down on militants in response to a US suspension of aid and a UN Security Council monitoring visit.
Pakistan’s use of militants in its dispute with India over Kashmir serves China’s interest in keeping India off balance — a goal which Beijing sees as worthy despite the fact that Chinese personnel and assets have been the targets of a low-level insurgency in Balochistan. Saudi Arabia is also considering the use of Balochistan as a launching pad to destabilise Iran. By stirring ethnic unrest in Iran, Saudi Arabia will inevitably suck China into the Saudi–Iranian rivalry and sharpen its competition with the United States. Washington backs the Indian-supported port of Chabahar in Iran — a mere 70 kilometres from Gwadar.
China is discovering that it will prove impossible to avoid the pitfalls of the greater Middle East. This is despite the fact that US President Donald Trump and Saudi Arabia’s powerful Crown Prince Mohammad bin Salman seem singularly focussed on countering Iran and Islamic militants.
As it navigates the region’s numerous landmines, China is likely to find itself at odds with both the United States and Saudi Arabia. It will at least have a common interest in pursuing political stability at the expense of political change — however much this may violate its stated commitment to non-interference.
Chinese extradition request puts crackdown on Uyghurs in the spotlight
A Chinese demand for the extradition of 11 Uyghurs from Malaysia puts the spotlight on China’s roll-out of one of the world’s most intrusive surveillance systems, military moves to prevent Uyghur foreign fighters from returning to Xinjiang, and initial steps to export its security approach to countries like Pakistan.
The 11 were among 25 Uyghurs who escaped from a Thai detention centre in November through a hole in the wall, using blankets to climb to the ground.
The extradition request follows similar deportations of Uyghurs from Thailand and Egypt often with no due process and no immediate evidence that they were militants.
The escapees were among more than 200 Uighurs detained in Thailand in 2014. The Uyghurs claimed they were Turkish nationals and demanded that they be returned to Turkey. Thailand, despite international condemnation, forcibly extradited to China some 100 of the group in July 2015.
Tens of Uyghurs, who were unable to flee to Turkey in time, were detained in Egypt in July and are believed to have also been returned to China. Many of the Uyghurs were students at Al Azhar, one of the foremost institutions of Islamic learning.
China, increasingly concerned that Uyghurs fighters in Syria and Iraq will seek to return to Xinjiang or establish bases across the border in Afghanistan and Tajikistan in the wake of the territorial demise of the Islamic State, has brutally cracked down on the ethnic minority in its strategic north-western province, extended its long arm to the Uyghur Diaspora, and is mulling the establishment of its first land rather than naval foreign military base.
The crackdown appears, at least for now, to put a lid on intermittent attacks in Xinjiang itself. Chinese nationals have instead been targeted in Pakistan, the $50 billion plus crown jewel in China’s Belt and Road initiative that seeks to link Eurasia to the People’s Republic through infrastructure.
The attacks are believed to have been carried out by either Baloch nationalists or militants of the East Turkestan Independence Movement (ETIM), a Uighur separatist group that has aligned itself with the Islamic State.
Various other groups, including the Pakistani Taliban, Al Qaeda and the Islamic State have threatened to attack Chinese nationals in response to the alleged repression of Uyghurs in Xinjiang.
ETIM militants were believed to have been responsible for the bombing in August 2015 of Bangkok’s Erawan shrine that killed 20 people as retaliation for the forced repatriation of Uighurs a month earlier.
The Chinese embassy in Islamabad warned in December of possible attacks targeting “Chinese-invested organizations and Chinese citizens” in Pakistan
China’s ambassador, Yao Jing, advised the Pakistani interior ministry two months earlier that Abdul Wali, an alleged ETIM assassin, had entered the country and was likely to attack Chinese targets
China has refused to recognize ethnic aspirations of Uyghurs, a Turkic group, and approached it as a problem of Islamic militancy. Thousands of Uyghurs are believed to have joined militants in Syria, while hundreds or thousands more have sought to make their way through Southeast Asia to Turkey.
To counter ethnic and religious aspirations, China has introduced what must be the world’s most intrusive surveillance system using algorithms. Streets in Xinjiang’s cities and villages are pockmarked by cameras; police stations every 500 metres dot roads in major cities; public buildings resemble fortresses; and authorities use facial recognition and body scanners at highway checkpoints.
The government, in what has the makings of a re-education program, has opened boarding schools “for local children to spend their entire week in a Chinese-speaking environment, and then only going home to parents on the weekends,” according to China scholar David Brophy. Adult Uyghurs, who have stuck to their Turkic language, have been ordered to study Chinese at night schools.
Nightly television programs feature oath-swearing ceremonies,” in which participants pledge to root out “two-faced people,” the term used for Uyghur Communist Party members who are believed to be not fully devoted to Chinese policy.
The measures in Xinjiang go beyond an Orwellian citizen scoring system that is being introduced that scores a person’s political trustworthiness. The system would determine what benefits a citizen is entitled to, including access to credit, high speed internet service and fast-tracked visas for travel based on data garnered from social media and online shopping data as well as scanning of irises and content on mobile phones at random police checks.
Elements of the system are poised for export. A long-term Chinese plan for China’s investment in Pakistan, dubbed the China Pakistan Economic Corridor (CPEC), envisioned creating a system of monitoring and surveillance in Pakistani cities to ensure law and order.
The system envisions deployment of explosive detectors and scanners to “cover major roads, case-prone areas and crowded places…in urban areas to conduct real-time monitoring and 24-hour video recording.”
A national fibre optic backbone would be built for internet traffic as well as the terrestrial distribution of broadcast media. Pakistani media would cooperate with their Chinese counterparts in the “dissemination of Chinese culture.”
The plan described the backbone as a “cultural transmission carrier” that would serve to “further enhance mutual understanding between the two peoples and the traditional friendship between the two countries.”
The measures were designed to address the risks to CPEC that the plan identified as “Pakistani politics, such as competing parties, religion, tribes, terrorists, and Western intervention” as well as security. “The security situation is the worst in recent years,” the plan said.
At the same time, China, despite official denials, is building, according to Afghan security officials, a military base for the Afghan military that would give the People’s Republic a presence in Badakhshan, the remote panhandle of Afghanistan that borders China and Tajikistan.
Chinese military personnel have reportedly been in the mountainous Wakhan Corridor, a narrow strip of territory in north-eastern Afghanistan that extends to China and separates Tajikistan from Pakistan since March last year.
The importance China attributes to protecting itself against Uyghur militancy and extending its protective shield beyond its borders was reflected in the recent appointment as its ambassador to Afghanistan, Liu Jinsong, who was raised in Xinjiang and served as a director of the Belt and Road initiative’s $15 billion Silk Road Fund.
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