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Move and Counter-move

Osama Rizvi



[yt_dropcap type=”square” font=”” size=”14″ color=”#000″ background=”#fff” ] T [/yt_dropcap] he world has always been an inquisitive olio of kaleidoscopic diplomacy. After the World War-1 we saw how nations toggled between alliances and camaraderie betwixt one another as globalization begun to spread its thousands of tentacles around the world. With the proliferation in technology, scarcity of resources and blurring of the boundaries the aforesaid trend has only gained more momentum and today we live in a world that is intricately connected.

A huge nexus. Tweak one string and the whole web vibrates. There were blood-wars in the past. Now there are trade-wars. The paradigm shift has caused many countries to cash in the benefits of trade blocs. Lo and Behold! Welcome to the era of Economic Integration. Here tariffs are the ammunitions and trade-areas bombs. Ladies and gentleman, welcome to the world of ‘soft-power’.

Today the largest trading nation with a GDP of more than $17 trillion USA stands as The Business Hub. China, yes, their oriental rivals. The recent rise in the populist narrative has raised some eye-brows across the world. USA was ringing with the “Make America Great Again” slogan and people were moved by the promise to “bring back our jobs”. So, we have the estate Mogul, Mr. Trump, as the president-elect who will assume office on 20th January, 2017. He has made few ambitious announcements and revealed some revolutionary plans. But it is often that what politicians use political sloganeering is in reality bitter paragraphs. His claims to repeal the Trans-Pacific Partnership (TPP hereinafter) has, inter-alia, send ripples across the seas reaching directly to their Far-Eastern and Pacific countries who are now confounded and incensed. Dislocating the President Obama’s “pivot to Asia” is not a small matter.

TPP is a trade deal that covers almost 40% of the world’s trade and includes 12 countries: Canada, Mexico, Brunei, Malaysia, Vietnam, Australia, New Zealand, Japan, Chile, Peru, Singapore and US. The trade deal has been finalized but this deal with 30 chapters running into 5000 pages needs to be ratified by at-least 6 member countries that constitutes 80% of the groups trade output. US alone constitutes 55-60% of it. Hence, its absence will certainly repudiate the deal. This has left many of the member countries pondering at the actual implementation of the deal.

Enters China, to the rescue of their neighbors and as well as other countries, holding a file titled: Regional Comprehensive Economic Partnership (RCEP). As I mentioned in the start, moves and counter moves. Chinese leadership is all ready to fill in the impending and expected void if created by president elect Mr. Trump. RCEP involves members of ASEAN plus India, Australia and New Zealand, South Korea, Japan and evidently, China. Seven of the countries superimpose each other in both the deals. However, there are few political and regional nuances that might come into effect as, and if, the deal progress. The first thing is the issue of South China Sea. Philippines, Malaysia and Vietnam all have laid claim on this significant trading route which hosts $5trillion of trade annually. The recent election of Mr. Dutetre in Philippines may help ameliorate the growing acrimony but the territorial infringement remains there. One thing China might be doing by peddling this RCEP is to solve this issue in its [RCEP] guise. As the economic bond with all the ASEAN countries which also includes the above three bolsters, the virtues of economic integration play their role. One of which is that the countries engaged in bi-lateral trade very rarely go to war or in conflicts with each other. Secondly, as the deal is “backed” by Beijing it might abet Chinese influence and legality in the trading bloc. Another intriguing partner is the Southeast Asian nation, India. India and China has engaged in word war from decades over the border claims. Also, both occupy the top slots for being the most populous countries in the world. Free movement of people can create a lot of issues. The domestic industries may also be effected. For the rest of the member countries all is hunky-dory. Both the trade deals have an equipoise importance.

TPP represents 13% of global trade and RCEP 12%. TPP countries are slow growing as compared to the RCEP ones. RCEP will cover almost half of the world’s population and TPP covers more than 800 million of people. But TPP tends to cater trade between richer countries than RCEP. The benefits yaw from one bloc to another. It is not about TPP or no TPP or RCEP. But it is certainly about the question: who writes the rules for the trade in Pacific. USA and China both are well acquainted of the significance of the region and hence, Mr. Trump’s revolting mindset is a cause of concern and surprise for many. He must know that if USA doesn’t than China is ready to ‘write down the rules’. The geopolitical, social and economic axis can shift and the gyrations may prove costly for the police man of the world. But we have to wait and see how much coherence the president-elect can instill in his pre-office and post-office life. This is a world today. Of trade clouts and economic weapons. I am not sure whether the US will continue to tread upon the precarious path adduced by Mr. Trump. But given his tilt for economic nationalism it is not hard to imagine that the biggest trade deal ever will see its demise very soon.

Independent Economic Analyst, Writer and Editor. Contributes columns to different newspapers. He is a columnist for, where he analyzes Crude Oil and markets. Also a sub-editor of an online business magazine and a Guest Editor in Modern Diplomacy. His interests range from Economic history to Classical literature.


Report: CPEC offers enormous potential to Boost Pakistan Economy

MD Staff



With investments in road, railways and ports, the $60 billion China Pakistan Economic Corridor (CPEC) offers enormous potential for Pakistan to boost its economy, reduce poverty, spread benefits widely and help those likely to be affected by the new trade route, a new report says.

The report, entitled “The Web of Transport Corridors in South Asia”, published by the Asian Development Bank, the United Kingdom’s Department for International Development, the Japan International Cooperation Agency, and the World Bank, discusses several economic corridors including CPEC

“The largest economic gains from investing in transport corridors may arise from urbanization and job creation around this new infrastructure, rather than from many more vehicles using it”, said one of the report’s authors, World Bank economist Martin Melecky, who added: “not all corridor investments are equally successful in creating large economic surpluses that spread fairly throughout society.”

The report notes that the many transport corridors proposed across Asia would cost trillions of dollars to implement, far exceeding the financing resources available. Hence, countries need to prioritize the most promising corridors that will deliver the expected transformative impacts for their economies and people. Engineering designs and geopolitical considerations could be important, but sound economic analysis is the key to designing truly successful corridors, the report argues.

The ability of large-scale transport investments to generate wider economic benefits depends on the population density in the areas they cross. Their capacity to spur structural transformation along the way depends on complementary factors around the transport corridors, such as the skills of the local population or restrictions on local land use. The new transport infrastructure must come with the means for people to take advantage of the improved connectivity right from the start.

“The upcoming Khyber Pass Economic Corridor project is a positive example, where trade facilitation and the development of local economic activities are explicitly integrated in the design of the project”, said Illango Patchamuthu, World Bank Country Director for Pakistan.

The report reviews the international experience with economic corridors, from the Pacific Ocean Belt in Japan in the 1960s to high-speed train networks in Europe more recently. It also analyzes the impacts of the Golden Quadrilateral highway system in India and finds positive effects, including higher economic activity and better (non-farm) jobs for women. However, air pollution rose in parallel and gains in household consumption were not equally shared across connected districts.  Appraisal simulations for CPEC and the Kolkata-Dhaka corridor suggest that complementary measures are needed to improve local conditions that in turn will create formal jobs and generate tax revenues that could pay for corridor investments.

In light of the international evidence and specific analyses for South Asia, the report advocates for a more comprehensive design of corridor programs that actively manages tradeoffs and closes potential financing gaps in a sustainable manner.

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Good Tourism Practices to Advance Sustainable Development in the Americas

MD Staff



Concrete examples of how to advance sustainable development through tourism take centre stage in the first joint publication between the World Tourism Organization (UNWTO) and the Organization of American States (OAS). ‘Tourism and the Sustainable Development Goals: Good Practices in the Americas’ provides 14 case studies from across the region on why tourism ranks high among the economic sectors better positioned to enable the Agenda 2030 for Sustainable Development and its 17 Sustainable Development Goals.

Ranging from tourism projects to strengthen the peace process in Colombia to initiatives in the heart of the Peruvian Amazon, addressing climate change in Mexico or providing insight into management and sustainability systems in Honduras or Panama. A total of 14 case studies portray the contribution of tourism to advance the Sustainable Development Goals in the Americas.

Tourism and the Sustainable Development Goals: Good Practices in the Americas’ recommends to pay critical attention to tourism management as well as to strengthening partnerships between national and international public and private stakeholders, as well as local communities. The report also addresses the emergence of a more responsible traveler and how destinations in the region should integrate resource efficiency and multi-stakeholder involvement in their policies, actions and initiatives.

“With more than 200 million international tourists who traveled to the Americas in 2017, tourism can and must play a significant role in delivering solutions for sustainable development in the region”, said UNWTO Secretary-General, Zurab Pololikashvili. “I am grateful for the partnership with the Organization of American States and am confident that together we will support tourism’s role in the sustainable development agenda of the region up to and beyond 2030”, he added.

According to the Executive Secretary for Integral Development of the OAS, Kim Osborne, this joint effort “provides greater awareness on how tourism can help address poverty alleviation, protect biodiversity and cultural heritage, and support community development in the Americas”.

Authorities at all levels in the Americas have identified tourism as a priority sector to promote economic development and diversification and countries across the region are adopting new legislation and policies in this direction. Against this backdrop, ‘Tourism and the Sustainable Development Goals: Good Practices in the Americas’ provides insight into how a common approach – including policy makers, private sector, tourists and the development community – can catalyze sustainable development through tourism.

The report was presented during the 2018 Inter-American Congress of Ministers and High-level Authorities of Tourism, under the theme ‘Connecting the Americas through sustainable tourism’.

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Azerbaijan’s geo-economic expansion prospects: Conventional or emerging markets?



In the background of global geo-economic shifting, nation states confront significant challenges in terms of appropriate positioning. In case of Azerbaijan, these challenges are also related to regional geopolitical imbalances as well as structural problems existing in the national economy.

Throughout its independence, Azerbaijan has pursued the way to formulate its foreign economic relations through maximizing its economic benefits in the context of achieving relevance to its national interests. Indeed, country’s geographical location and economic strength gained thanks to oil boom gave birth to the possibility of formulation of Azerbaijan as a regional geo-economic pivot.

Azerbaijan iscurrently conducting multi-vectorial geo-economic development strategy in order to maximize its geographic advantages as well as maintaining better positioning in the framework of massive realignments observing in global economic architecture.Looking through of the policy frameworks which encapsulate country’s medium and long-term economic vision, it becomes obvious that Azerbaijan will continue to adjust these strategies to the “new game rules” of geo-economic shifting.

However, it should also be mentioned that in some cases, Azerbaijan’s geographic location takes part as an impediment rather than advantage.Referring to conventional understanding of the concept of “space”, Azerbaijan has only limited number of spaces in which geo-economic sustainability can be realized. However, shifting from geopoliticsrelying on the dominance over geographic basins to the geo-economics which relying on controlling financial and trade flows creates an excellent opportunity for Azerbaijan to tackle with this problem. In this regard, it should be emphasized that successful realization of trade-logistics and energy transport projects in recent years have created a sound ground to continue geo-economic expansion in the new stage of economic development. But the question currently standing in front of this expansion strategy is that which markets or “geo-economic spaces” should be main target?

Assessment of trans-regional projects initiated or supported by Azerbaijan during last two decades indicate that these initiatives are mainly directed to mitigate EU’s dependence on several routes or building an appropriate infrastructure to bolster these countries’ trade relations with Central Asian countries. This factor was strategically and economically beneficial for Azerbaijan in terms of getting better access to European markets and eliminating infrastructural backwardness inherited from Soviets. However, as aforementioned, current realignments in geo-economic landscape make it necessity to add new directions and quality features to the geo-economic expansion strategy of the country.

In this regard, Strategic Road Map for the perspectives of the national economy which approved by President Ilham Aliyev in late 2016 can be accepted as a reliable guide to find answer to the question put above. It is not secret that in recent years, we are observing geo-economic shifting from Euro-Atlantic region to the Asia-Pasific. This shifting is gradual and time-consuming process and cannot be constrained only by Chinese economic expansion or South Korean success story.

According to the World Bank, over the next three years the $75 trillion global economy will expand by more than $6.5 trillion in size. It is also estimated that China and India will be among Top 3 contributors to real GDP growth predicted for 2018-2020 while Turkey, Indonesia, South Korea and Japan will be also among major contributors.Furthermore, emerging and developing Asia seems will be achieved to quadruple its share in global GDP based on PPP during 1980-2020.

In the light of these figures, it can be put forward that Azerbaijan can take more benefits through getting better access to these emerging Asian markets. Furthermore, taking into consideration country’s medium and long-term economic vision in which acceleration of joining to global value chains has been mentioned as one of the strategic targets,integration to these markets promise more economic gains. The scale of these gains will not be constrained only in the framework of monetary or financial units. Particularly, significant progress achieved in realization of North-South and East-West transport corridors in recent years, additionally much brighter prospective transport projects which are expected to be realizedin the near future will lead to increase Azerbaijan’s geo-economic importance. This achievement can be accepted as a result of continuous efforts made by Azerbaijan during last two decades. As mentioned by President Aliyev, situated between Europe and Asia, Azerbaijan will continue to use wisely its geographical location to become one of the leading transportation hubs in Eurasia. Pursuant to his opinions, it is highly predictable that Azerbaijan geo-economic expansion will continue in accordance with regional and global economic landscape movements.

Getting efficient positioning in regional integration movements which dominantly shaping under priority of national interests is one of the key directions of Azerbaijan’s geo-economic expansion strategy.In this regard, preserving independence in integration processes is one of the significant imperatives in Azerbaijan’s foreign economic and trade relations.It is worth to mention that Azerbaijan, unlike to some of other region countries, still preserves independence in making choices regarding with integration movements. Therefore, Azerbaijan’s current stance lets us put forward the idea that consistence of joining to such type of integration movements with the country’s strategic foreign and domestic economic targets is more deterministic imperative rather than nominal participation.This hypothesisalso involves some insights regarding with the issue that in which direction geo-economic expansion ought to be continued in the following years.

On the macroeconomic and foreign trade perspective, it is worth to emphasize that Azerbaijan has achieved significant growth rates during 2004-2014. After some adverse effects of oil price crunch after 2014 Azerbaijan economy is currently in the process of adjusting new equilibrium points.This process is conducting not only through improving macroeconomic indicators, but also through making changes in geographic orientation of the country’s foreign trade relations. According to the official figures, the share of Asian markets is averagely 38% in exports and 39% in imports. However, analyzing of commodity structure of this trade turnover exhibits that in exports low value-added commodities dominate while in imports particularly medium and high value added ones take the lion share. This structure of trade relations with Asian countries brings forth some challenges in terms of diversifying commodity structure of exports as well as increasing turnover with these emerging economies. Therefore, in the context of geo-economic expansion, it would be more reasonable for Azerbaijan to pay much attention to join global value chains appearing in these markets. Additionally, thanks to already finished and prospective  trade-logistics and transportation projects, Azerbaijan’s opportunities to benefit from new trade reality which involves geographical fragmentation of production is increasing. This new reality offers to accelerate diversification of economy with limited resources avoiding from conventional barriers existing in small economies such as Azerbaijan.

Finally, Azerbaijan seems very determined to become a geo-economic pivot in its region relying on its comprehensive and continuous development strategies and rising international economic competitiveness which achieved during recent years. This deterministic stance will continue through shifting beyond a new quality stage of geo-economic expansion in the era of formulation multipolar global economic order. This shifting additionally requires revision of geographic expansion postulates of the country’s geo-economic development strategies. The characteristics of this revisionwill be determined by systemic realignments in the global economy.

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