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Future of Davos in Kyrgyzstan

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Is the new Russian approach towards China and India, vector for a multipolar world order? Will the new Davos – gathering between vanity fair and summit of the mightiest – in future take place in Kyrgyzstan – Central Asian country surrounded by the most prosperous and promising powers?

 

The last months of 2014 were marked by a series of significant bilateral agreements and summits involving Russia, India and China. According to many international analysts, the research of better relations with the two Asian giants by Moscow represents another further step towards global transformation from an unipolar order ruled by United States to a multipolar one.

A key point in order to analyze the fundamental reasons of Moscow’s approach towards China and India is connected to difficulties emerged in the last year with European Union and United States. Complications in Russia-West relations are clearly exemplified by the Ukrainian imbroglio.
However, it’s also necessary to dwell on long-term strategic interests of the countries involved. Despite the current shaky situation of Eastern Europe and Middle East, generally speaking Beijing and New Delhi look at Russia as a reliable partner with whom it’s fundamental continue to dialogue, cooperate and trade. China-Russia dialogue is growing from mid-nineties, while Indian strategic relationship with Moscow is heir of the one established during Cold War with Soviet Union. Moreover, it should not to be underestimate the fact that Russia, India and China are already actively cooperating in other multilateral organizations, such as BRICS forum (Brazil, Russia, India, China, South Africa), and have the opportunity to develop new platforms for political, economic and military cooperation, for example within the Shanghai Cooperation Organisation (SCO). The strategic triangle Russia-India-China (RIC), taken into account difficulties of relations especially considering Indo-Chinese bond characterized at the same time by cooperation and competition, could therefore be an interesting model of dialogue in the new multipolar world order.

The strengthening of Russian-Chinese cooperation
Regarding the close relationship between China and Russia, it is possible to consider latest agreements on energy co-operation, taking into consideration that improvements of this relation have been underway for about two decades after the fall of Soviet Union. It can be argued that Russian-Chinese partnership is based on three basic pillars, key points of Chinese foreign policy: peace, cooperation and development, to which it’s possible to add mutual profit for both sides and “win-win strategy”.
Milestone of last year improvements in bilateral relations was May 2014 agreement worth $ 400 billion, which concerns pipeline Power of Siberia and the sending of 38 billion cubic meters of natural gas from Russia to China. The sale of gas will not begin immediately because natural gas fields in Eastern Russia require infrastructural improvements as well as connecting pipelines have yet to be installed. However, according to agreements the sending of natural gas through the eastern route will be operative from 2018.

Russia and China have also signed a Memorandum of Understanding for the western route, which could guarantee to China further 30 billion cubic meters of natural gas per year. The main important consequence of these agreements is that they could transform China in the largest consumer of Russian gas. An aspect that should not be underestimated in a consideration of medium-long term is that China could become the main market of Russian energy resources as a whole, overcoming Europe. In 2012 Russian exports of natural gas towards Europe totaled $ 66 billion and accounted for more than 10% of total Russian exports. In the diversification of its exports, Russia could find in Chinese market a viable alternative to Europe, while the latter should find clear alternatives such as shale gas from United States reducing its energy dependence from Russia.

At the same time, there is an important strategic advantage for Beijing because it would receive resources through land. This would be a major transformation of Chinese energy supplying, considering that currently resources destined to China are transported by sea through the Strait of Malacca, controlled by United States, and through areas characterized by tensions and territorial disputes (South and Eastern China Sea).
Becoming a fundamental energy partner of China, Russia would be also a competitor of United States since Chinese territory is one of the most advantages markets for Washington’s exportations of Liquefied Natural Gas (LNG). Energy sector represents the most important area in which Russian-Chinese cooperation could further develop: for example Rosneft has offered a 10% stake to Chinese authorities for the project of joint exploitation of Vankor oil field in Eastern Siberia, Rosneft’s third-largest onshore production subsidiary. This deal would represent the most substantial Chinese equity participation in Russia’s onshore oil industry to date. Furthermore, it will be offered a representative office to China in the board of the same project, while Moscow would offer the sale of oil from Vankor’s field with payments in Yuan, a move that would exemplify a challenge to international dollar system and its role as reserve-currency in the world.

China aims to invest in Asian infrastructural sector with the ambitious objective to create a complex network of high-speed railways, pipelines, ports and optical fibers cables that could link Chinese cities to neighboring countries and beyond; in this case two projects could be cited, the Silk Road Economic Belt through Eurasia and the 21st Century Maritime Silk Road trough East and South China Seas and Pacific and Indian Oceans. These projects could effectively link Europe to Asia-Pacific. Some components of these plans are already under construction, especially in Central Asian republics, but Chinese intentions are to create more links with Russia, Iran, Middle East, Turkey, Indian Subcontinent, South-East Asia and Europe.

The current Asian political scenario, considering these Chinese infrastructural projects, is then characterized by the consolidation of a strategic cooperation between Russia and China, a factor confirmed at the end of the last meeting between APEC countries (Asia-Pacific Economic Cooperation), hosted by Beijing (November 10th – 11th, 2014). This strategic cooperation has been further emphasized by visit of Russian Defense Minister Sergey Shoigu in Beijing few days after APEC summit. From all these meetings and subsequent agreements emerged the prospect of an alliance based on common economic, military, political and energy interests in order to share development and stability in the Asia-Pacific region. This cooperation could also appear to some extent as a political response to NATO’s containment of Russia and US pivot strategy finalized to rebalance of power in Asia-Pacific. This particular kind of interpretation focused on Washington’s concerns is founded analyzing Eastern Europe’s tensions and sporadic diplomatic clashes for the economic control of East and South China Seas.

China looks favorably to economic consequences arising from its cooperation with Russia. The international situation and concerns related to strategic issues have created the conditions for a strengthening of teamwork between Russia and China so that Moscow could defend its interests and Beijing could maintain globally a balance of power. It is possible that this kind of collaboration could go further, making the two countries interdependent and able to reinforce relationship in other sectors (agriculture, aerospace, defense and information technology). Russia and China have already a consolidated business relationship worth approximately $ 100 billion and at the same time China could support Moscow to deal with the effects of Western sanctions on its finances. Beijing would continue to invest in Russian bonds and make direct investments in Russia. China is currently in the position to do so, given the availability of foreign exchange reserves (more than $ 4,000 billion).
Additionally, as demonstrated by the visit of Russian Defense Minister Shoigu to Beijing the Russian-Chinese cooperation will be strengthened in other fronts such as that of the military cooperation, which could be implemented considering common concerns related to cited US Pivot to Asia. As announced by Shoigu during 2015 there will be Russian-Chinese joint naval exercises not only in the Pacific, but also in the Mediterranean Sea.

This is a deliberate long-term Russian strategy to leave behind cooperation with Europe and United States or is a merely tactic searching a revitalization of relations with the West? It’s likely that Russia contemplates strengthening of partnership with Beijing as a useful alternative to relationship with Europe, but also to counterbalance US role in Asia-Pacific. However, the whole scenario is more multifaceted, given the complexity of Sino-US relations and the economic interdependency between Washington and Beijing. Tensions between Russia and West could be exploited to its advantage by China. Given the all picture, another point to consider is in fact that China does not intend to completely sever its relations with Washington coming to a strategic rivalry between blocks typical of Cold War period. The complexity of Sino-American relations is evident, given the value of economic cooperation and common concerns on various global issues (Islamic terrorism, the future of Afghanistan, Iran’s nuclear issue and agreements on global warming). The current global context is not characterized by the presence of ideological opposing blocs, but can be rather be described as an evolving multipolar system characterized by power centers interdependent with an increasingly significant role of Asian countries.

The long-term synergy between India and Russia
After China, Moscow may look to other alternatives to Europe for its natural resources exportations, considering a strengthening of relations with Japan, South Korea and India.
In the specific case of India, the Sino-Russian energy pact could be followed by a similar cooperation between Moscow and New Delhi. Narendra Modi, the new prime minister of India in charge from last May 2014, is searching to improve relationships with many global and regional actors, like United States, China and Japan. Russia is another important partner, to which current India’s government looks with deep attention in a changing international environment. At the same time it’s thanks to Vladimir Putin that from the end of nineties Russia-India strategic partnership had new force after the fall of Soviet Union.  

A stronger Indo-Russian energy relation could significantly change the political equilibriums of Asian continent. This kind of cooperation would be focused on natural gas and in particular in the importation by India of LNG, despite the need of infrastructural improvements in Indian and Russian territories. Since India has limited reserves of natural gas, it would be for New Delhi a concrete opportunity to diversify its energy supply and a necessary provision in order to support economic growth and meet rising domestic demand of energy resources. However energy collaboration could also involve Russian oil.

Nevertheless, there are a number of political issues that could hinder Indo-Russian energy cooperation. Russia negative relations with Western countries represent a counterproductive aspect for India and an expected tightening of Western sanctions against Russia linked to Ukrainian situation could affect the activity of certain Indian public companies with interests in dealing with Russian counterparts, such as Oil and Natural Gas Corporation Limited (ONGC), Gas Authority of India Limited (GAIL) and Bharat Petroleum (BP). ONGC’s interests to drill shale oil in Siberia could be delayed because sanctions against Moscow make it more problematic to work with US counterparts, given the fact that last September 2014 Washington banned its companies from supporting exploration and productive activities in deep water, Artic offshore and shale projects in Russia. This problematic situation could affect ONGC’s activity because it has contracted US firm Liberty Resources to drill four wells in the Bazhenov shale formation in Siberia, a project that now could be interrupted. ONGC has also a 20% stake in the Sakhalin 1 project in Russia and is in consultations with Rosneft over a stake in two east Siberian oil fields and it could look out for alternative solutions for drilling in the Bazhenov.

GAIL company, the nation’s largest natural gas distributor,has recently signed several agreements with some US corporations, for example the pact with US-based WGL for buying about 2.5 million tons of gas for twenty years. GAIL may incur therefore in problematic situations in the case of business activity with Russian firms, for example Gazprom held discussions with GAIL for deliveries also of Russian LNG.
While it’s true that India has other public companies that haven’t developed agreements outside of the Subcontinent and could benefit from an effective Indo-Russian energy cooperation, United States see adversely the developments of New Delhi-Moscow relations. Washington has publicly expressed its disappointment in the aftermath of the positive 15th Indo-Russian bilateral summit held last December in New Delhi, arguing that this is not a good time “to make business with Russia as usual”.

New Delhi has not approved Western sanctions against Russia, but at the same time it has not yet recognized Crimea as an effective part of Russia, though refusing to criticize openly Moscow. At this particular juncture it’s clearly emerging an Indian intention to maintain a substantial strategic autonomy and a difficult balance position in its approach towards United States and Russia. Though, it’s at the same time clear that Washington has used and will continue to apply sanctions to commercial activities related to energy sector as a political tool to isolate opponents (for example Iran in the past for nuclear issue and Russia today for Ukrainian situation),pressuring its allies (for example India) to stop commercial activities with these antagonists States that have to change a specific political behavior according to Washington strategic calculus. Iran’s case of few years ago is emblematic: New Delhi as a result of US pressure supported sanctions against Tehran regarding nuclear issue, partially spoiling Indo-Iranian traditional good cooperation. If it is true that in that case sanctions had United Nations assent and India is against unilateral sanctions, it is certainly not to be underestimated US irritation towards India’s attempts to improve relations with Russia.

At the last Indo-Russian bilateral summit the two countries signed twenty agreements – seven intergovernmental and thirteen commercial – including a strategic vision for a peaceful cooperation in the use of atomic energy. In summary, agreements have concerned energy sector, fields of technology and innovation and they promoted a wide-ranging engagement in commercial activities, considering the use of national currency for bilateral trade. According to Vladimir Putin’s statements, Russia will support India in the construction of twelve nuclear power plants after the positive results related to Kudankulam nuclear power project and the oil company Rosneft will start to send ten tons of oil per year. Russian authorities offered to build in India one of the most advanced Russian helicopters and it will speed up the implementation of the joint project for the fifth-generation fighter jet. Russia aims also to participate in the plan for the realization of Delhi-Mumbai Industrial Corridor and facilitate the process of India’s accession to SCO. However, trade is declining and it’s equal to $ 11 billion; for a comparison, Indo-Chinese bilateral commerce is about 70 billion, while Sino-Russian stands around 100 billion. In this sense, negotiations to promote a free trade agreement between India and Eurasian Union could be seen as a measure suitable to boost bilateral commerce. It’s also important that the project for North-South Transport Corridor (involving Russia, India and Iran) would be effectively implemented since the intentions of a commerce network that could integrate South Asia, Iran, Central Asia and Russia. The geographical distance between India and Russia is significant, but last bilateral summit showed willingness in both sides to overcome this particular difficulty. The basic idea is to encourage a transformation of bilateral cooperation in a much better quality, observing also the international framework and supporting the development of a collective, balanced and inclusive security in Asia-Pacific, considering the legitimate interests of all States in a region led by the respect of international law.

Narendra Modi has recently affirmed the importance and priority assigned to Moscow in the strategic calculus of New Delhi, claiming that Russia will remain the most important partner of India in defense sector. The Indian government is also interested to enhance cooperation with Russia in spite of sanctions sponsored by Washington. However, it is important to underline that Modi is keen to have stronger defense ties with US – the main partner in the sector of arms imports in recent years during Manmohan Singh government – although it’s not possible at this moment to replace Russia’s role. At the same time Moscow is looking to Pakistan, which could become a strategic military partner of Russia. Another aspect is that Russian-Chinese partnership could be seen with concern by New Delhi: Russian technologies and systems are now exported also to China, not only to India, and a rising Chinese power could transform Asian balance of power, pushing India towards United States.
Nevertheless,India seems interested to promote a deep cooperation with Russia, which could aspire to become one of the countries most concerned in governmental campaign “Make in India” launched by Modi and designed to accelerate the economic growth of the country and particularly to support the Indian manufacturing sector by attracting foreign direct investment. In this case the nature of Indo-Russian cooperation could be transformed by purchaser-consumer structure to joint manufacturing partners.

 

The recent meeting between Putin and Modi, as well as summits and agreements between Russian and Chinese authorities are particularly important for the period in which they occurred, few months after the inauguration of a new government in India andwith the specter of a “New Cold War” between West and Russia, though the use of the term “Cold War” in order to describe the current standoff of US-Russian relations is not totally correct.

There are different expectations from Russian government that new course in India will fortify Indo-Russian partnership and many signals go in this direction; as well as it could be possible a strategic alliance with China, considering many fields of joint cooperation. The world order is changing and Western countries should take into account the complex network of relations involving Russia, India and China and other Asian countries. These regional powers are no longer only spokesman of an emergent world seeking voice in an anachronistic international system, considering for example India and China aspirations to reorganize board of United Nations, World Bank and International Monetary Fund. Furthermore, Russia, India and China are not only characters of multilateral forums such as BRICS or G-20, but they are already proponents of deep bilateral relations and bearer of new systems of payment in international trade, considering the use of national currencies than could potentially change future global balances of power. These are clear exemplifications of the emergence of a multipolar world order.

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Economy

How U.S.’s Response to Covid-19 Could Precipitate 2nd Great Depression

Eric Zuesse

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On March 10th of this year, there were 290 daily new U.S. cases of Covid-19 (coronavirus-19).

On March 13th, U.S. President Donald Trump declared a pandemic national emergency, because the number of daily new cases was now suddenly doubling within only three days. However, no lockdown was imposed. The policy-response was instead left to each individual. This is in accord with America’s libertarian idelogy. Trump even announced that “he was allowing his health secretary to bypass certain regulations to provide more flexibility to doctors and hospitals responding to the outbreak” — outright reducing, insead of increasing, federal regulations, this being his way to address the matter. That’s the libertarian response.

Covid-19 (coronavirus-19) cases started soaring in the U.S., from 600 daily new cases on March 13th, to 25,665 on March 31st. Americans were scared to death, and facemask-usage soared, and independent small businesses started laying people off en-masse. (Restaurants, hair salons, travel agencies, inns, dental offices, etc., were hard-hit.)

Immediately, the alarming rise in new cases halted on April 4th (at 34,480), and the daily new cases remained approximately flat, but slightly downward, from March 31 to June 9th (when it reached bottom at 19,166), but then soared yet again, to 78,615, on July 24th.

But, then, it again declined, so that, on September 8th, it was at only 28,561. This was already returning to around what the new-cases rate had been back on March 31st. So: despite peaking again on July 24th, the rate of daily new cases was little changed between March 31st and September 8th. And, all during that 5-month period, people were coming back to work.

The key immediate and direct economic variable affected by Covid-19 is the unemployment rate. Here, that economic effect is clearly shown:

U.S. unemployment: March 4.4%, April 14.7%, May 13.3%, June 11.1%, July 10.2%, August 8.4%

Though the daily-new-cases rate went down after March 31st and after July 24th, the unemployment rate progressed far more gradually downward after March 31st: the small businesses that had been panicked by the explosion of new cases during March were now gradually re-opening — but they remained very nervous; and, so, unemployment still was almost twice what it had been during March.

Here, that experience will be compared with two Scandinavian countries, starting with Denmark, which declared a pandemic national emergency on March 13th, just when Trump also did. “Starting on 13 March 2020, all people working in non-essential functions in the public sector were ordered to stay home for two weeks.” The daily new cases fell from the high of 252 on March 11th, down to the low of 28 on March 15th, but then soared to 390 on April 7th, and gradually declined to 16 (only 16 new cases) on July 9th. Then it peaked back up again, at 373, on August 10th, plunged down to 57 on August 26th, and then soared yet again back up to 243 on September 8th. The new-cases rates were thus irregular, but generally flat. By contrast against the experience in U.S., Denmark’s unemployment-rate remained remarkably stable, throughout this entire period:

Denmark: March 4.1, April 5.4, May 5.6, June 5.5, July 5.2

Sweden’s Government pursued a far more laissez-faire policy-response (“The government has tried to focus efforts on encouraging the right behaviour and creating social norms rather than mandatory restrictions.”), and had vastly worse Covid-19 infection-rates than did the far more socialistic Denmark, and also vastly worse death-rates, both producing results in Sweden more like that of the U.S. policy-response than like that of the Danish policy-response, but far less bad than occurred on the unemployment-rate; and, thus, Sweden showed unemployment-increases which were fairly minor, more like those shown in Denmark:

Sweden: March 7.1, April 8.2, May 9.0, June 9.8, July 8.9

That was nothing like the extreme gyration in:

U.S.: March 4.4%, April 14.7%, May 13.3%, June 11.1%, July 10.2%, August 8.4%

Why was this? 

Even though Sweden’s policy-effectiveness was more like America’s than like Denmark’s at keeping down the percentages of the population who became infected, and who died from Covid-19 (i.e., it was not effective), Sweden’s policy-effectiveness at keeping down the percentage of the population who became unemployed was more like Denmark’s (i.e., it was effective, at that). Unlike America, which has less of a social safety-net than any other industrialized nation does, Sweden had, until recently, one of the most extensive ones, and hasn’t yet reduced it down to American levels (which are exceptionally libertarian). Therefore, whereas Swedes know that the Government will be there for them if they become infected, Americans don’t; and, so, Americans know that, for them, it will instead be “sink or swim.” Make do, or drop dead if you can’t — that is the American way. This is why Swedish unemployment wasn’t much affected by Covid-19. When a Swede experienced what might be symptoms, that person would want to stay home and wouldn’t be so desperate as to continue working even if doing that might infect others. Thus, whereas Sweden’s unemployment-rate rose 27% from March to May, America’s rose 202% during that same period. Americans were desperate for income, because so many of them were poor, and so many of them had either bad health insurance or none at all. (All other industrialized countries have universal health insurance: 100% of the population insured. Only in America is healthcare a privilege that’s available only to people who have the ability to pay for it, instead of a right that is provided to everyone.)

On September 9th, Joe Neel headlined at NPR, “NPR Poll: Financial Pain From Coronavirus Pandemic ‘Much, Much Worse’ Than Expected”, and he reported comprehensively not only from a new NPR poll, but from a new Harvard study, all of which are consistent with what I have predicted (first, here, and then here, and, finally, here), and which seems to me to come down to the following ultimate outcomes, toward which the U.S. is now heading (so, I close my fourth article on this topic, with these likelihoods): 

America’s lack of the democratic socialism (social safety-net) that’s present in countries such as Denmark (and residual vestiges of which haven’t yet been dismantled in Sweden and some other countries) will have caused, in the United States, massive laying-off of the workers in small businesses, as a result of which, overwhelmingly more families will be destroyed that are at the bottom of the economic order, largely Black and/or Hispanic families, than that are White and not in poverty. Also as a consequence, overwhelmingly in the United States, poor people will be suffering far more of the infections, and of the deaths, and of the laying-off, and of the soon-to-be-soaring personal bankruptcies and homelessness; and, soon thereafter, soaring small-business bankruptcies, and ultimately then big-business bankruptcies, and then likely megabank direct federal bailouts such as in 2009, which will be followed, in the final phase, by a hyperinflation that might be comparable to what had occurred in Weimar Germany. The ceaselessly increasing suffering at the bottom will ultimately generate a collapse at the top. Presumably, therefore, today’s seemingly coronavirus-immune U.S. stock markets, such as the S&P 500, are now basically just mega-investors who are selling to small investors, so as to become enabled, after what will be the biggest economic crash in history, to buy “at pennies on the dollar,” the best of what’s left, so as to then go forward into the next stage of the capitalist economic cycle, as owning an even higher percentage of the nation’s wealth than now is the case. Of course, if that does happen, then America will be even more of a dictatorship than it now is. Post-crash 2021 America will be more like Hitler’s Germany, than like FDR’s America was.

The Democratic Party’s Presidential nominee, Joe Biden, is just as corrupt, and just as racist, as is the Republican nominee, Donald Trump. And just as neoconservative (but targeting Russia, instead of China). Therefore, the upcoming November 3rd elections in the U.S. are almost irrelevant, since both of the candidates are about equally disgusting. America’s problems are deeper than just the two stooges that America’s aristocracy hires to front for it at the ballot-boxes.

Author’s note: first posted at Strategic Culture

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Democracy in the doldrums

Samudrala VK

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It is clear that during the COVID-19 pandemic  times, Democracy has gone pear shaped throughout the world. Power and Political activity are considered as alpha and omega of the modern day democracy.
The Modern state(political authority),which is based on legitimacy and a tool to deliver political, economical and social justice, has been rendering yeoman service to
corporates, both domestic and foreign. The ruling dispensations all around the globe have resorted to authoritarianism under the guise of health emergency. In addition, the topsy turvy of Democracy, through excessive centralisation and the iron curtain imposed on political activities during this pandemic, has left minimal space to raise the concerns of the urban poor. The pandemic, a bolt from the blue, has caught our health systems off guard. In India, the labour class has caught between the devil and the deep sea, thanks to the recent twin moves of the central government, privatization and the helter-skelter lockdown. The pernicious effects of the lockdown are yet to hit the masses. Seemingly, the rudderless policies of central government have created enough space to further pauperization of masses, mostly have-nots.
Now, the federal governments of third world countries have to walk on razor edge by meeting the fiscal deficit targets on one hand and by connecting the welfare dots on the other.It is not surprising to say that the big corporates are making good fortunes with the relaxation of tax rates and new labour codes. As unemployment is hanging like the sword of domacles over the working class, the corporate class would expect this surplus labour to be at their beck and call.The early warnings of intelligentsia on the consequences of disastrous lockdown  were remained as the voices crying in the wilderness. The ruling elite has been trying to enshroud the general despondency among the civic force by shifting the propaganda machinery to sensitive elements like religion, hyper nationalism and sloganeering-not to mention self aggrandizement.

Neo-liberalism and corporatisation

The diktats of the world bank and the IMF(International monetary fund) on the third world nations like pruning the subsidies, roll back of welfare measures and the abatement of labour laws as an essential sina qua non for any sort of relief package during the crisis of BOP(Balance of payments) have left labour class of the thrid world nations in quandary. The US with the support of the WTO( World Trade Organization)had exhorted all these countries to provide untrammeled access its products. Apparently, the aims and paths of federal governments of these nations ,the WTO and the IMF are congruent with regard to free trade and the globalization of capital. The lawful protections for the working class under the labour laws have proved disastrous for the interests of the capitalist class and being viewed as shackles for the exploitation. The decades-long struggle to retain these labour rights in independent nation states has been ending in smoke due to weakened trade unions and the decline of social capital. The time has come to fight tenaciously and move heaven and earth to restore their rights which are otherwise go to the dogs. When the market space is being dominated by Monopoly or Duopoly or Tripoly, the free and fair competition which the unhindered market guarantee is an absolute sham. Extolling the virtues of Neo-liberalism, the modern nation states have centred their development agenda in and around urban centres. Economically, in the post-liberal era of India, the upward mobility is largely confined to a few sections of the urban middle class.

Welfare economics

It is wrong to mention that welfare economics is based on “Rob Peter to pay paul principle” when Peter has direct access to resources(natural, political, economical and social) vis-a-vis Paul. It is not the Peter but the Paul who is running from the pillar to post in search of opportunities. The notion of political equality of liberal ideological stream revolves around freedom and liberty of an individual and overlooks the core elements of equality like social and economical justice. The central governments all over the world have successfully repudiated the pro-poor agenda and this volte face from welfare state to pro-capitalist state has pushed the labour class out of the frying pan into the fire.

Nexus between political class and biggies

The unholy nexus between the political class  and corporates has been riding roughshod over the interests of poor. This alliance behooves the political class to safeguard the vested interests of corporate bigwigs. It is apposite to mention that representative democracy has been metamorphosing into a turncoat democracy. Back in the day, Politicians were known for their erudition, statesmanship and uncompromising ideological commitment. On the contrary, present day representatives are turning into snollygosters for their personal gains. There are several voluminous reports from different corners on rising economical disparities in the post-liberal era on which no political party is keen to act upon. As Michael Jackson, king of pop, penned in one of his famous tracks “All I want to say is that they don’t really care about us”-the lyrics are still relevant in this pandemic times.

Globalization and dependency

The South Asian nations have started their LPG (Liberalisation, privatization and Globalization) path at the same time, with the exception of Sri Lanka which had opened its economy by fits and starts.They had adjusted their economical apparatus with a new global integration process at a time when the global economical architecture was dominated by unipolar power, the US.
The lopsided globalization process has been converting many third world countries as dependents and in some cases almost to a level of aid recipients upon the erstwhile colonial powers or the US. Under the banner of global integration, all these nations were dragged into this complex whole, in most of the cases through persuasion. In the name of free trade, the Western powers have been  bleeding these nations white of their resources. The asymmetrical globalization has also challenged the sovereignty of these nations while the same has remained intact in case of developed nations. The US has been playing a rigged game of globalization under the auspices of the WTO, the world bank and other agencies. The time has come for these players to bury their hatchet and rise as a one voice to have a just order at the international sphere.

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Economy

Objectives and Importance of Advertising in a Competitive Business World

Ahsan Siraj

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The best way to communicate with the customers is communication through advertisements. Through advertising customers are informed about the available brands in the market and also variety of new and existing products useful for them.Here are different definitions of advertising.

According to Kotler’s definition: “Advertising is any paid form of non-personal presentation & promotion of ideas, goods, or services by an identified sponsor.”

According to the Advertising Association of the UK: “Advertising is any communication, usually paid-for, specifically intended to inform and/or influence one or more people.”

Advertising is done by using different media types and different techniques and methods as per the requirements. It also aims to attract all age groups depending on the nature of brands and products they are offering to their customers. Communication between companies and customers are basically carried out in a very artistic way and for this effective communication in order to fulfil desired objectives one should possess great communication skills and convincing power.

What are Advertising Objectives?

Advertising is part of marketing and one of the most creative fields. Advertising is part of marketing but normally people confuse advertising with marketing. Hence, the objectives of Advertising are completely different from Marketing. The main objective of advertising is to carry out communications between the brand and the customer. Here are some more important objectives of advertising.

  • The introduction of the new product in the market is the most common reason behind the advertising by the brands and these brands can be new in the market as well as existing brands. The objective here is to tell customers about the new product launched in the market.
  • There are a lot of new businesses starting in the market and many among those are service providing businesses. For services the business are marketed as a brand instead of marketing their individual products.
  • Businesses use advertising to get attention as well as creating desire to buy a certain product or service and according to the AIDA model mostly followed in advertising basically getting attention is awareness creation while desire creation leads to buying. By advertising companies capture attention of people and make them aware of the products available in the market.
  • Another important objective of advertising is seeking customers. These customers can be both new and the ones purchasing from other brands. By effective advertising potential customers can be attracted to a certain brand making existing customers to switch brands.
  • In a competitive business world, it is very important to differentiate a brand’s product and service from its competitors and it is done by effective advertising. A customer can only differentiate between products and services based on the value a certain business provides over its competitors. That’s why advertising is used to create value and to differentiate one brand’s products and services from others in the market.
  • Brand building is also an important objective of advertising. So, when a brand regularly advertises and delivers quality products and fulfills the promises it makes, automatically the value of the brand is built.
  • Increasing the sales is another objective being achieved by effective advertising. The more customers attracted to a brand by advertising the more increase in sales is recorded.
  • With the value being communicated and the brand being differentiated as well as sales being increased, there is no doubt that advertising can contribute a lot to increasing profits.

What is the Importance of Advertising?

Advertising is equally important to customers, businesses and society. So, here are some of the important factors to all above mentioned areas.

Importance of advertising to Customers

Convenience: Advertisement is very helpful for customer’s decision-making process because through advertisement customers are well aware of their desired products available in the market. So, it is convenience for them to find their desired products in the market.

Awareness: It is due to the advertising that customers are well aware of the products and their features available in the market.This awareness not only helps customers to make purchase decision but also enable them to compare different products and choose the best product for them.

Quality Assurance: When we look at the trends in the market we come to know that advertising is done by brands only about their products and services. No local businesses go for advertising because no advertisements are required for unbranded products. This ensures quality products to the customers.

Importance of advertising to Business

Awareness: It is because of advertising that people are well aware of their desired brands and productsavailable in the market.

Brand Image: It is very important to create a positivebrand image and brand personality in the minds of the customers and it is done efficiently by advertising.

Product Differentiation: One business is able to differentiate its product from those of its competitors’ and communicate its features and advantages to the target audience by using effective advertising.

Profit MaximizationDue toadvertising brands are able to deliver their message to a large audience and hence more people tend to buy from those brands ultimately making them able to earn more money.

Importance of advertising to Society

Advertising is really helpful in educating people. There are some social issues required to be addressed for social benefits and advertising deals with them like child labor, smoking, family planning education, etc. therefore, advertising plays a significant role in society.

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