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Airlines as Geopolitical Agents of Power

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Airlines are agents of geopolitical power. They are agents of geopolitical power, because they have the power to become the bridge between the core and peripheries of the world.

For example, in spite of the current civil strife in Mogadishu, Somalia, Turkish Airlines, during March, 2012, was the first and only internationally-acclaimed airline that began flying (via Khartoum at the time) to Somalia. Flying into Somalia, for Turkish Airlines, meant: We back Somalia. And let this flight herald our trust in Somalia and our Somali partners.

Geopolitically what does this mean? Since 2011 it was President (former prime-minister at the time) Recep Tayyip Erdogan that first visited Mogadishu (the highest non-African ranking official that Somalia has ever received after years of internal strife). Despite of the fact that Turkey initially began its bilateral relation with Somalia based on humanitarian aid, the Turco-Somali relationship would evolve into that of a political and commercial interest, particularly in Turkey’s interest of supporting vital infrastructure—i.e. ports—programs in Somalia by investing approximately over $500M. Yet, going back to the main topic of this article (airlines and geopolitics), what does it mean when an airline goes to another poorly served, connected country? It means one thing and one thing only: geopolitical trust (country stability) and geopolitical territorial linkage (exertion of state power from the airline’s country of origin. Think of Netherlands and Suriname).

Before studying and working in geopolitics and investment projects, I, myself, lived some kind of a hybrid life. Let’s say somewhere between business and aviation. From 2007—2011, I studied business administration at Embry-Riddle Aeronautical University (which actually has a huge military culture and values, and which also taught me, generally speaking, how many of my American colleagues in the military perceive the world), focused in the geographies of air transportation; in other words, commercial geographies and mobilities, combined with business administration critical thinking. Yet, throughout those years I became a pilot and even did an internship in Panama City, Panama, in Copa Airlines headquarters (Panama’s main airline).

Now, fast forwarding time, by combining both geopolitics and aviation studies, I have undoubtedly learned that airline routes are one of the prime indicators when a country’s socioeconomic status is improving, heading in the wrong direction, or a sign of the geopolitical influence one state exerts into another; airlines are the first geopolitical agents that have the power to suspend or completely terminate a destination, consequently, eliminating the bridge between one space and another, isolating an entire country, for example (e.g. Google: Yemen Sana’a airport).

Take for example Bangui, in the Central African Republic. What if I tell you that if you were to fly to the CAR, it is Air France (as the former—and still—colonial power) the only European airline that serves Bangui only once a week? What if I tell you that though Royal Air Maroc serves Bangui as well, it does so in the same degree—once a week—as Air France? And the same can be said for the relatively internationally known TAAG Angola airlines, which operates from Luanda. Regardless of how you look at it, if you were to fly to Bangui M’Poko International airport, in a trustworthy international airline (those that fly into Europe and the US are considered safe, trustworthy and high-standard airlines, because of both the FAA and EASA high-standard requirements on aircraft safety), most likely, you would have a really hard time in securing the correct flight schedule, price and, most importantly, the time and date you’d like to fly into the CAR. In the commercial aviation network and planning parlance, the CAR would be technically isolated. If Air France is the only European airline serving the CAR, can this mean that there are still some colonial, pastoralist-type of linkages? Or that an ex-colonial power controls the mobility and connectivity to its former colonies? I’ll let you be the judge of that question.

But, also, did you know that Air France has, from Europe, a complete monopoly on Cayenne, French Guiana, and to a certain extent to Papeete, French Polynesia? (Air Tahiti Nui—Air France’s only competitor—is supported by the French Government in the form of +$300M in subsidies, in spite of the fact that its main shareholder is the French Polynesian government, and though I am indeed generalizing, I am suspecting that the same French Government’s subsidies are the ones that are partially supporting Air Tahiti Nui vis-à-vis the Government in Tahiti). And, lastly, the same can be said about West Africa and the Sahel air travel network—until Turkish Airlines has come into play.

From a geopolitical point of view, Air France’s destination network is one of the most interesting to research as well as the rapid expansion of both Emirates and Turkish airlines’ networks (e.g. from Tajikistan to Eritrea). For example, Turkish airlines currently competes with Air France’s extensive West Africa network. Turkish airlines flies into the same cities were Air France’ airline empire once had a complete monopoly, including cities like Nouakchott (Mauritania), Niamey (Niger), Ouagadougou, (Burkina Faso), Conakry (Guinea), N’Djamena (Chad), and Libreville (Gabon). Therefore, as a result, one could generally conclude that Turkish Airlines is challenging many airline networks that aroused during colonial times (e.g. Turkish is challenging Aeroflot’s network in Central Asia; Air France and Brussels’s airlines West African network; and Turkish Airlines will eventually challenge US-based airlines hegemony in the Latin America-Europe-and-Asia controlled transit passengers market). Also, many of the gulf airlines (Etihad, Emirates, Qatar, particularly) have been gradually catching up by flying to cities like Buenos Aires and Sao Paulo, while continuing their expansion on US airspace (e.g. Emirates will fly into Orlando, Qatar is flying into Miami, Etihad is serving Los Angeles), which is why I am not surprised that many of the US legacy carriers’ CEOs are accusing the Gulf airlines from being heavily subsided, claiming unfair competition. Yet, I will leave that question to the legal experts.

What is the main lesson here? That airlines compete for power and influence as much as a state would.

An airline’s main geopolitical power is manifested as: 1) the power in controlling mobilities; 2) the power of transporting cargo, reducing the time, compared to shipping vessels and railway transportation; and 3) the power of being part of the propaganda and media machine of an hegemonic and/or rising power. For instance, in my country (Guatemala), which, unfortunately, due to high criminal violence and corruption, has been part of America’s illegal migration problem for a while. In spite of this migration problem, Guatemala is currently served by four US legacy airlines (Delta, American, United and Spirit), with 9 non-stop flights to United States, and with +50 frequencies of flights between America and Guatemala in a week. In turn, there are only five Latin American—and one European, Iberia—airlines legacy carriers that serve Guatemala, one of them is from Panama (Copa); three from Mexico (Aeromexico, Interjet and Volaris); and one is from Colombia (Avianca). Henceforth, and compared with the Latin American airlines, US-based carriers at least control 44% of the Guatemalan market; additionally controlling European and Asian mobility into Guatemala and the rest of Central America, except for Panama City—which is rapidly growing and served by major European legacy carriers (Iberia, KLM, Air-France, TAP, and Lufthansa this coming march 2016).

Last but not least, airline’s propaganda can dwell in our geographic imagination and induce our hearts and pockets. How? Well, they capture the essence of curiosity. The curiosity of traveling into their countries of origin. The curiosity of using them as linkages into another unknown, untraveled destination. The Curiosity of imagining what is life like in the airlines’ countries of origin. And, the curiosity of having the ‘experience’ of traveling with them. At least, from a Guatemalan standpoint, many of the US-legacy carriers advertise American hallmarks of touristic and geopolitical power, such as photos of the White House, the Statue of Liberty, the Golden Gate Bridge, and the giant Hollywood emblem in the hills of Los Angeles.

With that kind of propaganda, no wonder why many of my countrymen must imagine that as soon as you step in the US, your life will become great, suddenly change, and why not, you will be part of the American dream—and from a business and marketing standpoint, of course, that I congratulate the American airlines. They are making a fine job in serving and connecting Guatemala with the rest of the world.

Yes, airlines can provide many things for our self-esteem (the joy of looking forward to relax in a nice, sunny beach) and our egos (the joy of telling your family and friends that you will travel to a destination they are eager to go but can’t). But, the airlines are also part of the geopolitical architecture of a state’s power: connecting, uniting or burning the bridge between one space and another. The core and the periphery. The served and unserved.

So, my dear reader: are airlines agents of geopolitical power?

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Economy

Modi’s India a flawed partner for post-Brexit Britain

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With just two weeks to go until Britain is scheduled to exit the European Union, Boris Johnson and his ministers are understandably focused on the last-minute dash to formulate a workable Brexit deal with the EU. Once this moment has passed, however, either Johnson or whoever replaces him as PM will come under intense pressure to deliver the trade deals Brexit side supporters have so talked up since 2016.

One such envisaged deal is with India. Seven decades after securing independence from Britain’s colonial empire, New Delhi has the world’s seventh-largest economy and one of its fastest growth rates. The prospect of deeper trade ties with Asia’s third-largest economy has been a major feature of the pitch for a “Global Britain” that extends the UK’s reach beyond the continent, and Johnson himself made a big thing of expanding economic ties with India while campaigning to become PM.

Unfortunately, any plans to kickstart trade agreements with India will run into problems, and not just over immigration and visa issues. India is on the verge of a serious economic downturn, hit by job losses and decreasing levels of foreign investment. With growth slowing down, Indian PM Narendra Modi has fallen back on his aggressive brand of Hindu nationalism to galvanise public support, a gambit that has most recently resulted in his government’s controversial move to strip automony from Kashmir.

Bad time for a UK-India trade deal

Whereas only a few years ago India was held up as one of the world’s fastest growing economies and an enticing prospect for global trade and investment, Moody’s new projection of a 5.8% growth rate represents a danger to Narendra Modi’s promise of a $5 trillion economy. Recently released figures show India’s GDP growth falling for the fifth successive quarter, to a six-year low of 5.2%.

India’s economic woes are reflected in patterns of foreign investment. Around $45 billion has been invested in India from abroad over the last 6 years. The downturn in the country’s economic fortunes has seen a record $4.5 billion of shares sold by foreign investors since June this year. These economic problems are linked to Modi’s failure to carry through on economic reforms promised when he came to power in 2014, when a number of structural problems were seen as inhibiting external trade relationships.

India currently has over 1,000 business regulations and more than 3,000 filing requirements, as well as differing standards for social, environmental and human rights. These have been sticking points in the moribund trade deal negotiations between India and the EU, and Brexit advocates have not explained how they plan to overcome these hurdles.

Hostility to foreign companies

Structural issues are only part of the problem. Another key concern is the Indian government’s adversarial attitude towards foreign investors. Despite Modi’s promises to make India an attractive place to do business, his government has continued protectionist policies that throttle the country’s ability to attract outside capital.

One issue is retrospective taxation. Under Modi’s predecessor, Manmohan Singh, several British and international firms were hit with sizeable, legally dubious tax bills by the Indian government. Modi came to power on a promise of ending retrospective tax bills being imposed on overseas companies, and yet British firms such as Vodafone and Cairn Energy still find themselves pursued through the courts for back-dated tax bills, despite the protections they should enjoy under the bilateral investment treaty between India and the UK.

Vodafone’s case involved its 2007 acquisition of a stake in cellular carrier Hutchinson Essar. While the deal did not take place in India, New Delhi determined Vodafone still owed $5 billion in taxes on the overseas transaction. After the Indian Supreme Court dismissed the claim in 2012, India’s previous government introduced a new law to tax transactions of this nature that retroactively applied to cases going back to 1962. Modi attacked this “tax terrorism” at the time, but his government has continued its dogged pursuit of Vodafone in the courts.

Cairn Energy has faced an equally arduous struggle with the Indian Ministry of Finance, which in 2014 blocked the British firm from selling its 10% stake in Cairn India and subsequently demanded $1.6 billion in taxes. Indian officials used the 2012 law to justify their actions, violating the bilateral investment treaty and breaking one of Modi’s own campaign promises in the process.

Immigration laws a further sticking point

This recent history should already give British businesses pause, but the most obvious obstacle in any trade negotiations between UK and India will be the issue of immigration. The Centre For European Reform has argued post-Brexit trade will be closely linked to opening up UK borders to workers from partner countries, but a UK Commons Foreign Affairs Select Committee report in June highlighted how Britain’s immigration restrictions on Indian workers, students and tourists has already impacted bilateral trade relations. The report noted how the UK has slipped from being India’s 2nd largest trade partner in 1999 to 17th in 2019, adding that skilled workers, students and tourists are deterred from coming to the UK by the complicated, expensive and unwelcoming British migration system.

It is unlikely the Modi government will agree to any UK-India trade deal that doesn’t guarantee a relaxing of immigration rules that will allow a free flow of people as well as goods and capital between the two countries. The question is whether the British government, which has veered ever more closely towards a Brexit-fuelled populism at odds with relaxed border controls, will be flexible enough to sign up to this.

Given these issues, are Britain’s hopes for a post-Brexit dividend in Indian trade dead on arrival? Unless Modi’s government starts living up to international standards and honouring his country’s investment agreements with British companies, “Global Britain” may not get much further with India than it has with the US.

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Economy

A more effective labour market approach to fighting poverty

Cynthia Samuel-Olonjuwon

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Gainful employment is still the most reliable way of escaping poverty. However, access to both jobs and decent working conditions remains a challenge. Sixty-six per cent of employed people in developing economies and 22 per cent in emerging economies are in either extreme or moderate working poverty, and the problem becomes even more striking when the dependents of these “working poor” are considered.

Thus, it is not just unemployment or inactivity that traps people in poverty, they are also held back by a lack of decent work opportunities, including underemployment or informal employment.

Appropriate labour market policies can play an important role in the fight to eradicate poverty, by increasing access to job opportunities and improving the quality of working conditions. In particular, labour market policies that combine income support for jobless people with active labour market policies (ALMPs).

The new ILO report What works: Promoting pathways to decent work  shows that combining income support with active labour market support allows countries to tackle multiple barriers to decent work. These barriers can be structural, (e.g. lack of education and skills, presence of inequalities) or temporary (e.g. climate-related shocks, economic crises). This policy combination is particularly relevant today, at a time when the world of work is being reshaped by global forces such as international trade, technological progress, demographic shifts and environmental transformations.

Policies that combine income support with ALMPs can help people to adjust to the changes these forces create in the labour market. Income support ensures that people do not fall into poverty during joblessness and that they are not forced to accept any work, irrespective of its quality. At the same time, ALMPs endow people with the skills they need to find quality employment, improving their employability over the medium- to long-term.

New evidence gathered for this report shows that this combination of income support and active support is indeed effective in improving labour market conditions: impact evaluations of selected policies indicate how people who have benefited from this type of integrated approach have higher employment chances and better working conditions.

One example of how this combined approach can produce results is the innovative unemployment benefit scheme unrolled in Mauritius, the “Workfare Programme”. This provides workers with access to income support and three different types of activation measures; training (discontinued in 2016), job placement and start-up support. The programme was also open to those unemployed people who were previously working in an informal job. By extending coverage to the most vulnerable workers, the scheme has helped reduce inequalities and unlock the informality trap.

Another success came through a public works scheme implemented in Uruguay as part of a larger conditional cash transfer programme, the National Social Emergency Plan (PANES). The programme was implemented during a deep economic recession and carefully targeted the poorest and most vulnerable.

Beneficiaries of PANES were given the opportunity to take part in public works. In exchange for full-time work for up to five months, they received a higher level of income support as well as additional job placement help. This approach reached a large share of the population at risk of extreme poverty and who lacked social protection. The report indicates that providing both measures together was critical to the project’s success.

The effects of these policies on poverty eradication cannot be overestimated. By tackling unemployment, underemployment and informality, policies combining income support with ALMPs can directly affect some of the roots of poverty, while enhancing the working conditions and labour market opportunities for millions of women and men in emerging and developing countries.

ILO

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Economy

CPEC vs IMF in Pakistan

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International Monetary Fund (IMF) was created just after World War II (WWII) in 1945. The IMF is an organization of 189 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

Pakistan has been knocking doors of IMF since 1958, and it has been 21 agreements with IMF. Generally, the IMF provides loans at very low-interest rates and provides programs of better governance and monitoring too. But for the last 6 decades, Pakistan has suffered a lot, in terms of good governance. Especially last 2 decades, corruption, nepotism, poor planning, bribery, weakening of institution, de-moralization of society, etc were witnessed. We may not blame the IMF for all such evils but must complain that the IMF failed to deliver, what was expected. Of course, it is our country, we are responsible for all evils, and wrongdoings happened to us. We have to act smartly and should have made the right decision and at right times.

IMF also dictates its terms and condition or programs like: devaluation of local currencies, which causes inflation and hike in prices, cut or draw-back of subsidies on basic utilities like fuel, gas, electricity, food, agriculture etc, which causes cost of life rather higher for local people, cut on development expenditures like education, health, infrastructure, and social development etc, which pushes the country even more backward. IMF focusses only on reducing expenditures and collection of taxes to make a country to meet the deadlines of payments. IMF does not care about the development of a country, but emphasizes tax collections and payment of installments on time, to rescue a country from being a default.

While CPEC is an initiative where projects are launched in Power Generation, Infrastructure development under the early harvest program. Pakistan was an energy trust country and facing a severe shortage of Electricity. But after completion of several power projects under CPEC, the shortfall of electricity has been reduced to a great extent. One can witness no load shedding today, while, just a few years back the load shedding was visible throughout the country for several hours a day. Several motorways and highways have been completed. Gwadar port has been operational partially. Infrastructure developments are basic of economic activities.

Projects under CPEC has generated jobs up to 80,000. CPEC was the catalyst to improve GDP by around two percent during 2015-2018. CPEC has lifted the standard and quality of life of the common man in Pakistan. CPEC was instrumental to move the economic activities and circulation of wealth in society. Under CPEC, early harvest projects, 22 projects have been completed at the cost of approximately 19 billion US dollars.

It is understood that early harvest projects were heavy investment and rather slow on returns. But, these projects have provided a strong foundation for the second phase, where Agriculture, Industrialization and Social Sector will be focused. Return on Agriculture and Industrial produce is quick and also generates more jobs. The second phase will contribute toward the social development of Pakistan as well as generate wealth for the nation.  Pakistan’s agriculture sector has huge potential as cultivatable land is huge, workforce is strong and climate is favorable.  Regarding Industrialization, Pakistan is blessed with an abundance of mines and minerals. The raw material is cheap and the labor cost is competitive. Pakistan has 70% of its population under the age of 40 years, which means an abundance of the work force. Pakistan’s domestic market is 220 million and the traditional export market is the whole of the middle-east and the Muslim world.

The major difference between the CPEC and IMF is that CPEC generates wealth, while IMF focuses on tax collection and reducing the developments and growth. China is the latest model of developments in the modern days, China is willing to replicate its experience with Pakistan for its rapid development.

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